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

EXECUTION COPY

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of January 22,
2018, is by and among Longfin Corp, a Delaware corporation with offices located
at 16-017, 85 Broad Street, New York, New York 10004 (the “Company”), and each
of the investors listed on the Schedule of Buyers attached hereto (individually,
a “Buyer” and collectively, the “Buyers”).

RECITALS

A.The Company and each Buyer is executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule
506(b) of Regulation D (“Regulation D”) as promulgated by the United States
Securities and Exchange Commission (the “SEC”) under the 1933 Act. 

B.The Company has authorized two new series of convertible notes with an
aggregate principal amount of $52,700,000 as follows: (i) a new series of senior
convertible notes of the Company, in the aggregate original principal amount of
$10,095,941.18, substantially in the form attached hereto as Exhibit A-1 (the
“Series A Notes”), which Series A Notes shall be convertible into shares of
Common Stock (as defined below) (the shares of Common Stock issuable pursuant to
the terms of the Series A Notes, including, without limitation, upon conversion
or otherwise, collectively, the “Series A Conversion Shares”), in accordance
with the terms of the Series A Notes and (ii) a new series of senior secured
convertible notes of the Company, in the aggregate original principal amount of
$42,604,058.82, substantially in the form attached hereto as Exhibit A-2 (the
“Series B Notes”, and together with the Series A Notes, the “Notes”), which
Series B Notes shall be convertible into shares of Common Stock (as defined
below) (the shares of Common Stock issuable pursuant to the terms of the Series
B Notes, including, without limitation, upon conversion or otherwise,
collectively, the “Series B Conversion Shares”, and together with the Series A
Conversion Shares, the “Conversion Shares”), in accordance with the terms of the
Series B Notes. 

C.Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms
and conditions stated in this Agreement, (i) a Series A Note in the aggregate
original principal amount set forth opposite such Buyer’s name in column (3) on
the Schedule of Buyers, (ii) a Series B Note in the aggregate original principal
amount set forth opposite such Buyer’s name in column (4) on the Schedule of
Buyers and (iii) a warrant to initially acquire up to that aggregate number of
additional shares of Common Stock set forth opposite such Buyer’s name in column
(5) on the Schedule of Buyers, substantially in the form attached hereto as
Exhibit B (the “Warrants”) (as exercised, collectively, the “Warrant Shares”). 

D.At the Closing, the parties hereto shall execute and deliver a Registration
Rights Agreement, in the form attached hereto as Exhibit C (the “Registration
Rights Agreement”), pursuant to which the Company has agreed to provide certain
registration rights with respect to the Registrable Securities (as defined in
the Registration Rights Agreement), under the 1933 Act and the rules and
regulations promulgated thereunder, and applicable state securities laws. 

E.The Notes, the Conversion Shares, the Warrants and the Warrant Shares are
collectively referred to herein as the “Securities.” 

F.Concurrently herewith the Company and each Buyer, separately, have entered
into a Note Securities Purchase Agreement in the form attached hereto as Exhibit
D (each as amended, modified, supplemented, extended, renewed, restated or
replaced from time to time, collectively, the “Note Purchase Agreements”)
pursuant to which the Company shall acquire a secured promissory note issued by
the applicable Buyer (each, an “Investor Note”, and collectively, the “Investor
Notes”) as payment of the Series B Purchase Price (as defined below) hereunder. 

G.Concurrently herewith, the Company and each Buyer, separately, are entering
into that certain Master Netting Agreement, in substantially the form attached
hereto as Exhibit E (the “Master Netting Agreement”), to provide further
clarification of their rights (but not, in the case of each such Buyer only, its
obligation) to Net (as defined below) certain Obligations (as defined in the
Master Netting Agreement) arising under and across this Agreement, the Investor
Note, the Series B Notes and the Note Purchase Agreement (collectively, the
“Underlying Agreements”) and to treat the Master Netting Agreement, this
Agreement and the other Underlying Agreements as a single agreement for the
purposes set forth herein and to treat this Agreement and the Note Purchase
Agreement each as a “securities contract” (11 U.S.C. § 741) or other similar
agreements. 

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each Buyer hereby
agree as follows:

1.PURCHASE AND SALE OF NOTES AND WARRANTS. 

(a)Purchase of Notes and Warrants 

. Subject to the satisfaction (or waiver) of the conditions set forth in
Sections 6 and 7 below, the Company shall issue and sell to each Buyer, and each
Buyer severally, but not jointly, agrees to purchase from the Company on the
Closing Date (as defined below) (a) a Series A Note in the original principal
amount as is set forth opposite such Buyer’s name in column (3) on the Schedule
of Buyers, (b) a Series B Note in the aggregate original principal amount as is
set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers and
(c) Warrants to initially acquire up to that aggregate number of Warrant Shares
as is set forth opposite such Buyer’s name in column (5) on the Schedule of
Buyers.

(b)Closing 

.  The closing (the “Closing”) of the purchase of the Notes and the Warrants by
the Buyers shall occur at the offices of Kelley Drye & Warren LLP, 101 Park
Avenue, New York, NY 10178. The date and time of the Closing (the “Closing
Date”) shall be 10:00 a.m., New York time, on the first (1st) Business Day on
which the conditions to the Closing set forth in Sections 6 and 7 below are
satisfied or waived (or such other date as is mutually agreed to by the Company
and each Buyer).  As used herein “Business Day” means any day other than a
Saturday, Sunday or other day on which commercial banks in New York, New York
are authorized or required by law to remain closed.

(c)Purchase Price 

.  The aggregate purchase price for the Notes and Warrants to be purchased by
each Buyer (the “Purchase Price”) shall be (i) the aggregate amount as set forth
opposite such Buyer’s name in column (6) on the Schedule of Buyers, consisting
of (A) a payment in cash of such aggregate amount as set forth opposite such
Buyer’s name in column (7) on the Schedule of Buyers (the “Series A Cash
Purchase Price”) (less, in the case of any Buyer, the amounts withheld pursuant
to Section 4(g)) to the Company for the Series A Notes and the Warrants to be
issued and sold to such Buyer at the Closing, by wire transfer of immediately
available funds in accordance with the Flow of Funds Letter (as defined below)
and (B) the aggregate amount as set forth opposite such Buyer’s name in column
(8) on the Schedule of Buyers (the “Series B Purchase Price”) for the Series B
Notes to be satisfied, in full, by the issuance by such Buyer of an Investor
Note pursuant to the Note Purchase Agreement in the aggregate original principal
amount equal to the Series B Purchase Price.  In addition, at the Closing, an
authorized person of such Buyer shall certify in a written certificate in the
form attached hereto as Exhibit F (the “Investor Collateral Certificate”) that
as of the Closing Date the bank account described on Schedule I to such Investor
Note, which secures such Investor Note in accordance therewith, contains at
least the Series B Purchase Price of Eligible Assets (as defined in the Investor
Note) as of the Closing Date.  Each Buyer and the Company agree that the Notes
and the Warrants constitute an “investment unit” for purposes of Section
1273(c)(2) of the Internal Revenue Code of 1986, as amended (the “Code”). The
Buyers and the Company mutually agree that the allocation of the issue price of
such investment unit between the Notes and the Warrants in accordance with
Section 1273(c)(2) of the Code and Treasury Regulation Section 1.1273-2(h) shall
be an aggregate amount allocated to the Warrants and the balance of the Purchase
Price allocated to the Notes as mutually agreed by the Company and the Required
Holders, and neither the Buyers nor the Company shall take any position
inconsistent with such allocation in any tax return or in any judicial or
administrative proceeding in respect of taxes.  

(d)Form of Payment 

.  On the Closing Date, (i) each Buyer shall (x) pay its respective Series A
Cash Purchase Price (less, in the case of any Buyer, the amounts withheld
pursuant to Section 4(g)) to the Company for the Series A Notes and the Warrants
to be issued and sold to such Buyer at the Closing, by wire transfer of
immediately available funds in accordance with the Flow of Funds Letter (as
defined below) and (y) in accordance with the instructions of the Company in the
Flow of Funds Letter, maintain physical possession of a duly executed Investor
Note of such Buyer, in such original principal amount as is set forth across
from such Buyer’s name in column (7) of the Schedule of Buyers, issued pursuant
to the Note Purchase Agreement of such Buyer, both as payment for, and as
Collateral (as defined in such Buyer’s Series B Note) securing, such Buyer’s
Series B Note to be issued and sold to such Buyer at the Closing and (ii) the
Company shall deliver to each Buyer (A) a Series A Note in the aggregate
original principal amount as is set forth opposite such Buyer’s name in column
(3) of the Schedule of Buyers, and (B) a Series B Note in the aggregate original
principal amount as is set forth opposite such Buyer’s name in column (4) on the
Schedule of Buyers and (C) a Warrant pursuant to which such Buyer shall have the
right to initially acquire up to such aggregate number of Warrant Shares as is
set forth opposite such Buyer’s name in column (5) of the Schedule of Buyers, in
each case, duly executed on behalf of the Company and registered in the name of
such Buyer or its designee.

(e)Securities Contract; Netting Safe Harbor.  The Company hereby acknowledges
and agrees that the rights and obligations of each Buyer under the Note Purchase
Agreement of such Buyer, under the Investor Note of such Buyer, under the Series
B Note to be issued hereunder to such Buyer and the rights and obligations of
the Company hereunder, under each such Investor Note, under each such Series B
Note and under each such Note Purchase Agreement, respectively, arise in a
single integrated transaction and constitute related and interdependent
obligations within such transaction.  The Company and each Buyer, severally,
hereby acknowledge and agree that this Agreement and the Note Purchase
Agreements each are a “securities contract” as defined in 11 U.S.C. § 741 and
that each such Buyer shall have all rights in respect of the Master Netting
Agreement, this Agreement and the other Underlying Agreements as are set forth
in 11 U.S.C. § 555 and 11 U.S.C. § 362(b)(6), including, without limitation, all
rights of credit, deduction, setoff, offset, recoupment, and netting
(collectively, “Netting”) as are available under the Master Netting Agreement,
this Agreement and the other Underlying Agreements, and all Netting provisions
of the Master Netting Agreement, each Series B Note and each Investor Note,
including without limitation the provisions set forth in Section 7 of each
Investor Note, are hereby incorporated in this Agreement and made a part hereof
as if such provisions were set forth herein. 

2.BUYER’S REPRESENTATIONS AND WARRANTIES. 

Each Buyer, severally and not jointly, represents and warrants to the Company
with respect to only itself that, as of the date hereof and as of the Closing
Date:

(a)Organization; Authority. Such Buyer is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with the requisite power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents (as
defined below) to which it is a party and otherwise to carry out its obligations
hereunder and thereunder. 

(b)No Public Sale or Distribution 

.  Such Buyer (i) is acquiring its Note and Warrants, (ii) upon conversion of
its Note will acquire the Conversion Shares issuable upon conversion thereof,
and (iii) upon exercise of its Warrants (other than pursuant to a Cashless
Exercise (as defined in the Warrants)) will acquire the Warrant Shares issuable
upon exercise thereof, in each case, for its own account and not with a view
towards, or for resale in connection with, the public sale or distribution
thereof in violation of applicable securities laws, except pursuant to sales
registered or exempted under the 1933 Act; provided, however, by making the
representations herein, such Buyer does not agree, or make any representation or
warranty, to hold any of the Securities for any minimum or other specific term
and reserves the right to dispose of the Securities at any time in accordance
with or pursuant to a registration statement or an exemption from registration
under the 1933 Act.  Such Buyer does not presently have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the
Securities in violation of applicable securities laws.  For purposes of this
Agreement, “Person” means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization, any other entity and any Governmental Entity or any department or
agency thereof.

(c)Accredited Investor Status 

.  Such Buyer is an “accredited investor” as that term is defined in Rule 501(a)
of Regulation D.

(d)Reliance on Exemptions 

.  Such Buyer understands that the Securities are being offered and sold to it
in reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is relying in part
upon the truth and accuracy of, and such Buyer’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
such Buyer set forth herein in order to determine the availability of such
exemptions and the eligibility of such Buyer to acquire the Securities.

(e)Information 

.  Such Buyer and its advisors, if any, have been furnished with all materials
relating to the business, finances and operations of the Company and materials
relating to the offer and sale of the Securities that have been requested by
such Buyer.  Such Buyer and its advisors, if any, have been afforded (i) the
opportunity to ask questions of and receive answers from the Company concerning
the terms and conditions of the offering of the Notes and the merits and risks
of investing in the Notes; and (ii) access to information about the Company and
its financial condition, results of operations, business, properties, management
and prospects sufficient to enable it to evaluate its investment.  Neither such
inquiries nor any other due diligence investigations conducted by such Buyer or
its advisors, if any, or its representatives shall modify, amend or affect such
Buyer’s right to rely on the Company’s representations and warranties contained
herein.  Such Buyer understands that its investment in the Securities involves a
high degree of risk.  Such Buyer has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment decision
with respect to its acquisition of the Securities. Such Buyer hereby
acknowledges and agrees that it has independently evaluated the merits of its
decision to purchase the Securities, and that (i) Joseph Gunnar & Co. LLC (the
“Placement Agent”) is acting solely as placement agent in connection with the
execution, delivery and performance of the Transaction Documents and is not
acting as underwriter or in any other capacity and is not and shall not be
construed as a fiduciary for such Buyer, the Company or any other Person in
connection with the execution, delivery and performance of the Transaction
Documents, and (ii) such Buyer has not relied on the Placement Agent or its
officers, directors, employees, attorneys or affiliates or on the Company’s
attorneys with respect to the negotiation, execution or performance of the
Transaction Documents or any representation or warranty made in, in connection
with, or as an inducement to the Transaction Documents.

(f)No Governmental Review 

.  Such Buyer understands that no United States federal or state agency or any
other government or governmental agency has passed on or made any recommendation
or endorsement of the Securities or the fairness or suitability of the
investment in the Securities nor have such authorities passed upon or endorsed
the merits of the offering of the Securities.

(g)Transfer or Resale 

.  Such Buyer understands that except as provided in the Registration Rights
Agreement and Section 4(h) hereof:  (i) the Securities have not been and are not
being registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) such Buyer shall have delivered to the Company (if
requested by the Company) an opinion of counsel, in a form reasonably acceptable
to the Company, to the effect that such Securities to be sold, assigned or
transferred may be sold, assigned or transferred pursuant to an exemption from
such registration, or (C) such Buyer provides the Company with reasonable
assurance that such Securities can be sold, assigned or transferred pursuant to
Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor rule
thereto) (collectively, “Rule 144”); (ii) any sale of the Securities made in
reliance on Rule 144 may be made only in accordance with the terms of Rule 144,
and further, if Rule 144 is not applicable, any resale of the Securities under
circumstances in which the seller (or the Person through whom the sale is made)
may be deemed to be an underwriter (as that term is defined in the 1933 Act) may
require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC promulgated thereunder; and (iii) neither the Company nor
any other Person is under any obligation to register the Securities under the
1933 Act or any state securities laws or to comply with the terms and conditions
of any exemption thereunder.  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 and such pledge of Securities
shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Buyer effecting a pledge of Securities shall be required to
provide the Company with any notice thereof or otherwise make any delivery to
the Company pursuant to this Agreement or any other Transaction Document (as
defined in Section 3(b)), including, without limitation, this Section 2(g).

(h)Validity; Enforcement 

.  This Agreement and the Registration Rights Agreement have been duly and
validly authorized, executed and delivered on behalf of such Buyer and shall
constitute the legal, valid and binding obligations of such Buyer enforceable
against such Buyer in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies.

(i)No Conflicts 

.  The execution, delivery and performance by such Buyer of this Agreement and
the Registration Rights Agreement and the consummation by such Buyer of the
transactions contemplated hereby and thereby will not (i) result in a violation
of the organizational documents of such Buyer, or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which such Buyer is a party, or (iii) result in a violation of any
law, rule, regulation, order, judgment or decree (including federal and state
securities laws) applicable to such Buyer, except in the case of clauses (ii)
and (iii) above, for such conflicts, defaults, rights or violations which could
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Buyer to perform its obligations
hereunder.

(j)Company’s Representation and Warranties. Such Buyer acknowledges and agrees
that the Company does not make and has not made any representations or
warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 3. 

(k)Newly Organized Corporation; Cryptocurrency Matters.  Such Buyer acknowledges
that the Company has informed such Buyer that the Company (i) was recently
organized under the laws of the State of Delaware and is still in the process of
appointing executive officers and other personnel responsible for matters
relating to corporate governance and compliance matters generally and organizing
its corporate recordkeeping, (ii) has established neither “disclosure controls
and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934, as amended (the “1934 Act”)) nor “internal
controls over financial reporting” (as such term is defined in Rules 13a-15(f)
and 15d-15(f) under the 1934 Act) and (iii) may be required to report one or
more “material weaknesses” in its internal control over financial reporting,
once such controls have been established, in future filings with the SEC.  In
addition, such Buyer acknowledges that the Company has informed such Buyer that
the Company intends to develop and eventually deploy a digital token commonly
known as a “cryptocurrency” but that as of the date hereof no such digital token
has been developed or deployed and that digital tokens generally are the focus
of scrutiny by governmental or quasi-governmental regulatory authorities in many
jurisdictions (including those in which the Company seeks to deploy its digital
tokens) as to the legal status or validity of such cryptocurrencies (“Regulatory
Scrutiny”) and may be the subject of negative publicity regarding events
affecting the cryptocurrency industry as a whole, including computer hacks and
theft of digital assets, hard forks, failures of or public perception regarding
systems, networks or cryptocurrency exchanges, and other developments in public
key cryptography that adversely affect public acceptance of the digital token
services and products to be offered by the Company in the future (collectively,
the “Adverse Cryptocurrency Industry Matters”). 

