SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT, dated as of September 7, 2012 (this
“Agreement”), is entered into by and between PURAMED BIOSCIENCE, INC., a
Minnesota corporation (the “Company”), and TONAQUINT, INC., a Utah corporation,
its successors or assigns (the “Buyer”).

W I T N E S S E T H:

WHEREAS, the Company and the Buyer are executing and delivering this Agreement
in reliance upon the exemption from securities registration for offers and sales
to accredited investors afforded, inter alia, under Regulation D (“Regulation
D”) as promulgated by the United States Securities and Exchange Commission (the
“SEC”) under the Securities Act of 1933, as amended (the “1933 Act”), and/or
Section 4(2) of the 1933 Act; and
 
WHEREAS, the Buyer wishes to acquire from the Company, and the Company desires
to issue and sell to the Buyer, the Note (as defined below), which Note will be
convertible into shares of common stock of the Company, par value $0.001 per
share (the “Common Stock”), and the Warrant (as defined below), upon the terms
and subject to the conditions of the Note, the Warrant, this Agreement and the
other Transaction Documents (as defined below).

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

1.            CERTAIN DEFINITIONS. As used herein, each of the following terms
has the meaning set forth below, unless the context otherwise requires:

“Affiliate” means, with respect to a specific Person referred to in the relevant
provision, another Person who or which controls or is controlled by or is under
common control with such specified Person.

“Buyer’s Counsel” means Hansen Black Anderson PLLC.

“Buyer Control Person” means each manager, executive officer, promoter, and such
other Persons as may be deemed in control of the Buyer pursuant to Rule 405
under the 1933 Act or Section 20 of the 1934 Act (as defined below).

“Articles of Incorporation” means the certificate of incorporation, articles of
incorporation or other charter document (howsoever denominated) of the Company,
as amended to date.

“Closing Date” means the date of the closing of the purchase and sale of the
Securities.

 “Company Control Person” means each director, executive officer, promoter, and
such other Persons as may be deemed in control of the Company pursuant to Rule
405 under the 1933 Act or Section 20 of the 1934 Act.

“Company Counsel” means Lucosky Brookman LLP.

“Company’s SEC Documents” means the Company’s filings on the SEC’s EDGAR system.
 
 
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“Conversion Date” means the date a Holder submits a Conversion Notice (as
defined below), as provided in the Note.

“Conversion Shares” means the shares of Common Stock issuable upon conversion of
the Note and/or in payment of accrued interest, as contemplated in the Note.

“Holder” means the Person holding the relevant Securities at the relevant time.

“Last Audited Date” means March 31, 2012.

“Material Adverse Effect” means an event or combination of events, which
individually or in the aggregate, would reasonably be expected to (a) adversely
affect the legality, validity or enforceability of the Note, the Warrant or any
of the Transaction Documents, (b)  have or result in a material adverse effect
on the results of operations, assets, or financial condition of the Company and
its subsidiaries, taken as a whole, or (c) adversely impair the Company’s
ability to perform fully on a timely basis its material obligations under any of
the Transaction Documents or the transactions contemplated thereby.

“Maturity Date” has the meaning ascribed to it in the Note.

“Person” means any living person or any entity, such as, but not necessarily
limited to, a corporation, partnership or trust.

“Principal Trading Market” means (a) NYSE Amex, (b) the New York Stock Exchange,
(c) the Nasdaq Global Market, (d) the Nasdaq Capital Market, (e) the OTC
Bulletin Board, (f) the OTCQX or OTCQB, or (g) such other market on which the
Common Stock is principally traded at the relevant time, but shall not include
the “pink sheets.”

 “Registration Statement” means a registration statement of the Company under
the 1933 Act covering securities of the Company (including Common Stock) on Form
S-3, if the Company is then eligible to file using such form, and if not
eligible, on Form S-1 or other appropriate form.

 “Rule 144” means (a) Rule 144 promulgated under the 1933 Act or (b) any other
similar rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Company to the public without registration under the 1933
Act.

“Securities” means the Note, the Warrant and the Shares.

“Shares” means the shares of Common Stock representing any or all of the
Conversion Shares and the Warrant Shares.

“State of Incorporation” means Minnesota.

“Subsidiary” means, as of the relevant date, any subsidiary of the Company
(whether or not included in the Company’s SEC Documents) whether now existing or
hereafter acquired or created.

“Trading Day” means any day during which the Principal Trading Market shall be
open for business.

“Transaction Documents” means this Agreement, the Note, the Transfer Agent
Letter (defined below), the Warrant, and all other certificates, documents,
agreements, resolutions and instruments delivered to any party under or in
connection with this Agreement (including without limitation the Secretary’s
Certificate (defined below)), as the same may be amended from time to time.
 
 
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“Transfer Agent” means, at any time, the transfer agent for the Common Stock.

“Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Warrant.

“Wire Instructions” means the wire instructions for the Purchase Price (as
defined below), as provided by the Company, set forth on Annex I.

2.            AGREEMENT TO PURCHASE; PURCHASE PRICE.

a.            Purchase.

(i)           Subject to the terms and conditions of this Agreement and the
other Transaction Documents, the undersigned Buyer hereby agrees to purchase
from the Company a Convertible Promissory Note in the principal amount of
$172,500.00 substantially in the form attached hereto as Annex II (the “Note”).
In consideration thereof, the Buyer shall pay the principal amount set forth on
the Buyer’s signature page to this Agreement (the “Purchase Price”). The
Purchase Price shall be paid to the Company at Closing in accordance with the
Wire Instructions.

(ii)          In consideration for the Purchase Price, the Company shall also
issue to the Buyer a Warrant to Purchase Shares of Common Stock in the form
attached hereto as Annex III (the “Warrant”).
 
(iii)         The Company shall also execute and deliver to the Transfer Agent,
and the Transfer Agent shall execute to indicate its acceptance thereof, the
irrevocable transfer agent instruction letter substantially in the form attached
hereto as Annex IV (the “Transfer Agent Letter”).

(iv)        The Company shall also cause to be executed and delivered to the
Buyer a fully  executed secretary’s certificate and written consent of directors
evidencing the Company’s approval of the Transaction Documents substantially in
the forms attached hereto as Annex V (together, the “Secretary’s Certificate”).

b.            Form of Payment; Delivery of Securities. The purchase and sale of
the Securities shall take place at a closing (the “Closing”) to be held at the
offices of the Buyer on the Closing Date.  At the Closing, the Company will
deliver the Transaction Documents to the Buyer against delivery by the Buyer to
the Company of the Purchase Price.

c.            Purchase Price. The Note carries an original issue discount of
$15,000.00 (the “OID”).  In addition, the Company agrees to pay $7,500.00 to the
Buyer to cover the Buyer’s legal fees, accounting costs, due diligence,
monitoring and other transaction costs incurred in connection with the purchase
and sale of the Securities, all of which amount is included in the initial
principal balance of the Note (the “Transaction Expenses”).  The Purchase Price,
therefore, shall be $150,000.00, computed as follows: $172,500.00 less the OID
less the Transaction Expenses.