3.REPRESENTATIONS AND WARRANTIES OF THE COMPANY. 

The Company represents and warrants to each of the Buyers that, as of the date
hereof and as of the Closing Date:

(a)Organization and Qualification 

.  Each of the Company and each of its Subsidiaries are entities duly organized
and validly existing and in good standing under the laws of the jurisdiction in
which they are formed, and have the requisite power and authority to own their
properties and to carry on their business as now being conducted and as
presently proposed to be conducted.  Each of the Company and each of its
Subsidiaries is duly qualified as a foreign entity to do business and is in good
standing in every jurisdiction in which its ownership of property or the nature
of the business conducted by it makes such qualification necessary, except to
the extent that the failure to be so qualified or be in good standing would not
reasonably be expected to have a Material Adverse Effect (as defined below).  As
used in this Agreement, “Material Adverse Effect” means any material adverse
effect on (i) the business, properties, assets, liabilities, operations
(including results thereof), condition (financial or otherwise) or prospects of
the Company or any Subsidiary, individually or taken as a whole, (ii) the
transactions contemplated hereby or in any of the other Transaction Documents or
(iii) the authority or ability of the Company or any of its Subsidiaries to
perform any of their respective obligations under any of the Transaction
Documents (as defined below).  Other than the Persons (as defined below) set
forth on Schedule 3(a), the Company has no Subsidiaries.  “Subsidiaries” means
any Person in which the Company, directly or indirectly, (I) owns any of the
outstanding capital stock or holds any equity or similar interest of such Person
or (II) controls or operates all or any part of the business, operations or
administration of such Person, and each of the foregoing, is individually
referred to herein as a “Subsidiary.”

(b)Authorization; Enforcement; Validity 

.  The Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement and the other Transaction Documents
and to issue the Securities in accordance with the terms hereof and thereof.
 Each Subsidiary has the requisite power and authority to enter into and perform
its obligations under the Transaction Documents to which it is a party.  The
execution and delivery of this Agreement and the other Transaction Documents by
the Company and its Subsidiaries, and the consummation by the Company and its
Subsidiaries of the transactions contemplated hereby and thereby (including,
without limitation, the issuance of the Notes and the reservation for issuance
and issuance of the Conversion Shares issuable upon conversion of the Notes and
the issuance of the Warrants and the reservation for issuance and issuance of
the Warrant Shares issuable upon exercise of the Warrants) have been duly
authorized by the Company’s board of directors and each of its Subsidiaries’
board of directors or other governing body, as applicable, and (other than (i)
the filing with the SEC of one or more Registration Statements in accordance
with the requirements of the Registration Rights Agreement, (ii) a Form D with
the SEC and any other filings as may be required by any state securities
agencies, (iii) the 8-K Filing, (iv) a Listing of Additional Shares Notification
with the Principal Market, and (v) the Stockholder Approval (as defined below),
and (vi) waiver of certain restrictions regarding the issuance of securities by
the Company contained in the Amended and Restated Underwriting Agreement dated
September 28, 2017 between the Company and Network1 Financial Securities, Inc.
(collectively, the “Required Filings and Approvals”)) no further filing, consent
or authorization is required by the Company, its Subsidiaries, their respective
boards of directors or their stockholders or other governing body.  This
Agreement has been, and the other Transaction Documents to which it is a party
will be prior to the Closing, duly executed and delivered by the Company, and
each constitutes the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with its respective terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies and except as rights to indemnification and to
contribution may be limited by federal or state securities law.  Prior to the
Closing, the Transaction Documents to which each Subsidiary is a party will be
duly executed and delivered by each such Subsidiary, and shall constitute the
legal, valid and binding obligations of each such Subsidiary, enforceable
against each such Subsidiary in accordance with their respective terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies and except as rights to indemnification and to
contribution may be limited by federal or state securities law.  “Transaction
Documents” means, collectively, this Agreement, the Notes, the Warrants, the
Note Purchase Agreements, the Master Netting Agreement, the Registration Rights
Agreement, the Voting and Lockup Agreement, the Investor Note, the Irrevocable
Transfer Agent Instructions (as defined below) and each of the other agreements
and instruments entered into or delivered by any of the parties hereto in
connection with the transactions contemplated hereby and thereby, as may be
amended from time to time.

(c)Issuance of Securities 

.  The issuance of the Notes and the Warrants are duly authorized and upon
issuance in accordance with the terms of the Transaction Documents shall be
validly issued, fully paid and non-assessable and free from all preemptive or
similar rights, mortgages, defects, claims, liens, pledges, charges, taxes,
rights of first refusal, encumbrances, security interests and other encumbrances
(collectively “Liens”) with respect to the issuance thereof.  As of the Closing,
the Company shall have reserved from its duly authorized capital stock not less
than the sum of (i) 200% of the maximum number of Conversion Shares issuable
upon conversion of the Notes (assuming for purposes hereof that (x) the Notes
are convertible at the initial Conversion Price (as defined in the Notes) and
(y) any such conversion shall not take into account any limitations on the
conversion of the Notes set forth in the Notes), and (ii) 150% of the maximum
number of Warrant Shares initially issuable upon exercise of the Warrants
(without taking into account any limitations on the exercise of the Warrants set
forth therein).  Upon issuance or conversion in accordance with the Notes or
exercise in accordance with the Warrants (as the case may be), the Conversion
Shares and the Warrant Shares, respectively, when issued, will be validly
issued, fully paid and nonassessable and free from all preemptive or similar
rights or Liens with respect to the issue thereof, with the holders being
entitled to all rights accorded to a holder of Common Stock.  Subject to the
accuracy of the representations and warranties of the Buyers in this Agreement,
the offer and issuance by the Company of the Securities is exempt from
registration under the 1933 Act.  As of the six month anniversary of the Closing
Date, assuming the Company’s continued compliance with its filing obligations
under the 1934 Act, the Conversion Shares and, assuming a cashless exercise of
the Warrants, the Warrant Shares, in each case, shall be eligible to be resold
by each Buyer (assuming such Buyer is not then an affiliate of the Company)
pursuant to Rule 144.

(d)No Conflicts 

.  The execution, delivery and performance of the Transaction Documents by the
Company and its Subsidiaries and the consummation by the Company and its
Subsidiaries of the transactions contemplated hereby and thereby (including,
without limitation, the issuance of the Notes, the Warrants, the Conversion
Shares and the Warrant Shares and the reservation for issuance of the Conversion
Shares and the Warrant Shares) will not (i) result in a violation of the
Certificate of Incorporation (as defined below) (including, without limitation,
any certificate of designation contained therein), By-Laws (as defined below),
certificate of formation, memorandum of association, articles of association,
bylaws or other organizational documents of the Company or any of its
Subsidiaries, or any capital stock or other securities of the Company or any of
its Subsidiaries, (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) in any respect
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its Subsidiaries is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including, without limitation,
foreign, federal and state securities laws and regulations and the rules and
regulations of the Nasdaq Capital Market (the “Principal Market”) and including
all applicable foreign, federal and state laws, rules and regulations)
applicable to the Company or any of its Subsidiaries or by which any property or
asset of the Company or any of its Subsidiaries is bound or affected, assuming
in the case of the foregoing clauses (ii) and (iii), the making and receipt of
the Required Filings and Approvals.

(e)Consents 

.  Neither the Company nor any Subsidiary is required to obtain any consent
from, authorization or order of, or make any filing or registration with (other
than the Required Filings and Approvals), any Governmental Entity (as defined
below) or any regulatory or self-regulatory agency or any other Person in order
for it to execute, deliver or perform any of its respective obligations under or
contemplated by the Transaction Documents, in each case, in accordance with the
terms hereof or thereof.  All consents, authorizations, orders, filings and
registrations which the Company or any Subsidiary is required to obtain pursuant
to the preceding sentence other than the Stockholder Approval have been or will
be obtained or effected on or prior to the Closing Date, and neither the Company
nor any of its Subsidiaries are aware of any facts or circumstances which might
prevent the Company or any of its Subsidiaries from obtaining or effecting any
of the registration, application or filings contemplated by the Transaction
Documents, except as may result from Regulatory Scrutiny.  The Company is not in
violation of the requirements of the Principal Market and has no knowledge of
any facts or circumstances which could reasonably lead to delisting or
suspension of the Common Stock in the foreseeable future, other than as a result
of any investigation, inquiry, action, suit, proceeding, claim or other
regulatory action (any of the foregoing, “Trading Bubble Regulatory Scrutiny”)
taken in connection with the unusual volatility reflected in the trading price
of the Common Stock during the period from December 15 to and including the date
hereof (the “Trading Bubble”) or relating to Regulatory Scrutiny.  “Governmental
Entity” means any nation, state, county, city, town, village, district, or other
political jurisdiction of any nature, federal, state, local, municipal, foreign,
or other government, governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal), multi-national organization or body; or body
exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory, or taxing authority or power of any nature or
instrumentality of any of the foregoing, including any entity or enterprise
owned or controlled by a government or a public international organization or
any of the foregoing.

(f)Acknowledgment Regarding Buyer’s Purchase of Securities 

.  The Company acknowledges and agrees that each Buyer is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated hereby and thereby and that no Buyer is (i) an
officer or director of the Company or any of its Subsidiaries, (ii) an
“affiliate” (as defined in Rule 144) of the Company or any of its Subsidiaries
or (iii) to its knowledge, a “beneficial owner” of more than 10% of the shares
of Common Stock (as defined for purposes of Rule 13d-3 of the 1934 Act).  The
Company further acknowledges that no Buyer is acting as a financial advisor or
fiduciary of the Company or any of its Subsidiaries (or in any similar capacity)
with respect to the Transaction Documents and the transactions contemplated
hereby and thereby, and any advice given by a Buyer or any of its
representatives or agents in connection with the Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental to such
Buyer’s purchase of the Securities.  The Company further represents to each
Buyer that the Company’s and each Subsidiary’s decision to enter into the
Transaction Documents to which it is a party has been based solely on the
independent evaluation by the Company, each Subsidiary and their respective
representatives.

(g)No General Solicitation; Placement Agent’s Fees 

.  Neither the Company, nor any of its Subsidiaries or affiliates, nor any
Person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with the offer or sale of the Securities.  The Company shall be
responsible for the payment of any placement agent’s fees, financial advisory
fees, or brokers’ commissions (other than for Persons engaged by any Buyer or
its investment advisor) relating to or arising out of the transactions
contemplated hereby, including, without limitation, placement agent fees payable
to the Placement Agent in connection with the sale of the Securities.  The fees
and expenses of the Placement Agent and of Network1 Financial Securities Inc.
(“Network1”), to be paid by the Company or any of its Subsidiaries are as set
forth on Schedule 3(g) attached hereto.  The Company shall pay, and hold each
Buyer harmless against, any liability, loss or expense (including, without
limitation, attorney’s fees and out-of-pocket expenses) arising in connection
with any such claim.  The Company acknowledges that it has engaged the Placement
Agent and Network1 in connection with the sale of the Securities.  Other than
the Placement Agent and Network1, neither the Company nor any of its
Subsidiaries has engaged any placement agent or other agent in connection with
the offer or sale of the Securities.

 

(h)No Integrated Offering 

.  None of the Company, its Subsidiaries or any of their affiliates, nor any
Person acting on their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under
circumstances that would require registration of the issuance of any of the
Securities under the 1933 Act, whether through integration with prior offerings
or otherwise, or cause this offering of the Securities to require approval of
stockholders of the Company for purposes of the 1933 Act or under any applicable
stockholder approval provisions, including, without limitation, under the rules
and regulations of any exchange or automated quotation system on which any of
the securities of the Company are listed or designated for quotation.  None of
the Company, its Subsidiaries, their affiliates nor any Person acting on their
behalf will take any action or steps that would require registration of the
issuance of any of the Securities under the 1933 Act (other than pursuant to the
Registration Rights Agreement) or cause the offering of any of the Securities to
be integrated with other offerings of securities of the Company.

(i)Dilutive Effect 

.  The Company understands and acknowledges that the number of Conversion Shares
and Warrant Shares will increase in certain circumstances. The Company further
acknowledges that its obligation to issue the Conversion Shares pursuant to the
terms of the Notes in accordance with this Agreement and the Notes and the
Warrant Shares upon exercise of the Warrants in accordance with this Agreement,
the Notes and the Warrants is, in each case, absolute and unconditional
regardless of the dilutive effect that such issuance may have on the ownership
interests of other stockholders of the Company.

(j)Application of Takeover Protections; Rights Agreement 

.  The Company and its board of directors have taken all necessary action, if
any, in order to render inapplicable any control share acquisition, interested
stockholder, business combination, poison pill (including, without limitation,
any distribution under a rights agreement), stockholder rights plan or other
similar anti-takeover provision under the Certificate of Incorporation, Bylaws
or other organizational documents or the laws of the jurisdiction of its
incorporation or otherwise which is or could become applicable to any Buyer as a
result of the transactions contemplated by this Agreement, including, without
limitation, the Company’s issuance of the Securities and any Buyer’s ownership
of the Securities.  The Company and its board of directors have taken all
necessary action, if any, in order to render inapplicable any stockholder rights
plan or similar arrangement relating to accumulations of beneficial ownership of
shares of Common Stock or a change in control of the Company or any of its
Subsidiaries.

(k)SEC Documents; Financial Statements 

.  On March 13, 2017, the Company filed with the SEC an Offering Statement on
Form 1-A (File No. 024-10684), as subsequently amended (the “Offering
Statement”) and on November 3, 2017, the Company filed with the SEC
post-qualification offering circular Amendment No. 9 included in the Offering
Statement filed separately by the Company (the “Offering Circular”).  The
Company has filed all reports, schedules, forms, proxy statements, statements
and other documents (including, without limitation, the Offering Statement and
the Offering Circular) required to be filed by it with the SEC pursuant to (x)
from and after March 13, 2017, the rules and regulations of Regulation A
(“Regulation A”) of the 1933 Act and (y) from and after November 22, 2017, the
rules and regulations of the 1934 Act (all of the foregoing filed prior to the
date hereof and all exhibits and appendices included therein and financial
statements, notes and schedules thereto and documents incorporated by reference
therein being hereinafter referred to as the “SEC Documents”).  The Company has
delivered or has made available to the Buyers or their respective
representatives true, correct and complete copies of each of the SEC Documents
not available on the EDGAR system.  As of their respective dates, the SEC
Documents complied in all material respects with the requirements of Regulation
A and/or the 1934 Act, as applicable, and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.  As of
their respective dates, the financial statements of the Company included in the
SEC Documents complied in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto as in effect as of the time of filing.  Such financial statements have
been prepared in accordance with generally accepted accounting principles
(“GAAP”), consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments which will not be material, either individually or in the
aggregate).  No other information provided by or on behalf of the Company to any
of the Buyers which is not included in the SEC Documents (including, without
limitation, information referred to in Section 2(e) of this Agreement or in the
disclosure schedules to this Agreement) contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements therein not misleading, in the light of the circumstance under which
they are or were made.  The Company is not currently contemplating to amend or
restate any of the financial statements (including, without limitation, any
notes or any letter of the independent accountants of the Company with respect
thereto) included in the SEC Documents (the “Financial Statements”), nor is the
Company currently aware of facts or circumstances which would require the
Company to amend or restate any of the Financial Statements, in each case, in
order for any of the Financials Statements to be in compliance with GAAP and the
rules and regulations of the SEC.  The Company has not been informed by its
independent accountants that they recommend that the Company amend or restate
any of the Financial Statements or that there is any need for the Company to
amend or restate any of the Financial Statements.

(l)Absence of Certain Changes 

.  Since February 1, 2017, except as disclosed in the SEC Documents, 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 February 1, 2017, except as disclosed in the SEC
Documents, neither the Company nor any of its Subsidiaries has (i) declared or
paid any dividends, (ii) sold any assets, individually or in the aggregate,
outside of the ordinary course of business or (iii) made any capital
expenditures, individually or in the aggregate, outside of the ordinary course
of business.  Neither the Company nor any of its Subsidiaries has taken any
steps to seek protection pursuant to any law or statute relating to bankruptcy,
insolvency, reorganization, receivership, liquidation or winding up, nor does
the Company or any Subsidiary have any knowledge or reason to believe that any
of their respective creditors intend to initiate involuntary bankruptcy
proceedings or any actual knowledge of any fact which would reasonably lead a
creditor to do so.  The Company and its Subsidiaries, individually and on a
consolidated basis, are not as of the date hereof, and after giving effect to
the transactions contemplated hereby to occur at the Closing (and assuming,
solely for the purpose of this Section 3(l), that all Notes are simultaneously
converted, without regard to any limitations on conversion set forth therein, at
the Closing into shares of Common Stock), will not be Insolvent (as defined
below).  For purposes of this Section 3(l), “Insolvent” means, (i) with respect
to the Company and its Subsidiaries, on a consolidated basis, (A) the present
fair saleable value of the Company’s and its Subsidiaries’ assets is less than
the amount required to pay the Company’s and its Subsidiaries’ total
Indebtedness (as defined below), (B) the Company and its Subsidiaries are unable
to pay their debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured or (C) the Company and
its Subsidiaries intend to incur or believe that they will incur debts that
would be beyond their ability to pay as such debts mature; and (ii) with respect
to the Company and each Subsidiary, individually, (A) the present fair saleable
value of the Company’s or such Subsidiary’s (as the case may be) assets is less
than the amount required to pay its respective total Indebtedness, (B) the
Company or such Subsidiary (as the case may be) is unable to pay its respective
debts and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured or (C) the Company or such Subsidiary
(as the case may be) intends to incur or believes that it will incur debts that
would be beyond its respective ability to pay as such debts mature.  Neither the
Company nor any of its Subsidiaries has engaged in any business or in any
transaction, and is not about to engage in any business or in any transaction,
for which the Company’s or such Subsidiary’s remaining assets constitute
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted.

(m)No Undisclosed Events, Liabilities, Developments or Circumstances 

.  Except as set forth in the SEC Documents or as a result of the Trading Bubble
or Regulatory Scrutiny, no event, liability, development or circumstance has
occurred or exists, or is reasonably expected to exist or occur with respect to
the Company, any of its Subsidiaries or any of their respective businesses,
properties, liabilities, prospects, operations (including results thereof) or
condition (financial or otherwise), that (i) would be required to be disclosed
by the Company under applicable securities laws on a registration statement on
an Offering Statement on Form 1-A filed with the SEC relating to an issuance and
sale by the Company of its Common Stock and which has not been publicly
announced, (ii) could have a material adverse effect on any Buyer’s investment
hereunder or (iii) could have a Material Adverse Effect.  

(n)Conduct of Business; Regulatory Permits 

.  Neither the Company nor any of its Subsidiaries is in violation of any term
of or in default under its Certificate of Incorporation, any certificate of
designation, preferences or rights of any other outstanding series of preferred
stock of the Company or any of its Subsidiaries or Bylaws or their
organizational charter, certificate of formation, memorandum of association,
articles of association, Certificate of Incorporation or certificate of
incorporation or bylaws, respectively.  Neither the Company nor any of its
Subsidiaries is in violation of any judgment, decree or order or any statute,
ordinance, rule or regulation applicable to the Company or any of its
Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct
its business in violation of any of the foregoing, except in all cases for
possible violations which could not, individually or in the aggregate, have a
Material Adverse Effect.  Without limiting the generality of the foregoing, the
Company is not in violation of any of the rules, regulations or requirements of
the Principal Market and has no knowledge of any facts or circumstances that
could reasonably lead to delisting or suspension of the Common Stock by the
Principal Market in the foreseeable future except as may result from the Trading
Bubble or Regulatory Scrutiny.  During the two weeks prior to the date hereof,
(i) the Common Stock has been listed or designated for quotation on the
Principal Market, (ii) trading in the Common Stock has not been suspended by the
SEC or the Principal Market and (iii) the Company has received no communication,
written or oral, from the SEC or the Principal Market regarding the suspension
or delisting of the Common Stock from the Principal Market.  The Company and
each of its Subsidiaries possess all certificates, authorizations and permits
issued by the appropriate regulatory authorities necessary to conduct their
respective businesses, except where the failure to possess such certificates,
authorizations or permits would not have, individually or in the aggregate, a
Material Adverse Effect, and neither the Company nor any such Subsidiary has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.  There is no agreement,
commitment, judgment, injunction, order or decree binding upon the Company or
any of its Subsidiaries or to which the Company or any of its Subsidiaries is a
party which has or would reasonably be expected to have the effect of
prohibiting or materially impairing any business practice of the Company or any
of its Subsidiaries, any acquisition of property by the Company or any of its
Subsidiaries or the conduct of business by the Company or any of its
Subsidiaries as currently conducted other than such effects, individually or in
the aggregate, which have not had and would not reasonably be expected to have a
Material Adverse Effect on the Company or any of its Subsidiaries.  The Company
has no knowledge of any Regulatory Scrutiny or Trading Bubble Regulatory
Scrutiny directed at the Company, any of its Subsidiaries as of the date hereof
(and no Regulatory Scrutiny nor Trading Bubble Regulatory Scrutiny shall have
been directed at the Company, any of its Subsidiaries as of the Closing Date)
and no Adverse Cryptocurrency Industry Matters has adversely effected the
Company or any of its Subsidiaries as of the date hereof (nor will have any
Adverse Cryptocurrency Industry Matters adversely effect the Company or any of
its Subsidiaries as of the Closing Date).

(o)Foreign Corrupt Practices 

.  Neither the Company, the Company’s subsidiary or any director, officer,
agent, employee, nor any other person acting for or on behalf of the foregoing
(individually and collectively, a “Company Affiliate”) have violated the U.S.
Foreign Corrupt Practices Act (the “FCPA”) or any other applicable anti-bribery
or anti-corruption laws, nor has any Company Affiliate offered, paid, promised
to pay, or authorized the payment of any money, or offered, given, promised to
give, or authorized the giving of anything of value, to any officer, employee or
any other person acting in an official capacity for any Governmental Entity to
any political party or official thereof or to any candidate for political office
(individually and collectively, a “Government Official”) or to any person under
circumstances where such Company Affiliate knew or was aware of a high
probability that all or a portion of such money or thing of value would be
offered, given or promised, directly or indirectly, to any Government Official,
for the purpose of:

(i)(A) influencing any act or decision of such Government Official in his/her
official capacity, (B) inducing such Government Official to do or omit to do any
act in violation of his/her lawful duty, (C) securing any improper advantage, or
(D) inducing such Government Official to influence or affect any act or decision
of any Governmental Entity, or 

(ii)assisting the Company or its Subsidiaries in obtaining or retaining business
for or with, or directing business to, the Company or its Subsidiaries. 

(p)Transactions With Affiliates 

.  Except as set forth in the SEC Documents, since February 1, 2017 no current
or former employee, partner, director, officer or stockholder (direct or
indirect) of the Company or its Subsidiaries, or any associate, or, to the
knowledge of the Company, any affiliate of any thereof, or any relative with a
relationship no more remote than first cousin of any of the foregoing, is
presently, or has ever been, (i) a party to any transaction with the Company or
its Subsidiaries (including any contract, agreement or other arrangement
providing for the furnishing of services by, or rental of real or personal
property from, or otherwise requiring payments to, any such director, officer or
stockholder or such associate or affiliate or relative Subsidiaries (other than
for ordinary course services as employees, officers or directors of the Company
or any of its Subsidiaries)) or (ii) the direct or indirect owner of an interest
in any corporation, firm, association or business organization which is a
competitor, supplier or customer of the Company or its Subsidiaries (except for
a passive investment (direct or indirect) in less than 5% of the common stock of
a company whose securities are traded on or quoted through an Eligible Market
(as defined in the Notes)), nor does any such Person receive income from any
source other than the Company or its Subsidiaries which relates to the business
of the Company or its Subsidiaries or should properly accrue to the Company or
its Subsidiaries. Except as set forth in the SEC Documents, no employee,
officer, stockholder or director of the Company or any of its Subsidiaries or
member of his or her immediate family is indebted to the Company or its
Subsidiaries, as the case may be, nor is the Company or any of its Subsidiaries
indebted (or committed to make loans or extend or guarantee credit) to any of
them, other than (i) for payment of salary for services rendered, (ii)
reimbursement for reasonable expenses incurred on behalf of the Company, and
(iii) for other standard employee benefits made generally available to all
employees or executives (including stock option agreements outstanding under any
stock option plan approved by the Board of Directors of the Company).

(q)Equity Capitalization.   

(i)Definitions:   

(A)“Common Stock” means (x) the Company’s shares of common stock class A, par
value $0.00001 per share, and (y) any capital stock into which such common stock
shall have been changed or any share capital resulting from a reclassification
of such common stock.   

(B)“Class B Common Stock” means (x) the Company’s shares of common stock class
B, par value $0.00001 per share, and (y) any capital stock into which such
common stock shall have been changed or any share capital resulting from a
reclassification of such common stock.   

(C)“Class C Common Stock” means (x) the Company’s shares of common stock class
B, par value $0.00001 per share, and (y) any capital stock into which such
common stock shall have been changed or any share capital resulting from a
reclassification of such common stock.   

(ii)Authorized and Outstanding Capital Stock.  As of the date hereof, the
authorized capital stock of the Company consists of (A) 100,000,000 shares of
Common Stock, of which, 44,040,989 are issued and outstanding and 39,834 shares
are reserved for issuance pursuant to Convertible Securities (as defined below)
(other than the Notes and the Warrants) exercisable or exchangeable for, or
convertible into, shares of Common Stock, (B) 75,000,000 shares of Class B
Common Stock, 30,000,000 of which are issued and outstanding and (C) 25,000,000
shares of Class C Common Stock, none of which are issued and outstanding and.
   

(iii)Valid Issuance; Available Shares; Affiliates.  All of such outstanding
shares are duly authorized and have been, or upon issuance will be, validly
issued and are fully paid and nonassessable.  Schedule 3(r)(iii) sets forth the
number of shares of Common Stock that are (A) reserved for issuance pursuant to
Convertible Securities (as defined below) (other than the Notes and the
Warrants) and (B) that are, as of the date hereof, owned by Persons who are
“affiliates” (as defined in Rule 405 of the 1933 Act and calculated based on the
assumption that only officers, directors and holders of at least 10% of the
Company’s issued and outstanding Common Stock are “affiliates” without conceding
that any such Persons are “affiliates” for purposes of federal securities laws)
of the Company or any of its Subsidiaries.  Except as disclosed in the SEC
Documents, to the Company’s knowledge, no Person owns 10% or more of the
Company’s issued and outstanding shares of Common Stock (calculated based on the
assumption that all Convertible Securities (as defined below), whether or not
presently exercisable or convertible, have been fully exercised or converted (as
the case may be) taking account of any limitations on exercise or conversion
(including “blockers”) contained therein without conceding that such identified
Person is a 10% stockholder for purposes of federal securities laws).  

(iv)Existing Securities; Obligations.  Except as disclosed in the SEC Documents:
(A) none of the Company’s or any Subsidiary’s shares, interests or capital stock
is subject to preemptive rights or any other similar rights or Liens suffered or
permitted by the Company or any Subsidiary; (B) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or
exercisable or exchangeable for, any shares, interests or capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares, interests or capital stock of the Company or
any of its Subsidiaries or options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into, or exercisable or exchangeable for, any shares,
interests or capital stock of the Company or any of its Subsidiaries; (C) there
are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of their securities under
the 1933 Act (except pursuant to the Registration Rights Agreement); (D) there
are no outstanding securities or instruments of the Company or any of its
Subsidiaries which contain any redemption or similar provisions, and there are
no contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to redeem a security of the
Company or any of its Subsidiaries; (E) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Securities; and (F) neither the Company nor any Subsidiary has
any stock appreciation rights or “phantom stock” plans or agreements or any
similar plan or agreement. 

(v)Organizational Documents.  The Company has furnished to the Buyers true,
correct and complete copies of the Company’s Certificate of Incorporation, as
amended and as in effect on the date hereof (the “Certificate of
Incorporation”), and the Company’s bylaws, as amended and as in effect on the
date hereof (the “Bylaws”), and the terms of all Convertible Securities and the
material rights of the holders thereof in respect thereto.  

(r)Indebtedness and Other Contracts 

.  Neither the Company nor any of its Subsidiaries, (i) except as disclosed on
Schedule 3(r), has any outstanding debt securities, notes, credit agreements,
credit facilities or other agreements, documents or instruments evidencing
Indebtedness of the Company or any of its Subsidiaries or by which the Company
or any of its Subsidiaries is or may become bound, (ii) is a party to any
contract, agreement or instrument, the violation of which, or default under
which, by the other party(ies) to such contract, agreement or instrument could
reasonably be expected to result in a Material Adverse Effect, (iii) has any
financing statements securing obligations in any amounts filed in connection
with the Company or any of its Subsidiaries; (iv) is in violation of any term
of, or in default under, any contract, agreement or instrument relating to any
Indebtedness, except where such violations and defaults would not result,
individually or in the aggregate, in a Material Adverse Effect, or (v) is a
party to any contract, agreement or instrument relating to any Indebtedness, the
performance of which, in the judgment of the Company’s officers, has or is
expected to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries have any liabilities or obligations required to be disclosed in the
SEC Documents which are not so disclosed in the SEC Documents, other than those
incurred in the ordinary course of the Company’s or its Subsidiaries’ respective
businesses and which, individually or in the aggregate, do not or could not have
a Material Adverse Effect.   For purposes of this Agreement:  (x) “Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed
money, (B) all obligations issued, undertaken or assumed as the deferred
purchase price of property or services (including, without limitation, “capital
leases” in accordance with GAAP) (other than trade payables entered into in the
ordinary course of business consistent with past practice), (C) all
reimbursement or payment obligations with respect to letters of credit, surety
bonds and other similar instruments, (D) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or businesses,
(E) all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case with respect
to any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property), (F) all
monetary obligations under any leasing or similar arrangement which, in
connection with GAAP, consistently applied for the periods covered thereby, is
classified as a capital lease, (G) all indebtedness referred to in clauses (A)
through (F) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in any property or assets (including accounts and contract rights) owned by any
Person, even though the Person which owns such assets or property has not
assumed or become liable for the payment of such indebtedness, and (H) all
Contingent Obligations in respect of indebtedness or obligations of others of
the kinds referred to in clauses (A) through (G) above; and (y) “Contingent
Obligation” means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any Indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent
of the Person incurring such liability, or the primary effect thereof, is to
provide assurance to the obligee of such liability that such liability will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such liability will be protected (in whole or in
part) against loss with respect thereto.

(s)Litigation 

.  There is no action, suit, arbitration, proceeding, inquiry or investigation
before or by the Principal Market, any court, public board, other Governmental
Entity, self-regulatory organization or body pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries,
the Common Stock or any of the Company’s or its Subsidiaries’ officers or
directors , whether of a civil or criminal nature or otherwise, in their
capacities as such, except as set forth in Schedule 3(t).  No director, officer
or employee of the Company or any of its subsidiaries has willfully violated 18
U.S.C. §1519 or engaged in spoliation in reasonable anticipation of litigation.
 Without limitation of the foregoing, there has not been, and to the knowledge
of the Company, there is not pending or contemplated, any investigation by the
SEC involving the Company, any of its Subsidiaries or any current or former
director or officer of the Company or any of its Subsidiaries.  The SEC has not
issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company under the 1933 Act or the 1934 Act.
 Neither the Company nor any of its Subsidiaries is subject to any order, writ,
judgment, injunction, decree, determination or award of any Governmental Entity.

(t)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 and its
Subsidiaries believe that their relations with their 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) does not subject the Company or any of its
Subsidiaries to any liability with respect to any of the foregoing matters.  The
Company and its Subsidiaries are in compliance with all federal, state, local
and foreign laws and regulations respecting labor, employment and employment
practices and benefits, terms and conditions of employment and wages and hours,
except where failure to be in compliance would not, either individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect.

(u)Title.  

(i)Real Property.  Each of the Company and its Subsidiaries holds good title to
all real property, leases in real property, facilities or other interests in
real property owned or held by the Company or any of its Subsidiaries (the “Real
Property”) owned by the Company or any of its Subsidiaries (as applicable). The
Real Property is free and clear of all Liens and is not subject to any rights of
way, building use restrictions, exceptions, variances, reservations, or
limitations of any nature except for (a) Liens for current taxes not yet due and
(b) zoning laws and other land use restrictions that do not impair the present
or anticipated use of the property subject thereto.  Any Real Property held
under lease by the Company or any of its Subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company or any of its Subsidiaries.   

(ii)Fixtures and Equipment.  Each of the Company and its Subsidiaries (as
applicable) has good title to, or a valid leasehold interest in, the tangible
personal property, equipment, improvements, fixtures, and other personal
property and appurtenances that are used by the Company or its Subsidiary in
connection with the conduct of its business (the “Fixtures and Equipment”). The
Fixtures and Equipment are structurally sound, are in good operating condition
and repair, are adequate for the uses to which they are being put, are not in
need of maintenance or repairs except for ordinary, routine maintenance and
repairs and are sufficient for the conduct of the Company’s and/or its
Subsidiaries’ businesses (as applicable) in the manner as conducted prior to the
Closing. Each of the Company and its Subsidiaries owns all of its Fixtures and
Equipment free and clear of all Liens except for (a) liens for current taxes not
yet due and (b) zoning laws and other land use restrictions that do not impair
the present or anticipated use of the property subject thereto. 

(v)Intellectual Property Rights 

.  The Company and its Subsidiaries own or possess adequate rights or licenses
to use all trademarks, trade names, service marks, service mark registrations,
service names, original works of authorship, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and
other intellectual property rights and all applications and registrations
therefor (“Intellectual Property Rights”) necessary to conduct their respective
businesses as now conducted and presently proposed to be conducted.  Except as
set forth in Schedule 3(x)(ii), none of the Company’s Intellectual Property
Rights have expired or terminated or have been abandoned or are expected to
expire or terminate or are expected to be abandoned, within three years from the
date of this Agreement.  The Company does not have any knowledge of any
infringement by the Company or its Subsidiaries of Intellectual Property Rights
of others.  There is no claim, action or proceeding being made or brought, or to
the knowledge of the Company or any of its Subsidiaries, being threatened,
against the Company or any of its Subsidiaries regarding its Intellectual
Property Rights.  Neither the Company nor any of its Subsidiaries is aware of
any facts or circumstances that could reasonably be expected to give rise to any
of the foregoing infringements or claims, actions or proceedings.  The Company
and its Subsidiaries have taken reasonable security measures to protect the
secrecy, confidentiality and value of all of their Intellectual Property Rights.

(w)Environmental Laws 

(i).  (i) The Company and its Subsidiaries (A) are in compliance with any and
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.
 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. 