3.            BUYER REPRESENTATIONS AND WARRANTIES.

The Buyer represents and warrants to, and covenants and agrees with, the
Company, as of the date hereof and as of the Closing Date, as follows:
 
 
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a.           Binding Obligation. The Transaction Documents to which the Buyer is
a party, and the transactions contemplated hereby and thereby, have been duly
and validly authorized by the Buyer.  This Agreement has been executed and
delivered by the Buyer, and this Agreement is, and each of the other Transaction
Documents to which the Buyer is a party, when executed and delivered by the
Buyer (if necessary), will be valid and binding obligations of the Buyer
enforceable in accordance with their respective terms, subject as to
enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium and other similar laws affecting the enforcement of creditors’ rights
generally.
 
b.           Accredited Investor Status. The Buyer is an “accredited investor”
as that term is defined in Regulation D.

4.           COMPANY REPRESENTATIONS AND WARRANTIES.   The Company represents
and warrants to the Buyer as of the date hereof and as of the Closing Date that:

a.           Rights of Others Affecting the Transactions.  There are no
preemptive rights of any stockholder of the Company, as such, to acquire the
Securities.  No other party has a currently exercisable right of first refusal
which would be applicable to any or all of the transactions contemplated by the
Transaction Documents.

b.           Status.  The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Incorporation and
has the requisite corporate power to own its properties and to carry on its
business as now being conducted.  The Company is duly qualified as a foreign
corporation to do business and is in good standing in each jurisdiction where
the nature of the business conducted or property owned by it makes such
qualification necessary, other than those jurisdictions in which the failure to
so qualify would not have or result in a Material Adverse Effect.  The Company
has registered its stock under Section 12(g) of the Securities Exchange Act of
1934, as amended (the “1934 Act”), and is obligated to file reports pursuant to
Section 13 or Section 15(d) of the 1934 Act.   The Company has not taken any
action designed to terminate, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under the 1934 Act,
nor has the Company received any notification that the SEC is contemplating
terminating such registration.  The Common Stock is quoted on the Principal
Trading Market.  The Company has received no notice, either oral or written,
with respect to the continued eligibility of the Common Stock for quotation on
the Principal Trading Market, and the Company has maintained all requirements on
its part for the continuation of such quotation. The Company has not, in the
twelve (12) months preceding the date hereof, received notice from the Principal
Trading Market on which the Common Stock is or has been listed or quoted to the
effect that the Company is not in compliance with the listing or maintenance
requirements of such Principal Trading Market. The Company is, and has no reason
to believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements.

c.           Authorized Shares.
 
(i)           The authorized capital stock of the Company consists of 45,000,000
shares of Common Stock, of which approximately 22,697,117 are outstanding; and
5,000,000 undesignated shares, none of which shares are outstanding.
 
(ii)          Other than as set forth in the Company’s SEC Documents, there are
no outstanding securities which are convertible into or exchangeable for shares
of Common Stock, whether such conversion is currently exercisable or exercisable
only upon some future date or the occurrence of some event in the future.
 
 
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(iii)        All issued and outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable.  After
considering all other commitments that may require the issuance of Common Stock,
the Company has sufficient authorized and unissued shares of Common Stock as may
be necessary to effect the issuance of the Shares on the Closing Date, were (1)
the Note issued and fully converted on that date and (2) the Warrant issued and
fully exercised on that date.

(iv)        The Shares have been duly authorized by all necessary corporate
action on the part of the Company, and, when issued (1) on conversion of, or in
payment of interest on the Note in accordance with the terms thereof, (2) upon
exercise of the Warrant in accordance with the terms thereof, or (3) at the
Closing in accordance with the terms of this Agreement, as applicable, will have
been duly and validly issued, fully paid and non-assessable, free from all
taxes, liens, claims, pledges, mortgages, restrictions, obligations, security
interests and encumbrances of any kind, nature and description, and will not
subject the Holder thereof to personal liability by reason of being a Holder.

(v)         The Conversion Shares and Warrant Shares are enforceable against the
Company and the Company presently has no claims or defenses of any nature
whatsoever with respect to the Conversion Shares or the Warrant Shares.

d.            Transaction Documents and Stock.  This Agreement and each of the
other Transaction Documents, and the transactions contemplated hereby and
thereby, have been duly and validly authorized by the Company. This Agreement
has been duly executed and delivered by the Company and this Agreement is, and
the Note, the Warrant, and each of the other Transaction Documents, when
executed and delivered by the Company, will be, valid and binding obligations of
the Company, enforceable in accordance with their respective terms, subject as
to enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium, and other similar laws affecting the enforcement of creditors’
rights generally.

e.            Non-contravention.  The execution and delivery of this Agreement
and each of the other Transaction Documents by the Company, the issuance of the
Securities in accordance with the terms hereof and thereof, and the consummation
by the Company of the other transactions contemplated by this Agreement, the
Note, the Warrant and the other Transaction Documents do not and will not
conflict with or result in a breach by the Company of any of the terms or
provisions of, or constitute a default under (i) the Articles  of Incorporation
or bylaws of the Company, as currently in effect, (ii) any indenture, mortgage,
deed of trust, or other material agreement or instrument to which the Company is
a party or by which such party or any of its properties or assets are bound,
including any listing agreement for the Common Stock except as herein set forth,
or (iii) to the Company’s knowledge, any existing applicable law, rule, or
regulation or any applicable decree, judgment, or order of any court, United
States federal or state regulatory body, administrative agency, or other
governmental body having jurisdiction over the Company or the Company’s
properties or assets, except such conflict, breach or default which would not
have or result in a Material Adverse Effect.

f.            Approvals.  No authorization, approval or consent of any court,
governmental body, regulatory agency, self-regulatory organization, or stock
exchange or market or the stockholders of the Company is required to be obtained
by the Company for the issuance and sale of the Securities to the Buyer as
contemplated by this Agreement, except such authorizations, approvals and
consents that have been obtained.

g.            Filings; Financial Statements.  None of the Company’s SEC
Documents contained, at the time they were filed, any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The Company has filed
all reports, schedules, forms, statements and other documents required to be
filed by the Company with the SEC under the 1934 Act on a timely basis or has
received a valid extension of such time of filing and has filed any such report,
schedule, form, statement or other document prior to the expiration of any such
extension.  As of their respective dates, the financial statements of the
Company included in the Company’s SEC Documents complied as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto.  Such financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).  No other information provided by or on behalf of the Company to
the Buyer which is not included in the Company’s SEC Documents, including,
without limitation, information referred to in 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, in the light of the
circumstance under which they are or were made, not misleading.
 
 
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h.           Absence of Certain Changes.  Since the Last Audited Date, there has
been no Material Adverse Effect, except as disclosed in the Company’s SEC
Documents. Since the Last Audited Date, except as provided in the Company’s SEC
Documents, the Company has not (i) incurred or become subject to any material
liabilities (absolute or contingent) except liabilities incurred in the ordinary
course of business consistent with past practices; (ii) discharged or satisfied
any material lien or encumbrance or paid any material obligation or liability
(absolute or contingent), other than current liabilities paid in the ordinary
course of business consistent with past practices; (iii) declared or made any
payment or distribution of cash or other property to stockholders with respect
to its capital stock, or purchased or redeemed, or made any agreements to
purchase or redeem, any shares of its capital stock; (iv) sold, assigned or
transferred any other material tangible assets, or canceled any material debts
owed to the Company by any third party or material claims of the Company against
any third party, except in the ordinary course of business consistent with past
practices; (v) waived any rights of material value, whether or not in the
ordinary course of business, or suffered the loss of any material amount of
existing business; (vi) made any increases in employee compensation, except in
the ordinary course of business consistent with past practices; or (vii)
experienced any material problems with labor or management in connection with
the terms and conditions of their employment.
 
i.            Full Disclosure.  There is no fact known to the Company or that
the Company should know after having made all reasonable inquiries (other than
conditions known to the public generally or as disclosed in the Company’s SEC
Documents) that has not been disclosed in writing to the Buyer that would
reasonably be expected to have or result in a Material Adverse Effect.

j.            Absence of Litigation.  There is no action, suit, proceeding,
inquiry or investigation before or by any court, public board or body pending
or, to the knowledge of the Company, threatened against or affecting the Company
before or by any governmental authority or non-governmental department,
commission, board, bureau, agency or instrumentality or any other person,
wherein an unfavorable decision, ruling or finding would have a Material Adverse
Effect or which would adversely affect the validity or enforceability of, or the
authority or ability of the Company to perform its obligations under, any of the
Transaction Documents.  The Company is not aware of any valid basis for any such
claim that (either individually or in the aggregate with all other such events
and circumstances) could reasonably be expected to have a Material Adverse
Effect. There are no outstanding or unsatisfied judgments, orders, decrees,
writs, injunctions or stipulations to which the Company is a party or by which
the Company or any of its properties is bound, that involve the transactions
contemplated herein or that, alone or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

k.           Absence of Events of Default. Neither the Company nor any of its
Subsidiaries is in violation of or in default with respect to (i) its Articles
of Incorporation or bylaws or other organizational documents, each as currently
in effect, or any material judgment, order, writ, decree, statute, rule or
regulation applicable to such entity; or (ii) any material mortgage, indenture,
agreement, instrument or contract to which such entity is a party or by which it
or any of its properties or assets are bound (nor is there any waiver in effect
which, if not in effect, would result in such a violation or default), except
such breach or default which would not have or result in a Material Adverse
Effect.

l.            Absence of Certain Company Control Person Actions or
Events.  Other than as set forth in the Company’s SEC Documents, none of the
following has occurred during the past five (5) years with respect to a Company
Control Person:

(i)           A petition under the federal bankruptcy laws or any state
insolvency law was filed by or against, or a receiver, fiscal agent or similar
officer was appointed by a court for the business or property of such Company
Control Person, or any partnership in which he or she was a general partner at
or within two (2) years before the time of such filing, or any corporation or
business association of which he or she was an executive officer at or within
two (2) years before the time of such filing;

(ii)          Such Company Control Person was convicted in a criminal proceeding
or is a named subject of a pending criminal proceeding (excluding traffic
violations and other minor offenses);
 
 
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(iii)         Such Company Control Person was the subject of any order, judgment
or decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him or her from, or
otherwise limiting, the following activities:

A. acting, as an investment advisor, 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, as a futures
commission merchant, introducing broker, commodity trading advisor, commodity
pool operator, floor broker, any other Person regulated by the Commodity Futures
Trading Commission (“CFTC”) or engaging in or continuing any conduct or practice
in connection with such activity;

B. engaging in any type of business practice; or

C. engaging in any activity in connection with the purchase or sale of any
security or commodity or in connection with any violation of federal or state
securities laws or federal commodities laws;

(iv)         Such Company Control Person was the subject of any order, judgment
or decree, not subsequently reversed, suspended or vacated, of any federal or
state authority barring, suspending or otherwise limiting for more than sixty
(60) calendar days the right of such Company Control Person to engage in any
activity described in subsection (iii) immediately above, or to be associated
with Persons engaged in any such activity; or

(v)          Such Company Control Person was found by a court of competent
jurisdiction in a civil action or by the CFTC or SEC to have violated any
federal or state securities law, and the judgment in such civil action or
finding by the CFTC or SEC has not been subsequently reversed, suspended, or
vacated.

m.          No Undisclosed Liabilities or Events.  The Company has no
liabilities or obligations other than those disclosed in the Transaction
Documents or the Company’s SEC Documents or those incurred in the ordinary
course of the Company’s business since the Last Audited Date, or which
individually or in the aggregate, do not or would not have a Material Adverse
Effect.  No event or circumstance has occurred or exists with respect to the
Company or its properties, business, operations, condition (financial or
otherwise), or results of operations, which, under applicable laws, rules or
regulations, requires public disclosure or announcement prior to the date hereof
by the Company but which has not been so publicly announced or disclosed.  There
are no proposals currently under consideration or currently anticipated to be
under consideration by the Board of Directors or the executive officers of the
Company which proposal would (i) change the Articles of Incorporation or bylaws
of the Company, each as currently in effect, with or without stockholder
approval, which change would reduce or otherwise adversely affect the rights and
powers of the stockholders of the Common Stock or (ii) materially or
substantially change the business, assets or capital of the Company, including
its interests in Subsidiaries.

n.           No Integrated Offering.  Neither the Company nor any of its
Affiliates nor any Person acting on its or their behalf has, directly or
indirectly, made any offer or sale of any security of the Company or solicited
any offer to buy any such security under circumstances that would eliminate the
availability of the exemption from registration under Regulation D in connection
with the offer and sale of the Securities as contemplated hereby.

o.           Dilution.  Each of the Company and its executive officers and
directors is aware that the number of shares of Common Stock issuable upon the
execution of this Agreement, the conversion of the Note and exercise of the
Warrant, or pursuant to the other terms of the Transaction Documents, may have a
dilutive effect on the ownership interests of the other stockholders (and
Persons having the right to become stockholders) of the Company.  The Company
specifically acknowledges that its obligation to issue (i) the Conversion Shares
upon conversion of the Note and (ii) the Warrant Shares upon exercise of the
Warrant, is binding upon the Company and enforceable regardless of the dilution
such issuance may have on the ownership interests of other stockholders of the
Company, and the Company will honor such obligations, including honoring every
Notice of Conversion (or “Conversion Notice” as contemplated by the Note) and
Notice of Exercise (or “Exercise Notice” as contemplated in the Warrant), unless
the Company is subject to an injunction (which injunction was not sought by the
Company or any of its directors or executive officers) prohibiting the Company
from doing so.
 