(ii)No Hazardous Materials: 

(A)have been disposed of or otherwise released from any Real Property of the
Company or any of its Subsidiaries in violation of any Environmental Laws; or 

(B)are present on, over, beneath, in or upon a Real Property or any portion
thereof in quantities that would constitute a violation of any Environmental
Laws.  No prior use by the Company or any of its Subsidiaries of any Real
Property has occurred that violates any Environmental Laws, which violation
would have a material adverse effect on the business of the Company or any of
its Subsidiaries. 

(iii)Neither the Company nor any of its Subsidiaries knows of any other person
who or entity which has stored, treated, recycled, disposed of or otherwise
located on any Real Property any Hazardous Materials, including, without
limitation, such substances as asbestos and polychlorinated biphenyls. 

(iv)None of the Real Property are on any federal or state “Superfund” list or
Liability Information System (“CERCLIS”) list or any state environmental agency
list of sites under consideration for CERCLIS, nor subject to any environmental
related Liens. 

(x)Subsidiary Rights 

.  The Company or one of its Subsidiaries has the unrestricted right to vote,
and (subject to limitations imposed by applicable law) to receive dividends and
distributions on, all capital securities of its Subsidiaries as owned by the
Company or such Subsidiary.

(y)Tax Status 

.  Except as described on Schedule 3(y) attached hereto, the Company and each of
its Subsidiaries (i) has timely made or filed all foreign, federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject, (ii) has timely paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and (iii) has set aside on its books provision
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply.  There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company and its Subsidiaries know of
no basis for any such claim.  The Company is not operated in such a manner as to
qualify as a passive foreign investment company, as defined in Section 1297 of
the Code.

(z)Off Balance Sheet Arrangements 

.  There is no transaction, arrangement, or other relationship between the
Company or any of its Subsidiaries and an unconsolidated or other off balance
sheet entity that is required to be disclosed by the Company in its Regulation A
and/or 1934 Act filings, as applicable, and is not so disclosed or that
otherwise could be reasonably likely to have a Material Adverse Effect.

(aa)Investment Company Status 

.  The Company is not, and upon consummation of the sale of the Securities will
not be, an “investment company,” an affiliate of an “investment company,” a
company controlled by an “investment company” or an “affiliated person” of, or
“promoter” or “principal underwriter” for, an “investment company” as such terms
are defined in the Investment Company Act of 1940, as amended.

(bb)Acknowledgement Regarding Buyers’ Trading Activity 

.  Except as provided in Section 4(aa) below, it is understood and acknowledged
by the Company that (i) following the public disclosure of the transactions
contemplated by the Transaction Documents, in accordance with the terms thereof,
none of the Buyers have been asked by the Company or any of its Subsidiaries to
agree, nor has any Buyer agreed with the Company or any of its Subsidiaries, to
desist from effecting any transactions in or with respect to (including, without
limitation, purchasing or selling, long and/or short) any securities of the
Company, or “derivative” securities based on securities issued by the Company or
to hold any of the Securities for any specified term; (ii) any Buyer, and
counterparties in “derivative” transactions to which any such Buyer is a party,
directly or indirectly, presently may have a “short” position in the Common
Stock which was established prior to such Buyer’s knowledge of the transactions
contemplated by the Transaction Documents; and (iii) each Buyer shall not be
deemed to have any affiliation with or control over any arm’s length
counterparty in any “derivative” transaction.  Except as provided in Section
4(aa) below, the Company further understands and acknowledges that following the
public disclosure of the transactions contemplated by the Transaction Documents
pursuant to the Press Release (as defined below) one or more Buyers may engage
in hedging and/or trading activities (including, without limitation, the
location and/or reservation of borrowable shares of Common Stock) at various
times during the period that the Securities are outstanding, including, without
limitation, during the periods that the value and/or number of the Warrant
Shares or Conversion Shares, as applicable, deliverable with respect to the
Securities are being determined and such hedging and/or trading activities
(including, without limitation, the location and/or reservation of borrowable
shares of Common Stock), if any, can reduce the value of the existing
stockholders’ equity interest in the Company both at and after the time the
hedging and/or trading activities are being conducted.  The Company acknowledges
that such aforementioned hedging and/or trading activities do not constitute a
breach of this Agreement, the Notes, the Warrants or any other Transaction
Document or any of the documents executed in connection herewith or therewith.

(cc)Manipulation of Price 

.  Neither the Company nor any of its Subsidiaries has, and, to the knowledge of
the Company, no Person acting on their behalf has, directly or indirectly, (i)
taken any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company or any of its
Subsidiaries to facilitate the sale or resale of any of the Securities, (ii)
sold, bid for, purchased, or paid any compensation for soliciting purchases of,
any of the Securities (other than the Placement Agent), (iii) paid or agreed to
pay to any Person any compensation for soliciting another to purchase any other
securities of the Company or any of its Subsidiaries or (iv) paid or agreed to
pay any Person for research services with respect to any securities of the
Company or any of its Subsidiaries.

(dd)U.S. Real Property Holding Corporation 

.  Neither the Company nor any of its Subsidiaries is, or has ever been, and so
long as any of the Securities are held by any of the Buyers, shall become, a
U.S. real property holding corporation within the meaning of Section 897 of the
Code, and the Company and each Subsidiary shall so certify upon any Buyer’s
request.

(ee)Transfer Taxes 

.  On the Closing Date, all stock transfer or other taxes (other than income or
similar taxes) which are required to be paid in connection with the issuance,
sale and transfer of the Securities to be sold to each Buyer hereunder will be,
or will have been, fully paid or provided for by the Company, and all laws
imposing such taxes will be or will have been complied with.

(ff)Bank Holding Company Act 

.  Neither the Company nor any of its Subsidiaries is subject to the Bank
Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the
Board of Governors of the Federal Reserve System (the “Federal Reserve”).
 Neither the Company nor any of its Subsidiaries or affiliates owns or controls,
directly or indirectly, five percent (5%) or more of the outstanding shares of
any class of voting securities or twenty-five percent (25%) or more of the total
equity of a bank or any entity that is subject to the BHCA and to regulation by
the Federal Reserve.  Neither the Company nor any of its Subsidiaries or
affiliates exercises a controlling influence over the management or policies of
a bank or any entity that is subject to the BHCA and to regulation by the
Federal Reserve.

(gg)Shell Company Status 

.  The Company is not, and has never been, an issuer identified in, or subject
to, Rule 144(i).

(hh)Illegal or Unauthorized Payments; Political Contributions 

.  Neither the Company nor any of its Subsidiaries nor, to the best of the
Company’s knowledge (after reasonable inquiry of its officers and directors),
any of the officers, directors, employees, agents or other representatives of
the Company or any of its Subsidiaries or any other business entity or
enterprise with which the Company or any Subsidiary is or has been affiliated or
associated, has, directly or indirectly, made or authorized any payment,
contribution or gift of money, property, or services, whether or not in
contravention of applicable law, (i) as a kickback or bribe to any Person or
(ii) to any political organization, or the holder of or any aspirant to any
elective or appointive public office except for personal political contributions
not involving the direct or indirect use of funds of the Company or any of its
Subsidiaries.

(ii)Money Laundering 

.  The Company and its Subsidiaries are in compliance with, and have not
previously violated, the USA Patriot Act of 2001 and all other applicable U.S.
and non-U.S. anti-money laundering laws and regulations, including, without
limitation, the laws, regulations and Executive Orders and sanctions programs
administered by the U.S. Office of Foreign Assets Control, including, but not
limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any
regulations contained in 31 CFR, Subtitle B, Chapter V.

(jj)Management 

.  Except as set forth in Schedule 3(nn) hereto, during the past five year
period, no current or former officer or director or, to the knowledge of the
Company, no current ten percent (10%) or greater stockholder of the Company or
any of its Subsidiaries has been the subject of:

(i)a petition under bankruptcy laws or any other insolvency or moratorium law or
the appointment by a court of a receiver, fiscal agent or similar officer for
such Person, or any partnership in which such person was a general partner at or
within two years before the filing of such petition or such appointment, or any
corporation or business association of which such person was an executive
officer at or within two years before the time of the filing of such petition or
such appointment; 

(ii)a conviction in a criminal proceeding or a named subject of a pending
criminal proceeding (excluding traffic violations that do not relate to driving
while intoxicated or driving under the influence); 

(iii)any order, judgment or decree, not subsequently reversed, suspended or
vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining any such person from, or otherwise limiting, the following
activities: 

(1)Acting as a futures commission merchant, introducing broker, commodity
trading advisor, commodity pool operator, floor broker, leverage transaction
merchant, any other person regulated by the United States Commodity Futures
Trading Commission or an associated person of any of the foregoing, or as an
investment adviser, underwriter, broker or dealer in securities, or as an
affiliated person, director or employee of any investment company, bank, savings
and loan association or insurance company, or engaging in or continuing any
conduct or practice in connection with such activity; 

(2)Engaging in any particular type of business practice; or 

(3)Engaging in any activity in connection with the purchase or sale of any
security or commodity or in connection with any violation of securities laws or
commodities laws; 

(iv)any order, judgment or decree, not subsequently reversed, suspended or
vacated, of any authority barring, suspending or otherwise limiting for more
than sixty (60) days the right of any such person to engage in any activity
described in the preceding sub paragraph, or to be associated with persons
engaged in any such activity; 

(v)a finding by a court of competent jurisdiction in a civil action or by the
SEC or other authority to have violated any securities law, regulation or decree
and the judgment in such civil action or finding by the SEC or any other
authority has not been subsequently reversed, suspended or vacated; or 

(vi)a finding by a court of competent jurisdiction in a civil action or by the
Commodity Futures Trading Commission to have violated any federal commodities
law, and the judgment in such civil action or finding has not been subsequently
reversed, suspended or vacated. 

(kk)No Disagreements with Accountants and Lawyers 

(a).  There are no material disagreements of any kind presently existing, or
reasonably anticipated by the Company to arise, between the Company and the
accountants and lawyers formerly or presently employed by the Company and the
Company is current with respect to any fees owed to its accountants and lawyers
which could affect the Company’s ability to perform any of its obligations under
any of the Transaction Documents.  In addition, the Company has no reason to
believe that it will need to restate any such financial statements or any part
thereof. 

(ll)No Disqualification Events 

(b).  With respect to Securities to be offered and sold hereunder in reliance on
Rule 506(b) under the 1933 Act (“Regulation D Securities”), none of the Company,
any of its predecessors, any affiliated issuer, any director, executive officer,
other officer of the Company participating in the offering contemplated hereby,
any beneficial owner of 20% or more of the Company’s outstanding voting equity
securities, calculated on the basis of voting power, nor any promoter (as that
term is defined in Rule 405 under the 1933 Act) connected with the Company in
any capacity at the time of sale (each, an “Issuer Covered Person” and,
together, “Issuer Covered Persons”) is subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a
“Disqualification Event”), except for a Disqualification Event covered by Rule
506(d)(2) or (d)(3). The Company has exercised reasonable care to determine
whether any Issuer Covered Person is subject to a Disqualification Event.  The
Company has complied, to the extent applicable, with its disclosure obligations
under Rule 506(e), and has furnished to the Buyers a copy of any disclosures
provided thereunder. 

(mm)Other Covered Persons 

(c).  The Company is not aware of any Person (other than the Placement Agent)
that has been or will be paid (directly or indirectly) remuneration for
solicitation of Buyers or potential purchasers in connection with the sale of
any Regulation D Securities. 

(nn)No Additional Agreements 

.  The Company does not have any agreement or understanding with any Buyer with
respect to the transactions contemplated by the Transaction Documents other than
as specified in the Transaction Documents.

(oo)Public Utility Holding Act 

.  None of the Company nor any of its Subsidiaries is a “holding company,” or an
“affiliate” of a “holding company,” as such terms are defined in the Public
Utility Holding Act of 2005.

(pp)Federal Power Act 

.  None of the Company nor any of its Subsidiaries is subject to regulation as a
“public utility” under the Federal Power Act, as amended.

(qq)Ranking of Notes 

.  No Indebtedness of the Company, at the Closing, will be senior to, or pari
passu with, the Notes in right of payment, whether with respect to payment or
redemptions, interest, damages, upon liquidation or dissolution or otherwise.

(rr)Disclosure 

.  The Company confirms that neither it nor any other Person acting on its
behalf has provided any of the Buyers or their agents or counsel with any
information that constitutes or could reasonably be expected to constitute
material, non-public information concerning the Company or any of its
Subsidiaries, other than the existence of the transactions contemplated by this
Agreement and the other Transaction Documents.  The Company understands and
confirms that each of the Buyers will rely on the foregoing representations in
effecting transactions in securities of the Company.  All disclosure provided to
the Buyers regarding the Company and its Subsidiaries, their businesses and the
transactions contemplated hereby, including the schedules to this Agreement,
furnished by or on behalf of the Company or any of its Subsidiaries is true and
correct and does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
 All of the written information furnished after the date hereof by or on behalf
of the Company or any of its Subsidiaries to each Buyer pursuant to or in
connection with this Agreement and the other Transaction Documents, taken as a
whole, will be true and correct in all material respects as of the date on which
such information is so provided and will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.  Each press release issued by the Company or any of its
Subsidiaries during the twelve (12) months preceding the date of this Agreement
did not at the time of release contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading.  To the Company’s knowledge, no event or
circumstance has occurred or information exists with respect to the Company or
any of its Subsidiaries or its or their business, properties, liabilities,
prospects, operations (including results thereof) or conditions (financial or
otherwise), which, under applicable law, rule or regulation, requires public
disclosure at or before the date hereof or announcement by the Company but which
has not been so publicly disclosed other than relating to the Trading Bubble and
potential Regulatory Scrutiny.  The Company acknowledges and agrees that no
Buyer makes or has made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Section 2.

4.COVENANTS. 

(a)Best Efforts 

.  Each Buyer shall use its best efforts to timely satisfy each of the covenants
hereunder and conditions to be satisfied by it as provided in Section 6 of this
Agreement. The Company shall use its best efforts to timely satisfy each of the
covenants hereunder and conditions to be satisfied by it as provided in Section
7 of this Agreement.

(b)Form D and Blue Sky 

.  The Company shall file a Form D with respect to the Securities as required
under Regulation D and to provide a copy thereof to each Buyer promptly after
such filing.  The Company shall, on or before the Closing Date, take such action
as the Company shall reasonably determine is necessary in order to obtain an
exemption for, or to, qualify the Securities for sale to the Buyers at the
Closing pursuant to this Agreement under applicable securities or “Blue Sky”
laws of the states of the United States (or to obtain an exemption from such
qualification), and shall provide evidence of any such action so taken to the
Buyers on or prior to the Closing Date.  Without limiting any other obligation
of the Company under this Agreement, the Company shall timely make all filings
and reports relating to the offer and sale of the Securities required under all
applicable securities laws (including, without limitation, all applicable
federal securities laws and all applicable “Blue Sky” laws), and the Company
shall comply with all applicable foreign, federal, state and local laws,
statutes, rules, regulations and the like relating to the offering and sale of
the Securities to the Buyers.

(c)Reporting Status 

.  Until the date on which the Buyers shall have sold all of the Registrable
Securities (the “Reporting Period”), the Company shall timely file all reports
required to be filed with the SEC pursuant to the 1934 Act, and the Company
shall not terminate its status as an issuer required to file reports under the
1934 Act even if the 1934 Act or the rules and regulations thereunder would no
longer require or otherwise permit such termination.  

(d)Use of Proceeds 

.  The Company will use the proceeds from the sale of the Securities (less fees
and expenses of counsel for the Company and the fees and expenses of the
Placement Agent and Network1) for general corporate purposes, but not, directly
or indirectly, for (i) except as set forth on Schedule 4(d), the satisfaction of
any indebtedness of the Company or any of its Subsidiaries, (ii) the redemption
or repurchase of any securities of the Company or any of its Subsidiaries, or
(iii) the settlement of any outstanding litigation.

(e)Financial Information 

.  The Company agrees to send the following to each Investor (as defined in the
Registration Rights Agreement) during the Reporting Period (i) unless the
following are filed with the SEC through EDGAR and are available to the public
through the EDGAR system, within one (1) Business Day after the filing thereof
with the SEC, a copy of its Annual Reports on Form 10-K and Quarterly Reports on
Form 10-Q, any interim reports or any consolidated balance sheets, income
statements, stockholders’ equity statements and/or cash flow statements for any
period other than annual, any Current Reports on Form 8-K and any registration
statements (other than on Form S-8) or amendments filed pursuant to the 1933
Act, (ii) unless the following are either filed with the SEC through EDGAR or
are otherwise widely disseminated via a recognized news release service (such as
PR Newswire), on the same day as the release thereof, facsimile copies of all
press releases issued by the Company or any of its Subsidiaries and (iii) unless
the following are filed with the SEC through EDGAR, copies of any notices and
other information made available or given to the stockholders of the Company
generally, contemporaneously with the making available or giving thereof to the
stockholders.

(f)Listing 

.  The Company shall promptly secure the listing or designation for quotation
(as the case may be) of all of the 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 the Principal Market, The New York Stock Exchange, the NYSE American,
the Nasdaq Capital Market, the Nasdaq Global Market or the Nasdaq Global Select
Market (each, an “Eligible Market”).  Neither the Company nor any of its
Subsidiaries shall take any action which could be reasonably expected to result
in the delisting or suspension of the Common Stock on an Eligible Market.  The
Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section 4(f).