 
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p.           Fees to Brokers, Placement Agents and Others.  The Company has
taken no action which would give rise to any claim by any Person for a brokerage
commission, placement agent or finder’s fees or similar payments by the Buyer
relating to this Agreement or the transactions contemplated hereby.  Except for
such fees arising as a result of any agreement or arrangement entered into by
the Buyer without the knowledge of the Company (a “Buyer’s Fee”), the Buyer
shall have no obligation with respect to such fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in this
subsection that may be due in connection with the transactions contemplated
hereby.  The Company shall indemnify and hold harmless each of the Buyer, its
employees, officers, directors, stockholders, managers, agents, and partners,
and their respective Affiliates, from and against all claims, losses, damages,
costs (including the costs of preparation and attorneys’ fees) and expenses
suffered in respect of any such claimed or existing fees (other than a Buyer’s
Fee, if any).

q.           Disclosure.  All information relating to or concerning the Company
set forth in the Transaction Documents or in the Company’s SEC Documents or
other public filings provided by or on behalf of the Company to the Buyer is
true and correct in all material respects and the Company has not omitted to
state any material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading.  No event or
circumstance has occurred or exists with respect to the Company or its business,
properties, prospects, operations or financial conditions, which under
applicable laws, rules or regulations, requires public disclosure or
announcement by the Company.

r.           Confirmation.  The Company agrees that, if, to the knowledge of the
Company, any events occur or circumstances exist prior to the payment of the
Purchase Price by the Buyer to the Company which would make any of the Company’s
representations or warranties set forth herein materially untrue or materially
inaccurate as of such date, the Company shall immediately notify the Buyer in
writing prior to such date of such events or circumstances, specifying which
representations or warranties are affected and the reasons therefor.

s.           Title. The Company and the Subsidiaries, if applicable, own and
have good and marketable title in fee simple absolute to, or a valid leasehold
interest in, all their respective real properties and good title to their other
respective assets and properties, subject to no liens, claims or encumbrances
except as have been disclosed to the Buyer.

t.           Intellectual Property.

(i)           Ownership.  The Company owns or possesses or can obtain on
commercially reasonable terms sufficient legal rights to all patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses
(software or otherwise), information, know-how, inventions, discoveries,
published and unpublished works of authorship, processes and any and all other
proprietary rights (“Intellectual Property”) necessary to the business of the
Company as presently conducted, the lack of which could reasonably be expected
to have a Material Adverse Effect.  Except for agreements with its own employees
or consultants, standard end-user license agreements, support/maintenance
agreements and agreements entered in the ordinary course of the Company’s
business, all of which have been made available for review by the Buyer, there
are no outstanding options, licenses or agreements relating to the Intellectual
Property of the Company, and the Company is not bound by or a party to any
options, licenses or agreements with respect to the Intellectual Property of any
other person or entity.  The Company has not received any written communication
alleging that the Company has violated or, by conducting its business as
currently conducted, would violate any of the Intellectual Property of any other
person or entity, nor is the Company aware of any basis therefor.  The Company
is not obligated to make any payments by way of royalties, fees or otherwise to
any owner or licensor of or claimant to any Intellectual Property with respect
to the use thereof in connection with the present conduct of its business other
than in the ordinary course of its business.  There are no agreements,
understandings, instruments, contracts, judgments, orders or decrees to which
the Company is a party or by which it is bound which involve indemnification by
the Company with respect to infringements of Intellectual Property, other than
in the ordinary course of its business.
 
 
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(ii)          No Breach by Employees.  The Company is not aware that any of its
employees is obligated under any contract or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
materially interfere with the use of his or her efforts to promote the interests
of the Company or that would conflict with the Company’s business as presently
conducted.  Neither the execution nor delivery of this Agreement, nor the
carrying on of the Company’s business by the employees of the Company, nor the
conduct of the Company’s business as presently conducted, will, to the Company’s
knowledge, conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or
instrument under which any such employee is now obligated.  The Company does not
believe it is or will be necessary to use any inventions of any of its employees
made prior to their employment by the Company of which it is aware.

u.           Environmental Matters.
 
(i)          No Violation. There are, to the Company’s knowledge, with respect
to the Company or any of its Subsidiaries or any predecessor of the Company, no
past or present violations of Environmental Laws (as defined below), releases of
any material into the environment, actions, activities, circumstances,
conditions, events, incidents, or contractual obligations which may give rise to
any common law environmental liability or any liability under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 or similar
federal, state, local or foreign laws and neither the Company nor any of its
Subsidiaries has received any notice with respect to any of the foregoing, nor
is any action pending or, to the Company’s knowledge, threatened in connection
with any of the foregoing. 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. Other than those that are or were stored,
used or disposed of in compliance with applicable law, no Hazardous Materials
are contained on or about any real property currently owned, leased or used by
the Company or any of its Subsidiaries, and no Hazardous Materials were released
on or about any real property previously owned, leased or used by the Company or
any of its Subsidiaries during the period the property was owned, leased or used
by the Company or any of its Subsidiaries, except in the normal course of the
Company’s or any of its Subsidiaries’ business.
 
(iii)         No Storage Tanks.  There are no underground storage tanks on or
under any real property owned, leased or used by the Company or any of its
Subsidiaries that are not in compliance with applicable law.

5.           CERTAIN COVENANTS AND ACKNOWLEDGMENTS.

a.           Covenants and Acknowledgements of the Buyer.

(i)           Transfer Restrictions.  The Buyer acknowledges that (1) the
Securities have not been and are not being registered under the provisions of
the 1933 Act and, except as included in an effective Registration Statement, the
Shares have not been and are not being registered under the 1933 Act, and may
not be transferred unless (A) subsequently registered thereunder, or (B) the
Buyer shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company, to the effect that the
Securities to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration; (2) any sale of the Securities made in
reliance on Rule 144 may be made only in accordance with the terms of such Rule
and further, if such Rule is not applicable, any resale of such 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 used in the 1933 Act, may
require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (3) neither the Company nor any other
Person is under any obligation to register the Securities under the 1933 Act or
to comply with the terms and conditions of any exemption thereunder.
 