(g)Fees 

.  The Company shall reimburse the lead Buyer for all costs and expenses
incurred by it or its affiliates in connection with the structuring,
documentation, negotiation and closing of the transactions contemplated by the
Transaction Documents (including, without limitation, as applicable, all
reasonable legal fees of outside counsel and disbursements of Kelley Drye &
Warren LLP, counsel to the lead Buyer, any other reasonable fees and expenses in
connection with the structuring, documentation, negotiation and closing of the
transactions contemplated by the Transaction Documents and due diligence and
regulatory filings in connection therewith) (the “Transaction Expenses”) and
shall be withheld by the lead Buyer from its Purchase Price at the Closing, less
$25,000 previously paid by the Company to Kelley Drye & Warren LLP; provided,
that the Company shall promptly reimburse Kelley Drye & Warren LLP on demand for
all Transaction Expenses not so reimbursed through such withholding at the
Closing.  The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, transfer agent fees, DTC (as defined
below) fees or broker’s commissions (other than for Persons engaged by any
Buyer) relating to or arising out of the transactions contemplated hereby
(including, without limitation, any fees or commissions payable to the Placement
Agent, who is the Company’s sole placement agent in connection with the
transactions contemplated by this Agreement).  The Company shall pay, and hold
each Buyer harmless against, any liability, loss or expense (including, without
limitation, reasonable attorneys’ fees and out-of-pocket expenses) arising in
connection with any claim relating to any such payment.  Except as otherwise set
forth in the Transaction Documents, each party to this Agreement shall bear its
own expenses in connection with the sale of the Securities to the Buyers.

(h)Pledge of Securities 

.  Notwithstanding anything to the contrary contained in this Agreement, the
Company acknowledges and agrees that the Securities may be pledged by an
Investor in connection with a bona fide margin agreement or other loan or
financing arrangement that is secured by the Securities.  The pledge of
Securities shall not be deemed to be a transfer, sale or assignment of the
Securities hereunder, and no Investor effecting a pledge of Securities shall be
required to provide the Company with any notice thereof or otherwise make any
delivery to the Company pursuant to this Agreement or any other Transaction
Document, including, without limitation, Section 2(g) hereof; provided that an
Investor and its pledgee shall be required to comply with the provisions of
Section 2(g) hereof in order to effect a sale, transfer or assignment of
Securities to such pledgee.  The Company hereby agrees to execute and deliver
such documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by a Buyer.

(i)Disclosure of Transactions and Other Material Information 

.  

(i)Disclosure of Transaction.  The Company shall, on or before 9:30 a.m., New
York time, on the first (1st) Business Day after the date of this Agreement,
issue a press release (the “Press Release”) reasonably acceptable to the Buyers
disclosing all the material terms of the transactions contemplated by the
Transaction Documents.  On or before 9:30 a.m., New York time, on the first
(1st) Business Day after the date of this Agreement, the Company shall file a
Current Report on Form 8-K describing all the material terms of the transactions
contemplated by the Transaction Documents in the form required by the 1934 Act
and attaching all the material Transaction Documents (including, without
limitation, this Agreement (and all schedules to this Agreement), the form of
Notes, the form of Investor Note, the form of the Warrants, the form of
Guaranties, the form of Security Documents, the form of the Voting and Lockup
Agreement, the form of the Registration Rights Agreement, the form of Master
Netting Agreement and the form of Note Purchase Agreement) (including all
attachments, the “8-K Filing”).  From and after the filing of the 8-K Filing,
the Company shall have disclosed all material, non-public information (if any)
provided to any of the Buyers by the Company or any of its Subsidiaries or any
of their respective officers, directors, employees or agents in connection with
the transactions contemplated by the Transaction Documents.  In addition,
effective upon the filing of the 8-K Filing, the Company acknowledges and agrees
that any and all confidentiality or similar obligations under any agreement,
whether written or oral, between the Company, any of its Subsidiaries or any of
their respective officers, directors, affiliates, employees or agents, on the
one hand, and any of the Buyers or any of their affiliates, on the other hand,
shall terminate.   

(ii)Limitations on Disclosure.  The Company shall not, and the Company shall
cause each of its Subsidiaries and each of its and their respective officers,
directors, employees and agents not to, provide any Buyer with any material,
non-public information regarding the Company or any of its Subsidiaries from and
after the date hereof without the express prior written consent of such Buyer
(which may be granted or withheld in such Buyer’s sole discretion).  In the
event of a breach of any of the foregoing covenants or any of the covenants or
agreements contained in any other Transaction Document, by the Company, any of
its Subsidiaries, or any of its or their respective officers, directors,
employees and agents (as determined in the reasonable good faith judgment of
such Buyer), in addition to any other remedy provided herein or in the
Transaction Documents, such Buyer shall have the right to make a public
disclosure, in the form of a press release, public advertisement or otherwise,
of such breach or such material, non-public information, as applicable, without
the prior approval by the Company, any of its Subsidiaries, or any of its or
their respective officers, directors, employees or agents.  No Buyer shall have
any liability to the Company, any of its Subsidiaries, or any of its or their
respective officers, directors, employees, affiliates, stockholders or agents,
for any such disclosure.  To the extent that the Company delivers any material,
non-public information to a Buyer without such Buyer’s consent, the Company
hereby covenants and agrees that such Buyer shall not have any duty of
confidentiality with respect to, or a duty not to trade on the basis of, such
material, non-public information.  Subject to the foregoing, neither the
Company, its Subsidiaries nor any Buyer shall issue any press releases or any
other public statements with respect to the transactions contemplated hereby;
provided, however, the Company shall be entitled, without the prior approval of
any Buyer, to make the Press Release and any press release or other public
disclosure with respect to such transactions (i) in substantial conformity with
the 8-K Filing and contemporaneously therewith and (ii) as is required by
applicable law and regulations (provided that in the case of clause (i) each
Buyer shall be consulted by the Company in connection with any such press
release or other public disclosure prior to its release).  Without the prior
written consent of the applicable Buyer (which may be granted or withheld in
such Buyer’s sole discretion), the Company shall not (and shall cause each of
its Subsidiaries and affiliates to not) disclose the name of such Buyer in any
filing, announcement, release or otherwise, except as such disclosure may be
required by applicable law including, without limitation, in the 8-K Filing.
 Notwithstanding anything contained in this Agreement to the contrary and
without implication that the contrary would otherwise be true, the Company
expressly acknowledges and agrees that no Buyer shall have (unless expressly
agreed to by a particular Buyer after the date hereof in a written definitive
and binding agreement executed by the Company and such particular Buyer (it
being understood and agreed that no Buyer may bind any other Buyer with respect
thereto)), any duty of confidentiality with respect to, or a duty not to trade
on the basis of, any material, non-public information regarding the Company or
any of its Subsidiaries. Each Buyer further acknowledges that the Company shall
not be deemed to violate this Section 4(i) by disclosing the name of any Buyer
that beneficially owns more than 4.99% of the Common Stock of the Company in
accordance with the disclosure made by such Buyer in any Schedule 13D or
Schedule 13G filed by such Buyer with the SEC. 

(iii)Other Confidential Information.  Disclosure Failures; Disclosure Delay
Payments.  In addition to other remedies set forth in this Section 4(i), and
without limiting anything set forth in any other Transaction Document, at any
time after the Closing Date if the Company, any of its Subsidiaries, or any of
their respective officers, directors, employees or agents, provides any Buyer
with material non-public information relating to the Company or any of its
Subsidiaries (each, the “Confidential Information”), the Company shall, on or
prior to the applicable Required Disclosure Date (as defined below), publicly
disclose such Confidential Information on a Current Report on Form 8-K or
otherwise (each, a “Disclosure”). From and after such Disclosure, the Company
shall have disclosed all Confidential Information provided to such Buyer 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. In addition, effective upon such Disclosure, the
Company acknowledges and agrees that any and all confidentiality or similar
obligations under any agreement, whether written or oral, between the Company,
any of its Subsidiaries or any of their respective officers, directors,
affiliates, employees or agents, on the one hand, and any of the Buyers or any
of their affiliates, on the other hand, shall terminate.  In the event that the
Company fails to effect such Disclosure on or prior to the Required Disclosure
Date and such Buyer shall have possessed Confidential Information for at least
ten (10) consecutive Trading Days (each, a “Disclosure Failure”), then, as
partial relief for the damages to such Buyer by reason of any such delay in, or
reduction of, its ability to buy or sell shares of Common Stock after such
Required Disclosure Date (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to such Buyer an
amount in cash equal to the greater of (I) two percent (2%) of the aggregate
Purchase Price and (II) the applicable Disclosure Restitution Amount, on each of
the following dates (each, a “Disclosure Delay Payment Date”): (i) on the date
of such Disclosure Failure and (ii) on every thirty (30) day anniversary such
Disclosure Failure until the earlier of (x) the date such Disclosure Failure is
cured and (y) such time as all such non-public information provided to such
Buyer shall cease to be Confidential Information (as evidenced by a certificate,
duly executed by an authorized officer of the Company to the foregoing effect)
(such earlier date, as applicable, a “Disclosure Cure Date”).  Following the
initial Disclosure Delay Payment for any particular Disclosure Failure, without
limiting the foregoing, if a Disclosure Cure Date occurs prior to any thirty
(30) day anniversary of such Disclosure Failure, then such Disclosure Delay
Payment (prorated for such partial month) shall be made on the second (2nd)
Business Day after such Disclosure Cure Date.  The payments to which an Investor
shall be entitled pursuant to this Section 4(l)(iii) are referred to herein as
“Disclosure Delay Payments.” In the event the Company fails to make Disclosure
Delay Payments in a timely manner in accordance with the foregoing, such
Disclosure Delay Payments shall bear interest at the rate of two percent (2%)
per month (prorated for partial months) until paid in full.  

(iv)For the purpose of this Agreement the following definitions shall apply:  

(1) “Disclosure Failure Market Price” means, as of any Disclosure Delay Payment
Date, the price computed as the quotient of (I) the sum of the five (5) highest
VWAPs (as defined in the Warrants) of the Common Stock during the applicable
Disclosure Restitution Period (as defined below), divided by (II) five (5) (such
period, the “Disclosure Failure Measuring Period”).  All such determinations to
be appropriately adjusted for any share dividend, share split, share
combination, reclassification or similar transaction that proportionately
decreases or increases the Common Stock during such Disclosure Failure Measuring
Period. 

(2)“Disclosure Restitution Amount” means, as of any Disclosure Delay Payment
Date, the product of (x) difference of (I) the Disclosure Failure Market Price
less (II) the lowest purchase price, per share of Common Stock, of any Common
Stock issued or issuable to such Buyer pursuant to this Agreement or any other
Transaction Documents, multiplied by (y) 10% of the aggregate daily dollar
trading volume (as reported on Bloomberg (as defined in the Warrants)) of the
Common Stock on the Principal Market for each Trading Day (as defined in the
Warrants) either (1) with respect to the initial Disclosure Delay Payment Date,
during the period commencing on the applicable Required Disclosure Date through
and including the Trading Day immediately prior to the initial Disclosure Delay
Payment Date or (2) with respect to each other Disclosure Delay Payment Date,
during the period commencing the immediately preceding Disclosure Delay Payment
Date through and including the Trading Day immediately prior to such applicable
Disclosure Delay Payment Date (such applicable period, the “Disclosure
Restitution Period”). 

(3)“Required Disclosure Date” means (x) if such Buyer authorized the delivery of
such Confidential Information, either (I) if the Company and such Buyer have
mutually agreed upon a date (as evidenced by an e-mail or other writing) of
Disclosure of such Confidential Information, such agreed upon date or (II)
otherwise, the seventh (7th) calendar day after the date such Buyer first
received any Confidential Information or (y) if such Buyer did not authorize the
delivery of such Confidential Information, the first (1st) Business Day after
such Buyer’s receipt of such Confidential Information. 

(j)Additional Registration Statements 

.  Until the Applicable Date (as defined below) and at any time thereafter while
any Registration Statement is not effective or the prospectus contained therein
is not available for use or any Current Public Information Failure (as defined
in the Registration Rights Agreement) exists, the Company shall not file a
registration statement or an offering statement under the 1933 Act relating to
securities that are not the Registrable Securities (other than a registration
statement on Form S-8 or such supplements or amendments to registration
statements that are outstanding and have been declared effective by the SEC as
of the date hereof (solely to the extent necessary to keep such registration
statements effective and available and not with respect to any Subsequent
Placement)).  “Applicable Date” means the earlier of (x) the first date on which
the resale by the Buyers of all the Registrable Securities required to be filed
on the initial Registration Statement (as defined in the Registration Rights
Agreement) pursuant to the Registration Rights Agreement is declared effective
by the SEC (and each prospectus contained therein is available for use on such
date) or (y) the first date on which all of the Registrable Securities are
eligible to be resold by the Buyers pursuant to Rule 144 (or, if a Current
Public Information Failure has occurred and is continuing, such later date after
which the Company has cured such Current Public Information Failure).

(k)Additional Issuance of Securities 

.  So long as any Buyer beneficially owns any Securities, the Company will not,
without the prior written consent of the Required Holders, issue any Notes
(other than to the Buyers as contemplated hereby) and the Company shall not
issue any other securities that would cause a breach or default under the Notes
or the Warrants.  The Company agrees that for the period commencing on the date
hereof and ending on the date immediately following the 90th Trading Day after
the Applicable Date (provided that such period shall be extended by the number
of calendar days during such period and any extension thereof contemplated by
this proviso on which any Registration Statement is not effective or any
prospectus contained therein is not available for use or any Current Public
Information Failure exists) (the “Restricted Period”), neither the Company nor
any of its Subsidiaries shall directly or indirectly issue, offer, sell, grant
any option or right to purchase, or otherwise dispose of (or announce any
issuance, offer, sale, grant of any option or right to purchase or other
disposition of) any equity security or any equity-linked or related security
(including, without limitation, any “equity security” (as that term is defined
under Rule 405 promulgated under the 1933 Act), any Convertible Securities (as
defined below), any preferred stock or any purchase rights) (any such issuance,
offer, sale, grant, disposition or announcement (whether occurring during the
Restricted Period or at any time thereafter) is referred to as a “Subsequent
Placement”).  Notwithstanding the foregoing, this Section 4(k) shall not apply
in respect of the issuance of (i) shares of Common Stock, standard options or
similar incentive equity awards to purchase Common Stock to directors, officers
or employees of the Company in their capacity as such pursuant to an Approved
Stock Plan (as defined below), provided that (1) all such issuances (taking into
account the shares of Common Stock issuable upon exercise of such options) after
the date hereof pursuant to this clause (i) do not, in the aggregate, exceed
more than 5% of the Common Stock issued and outstanding immediately prior to the
date hereof and (2) the exercise price of any such options is not lowered after
issuance, none of such options are amended to increase the number of shares
issuable thereunder and none of the terms or conditions of any such options are
otherwise materially changed in any manner that adversely affects any of the
Buyers; (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, exercise or other
method of issuance (as the case may be) of any such Convertible Security is made
solely pursuant to the conversion, exercise or other method of issuance (as the
case may be) provisions of such Convertible Security that were in effect on the
date immediately prior to the date of this Agreement, the conversion, exercise
or issuance price of any such Convertible Securities (other than standard
options to purchase Common Stock issued pursuant to an Approved Stock Plan that
are covered by clause (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 Buyers; (iii) the Conversion Shares, (iv) the
Warrant Shares and (v) subject to conditions of Section 13(r) of the Notes,
Permitted Shares (as defined in the Notes), each subject to the Required Lock-Up
(as defined in the Notes), issued in connection with strategic alliances,
strategic mergers and acquisitions and strategic partnerships (each, a
“Strategic Transaction”), provided that (A) the primary purpose of such issuance
is not to raise capital as determined in good faith by the Buyers, (B) the
purchaser or acquirer of such shares of Common Stock in such issuance solely
consists of either (1) the actual participants in such strategic alliance or
strategic partnership, (2) the actual owners of such assets or securities
acquired in such merger or acquisition or (3) the shareholders, partners or
members of the foregoing Persons, (C) the number or amount (as the case may be)
of such shares of Common Stock 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), and (D) such shares of Common Stock
are issued as “restricted securities” (as defined in Rule 144) and shall not
have registration rights that would provide for or allow registration for
issuance or resale during the Restricted Period (each of the foregoing in
clauses (i) through (v), collectively the “Excluded Securities”).  “Approved
Stock Plan” means any employee benefit plan or employment agreement 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, standard options and
similar incentive equity awards to purchase Common Stock may be issued to any
employee, officer or director for services provided to the Company in their
capacity as such.  “Convertible Securities” means any capital stock or other
security of the Company or any of its Subsidiaries that is at any time and under
any circumstances directly or indirectly convertible into, exercisable or
exchangeable for, or which otherwise entitles the holder thereof to acquire, any
capital stock or other security of the Company (including, without limitation,
Common Stock) or any of its Subsidiaries.

(l)Reservation of Shares 

.  So long as any of the Notes or Warrants remain outstanding, the Company shall
take all action necessary to at all times have authorized, and reserved for the
purpose of issuance, no less than (i) 200% of the maximum number of shares of
Common Stock issuable upon conversion of all the Notes then outstanding
(assuming for purposes hereof that (x) the Notes are convertible at the
Conversion Price then in effect, and (y) any such conversion shall not take into
account any limitations on the conversion of the Notes set forth in the Notes),
and (ii) 150% of the maximum number of Warrant Shares issuable upon exercise of
all the Warrants then outstanding (without regard to any limitations on the
exercise of the Warrants set forth therein) (collectively, the “Required Reserve
Amount”); provided that at no time shall the number of shares of Common Stock
reserved pursuant to this Section 4(l) be reduced other than proportionally in
connection with any conversion, exercise and/or redemption, as applicable of
Notes and Warrants.  If at any time the number of shares of Common Stock
authorized and reserved for issuance is not sufficient to meet the Required
Reserve Amount, the Company will promptly take all corporate action necessary to
authorize and reserve a sufficient number of shares, including, without
limitation, calling a special meeting of stockholders to authorize additional
shares to meet the Company’s obligations pursuant to the Transaction Documents,
in the case of an insufficient number of authorized shares, obtain stockholder
approval of an increase in such authorized number of shares, and voting the
management shares of the Company in favor of an increase in the authorized
shares of the Company to ensure that the number of authorized shares is
sufficient to meet the Required Reserve Amount.