 
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(ii)          Restrictive Legend.  The Buyer acknowledges and agrees that, until
such time as the relevant Securities have been registered under the 1933 Act,
and may be sold in accordance with an effective Registration Statement, or until
such Securities can otherwise be sold without restriction, whichever is earlier,
the certificates and other instruments representing any of the Securities shall
bear a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of any such Securities):

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR
AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.

b.           Covenants, Acknowledgements and Agreements of the Company. As a
condition to the Buyer’s obligation to purchase the Securities contemplated by
this Agreement, and as a material inducement for the Buyer to enter into this
Agreement and the other Transaction Documents, until all of the Company’s
obligations hereunder and the Note are paid and performed in full and the
Warrant is exercised in full, or within the timeframes otherwise specifically
set forth below, the Company shall comply with the following covenants:
 
(i)           Filings.  From the date hereof until the date that is six (6)
months after all the Conversion Shares and Warrant Shares either have been sold
by the Buyer, or may permanently be sold by the Buyer without any restrictions
pursuant to Rule 144 (the “Registration Period”), the Company shall  timely make
all filings required to be made by it under the 1933 Act, the 1934 Act, Rule 144
or any United States state securities laws and regulations thereof applicable to
the Company or by the rules and regulations of the Principal Trading Market, and
such filings shall conform to the requirements of applicable laws, regulations
and government agencies, and, unless such filings are publicly available on the
SEC’s EDGAR system (via the SEC’s web site at no additional charge), the Company
shall provide a copy thereof to the Buyer promptly after such
filings.  Additionally, within four (4) Trading Days following the date of this
Agreement, the Company shall file a current report on Form 8-K describing the
terms of the transactions contemplated by the Transaction Documents in the form
required by the 1934 Act and approved by the Buyer and attaching the material
Transaction Documents as exhibits to such filing. The Company shall further
redact all confidential information from such Form 8-K.   Additionally, the
Company shall furnish to the Buyer, so long as the Buyer owns any Securities,
promptly upon request, (1) a written statement by the Company that it has
complied with the reporting requirements of Rule 144, the 1933 Act and the 1934
Act, (2) a copy of the most recent annual or quarterly report of the Company,
and (3) such other information as may be reasonably requested to permit the
Buyer to sell such Securities pursuant to Rule 144 without registration.
 
(ii)          Reporting Status.  So long as the Buyer beneficially owns
Securities and for at least twenty (20) Trading Days thereafter, the Company
shall file all reports required to be filed with the SEC pursuant to Sections 13
or 15(d) of the 1934 Act, and shall take all reasonable action under its control
to ensure that adequate current public information with respect to the Company,
as required in accordance with Rule 144, is publicly available, and 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 permit such
termination.
 
(iii)         Listing.  The Common Stock shall be listed or quoted for trading
on any of (1) NYSE Amex, (2) the New York Stock Exchange, (3) the Nasdaq Global
Market, (4) the Nasdaq Capital Market, (5) the OTC Bulletin Board, or (6) the
OTCQX or OTCQB. The Company shall promptly secure the listing of all of the
Conversion Shares and Warrant Shares upon each national securities exchange and
automated quotation system, if any, upon which the Common Stock is then listed
(subject to official notice of issuance) and shall maintain such listing of all
securities from time to time issuable under the terms of the Transaction
Documents. The Company shall comply in all material respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the
Principal Trading Market and/or the Financial Industry Regulatory Authority,
Inc. (“FINRA”) or any successor thereto, as the case may be, applicable to it at
least through the date which is sixty (60) calendar days after the later of (1)
the date on which the Note has been converted or paid in full, or (2) the date
on which the Warrant has been exercised in full.
 
 
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(iv)         Use of Proceeds.  The Company shall use the net proceeds received
hereunder for working capital and general corporate purposes only, including the
payment of a commission to Brighton Capital; provided, however, the Company will
not use such proceeds to pay fees payable (1) to any broker or finder relating
to the offer and sale of the Note and/or the Warrant other than Brighton
Capital, or (2) to any other party relating to any financing transaction
effected prior to the Closing Date.
 
(v)          Publicity, Filings, Releases, Etc.  Neither party shall disseminate
any information relating to the Transaction Documents or the transactions
contemplated thereby, including issuing any press releases, holding any press
conferences or other forums, or filing any reports (collectively, “Publicity”),
without giving the other party reasonable advance notice and an opportunity to
comment on the contents thereof.  Neither party will include in any such
Publicity any statement or statements or other material to which the other party
reasonably objects, unless in the reasonable opinion of counsel to the party
proposing such statement, such statement is legally required to be included.  In
furtherance of the foregoing, the Company shall provide to the Buyer’s Counsel a
draft of the first current report on Form 8-K or a quarterly or annual report on
Form 10-Q or 10-K, as the case may be, intended to be made with the SEC which
refers to the Transaction Documents or the transactions contemplated thereby as
soon as practicable (but at least two (2) Trading Days before such filing will
be made) and shall not include in such filing (or any other filing filed before
then) any statement or statements or other material to which the other party
reasonably objects, unless in the reasonable opinion of counsel to the party
proposing such statement, such statement is legally required to be
included.  Notwithstanding the foregoing, each of the parties hereby consents to
the inclusion of the text of the Transaction Documents in filings made with the
SEC (but any descriptive text accompanying or part of such filing shall be
subject to the other provisions of this subsection).
 
(vi)         FINRA Rule 5110. In the event that the Corporate Financing Rule
5110 of FINRA is or becomes applicable to the transactions contemplated by the
Transaction Documents or to the sale by a Holder of any of the Securities, then
the Company shall, to the extent required by such rule, timely make any filings
and cooperate with any broker or selling stockholder in respect of any consents,
authorizations or approvals that may be necessary for FINRA to timely and
expeditiously permit the Holder to sell the Securities.
 
(vii)        Keeping of Records and Books of Account. The Company shall keep and
cause each Subsidiary to keep adequate records and books of account, in which
complete entries shall be made in accordance with GAAP consistently applied,
reflecting all financial transactions of the Company and such Subsidiaries, and
in which, for each fiscal year, all proper reserves for depreciation, depletion,
obsolescence, amortization, taxes, bad debts and other purposes in connection
with its business shall be made.
 