(m)Conduct of Business 

.  The business of the Company and its Subsidiaries shall not be conducted in
violation of any law, ordinance or regulation of any Governmental Entity, except
as a result of Regulatory Scrutiny or where such violations would not reasonably
be expected to result, either individually or in the aggregate, in a Material
Adverse Effect.

(n)Other Notes; Variable Securities 

.   So long as any Notes or Warrants remain outstanding, the Company and each
Subsidiary shall be prohibited from effecting or entering into an agreement to
effect any Subsequent Placement involving a Variable Rate Transaction.
 “Variable Rate Transaction” means a transaction in which the Company or any
Subsidiary (i) issues or sells any Convertible Securities either (A) at a
conversion, exercise or exchange rate or other price that is based upon and/or
varies with the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such Convertible Securities, or (B)
with a conversion, exercise or exchange price that is subject to being reset at
some future date after the initial issuance of such Convertible Securities or
upon the occurrence of specified or contingent events directly or indirectly
related to the business of the Company or the market for the Common Stock, other
than pursuant to a customary “weighted average” anti-dilution provision or (ii)
enters into any agreement (including, without limitation, an equity line of
credit or an “at-the-market” offering) whereby the Company or any Subsidiary may
sell securities at a future determined price (other than standard and customary
“preemptive” or “participation” rights).  Each Buyer shall be entitled to obtain
injunctive relief against the Company and its Subsidiaries to preclude any such
issuance, which remedy shall be in addition to any right to collect damages.

(o)Passive Foreign Investment Company 

.  The Company shall conduct its business, and shall cause its Subsidiaries to
conduct their respective businesses, in such a manner as will ensure that the
Company will not be deemed to constitute a passive foreign investment company
within the meaning of Section 1297 of the Code.

(p)Restriction on Redemption and Cash Dividends 

.  So long as any Notes are outstanding, the Company shall not, directly or
indirectly, redeem, or declare or pay any cash dividend or distribution on, any
securities of the Company without the prior express written consent of the
Buyers.

(q)Corporate Existence 

.  So long as any Buyer beneficially owns any Notes or Warrants, the Company
shall not be party to any Fundamental Transaction (as defined in the Notes)
unless the Company is in compliance with the applicable provisions governing
Fundamental Transactions set forth in the Notes and the Warrants.

(r)Stock Splits 

.  Until the Notes are no longer outstanding, the Company shall not effect any
stock combination, reverse stock split or other similar transaction (or make any
public announcement or disclosure with respect to any of the foregoing) without
the prior written consent of the Required Holders (as defined below) except as
required by an Eligible Market to provide for the eligibility or continued
eligibility of the Common Stock for listing or quotation on such market.

(s)Conversion and Exercise Procedures.  Each of the form of Exercise Notice (as
defined in the Warrants) included in the Warrants and the form of Conversion
Notice (as defined in the Notes) included in the Notes set forth the totality of
the procedures required of the Buyers in order to exercise the Warrants or
convert the Notes.  Except as provided in Section 5(d), no additional legal
opinion, other information or instructions shall be required of the Buyers to
exercise their Warrants or convert their Notes.  The Company shall honor
exercises of the Warrants and conversions of the Notes and shall deliver the
Conversion Shares and Warrant Shares in accordance with the terms, conditions
and time periods set forth in the Notes and Warrants. 

(t)Regulation M 

.  The Company will not take any action prohibited by Regulation M under the
1934 Act, in connection with the distribution of the Securities contemplated
hereby.

(u)General Solicitation 

(d).  None of the Company, any of its affiliates (as defined in Rule 501(b)
under the 1933 Act) or any person acting on behalf of the Company or such
affiliate will solicit any offer to buy or offer or sell the Securities by means
of any form of general solicitation or general advertising within the meaning of
Regulation D, including:  (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or
broadcast over television or radio; and (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising;
provided, that, notwithstanding the foregoing, the Company shall not be
restricted from any general solicitation in compliance with Regulation A solely
with respect to securities of the Company to be sold pursuant to the Offering
Statement and the Offering Circular. 

(v)Integration 

(e).  None of the Company, any of its affiliates (as defined in Rule 501(b)
under the 1933 Act), or any person acting on behalf of the Company or such
affiliate will sell, offer for sale, or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the 1933 Act) which will be
integrated with the sale of the Securities in a manner which would require the
registration of the Securities under the 1933 Act or require stockholder
approval under the rules and regulations of the Principal Market and the Company
will take all action that is appropriate or necessary to assure that its
offerings of other securities will not be integrated for purposes of the 1933
Act or the rules and regulations of the Principal Market, with the issuance of
Securities contemplated hereby. 

(w)Notice of Disqualification Events 

(a).  The Company will notify the Buyers in writing, prior to the Closing Date
of (i) any Disqualification Event relating to any Issuer Covered Person and (ii)
any event that would, with the passage of time, become a Disqualification Event
relating to any Issuer Covered Person. 

(x)Stockholder Approval 

.  The Company shall prepare and file with the SEC, as promptly as practicable
after the date hereof, but in no event later than twenty (20) days after the
date hereof, an information statement (the “Information Statement”),
substantially in the form that has been previously reviewed and reasonably
approved by the Buyers and Kelley Drye & Warren LLP, at the expense of the
Company, with the Company obligated to reimburse the expenses of Kelley Drye &
Warren LLP incurred in connection therewith in an amount not exceed $10,000,
informing the stockholders of the Company of the receipt of the irrevocable
consents of the requisite stockholders (the “Stockholder Consent”) providing for
(x) the amendment and restatement of the Certificate of Incorporation and Bylaws
of the Company in the forms attached to the Stockholder Consent and previously
delivered to the Buyers and (y) the approval of the issuance of all of the
Securities in compliance with Nasdaq Rule 5635(d) (the “Stockholder Approval”,
and the date the Information Statement is initially effective (or the Company
otherwise obtains the approval of its stockholders at a special or annual
meeting of stockholders of the Company (the “Stockholder Meeting”) to
resolutions (“Stockholder Resolutions”) providing for the approval of the
issuance of all of the Securities in compliance with Nasdaq Rule 5635(d)),
respectively, the “Stockholder Approval Date”).  If an Information Statement is
not effective by February 28, 2018, the Company shall prepare and file with the
SEC a preliminary proxy statement, substantially in the form that has been
previously reviewed and reasonably approved by the Buyers and Kelley Drye &
Warren LLP, at the expense of the Company, with the Company obligated to
reimburse the expenses of Kelley Drye & Warren LLP incurred in connection
therewith in an amount not exceed $10,000, with respect to a Stockholder
Meeting, which shall be promptly called and held not later than March 15, 2018
(the “Stockholder Meeting Deadline”) soliciting each such stockholder’s
affirmative vote for the approval of the Stockholder Resolutions, and the
Company shall use its reasonable best efforts to solicit its stockholders’
approval of such resolutions and to cause the Board of Directors of the Company
to recommend to the stockholders that they approve such resolutions.  The
Company shall be obligated to seek to obtain the Stockholder Approval by the
Stockholder Meeting Deadline.  If, despite the Company’s reasonable best efforts
the Stockholder Approval is not obtained on or prior to the Stockholder Meeting
Deadline, the Company shall cause an additional Stockholder Meeting to be held
on or prior to June 15, 2018.  If, despite the Company’s reasonable best efforts
the Stockholder Approval is not obtained after such subsequent stockholder
meetings, the Company shall cause an additional Stockholder Meeting to be held
semi-annually thereafter until such Stockholder Approval is obtained.

(y)Closing Documents 

.  On or prior to fourteen (14) calendar days after the Closing Date, the
Company agrees to deliver, or cause to be delivered, electronically to each
Buyer and Kelley Drye & Warren LLP a complete closing set of the executed
Transaction Documents, Securities and any other document required to be
delivered to any party pursuant to Section 7 hereof or otherwise (which may be
photocopies or pdf versions of executed copies).

(z)No Waiver of Voting and Lockup Agreements.  The Company shall not amend,
waive or modify any provision of any of the Voting and Lockup Agreements (as
defined below). 

(aa)Trading in Common Stock 

.  

(i)During the period commencing on the date hereof and ending with respect to
each Buyer on the date such Buyer no longer holds any Notes, each Buyer hereby
agrees solely with the Company, severally and not jointly, and not with any
other Buyer, such Buyer shall not maintain a Net Short Position (as defined
below).   

(ii)For purposes hereof, a “Net Short Position” by a person means a position
whereby such person has executed one or more sales of Common Stock that is
marked as a “short” sale (but not including any sale marked “short exempt”) and
that is executed at a time when such Buyer has no equivalent offsetting “long”
position in the Common Stock (including any shares deemed to be part of a “long”
position hereunder or otherwise in accordance with Regulation SHO of the 1934
Act). For purposes of determining whether a Buyer has an equivalent offsetting
“long” position in the Common Stock, all Common Stock (A) that is owned by such
Buyer, (B) that is owed to such Buyer by the Company pursuant to any Exercise
Notice and/or Conversion Notice delivered by such Buyer to the Company and/or
(C) that would be issuable upon conversion in full of any Notes then held by
such Buyer at the Conversion Price (as defined in the Notes) then in effect
(without regard to any limitations on conversion set forth therein and giving
effect to any conversion price adjustments that would take effect given only the
passage of time) or exercise in full of all Warrants then held by such Buyer
(without regard to any limitations on exercise set forth therein other than
relating to the Maximum Eligibility Number (as defined therein) and giving
effect to any exercise price adjustments or adjustments to the number of Warrant
Shares issuable upon exercise of the Warrants that would take effect given only
the passage of time) shall be deemed to be held “long” by such Buyer. 

5.REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND. 

(a)Register 

.  The Company shall maintain at its principal executive offices (or such other
office or agency of the Company as it may designate by notice to each holder of
Securities), a register for the Notes and the Warrants in which the Company
shall record the name and address of the Person in whose name the Notes and the
Warrants have been issued (including the name and address of each transferee),
the principal amount of the Notes held by such Person, the number of Conversion
Shares issuable pursuant to the terms of the Notes and the number of Warrant
Shares issuable upon exercise of the Warrants held by such Person.  The Company
shall keep the register open and available at all times during business hours
for inspection of any Buyer or its legal representatives.

(b)Transfer Agent Instructions 

.  The Company shall issue irrevocable instructions to its transfer agent and
any subsequent transfer agent (as applicable, the “Transfer Agent”) in a form
acceptable to each of the Buyers (the “Irrevocable Transfer Agent Instructions”)
to issue certificates or credit shares to the applicable balance accounts at The
Depository Trust Company (“DTC”), registered in the name of each Buyer or its
respective nominee(s), for the Conversion Shares and the Warrant Shares in such
amounts as specified from time to time by each Buyer to the Company upon
conversion of the Notes or the exercise of the Warrants (as the case may be).
 The Company represents and warrants that no instruction other than the
Irrevocable Transfer Agent Instructions referred to in this Section 5(b), and
stop transfer instructions to give effect to Section 2(g) hereof, will be given
by the Company to its transfer agent with respect to the Securities, and that
the Securities shall otherwise be freely transferable on the books and records
of the Company, as applicable, to the extent provided in this Agreement and the
other Transaction Documents.  If a Buyer effects a sale, assignment or transfer
of the Securities in accordance with Section 2(g), the Company shall permit the
transfer and shall promptly instruct its transfer agent to issue one or more
certificates or credit shares to the applicable balance accounts at DTC in such
name and in such denominations as specified by such Buyer to effect such sale,
transfer or assignment.  In the event that such sale, assignment or transfer
involves Conversion Shares or Warrant Shares sold, assigned or transferred
pursuant to an effective registration statement or in compliance with Rule 144,
the transfer agent shall issue such shares to such Buyer, assignee or transferee
(as the case may be) without any restrictive legend in accordance with
Section 5(d) below.  The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to a Buyer.  Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Section 5(b) will be inadequate and agrees, in the event of a breach
or threatened breach by the Company of the provisions of this Section 5(b), that
a Buyer shall be entitled, in addition to all other available remedies, to an
order and/or injunction restraining any breach and requiring immediate issuance
and transfer, without the necessity of showing economic loss and without any
bond or other security being required.  The Company shall cause its counsel to
issue the legal opinion referred to in the Irrevocable Transfer Agent
Instructions to the Company’s transfer agent on each Effective Date (as defined
in the Registration Rights Agreement).  Any fees (with respect to the transfer
agent, counsel to the Company or otherwise) associated with the issuance of such
opinion or the removal of any legends on any of the Securities shall be borne by
the Company.

(c)Legends 

.  Each Buyer understands that the Securities have been issued (or will be
issued in the case of the Conversion Shares and the Warrant Shares) pursuant to
an exemption from registration or qualification under the 1933 Act and
applicable state securities laws, and except as set forth below, the Securities
shall bear any legend as required by the “blue sky” laws of any state and a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):

[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE]
HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN]
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER
SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.

(d)Removal of Legends 

.  Certificates evidencing Securities shall not be required to contain the
legend set forth in Section 5(c) above or any other legend (i) while a
registration statement (including a Registration Statement) covering the resale
of such Securities is effective under the 1933 Act, (ii) following any sale of
such Securities pursuant to Rule 144 (assuming the transferor is not an
affiliate of the Company), (iii) if such Securities are eligible to be sold,
assigned or transferred under Rule 144 (provided that a Buyer provides the
Company with reasonable assurances that such Securities are eligible for sale,
assignment or transfer under Rule 144 which shall not include an opinion of
Buyer’s counsel), (iv) in connection with a sale, assignment or other transfer
(other than under Rule 144), provided that such Buyer provides the Company with
an opinion of counsel to such Buyer, in a generally acceptable form, to the
effect that such sale, assignment or transfer of the Securities may be made
without registration under the applicable requirements of the 1933 Act or (v) if
such legend is not required under applicable requirements of the 1933 Act
(including, without limitation, controlling judicial interpretations and
pronouncements issued by the SEC).  If a legend is not required pursuant to the
foregoing, the Company shall no later than two (2) Trading Days (or such earlier
date as required pursuant to the 1934 Act or other applicable law, rule or
regulation for the settlement of a trade initiated on the date such Buyer
delivers such legended certificate representing such Securities to the Company)
following the delivery by a Buyer to the Company or the transfer agent (with
notice to the Company) of a legended certificate representing such Securities
(endorsed or with stock powers attached, signatures guaranteed, and otherwise in
form necessary to affect the reissuance and/or transfer, if applicable),
together with any other deliveries from such Buyer as may be required above in
this Section 5(d), as directed by such Buyer, either:  (A) provided that the
Company’s transfer agent is participating in the DTC Fast Automated Securities
Transfer Program and such Securities are Conversion Shares or Warrant Shares,
credit the aggregate number of shares of Common Stock to which such Buyer shall
be entitled to such Buyer’s or its designee’s balance account with DTC through
its Deposit/Withdrawal at Custodian system or (B) if the Company’s transfer
agent is not participating in the DTC Fast Automated Securities Transfer
Program, issue and deliver (via reputable overnight courier) to such Buyer, a
certificate representing such Securities that is free from all restrictive and
other legends, registered in the name of such Buyer or its designee (the date by
which such credit is so required to be made to the balance account of such
Buyer’s or such Buyer’s designee with DTC or such certificate is required to be
delivered to such Buyer pursuant to the foregoing is referred to herein as the
“Required Delivery Date”, and the date such shares of Common Stock are actually
delivered without restrictive legend to such Buyer or such Buyer’s designee with
DTC, as applicable, the “Share Delivery Date”).  The Company shall be
responsible for any transfer agent fees or DTC fees with respect to any issuance
of Securities or the removal of any legends with respect to any Securities in
accordance herewith.

(e)Failure to Timely Deliver; Buy-In 

.  If the Company fails to fail, for any reason or for no reason, to issue and
deliver (or cause to be delivered) to a Buyer (or its designee) by the Required
Delivery Date, either (I) if the Transfer Agent is not participating in the DTC
Fast Automated Securities Transfer Program, a certificate for the number of
Conversion Shares or Warrant Shares (as the case may be) to which such Buyer is
entitled and register such Conversion Shares or Warrant Shares (as the case may
be) on the Company’s share register or, if the Transfer Agent is participating
in the DTC Fast Automated Securities Transfer Program, to credit the balance
account of such Buyer or such Buyer’s designee with DTC for such number of
Conversion Shares or Warrant Shares (as the case may be) submitted for legend
removal by such Buyer pursuant to Section 5(d) above or (II) if the Registration
Statement covering the resale of the Conversion Shares or Warrant Shares (as the
case may be) submitted for legend removal by such Buyer pursuant to Section 5(d)
above (the “Unavailable Shares”) is not available for the resale of such
Unavailable Shares and the Company fails to promptly, but in no event later than
as required pursuant to the Registration Rights Agreement (x) so notify such
Buyer and (y) deliver the Conversion Shares or Warrant Shares, as applicable,
electronically without any restrictive legend by crediting such aggregate number
of Conversion Shares or Warrant Shares (as the case may be) submitted for legend
removal by such Buyer pursuant to Section 5(d) above to such Buyer’s or its
designee’s balance account with DTC through its Deposit/Withdrawal At Custodian
system (the event described in the immediately foregoing clause (II) is
hereinafter referred as a “Notice Failure” and together with the event described
in clause (I) above, a “Delivery Failure”), then, in addition to all other
remedies available to such Buyer, the Company shall pay in cash to such Buyer on
each day after the Share Delivery Date and during such Delivery Failure an
amount equal to 2% of the product of (A) the sum of the number of shares of
Common Stock not issued to such Buyer on or prior to the Required Delivery Date
and to which such Buyer is entitled, and (B) any trading price of the Common
Stock selected by such Buyer in writing as in effect at any time during the
period beginning on the date of the delivery by such Buyer to the Company of the
applicable Conversion Shares or Warrant Shares (as the case may be) and ending
on the applicable Share Delivery Date.  In addition to the foregoing, if on or
prior to the Required Delivery Date either (I) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer Program, the Company
shall fail to issue and deliver a certificate to a Buyer and register such
shares of Common Stock on the Company’s share register or, if the Transfer Agent
is participating in the DTC Fast Automated Securities Transfer Program, credit
the balance account of such Buyer or such Buyer’s designee with DTC for the
number of shares of Common Stock to which such Buyer submitted for legend
removal by such Buyer pursuant to Section 5(d) above (ii) below or (II) a Notice
Failure occurs, and if on or after such Trading Day such Buyer purchases (in an
open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by such Buyer of shares of Common Stock submitted for
legend removal by such Buyer pursuant to Section 5(d) above that such Buyer is
entitled to receive from the Company (a “Buy-In”), then the Company shall,
within two (2) Trading Days after such Buyer’s request and in such Buyer’s
discretion, either (i) pay cash to such Buyer in an amount equal to such Buyer’s
total purchase price (including brokerage commissions and other out-of-pocket
expenses, if any, for the shares of Common Stock so purchased) (the “Buy-In
Price”), at which point the Company’s obligation to so deliver such certificate
or credit such Buyer’s balance account shall terminate and such shares shall be
cancelled, or (ii) promptly honor its obligation to so deliver to such Buyer a
certificate or certificates or credit the balance account of such Buyer or such
Buyer’s designee with DTC representing such number of shares of Common Stock
that would have been so delivered if the Company timely complied with its
obligations hereunder and pay cash to such Buyer in an amount equal to the
excess (if any) of the Buy-In Price over the product of (A) such number of
shares of Conversion Shares or Warrant Shares (as the case may be) that the
Company was required to deliver to such Buyer by the Required Delivery Date
multiplied by (B) the lowest Closing Sale Price (as defined in the Warrants) of
the Common Stock on any Trading Day during the period commencing on the date of
the delivery by such Buyer to the Company of the applicable Conversion Shares or
Warrant Shares (as the case may be) and ending on the date of such delivery and
payment under this clause (ii).  Nothing shall limit such Buyer’s right to
pursue any other remedies available to it hereunder, at law or in equity,
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock (or to electronically deliver
such shares of Common Stock) as required pursuant to the terms hereof.
 Notwithstanding anything herein to the contrary, with respect to any given
Notice Failure and/or Delivery Failure, this Section 5(e) shall not apply to the
applicable Buyer the extent the Company has already paid such amounts in full to
such Buyer with respect to such Notice Failure and/or Delivery Failure, as
applicable, pursuant to the analogous sections of the Note or Warrant, as
applicable, held by such Buyer.

(f)FAST Compliance.  While any Warrants remain outstanding, the Company shall
maintain a transfer agent that participates in the DTC Fast Automated Securities
Transfer Program. 

6.CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL. 

The obligation of the Company hereunder to issue and sell the Notes and the
related Warrants to each Buyer at the Closing is subject to the satisfaction, at
or before the Closing Date, of each of the following conditions, provided that
these conditions are for the Company’s sole benefit and may be waived by the
Company at any time in its sole discretion by providing each Buyer with prior
written notice thereof:

 

(i)Such Buyer shall have duly executed and delivered to the Company an Investor
Collateral Certificate and, in accordance with the instructions of the Company
in the Flow of Funds Letter, maintained physical possession of a duly executed
Investor Note of such Buyer, in such original principal amount as is set forth
across from such Buyer’s name in column (7) of the Schedule of Buyers, issued
pursuant to the Note Purchase Agreement of such Buyer, both as payment for, and
as Collateral (as defined in such Buyer’s Series B Note) securing, such Buyer’s
Series B Note to be issued and sold to such Buyer at the Closing. 

(ii)Such Buyer shall have executed each of the other Transaction Documents to
which it is a party and delivered the same to the Company. 

(iii)Such Buyer and each other Buyer shall have delivered to the Company the
Purchase Price (less, in the case of any Buyer, the amounts withheld pursuant to
Section 4(g)) for the Note and the related Warrants being purchased by such
Buyer at the Closing by wire transfer of immediately available funds in
accordance with the Flow of Funds Letter. 

(iv)The representations and warranties of such Buyer shall be true and correct
in all material respects as of the date when made and as of the Closing Date as
though originally made at that time (except for representations and warranties
that speak as of a specific date, which shall be true and correct as of such
specific date), and such Buyer shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by such Buyer at or
prior to the Closing Date. 

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

The obligation of each Buyer hereunder to purchase its Note and its related
Warrants at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are
for each Buyer’s sole benefit and may be waived by such Buyer at any time in its
sole discretion by providing the Company with prior written notice thereof:

 

(i)The Company and each Subsidiary (as the case may be) shall have duly executed
and delivered to such Buyer each of the Transaction Documents to which it is a
party and the Company shall have duly executed and delivered to such Buyer (A) a
Series A Note in such original principal amount as is set forth across from such
Buyer’s name in column (3) of the Schedule of Buyers, (B) a Series B Note in the
aggregate original principal amount as is set forth opposite such Buyer’s name
in column (4) on the Schedule of Buyers and (C) a Warrants initially exercisable
for such aggregate number of Warrant Shares as is set forth across from such
Buyer’s name in column (5) of the Schedule of Buyers, in each case, as being
purchased by such Buyer at the Closing pursuant to this Agreement. 

(ii)Such Buyer shall have received the opinion of Loeb & Loeb LLP, the Company’s
counsel, dated as of the Closing Date, in the form acceptable to such Buyer. 

(iii)The Company shall have delivered to such Buyer a copy of the Irrevocable
Transfer Agent Instructions, in the form acceptable to such Buyer, which
instructions shall have been delivered to and acknowledged in writing by the
Company’s transfer agent. 

(iv)The Company shall have delivered to such Buyer a certificate evidencing the
formation and good standing of the Company in such entity’s jurisdiction of
formation issued by the Secretary of State (or comparable office) of such
jurisdiction of formation as of a date within ten (10) days of the Closing
Date. 

(v)The Company shall have delivered to such Buyer a certificate evidencing the
Company’s qualification as a foreign corporation and good standing issued by the
Secretary of State (or comparable office) of each jurisdiction in which the
Company conducts business and is required to so qualify, as of a date within ten
(10) days of the Closing Date. 

(vi)The Company shall have delivered to such Buyer a certified copy of the
Certificate of Incorporation as certified by the Delaware Secretary of State
within ten (10) days of the Closing Date. 

(vii)Each Subsidiary shall have delivered to such Buyer a certified copy of its
Certificate of Incorporation (or such equivalent organizational document) as
certified by the Secretary of State (or comparable office) of such Subsidiary’s
jurisdiction of incorporation within ten (10) days of the Closing Date. 

(viii)The Company shall have delivered to such Buyer a certificate, in the form
acceptable to such Buyer, executed by the Secretary of the Company and dated as
of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as
adopted by the Company’s board of directors in a form reasonably acceptable to
such Buyer, (ii) the Certificate of Incorporation of the Company and (iii) the
Bylaws of the Company as in effect at the Closing. 

(ix)Each and every representation and warranty of the Company shall be true and
correct in all material respects (except for such representations and warranties
that are qualified by materiality or Material Adverse Effect, which shall be
true in correct in all respects) as of the date when made and as of the Closing
Date as though originally made at that time (except for representations and
warranties that speak as of a specific date, which shall be true and correct as
of such specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required to be performed, satisfied or complied with by the Company at or prior
to the Closing Date.  Such Buyer shall have received a certificate, duly
executed by the Chief Executive Officer of the Company, dated as of the Closing
Date, to the foregoing effect and as to such other matters as may be reasonably
requested by such Buyer in the form acceptable to such Buyer. 

(x)The Company shall have delivered to such Buyer a letter from the Company’s
transfer agent certifying the number of shares of Common Stock outstanding on
the Closing Date immediately prior to the Closing. 

(xi)The Common Stock (A) shall be designated for quotation or listed (as
applicable) on the Principal Market and (B) shall not have been suspended, as of
the Closing Date, by the SEC or the Principal Market from trading on the
Principal Market nor shall suspension by the SEC or the Principal Market have
been threatened, as of the Closing Date, either (I) in writing by the SEC or the
Principal Market or (II) by falling below the minimum maintenance requirements
of the Principal Market.   

(xii)The Company shall have obtained all governmental, regulatory or third party
consents and approvals, if any, necessary for the sale of the Securities,
including without limitation, those required by the Principal Market, if any. 

(xiii)No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or Governmental Entity of competent jurisdiction that prohibits the
consummation of any of the transactions contemplated by the Transaction
Documents. 

(xiv)Since the date of execution of this Agreement, no event or series of events
shall have occurred that reasonably would have or result in a Material Adverse
Effect. 

(xv)The Company shall have obtained approval of the Principal Market to list or
designate for quotation (as the case may be) the Conversion Shares and the
Warrant Shares. 

(xvi)Within two (2) Business Days prior to the Closing, the Company shall have
delivered or caused to be delivered to each Buyer certified copies of requests
for copies of information on Form UCC-11, listing all effective financing
statements which name as debtor the Company and which are filed in such office
or offices as may be necessary or, in the opinion of the Required Holders (as
defined below), desirable to perfect the security interests purported to be
created by the Series B Notes, together with copies of such financing
statements, none of which, except as otherwise agreed in writing by the Required
Holders, shall cover any of the Collateral (as defined in each Series B Note),
and the results of searches for any tax Lien and judgment Lien filed against
such Person or its property, which results, except as otherwise agreed to in
writing by the Required Holders, shall not show any such Liens. 

(xvii)Such Buyer shall have received a letter on the letterhead of the Company,
duly executed by the Chief Executive Officer of the Company, (x) setting forth
the wire amounts of each Buyer and the wire transfer instructions of the Company
and (y) directing each Buyer (or its designee) to maintain physical possession
of a duly executed Investor Note of such Buyer, in such original principal
amount as is set forth across from such Buyer’s name in column (7) of the
Schedule of Buyers, issued pursuant to the Note Purchase Agreement of such
Buyer, both as payment for, and as Collateral (as defined in such Buyer’s Series
B Note) securing, such Buyer’s Series B Note to be issued and sold to such Buyer
at the Closing. 

(xviii)The Company shall have duly executed and delivered to such Buyer voting
and lockup agreements, each in the form of Exhibit G hereof (the “Voting and
Lockup Agreement”), duly executed and delivered to such Buyer by the Company, on
one hand, and, in separate Voting and Lockup Agreements, on the other hand, the
holders of outstanding Common Stock representing at least 91% of the outstanding
Common Stock of the Company as of the date hereof. 

(xix)The Company shall have delivered to such Buyer the Stockholder Consent,
duly executed and delivered by the stockholders party to the Voting and Lockup
Agreements. 

(xx)The Company shall have delivered to such Buyer evidence that the Company
shall have obtained at least $2.5 million in director and officer’s insurance
with at least a $2 million retention from Indian Harbor Insurance Company (or
such other insurer reasonably acceptable to such Buyer). 

(xxi)The Company and its Subsidiaries shall have delivered to such Buyer such
other documents, instruments or certificates relating to the transactions
contemplated by this Agreement as such Buyer or its counsel may reasonably
request. 

8.TERMINATION. 

In the event that the Closing shall not have occurred with respect to a Buyer
within five (5) days of the date hereof, then such Buyer shall have the right to
terminate its obligations under this Agreement with respect to itself at any
time on or after the close of business on such date without liability of such
Buyer to any other party; provided, however, (i) the right to terminate this
Agreement under this Section 8 shall not be available to such Buyer if the
failure of the transactions contemplated by this Agreement to have been
consummated by such date is the result of such Buyer’s breach of this Agreement
and (ii) the abandonment of the sale and purchase of the Notes and the Warrants
shall be applicable only to such Buyer providing such written notice, provided
further that no such termination shall affect any obligation of the Company
under this Agreement to reimburse such Buyer for the expenses described in
Section 4(g) above.  Nothing contained in this Section 8 shall be deemed to
release any party from any liability for any breach by such party of the terms
and provisions of this Agreement or the other Transaction Documents or to impair
the right of any party to compel specific performance by any other party of its
obligations under this Agreement or the other Transaction Documents.  

9.MISCELLANEOUS. 

(a)Governing Law; Jurisdiction; Jury Trial 

.  All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York.  The Company hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or under any of the other Transaction Documents or with any
transaction contemplated hereby or thereby, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper.  Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
 Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.  Nothing contained herein shall be
deemed or operate to preclude any Buyer from bringing suit or taking other legal
action against the Company in any other jurisdiction to collect on the Company’s
obligations to such Buyer or to enforce a judgment or other court ruling in
favor of such Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE
TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR
ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY OR THEREBY.

(b)Counterparts 

.  This Agreement may be executed in two or more identical counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other
party.  In the event that any signature is delivered by facsimile transmission
or by an e-mail which contains a portable document format (.pdf) file of an
executed signature page, such signature page shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such signature page were an
original thereof.

(c)Headings; Gender 

.  The headings of this Agreement are for convenience of reference and shall not
form part of, or affect the interpretation of, this Agreement.  Unless the
context clearly indicates otherwise, each pronoun herein shall be deemed to
include the masculine, feminine, neuter, singular and plural forms thereof.  The
terms “including,” “includes,” “include” and words of like import shall be
construed broadly as if followed by the words “without limitation.”  The terms
“herein,” “hereunder,” “hereof” and words of like import refer to this entire
Agreement instead of just the provision in which they are found.

(d)Severability; Maximum Payment Amounts 

.  If any provision of this Agreement is prohibited by law or otherwise
determined to be invalid or unenforceable by a court of competent jurisdiction,
the provision that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended to apply to the broadest extent that it would be valid and
enforceable, and the invalidity or unenforceability of such provision shall not
affect the validity of the remaining provisions of this Agreement so long as
this Agreement as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter hereof and the
prohibited nature, invalidity or unenforceability of the provision(s) in
question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that
would otherwise be conferred upon the parties.  The parties will endeavor in
good faith negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes as close as
possible to that of the prohibited, invalid or unenforceable provision(s).
 Notwithstanding anything to the contrary contained in this Agreement or any
other Transaction Document (and without implication that the following is
required or applicable), it is the intention of the parties that in no event
shall amounts and value paid by the Company and/or any of its Subsidiaries (as
the case may be), or payable to or received by any of the Buyers, under the
Transaction Documents (including without limitation, any amounts that would be
characterized as “interest” under applicable law) exceed amounts permitted under
any applicable law.  Accordingly, if any obligation to pay, payment made to any
Buyer, or collection by any Buyer pursuant the Transaction Documents is finally
judicially determined to be contrary to any such applicable law, such obligation
to pay, payment or collection shall be deemed to have been made by mutual
mistake of such Buyer, the Company and its Subsidiaries and such amount shall be
deemed to have been adjusted with retroactive effect to the maximum amount or
rate of interest, as the case may be, as would not be so prohibited by the
applicable law.  Such adjustment shall be effected, to the extent necessary, by
reducing or refunding, at the option of such Buyer, the amount of interest or
any other amounts which would constitute unlawful amounts required to be paid or
actually paid to such Buyer under the Transaction Documents.  For greater
certainty, to the extent that any interest, charges, fees, expenses or other
amounts required to be paid to or received by such Buyer under any of the
Transaction Documents or related thereto are held to be within the meaning of
“interest” or another applicable term to otherwise be violative of applicable
law, such amounts shall be pro-rated over the period of time to which they
relate.  