(viii)       Corporate Existence.  The Company shall (1) do all things necessary
to preserve and keep in full force and effect its corporate existence,
including, without limitation, preserving and keeping in full force and effect
all licenses or similar qualifications required by it to engage in its business
in all jurisdictions in which it is at the time so engaged; (2) continue to
engage in business of the same general type as conducted as of the date hereof;
and (3) continue to conduct its business substantially as now conducted or as
otherwise permitted hereunder.
 
(ix)         Taxes.  The Company shall pay and discharge promptly when due all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or in respect of its property before the same shall become
delinquent or in default, which, if unpaid, might reasonably be expected to give
rise to liens or charges upon such properties or any part thereof, unless, in
each case, the validity or amount thereof is being contested in good faith by
appropriate proceedings and the Company has maintained adequate reserves with
respect thereto in accordance with GAAP.
 
(x)          Compliance. The Company shall comply in all material respects with
all federal, state and local laws and regulations, orders, judgments, decrees,
injunctions, rules, regulations, permits, licenses, authorizations and
requirements (collectively, “Requirements”) of all governmental bodies,
insurers, departments, commissions, boards, courts, authorities, officials or
officers which are applicable to the Company, its business, operations, or any
of its properties, except where the failure to so comply would not have a
Material Adverse Effect on the Company or any of its properties; provided,
however, that nothing provided herein shall prevent the Company from contesting
in good faith the validity or the application of any Requirements.
 
 
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(xi)         Intentionally Left Blank.

(xii)        Litigation.  From and after the date hereof and until all of the
Company’s obligations hereunder and the Note are paid and performed in full and
the Warrant is exercised in full, the Company shall notify the Buyer in writing,
promptly upon learning thereof, of any litigation or administrative proceeding
commenced or threatened against the Company involving a claim in excess of
$100,000.00.
 
(xiii)       Performance of Obligations.  The Company shall promptly and in a
timely fashion perform and honor all demands, notices, requests and obligations
that exist or may arise under the Transaction Documents.
 
(xiv)       Intentionally Left Blank.
 
(xv)        Authorized Shares.  The Company shall take all action necessary to,
at all times, have authorized and reserved for the purpose of issuance: (i) the
higher of such number of shares of Common Stock (1) as shall be necessary to
effect the full conversion of the Note as of the relevant date of determination,
multiplied by two, and (2) equal to two times the Outstanding Balance (as
defined in the Note) of the Note as of the relevant date of determination,
divided by the then-current Conversion Price (as defined in and determined
pursuant to the Note) (the “Note Share Reserve”); plus (ii) the higher of such
number of shares of Common Stock (1) as shall be necessary to effect the
complete exercise of the Warrant as of the relevant date of determination,
multiplied by two, and (2) equal to the number of Delivery Shares (as defined in
the Warrant) that would be required to be delivered to the Holder in order to
effect a complete exercise of the Warrant pursuant to the terms thereof as of
the relevant date of determination (the “Warrant Share Reserve,” and together
with the Note Share Reserve, the “Share Reserve”).  If at any time the Share
Reserve is less than required herein at such time, the Company shall immediately
increase the Share Reserve in an amount equal to no less than the
deficiency.  If the Company does not have sufficient authorized and unissued
shares of Common Stock available to increase the Share Reserve, the Company
shall call a special meeting of the stockholders as soon as practicable after
such occurrence, but in no event later than thirty (30) calendar days after such
occurrence (and hold such meeting as soon as practicable thereafter, but in no
event later than thirty (30) calendar days after calling the meeting as required
above), for the sole purpose of increasing the number of authorized shares of
Common Stock. The Company’s management shall recommend to the Company’s
stockholders to vote in favor of increasing the number of authorized shares of
Common Stock.  Management shall also vote all of its shares in favor of
increasing the number of authorized shares of Common Stock. The Company shall
use its best efforts to cause such additional shares of Common Stock to be
authorized so as to comply with the requirements of this Section.  All
calculations with respect to determining the Note Share Reserve and the Warrant
Share Reserve shall be made without regard to any limitations on conversion of
the Note or exercise of the Warrant).
 
(xvi)       DWAC Eligibility. For so long as (1) any portion of the Note remains
outstanding, or (2) any portion of the Warrant remains unexercised, the Company
shall use its best efforts to maintain DWAC eligibility.
 
(xvii)      Anti-Dilution Certification.  For so long as any portion of the Note
remains outstanding, the Company shall deliver to the Buyer on or before the
10th day of each month a certification in the form attached hereto as Annex VI
whereby the Company shall notify the Buyer of any events that occurred during
the previous month that trigger anti-dilution protection or other adjustments to
the applicable Conversion Price (as defined in the Note) or Exercise Price (as
defined in the Warrant) (collectively, “Adjustment Events”) under the Note or
the Warrant, as applicable, or, if no Adjustment Events occurred, certifying to
the Buyer that no Adjustment Events occurred during the previous month.
 
(xviii)     Piggyback Registrations. Other than a Form S-1 Registration
Statement the Company is required to file pursuant to a certain Registration
Rights Agreement between the Company and TCA Global Credit Master Fund, LP, a
Cayman Islands limited partnership, on July 11, 2012, provided such Registration
Rights Agreement is not amended, altered or modified hereafter, (1) During the
ninety (90) calendar days immediately following the Closing Date, and (2) any
time after the six-month anniversary of the Closing Date during which  the Buyer
is not eligible to sell Shares under Rule 144, the Company shall notify the
Buyer in writing at least fifteen (15) Trading Days prior to the filing of any
Registration Statement for purposes of a public offering of securities of the
Company (including, but not limited to, Registration Statements relating to
secondary offerings of securities of the Company) and will afford the Buyer an
opportunity to include in such Registration Statement all or part of the Shares
it holds. If the Buyer desires to include in any such Registration Statement all
or any part of the Shares held by it, the Buyer shall, within fifteen (15)
Trading Days after the above-described notice from the Company, so notify the
Company in writing. Such notice shall state the intended method of disposition
of the Shares by the Buyer. In the event the Buyer desires to include less than
all of its Shares in any Registration Statement it shall continue to have the
right to include any Shares in any subsequent Registration Statement or
Registration Statements as may be filed by the Company with respect to offerings
of its securities, all upon the terms and conditions set forth herein.
 
 
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(xix)       Rule 144 Opinion.  The Company shall accept, in its reasonable
discretion, an opinion letter prepared by legal counsel of the Buyer’s choosing,
stating that (1) the Company is not a “Shell Company” as such term is defined in
Rule 144, (2) the Company has not been a Shell Company for the preceding twelve
(12) months, (3) the Company is in compliance with all filing requirements under
Rule 144, and (4) the Shares may be sold by the Buyer without any restrictions
pursuant to Rule 144, so long as the applicable holding period specified by Rule
144 is satisfied, and, as applicable, the Company shall give instructions to its
Transfer Agent to issue shares of Common Stock upon conversion of the Note
and/or exercise of the Warrant based upon or otherwise consistent with such
opinion.

(xx)    Transfer Agent Reserve.  From and after the date hereof and until all of
the Company’s obligations hereunder and the Note are paid and performed in full
and the Warrant is  exercised in full (or otherwise expired):
 
1.         the Company shall at all times require its Transfer Agent to
establish a reserve of shares of authorized but unissued Common Stock in an
amount not less than the Share Reserve (the “Transfer Agent Reserve”);
 
2.         the Company shall require its Transfer Agent to hold the Transfer
Agent Reserve for the exclusive benefit of the Holder and shall authorize the
Transfer Agent to issue the shares of Common Stock held in the Transfer Agent
Reserve to the Holder only (subject to subsection (3) immediately below);
 
3.         the Company shall cause the Transfer Agent to agree that when the
Transfer Agent issues shares of Common Stock to the Holder pursuant to the
Transaction Documents, the Transfer Agent will not issue such shares from the
Transfer Agent Reserve, unless such is pre-approved in writing by the Holder;
 
4.         the Company shall cause the Transfer Agent to agree that it will not
reduce the Transfer Agent Reserve under any circumstances, unless such reduction
is pre-approved in writing by the Holder;
 
5.         no less frequently than quarterly, the Company shall recalculate the
Transfer Agent Reserve as of such time (each a “Transfer Agent Reserve
Calculation”), and if additional shares of Common Stock are required to be added
to the Transfer Agent Reserve pursuant to subsection (1) immediately above, the
Company shall immediately give instructions to the Transfer Agent to cause the
Transfer Agent to set aside and increase the Transfer Agent Reserve by the
necessary number of shares of Common Stock; and
 
6.         no less frequently than quarterly, the Company shall certify in
writing to the Holder (a) the correctness of the Company’s Transfer Agent
Reserve Calculation and (b) that either (i) the Company has instructed the
Transfer Agent to increase the Transfer Agent Reserve in accordance with the
terms hereof, or (ii) there was no need to increase the Transfer Agent Reserve,
in either case consistent with the Transfer Agent Reserve Calculation.
 
For the avoidance of any doubt, the requirements of this subsection 5.2(b)(xx)
are material to this Agreement and any violation or breach thereof by the
Company shall constitute a default under this Agreement.
 
 
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6.           TRANSFER AGENT INSTRUCTIONS.

a.           The Company covenants that, with respect to the Securities, other
than the stop transfer instructions to give effect to Section 5(a)(i) hereof,
the Company will give the Transfer Agent no instructions inconsistent with
instructions to issue Common Stock upon conversion of the Note and/or exercise
of the Warrant, as may be applicable from time to time, in such amounts as
specified from time to time by the Company to the Transfer Agent, bearing the
restrictive legend specified in Section 5(a)(ii) of this Agreement prior to
registration of the Shares under the 1933 Act, registered in the name of the
Holder or its designee and in such denominations to be specified by the Holder
in connection therewith.  Except as so provided, the Shares shall otherwise be
freely transferable on the books and records of the Company as and to the extent
provided in this Agreement and the other Transaction Documents.  Nothing in this
Section shall affect in any way the Buyer’s obligations and agreement to comply
with all applicable securities laws upon resale of the Securities.  If the Buyer
provides the Company with an opinion of counsel reasonably satisfactory to the
Company that registration of a resale by the Buyer of any of the Securities in
accordance with clause (1)(B) of Section 5(a)(i) of this Agreement is not
required under the 1933 Act or upon request from a Holder while an applicable
Registration Statement is effective, the Company shall (except as provided in
clause (2) of Section 5(a)(i) of this Agreement) permit the transfer of the
Securities and, in the case of the Conversion Shares and the Warrant Shares, as
may be applicable, use its best efforts to cause the Transfer Agent to promptly
electronically transmit to the Holder via DWAC such Conversion Shares or Warrant
Shares.  The Company specifically covenants that, as of the Closing Date, the
Transfer Agent shall be (i) participating in the DWAC program, and (ii) DWAC
eligible.  Moreover, the Company shall notify the Buyer in writing if the
Company at any time while the Holder holds Securities becomes aware of any plans
of the Transfer Agent to terminate such DWAC participation or
eligibility.  While any Holder holds Securities, the Company shall at all times
after the Closing Date maintain a transfer agent which participates in the DWAC
program and is DWAC eligible, and the Company shall not appoint any transfer
agent which does not both participate in the DWAC program and maintain DWAC
eligibility.  Nevertheless, if at any time that the Company receives a
Conversion Notice the Transfer Agent is not participating in the DWAC program or
the Conversion Shares or Warrant Shares are not otherwise transferable via the
DWAC program, then the Company shall instruct the Transfer Agent to issue one or
more certificates for Common Stock without legend in such name and in such
denominations as specified by the Holder.

b.           The Company shall assume any fees or charges of the Transfer Agent
or Company Counsel regarding (i) the removal of a legend or stop transfer
instructions with respect to the Securities, and (ii) the issuance of
certificates or DWAC registration to or in the name of the Holder or the
Holder’s designee or to a transferee as contemplated by an effective
Registration Statement.  Notwithstanding the foregoing, it shall be the Holder’s
responsibility to obtain all needed formal requirements (specifically: medallion
guarantee and prospectus delivery compliance) in connection with any electronic
issuance of shares of Common Stock.

c.           The Holder of the Note shall be entitled to exercise its conversion
privilege with respect to such Note, notwithstanding the commencement of any
case under 11 U.S.C. §101 et seq. (the “Bankruptcy Code”).  In the event the
Company is a debtor under the Bankruptcy Code, the Company hereby waives, to the
fullest extent permitted, any rights to relief it may have under 11 U.S.C. §362
in respect of such Holder’s exercise privilege.  The Company hereby waives, to
the fullest extent permitted, any rights to relief it may have under 11 U.S.C.
§362 in respect of the conversion of such Note. The Company agrees, without cost
or expense to such Holder, to take or to consent to any and all action necessary
to effectuate relief under 11 U.S.C. §362.

7.           CLOSING DATE.

a.           The Closing Date shall occur on the date which is the first Trading
Day after each of the conditions contemplated by Sections 8 and 9 hereof shall
have either been satisfied or been waived by the party in whose favor such
conditions run.

b.           Closing of the purchase and sale of the Securities, which the
parties anticipate shall occur concurrently with the execution of this
Agreement, shall occur at the offices of the Buyer and shall take place no later
than 3:00 P.M., Eastern Time, or on such day or such other time as is mutually
agreed upon by the Company and the Buyer.
 