(e)Entire Agreement; Amendments 

.  This Agreement, the other Transaction Documents and the schedules and
exhibits attached hereto and thereto and the instruments referenced herein and
therein supersede all other prior oral or written agreements between the Buyers,
the Company, its Subsidiaries, their affiliates and Persons acting on their
behalf, including, without limitation, any transactions by any Buyer with
respect to Common Stock or the Securities, and the other matters contained
herein and therein, and this Agreement, the other Transaction Documents, the
schedules and exhibits attached hereto and thereto and the instruments
referenced herein and therein contain the entire understanding of the parties
solely with respect to the matters covered herein and therein; provided,
however, nothing contained in this Agreement or any other Transaction Document
shall (or shall be deemed to) (i) have any effect on any agreements any Buyer
has entered into with, or any instruments any Buyer has received from, the
Company or any of its Subsidiaries prior to the date hereof with respect to any
prior investment made by such Buyer in the Company or (ii) waive, alter, modify
or amend in any respect any obligations of the Company or any of its
Subsidiaries, or any rights of or benefits to any Buyer or any other Person, in
any agreement entered into prior to the date hereof between or among the Company
and/or any of its Subsidiaries and any Buyer, or any instruments any Buyer
received from the Company and/or any of its Subsidiaries prior to the date
hereof, and all such agreements and instruments shall continue in full force and
effect. Except as specifically set forth herein or therein, neither the Company
nor any Buyer makes any representation, warranty, covenant or undertaking with
respect to such matters.  For clarification purposes, the Recitals are part of
this Agreement.  No provision of this Agreement may be amended other than by an
instrument in writing signed by the Company and the Required Holders (as defined
below), and any amendment to any provision of this Agreement made in conformity
with the provisions of this Section 9(e) shall be binding on all Buyers and
holders of Securities, as applicable; provided that no such amendment shall be
effective to the extent that it (A) applies to less than all of the holders of
the Securities then outstanding or (B) imposes any obligation or liability on
any Buyer without such Buyer’s prior written consent (which may be granted or
withheld in such Buyer’s sole discretion).  No waiver shall be effective unless
it is in writing and signed by an authorized representative of the waiving
party, provided that the Required Holders may waive any provision of this
Agreement, and any waiver of any provision of this Agreement made in conformity
with the provisions of this Section 9(e) shall be binding on all Buyers and
holders of Securities, as applicable, provided that no such waiver shall be
effective to the extent that it (1) applies to less than all of the holders of
the Securities then outstanding (unless a party gives a waiver as to itself
only) or (2) imposes any obligation or liability on any Buyer without such
Buyer’s prior written consent (which may be granted or withheld in such Buyer’s
sole discretion).  No consideration (other than reimbursement of legal fees)
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of any of the Transaction Documents unless the
same consideration also is offered to all of the parties to the Transaction
Documents, all holders of the Notes or all holders of the Warrants (as the case
may be).  From the date hereof and while any Notes or Warrants are outstanding,
the Company shall not be permitted to receive any consideration from a Buyer or
a holder of Notes or Warrants that is not otherwise contemplated by the
Transaction Documents in order to, directly or indirectly, induce the Company or
any Subsidiary (i) to treat such Buyer or holder of Notes or Warrants in a
manner that is more favorable than to other similarly situated Buyers or holders
of Notes or Warrants, as applicable, or (ii) to treat any Buyer(s) or holder(s)
of Notes or Warrants in a manner that is less favorable than the Buyer or holder
of Notes or Warrants that is paying such consideration; provided, however, that
the determination of whether a Buyer has been treated more or less favorably
than another Buyer shall disregard any securities of the Company purchased or
sold by any Buyer.  The Company has not, directly or indirectly, made any
agreements with any Buyers relating to the terms or conditions of the
transactions contemplated by the Transaction Documents except as set forth in
the Transaction Documents.  Without limiting the foregoing, the Company confirms
that, except as set forth in this Agreement, no Buyer has made any commitment or
promise or has any other obligation to provide any financing to the Company, any
Subsidiary or otherwise.  As a material inducement for each Buyer to enter into
this Agreement, the Company expressly acknowledges and agrees that (x) no due
diligence or other investigation or inquiry conducted by a Buyer, any of its
advisors or any of its representatives shall affect such Buyer’s right to rely
on, or shall modify or qualify in any manner or be an exception to any of, the
Company’s representations and warranties contained in this Agreement or any
other Transaction Document and (y) unless a provision of this Agreement or any
other Transaction Document is expressly preceded by the phrase “except as
disclosed in the SEC Documents,” nothing contained in any of the SEC Documents
shall affect such Buyer’s right to rely on, or shall modify or qualify in any
manner or be an exception to any of, the Company’s representations and
warranties contained in this Agreement or any other Transaction Document.
 “Required Holders” means (I) prior to the Closing Date, each Buyer entitled to
purchase Notes at the Closing and (II) on or after the Closing Date, holders of
a majority of the Registrable Securities as of such time (excluding any
Registrable Securities held by the Company or any of its Subsidiaries as of such
time) issued or issuable hereunder or pursuant to the Notes and/or the Warrants;
provided, that such majority must include each holder of at least $500,000 in
aggregate principal amount of Notes.

(f)Notices 

.  Any notices, consents, waivers or other communications required or permitted
to be given under the terms of this Agreement must be in writing and will be
deemed to have been delivered:  (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party) or electronic mail (provided that such sent email is kept on file
(whether electronically or otherwise) by the sending party and the sending party
does not receive an automatically generated message from the recipient’s email
server that such e-mail could not be delivered to such recipient); or (iii) one
(1) Business Day after deposit with an overnight courier service with next day
delivery specified, in each case, properly addressed to the party to receive the
same.  The addresses, facsimile numbers and e-mail addresses for such
communications shall be:

If to the Company:

Longfin Corp
16-017
85 Broad Street
New York, New York 10004
Telephone:  (347) 277-2691
Attention:  Sarah Altahawi
E-Mail:  sarah@longfincorp.com

With a copy (for informational purposes only) to:

Loeb & Loeb LLP
345 Park Avenue
New York, NY 10154
Telephone:  (212) 407-4159
Facsimile:  (212) 504-3013
Attention:  Mitchell S. Nussbaum, Esq.
E-Mail:  mnussbaum@loeb.com

If to the Transfer Agent:

Colonial Stock Transfer Company, Inc.
66 Exchange Place, 1st Floor
Salt Lake City, UT 84111
Telephone:  (801) 433-9553
Facsimile:  (801) 355-6505
Attention:  Jason Carter
E-Mail:  jasoncarter@colonialstock.com

If to a Buyer, to its address, e-mail address and facsimile number set forth on
the Schedule of Buyers, with copies to such Buyer’s representatives as set forth
on the Schedule of Buyers,

with a copy (for informational purposes only) to:

Kelley Drye & Warren LLP
101 Park Avenue
New York, NY 10178
Telephone:  (212) 808-7540
Facsimile:  (212) 808-7897
Attention:  Michael A. Adelstein, Esq.
E-mail:  madelstein@kelleydrye.com

or to such other address, e-mail address and/or facsimile number and/or to the
attention of such other Person as the recipient party has specified by written
notice given to each other party five (5) days prior to the effectiveness of
such change, provided that Kelley Drye & Warren LLP shall only be provided
copies of notices sent to the lead Buyer.  Written confirmation of receipt (A)
given by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender’s facsimile machine
or e-mail containing the time, date, recipient facsimile number and, with
respect to each facsimile transmission, an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively.

(g)Successors and Assigns 

.  This Agreement shall be binding upon and inure to the benefit of the parties
and their respective successors and assigns, including any purchasers of any of
the Notes and Warrants.  The Company shall not assign this Agreement or any
rights or obligations hereunder without the prior written consent of the
Required Holders, including, without limitation, by way of a Fundamental
Transaction (as defined in the Warrants) (unless the Company is in compliance
with the applicable provisions governing Fundamental Transactions set forth in
the Warrants) or a Fundamental Transaction (as defined in the Notes) (unless the
Company is in compliance with the applicable provisions governing Fundamental
Transactions set forth in the Notes).  A Buyer may assign some or all of its
rights hereunder in connection with any transfer of any of its Securities
without the consent of the Company, in which event such assignee shall be deemed
to be a Buyer hereunder with respect to such assigned rights.

(h)No Third Party Beneficiaries 

.  This Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person, other than the
Indemnitees referred to in Section 9(k).

(i)Survival 

.  The representations, warranties, agreements and covenants shall survive the
Closing.  Each Buyer shall be responsible only for its own representations,
warranties, agreements and covenants hereunder.

(j)Further Assurances 

.  Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

(k)Indemnification 

.  In consideration of each Buyer’s execution and delivery of the Transaction
Documents and acquiring the Securities thereunder and in addition to all of the
Company’s other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless each Buyer and each holder of any
Securities and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing
Persons’ agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Indemnitees”) from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the
“Indemnified Liabilities”), incurred by any Indemnitee as a result of, or
arising out of, or relating to (i) any misrepresentation or breach of any
representation or warranty made by the Company or any Subsidiary in any of the
Transaction Documents, (ii) any breach of any covenant, agreement or obligation
of the Company or any Subsidiary contained in any of the Transaction Documents
or (iii) any cause of action, suit, proceeding or claim brought or made against
such Indemnitee by a third party (including for these purposes a derivative
action brought on behalf of the Company or any Subsidiary) or which otherwise
involves such Indemnitee that arises out of or results from (A) the execution,
delivery, performance or enforcement of any of the Transaction Documents, (B)
any transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Securities, (C) any
disclosure properly made by such Buyer pursuant to Section 4(i), or (D) the
status of such Buyer or holder of the Securities either as an investor in the
Company pursuant to the transactions contemplated by the Transaction Documents
or as a party to this Agreement (including, without limitation, as a party in
interest or otherwise in any action or proceeding for injunctive or other
equitable relief). To the extent that the foregoing undertaking by the Company
may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.  Except as otherwise set
forth herein, the mechanics and procedures with respect to the rights and
obligations under this Section 9(k) shall be the same as those set forth in
Section 6 of the Registration Rights Agreement.

(l)Construction 

.  The language used in this Agreement will be deemed to be the language chosen
by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.  No specific representation or
warranty shall limit the generality or applicability of a more general
representation or warranty. Each and every reference to share prices, shares of
Common Stock and any other numbers in this Agreement that relate to the Common
Stock shall be automatically adjusted for any stock splits, stock dividends,
stock combinations, recapitalizations or other similar transactions that occur
with respect to the Common Stock after the date of this Agreement.
 Notwithstanding anything in this Agreement to the contrary, for the avoidance
of doubt, nothing contained herein shall constitute a representation or warranty
against, or a prohibition of, any actions with respect to the borrowing of,
arrangement to borrow, identification of the availability of, and/or securing
of, securities of the Company in order for such Buyer (or its broker or other
financial representative) to effect short sales or similar transactions in the
future.

(m)Remedies 

.  Each Buyer and in the event of assignment by Buyer of its rights and
obligations hereunder, each holder of Securities, shall have all rights and
remedies set forth in the Transaction Documents and all rights and remedies
which such holders have been granted at any time under any other agreement or
contract and all of the rights which such holders have under any law.  Any
Person having any rights under any provision of this Agreement shall be entitled
to enforce such rights specifically (without posting a bond or other security),
to recover damages by reason of any breach of any provision of this Agreement
and to exercise all other rights granted by law.  Furthermore, the Company
recognizes that in the event that it or any Subsidiary fails to perform,
observe, or discharge any or all of its or such Subsidiary’s (as the case may
be) obligations under the Transaction Documents, any remedy at law would
inadequate relief to the Buyers.  The Company therefore agrees that the Buyers
shall be entitled to specific performance and/or temporary, preliminary and
permanent injunctive or other equitable relief from any court of competent
jurisdiction in any such case without the necessity of proving actual damages
and without posting a bond or other security.  The remedies provided in this
Agreement and the other Transaction Documents shall be cumulative and in
addition to all other remedies available under this Agreement and the other
Transaction Documents, at law or in equity (including a decree of specific
performance and/or other injunctive relief).

(n)Withdrawal Right 

.  Notwithstanding anything to the contrary contained in (and without limiting
any similar provisions of) the Transaction Documents, whenever any Buyer
exercises a right, election, demand or option under a Transaction Document and
the Company or any Subsidiary does not timely perform its related obligations
within the periods therein provided, then such Buyer may rescind or withdraw, in
its sole discretion from time to time upon written notice to the Company or such
Subsidiary (as the case may be), any relevant notice, demand or election in
whole or in part without prejudice to its future actions and rights.

(o)Payment Set Aside; Currency 

.  To the extent that the Company makes a payment or payments to any Buyer
hereunder or pursuant to any of the other Transaction Documents or any of the
Buyers enforce or exercise their rights hereunder or thereunder, and such
payment or payments or the proceeds of such enforcement or exercise or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside, recovered from, disgorged by or are required to be refunded, repaid
or otherwise restored to the Company, a trustee, receiver or any other Person
under any law (including, without limitation, any bankruptcy law, foreign, state
or federal law, common law or equitable cause of action), then to the extent of
any such restoration the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
 Unless otherwise expressly indicated, all dollar amounts referred to in this
Agreement and the other Transaction Documents are in United States Dollars
(“U.S. Dollars”), and all amounts owing under this Agreement and all other
Transaction Documents shall be paid in U.S. Dollars.  All amounts denominated in
other currencies (if any) shall be converted into the U.S. Dollar equivalent
amount in accordance with the Exchange Rate on the date of calculation.
 “Exchange Rate” means, in relation to any amount of currency to be converted
into U.S. Dollars pursuant to this Agreement, the U.S. Dollar exchange rate as
published in the Wall Street Journal on the relevant date of calculation.

(p)Judgment Currency 

.

(i)If for the purpose of obtaining or enforcing judgment against the Company in
connection with this Agreement or any other Transaction Document in any court in
any jurisdiction it becomes necessary to convert into any other currency (such
other currency being hereinafter in this Section 9(p) referred to as the
“Judgment Currency”) an amount due in US Dollars under this Agreement, the
conversion shall be made at the Exchange Rate prevailing on the Trading Day
immediately preceding: 

(1)the date actual payment of the amount due, in the case of any proceeding in
the courts of New York or in the courts of any other jurisdiction that will give
effect to such conversion being made on such date:  or 

(2)the date on which the foreign court determines, in the case of any proceeding
in the courts of any other jurisdiction (the date as of which such conversion is
made pursuant to this Section 9(p)(i)(2) being hereinafter referred to as the
“Judgment Conversion Date”). 

(ii)If in the case of any proceeding in the court of any jurisdiction referred
to in Section 9(p)(i)(2) above, there is a change in the Exchange Rate
prevailing between the Judgment Conversion Date and the date of actual payment
of the amount due, the applicable party shall pay such adjusted amount as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the Exchange Rate prevailing on the date of payment, will produce
the amount of US Dollars which could have been purchased with the amount of
Judgment Currency stipulated in the judgment or judicial order at the Exchange
Rate prevailing on the Judgment Conversion Date. 

(iii)Any amount due from the Company under this provision shall be due as a
separate debt and shall not be affected by judgment being obtained for any other
amounts due under or in respect of this Agreement or any other Transaction
Document. 

(q)Independent Nature of Buyers’ Obligations and Rights 

.  The obligations of each Buyer under the Transaction Documents are several and
not joint with the obligations of any other Buyer, and no Buyer shall be
responsible in any way for the performance of the obligations of any other Buyer
under any Transaction Document.  Nothing contained herein or in any other
Transaction Document, and no action taken by any Buyer pursuant hereto or
thereto, shall be deemed to constitute the Buyers as, and the Company
acknowledges that the Buyers do not so constitute, a partnership, an
association, a joint venture or any other kind of group or entity, or create a
presumption that the Buyers are in any way acting in concert or as a group or
entity, and the Company shall not assert any such claim with respect to such
obligations or the transactions contemplated by the Transaction Documents or any
matters, and the Company acknowledges that the Buyers are not acting in concert
or as a group, and the Company shall not assert any such claim, with respect to
such obligations or the transactions contemplated by the Transaction Documents.
 The decision of each Buyer to purchase Securities pursuant to the Transaction
Documents has been made by such Buyer independently of any other Buyer.  Each
Buyer acknowledges that no other Buyer has acted as agent for such Buyer in
connection with such Buyer making its investment hereunder and that no other
Buyer will be acting as agent of such Buyer in connection with monitoring such
Buyer’s investment in the Securities or enforcing its rights under the
Transaction Documents.  The Company and each Buyer confirms that each Buyer has
independently participated with the Company and its Subsidiaries in the
negotiation of the transaction contemplated hereby with the advice of its own
counsel and advisors.  Each Buyer shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights arising out of
this Agreement or out of any other Transaction Documents, and it shall not be
necessary for any other Buyer to be joined as an additional party in any
proceeding for such purpose.  The use of a single agreement to effectuate the
purchase and sale of the Securities contemplated hereby was solely in the
control of the Company, not the action or decision of any Buyer, and was done
solely for the convenience of the Company and its Subsidiaries and not because
it was required or requested to do so by any Buyer.  It is expressly understood
and agreed that each provision contained in this Agreement and in each other
Transaction Document is between the Company, each Subsidiary and a Buyer,
solely, and not between the Company, its Subsidiaries and the Buyers
collectively and not between and among the Buyers.

(r)Performance Date. If the date by which any obligation under any of the
Transaction Documents must be performed occurs on a day other than a Business
Day, then the date by which such performance is required shall be the next
Business Day following such date. 

[signature pages follow]

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

4811-8728-6105v.10

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

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

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

 

COMPANY:

 

LONGFIN CORP

 

 

 

By:
Name: 

Title:

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

4811-8728-6105v.10

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

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

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

 

 

BUYER:

 

 

HUDSON BAY MASTER FUND LTD

 

 

 

By:
Name: 

Title:

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

4811-8728-6105v.10

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

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

SCHEDULE OF BUYERS

 

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

 

 

 

 

 

 

 

 

 

Buyer

Address and Facsimile Number

Original Principal Amount of Series A Notes

Original
Principal
Amount of
Series B Notes

Aggregate
Number of
Warrant Shares

Purchase Price

Aggregate
Cash
Wire
Amount

Original
Principal
Amount of Investor Notes

Legal Representative’s
Address and Facsimile Number

 

 

 

 

 

 

 

 

 

Hudson Bay Master Fund Ltd.

Please deliver any notices other than Pre-Notices to:

 

777 Third Avenue, 30th Floor
New York, NY 10017
Attention:  Yoav Roth
Facsimile:  (212) 571-1279
E-mail:  investments@hudsonbaycapital.com
Residence:  Cayman Islands

 

Please deliver any Pre-Notice to:

 

777 Third Ave., 30th Floor

New York, NY 10017

Facsimile: (646) 214-7946

Attention: Scott Black

General Counsel and Chief Compliance Officer

 

$10,095,941.18

$42,604,058.82

751,896

$47,604,058.82

$5,000,000.00

$42,604,058.82

Kelley Drye & Warren LLP

101 Park Avenue

New York, NY 10178

Telephone:  (212) 808-7540

Facsimile:  (212) 808-7897

Attention:  Michael A. Adelstein, Esq.

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

4811-8728-6105v.10