 
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8.           CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL. The Company’s
obligation to sell the Securities to the Buyer pursuant to this Agreement on the
Closing Date is conditioned upon and subject to the fulfillment, on or prior to
the Closing Date, of all of the following conditions, any of which may be waived
in whole or in part by the Company:

a.           The execution and delivery of this Agreement and, as applicable,
the other Transaction Documents by the Buyer;

b.           Delivery by the Buyer of good funds as payment in full of an amount
equal to the Purchase Price in accordance with this Agreement;

c.           The accuracy on the Closing Date of the representations and
warranties of the Buyer contained in this Agreement, each as if made on such
date, and the performance by the Buyer on or before such date of all covenants
and agreements of the Buyer required to be performed on or before such date; and

d.           There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained.

9.           CONDITIONS TO THE BUYER’S OBLIGATION TO PURCHASE. The Buyer’s
obligation to purchase the Securities from the Company pursuant to this
Agreement on the Closing Date is conditioned upon and subject to the
fulfillment, on or prior to the Closing Date, of all of the following
conditions, any of which may be waived in whole or in part by the Buyer:

a.           The execution and delivery of this Agreement, the Transfer Agent
Letter, the Secretary’s Certificate, and, as applicable, the other Transaction
Documents by the Company;

b.           The delivery by the Company to the Buyer of the Note and the
Warrant, each in original form, duly executed by the Company, in accordance with
this Agreement;

c.           On the Closing Date, each of the Transaction Documents executed by
the Company on or before such date shall be in full force and effect and the
Company shall not be in default thereunder;

d.           The Share Reserve shall be sufficient to effect the full conversion
of the Note and exercise of the Warrant as of the Closing Date;

e.           The accuracy in all material respects on the Closing Date of the
representations and warranties of the Company contained in this Agreement and
the other Transaction Documents, each as if made on such date, and the
performance by the Company on or before such date of all covenants and
agreements of the Company required to be performed on or before such date;

f.           There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained;
 
 
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g.           From and after the date hereof up to and including the Closing
Date, each of the following conditions will remain in effect: (i) the trading of
the Common Stock shall not have been suspended by the SEC or on the Principal
Trading Market; (ii) trading in securities generally on the Principal Trading
Market shall not have been suspended or limited; (iii) no minimum prices shall
been established for securities traded on the Principal Trading Market; (iv)
there shall not have been any material adverse change in any financial market;
and (v) there shall not have occurred any Material Adverse Effect;
 
h.           Except for any notices required or permitted to be filed after the
Closing Date with certain federal and state securities commissions, the Company
shall have obtained (i) all governmental approvals required in connection with
the lawful sale and issuance of the Securities, and (ii) all third party
approvals required to be obtained by the Company in connection with the
execution and delivery of the Transaction Documents by the Company or the
performance of the Company’s obligations thereunder; and

i.           All corporate and other proceedings in connection with the
transactions contemplated at the Closing and all documents and instruments
incident to such transactions shall be reasonably satisfactory in substance and
form to the Buyer.

10.          INDEMNIFICATION.

a.           The Company agrees to defend, indemnify and forever hold harmless
the Buyer and its stockholders, directors, officers, managers, members,
partners, Affiliates, employees, attorneys, and agents, and each Buyer Control
Person (collectively, the “Buyer Parties”) from and against any losses, claims,
damages, liabilities or expenses incurred (collectively, “Damages”), joint or
several, and any action in respect thereof to which the Buyer or any of the
other Buyer Parties becomes subject, resulting from, arising out of or relating
to any misrepresentation, breach of warranty or nonfulfillment of or failure to
perform any covenant or agreement on the part of the Company contained in this
Agreement or any of the other Transaction Documents, as such Damages are
incurred. The Buyer Parties with the right to be indemnified under this Section
(the “Indemnified Parties”) shall have the right to defend any such action or
proceeding with attorneys of their own selection, and the Company shall be
solely responsible for all costs and expenses related thereto.  If the
Indemnified Parties opt not to retain their own counsel, the Company shall
defend any such action or proceeding with attorneys of its choosing at its sole
cost and expense, provided that such attorneys have been pre-approved by the
Indemnified Parties, which approval shall not be unreasonably withheld, and
provided further that the Company may not settle any such action or proceeding
without first obtaining the written consent of the Indemnified Parties.

b.           The indemnity contained in this Agreement shall be in addition to
(i) any cause of action or similar rights of the Buyer Parties against the
Company or others, and (ii) any other liabilities the Company may be subject to.

11.          INTENTIONALLY LEFT BLANK.

12.          OWNERSHIP LIMITATION. If at any time after the Closing, the Buyer
shall or would receive shares of Common Stock in payment of interest or
principal under the Note or upon conversion of the Note or exercise of the
Warrant, so that the Buyer would, together with other shares of Common Stock
held by it or its Affiliates, own or beneficially own by virtue of such action
or receipt of additional shares of Common Stock a number of shares exceeding
4.99% of the Common Stock then outstanding (the “Maximum Percentage”), the
Company shall not be obligated and shall not issue to the Buyer shares of Common
Stock which would exceed the Maximum Percentage, but only until such time as the
Maximum Percentage would no longer be exceeded by any such receipt of shares of
Common Stock by the Buyer.  Notwithstanding the forgoing, (a) if any of the DWAC
Eligible Conditions (as defined in the Note) are not then satisfied, the term
“4.99%” shall be replaced in the preceding sentence with “9.99%” at such time as
the Market Capitalization of the Common Stock is less than three million dollars
($3,000,000.00), but (ii) if all of the DWAC Eligible Conditions are then
satisfied, the term “4.99%” shall be replaced in the preceding sentence with
“9.99%” only at such time as the Market Capitalization of the Common Stock is
less than one million dollars ($1,000,000.00).  For the avoidance of any doubt,
notwithstanding any other provision contained herein, if the term “4.99%” is
replaced with “9.99%” pursuant to the preceding sentence, such change to “9.99%”
shall be permanent.  For purposes of this Agreement, the term “Market
Capitalization of the Common Stock” shall mean the product equal to (i) the
average VWAP (as defined in the Note) of the Common Stock for the immediately
preceding thirty (30) Trading Days, multiplied by (ii) the aggregate number of
outstanding shares of Common Stock as reported on the Company’s most recently
filed Form 10-Q or Form 10-K.  The foregoing limitations are enforceable,
unconditional and non-waivable and shall apply to all Affiliates and assigns of
the Buyer.
 
 
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13.          INTENTIONALLY LEFT BLANK.
 
14.          INTENTIONALLY LEFT BLANK.

15.          MISCELLANEOUS.

a.           Governing Law and Venue.  This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Utah for contracts to be
wholly performed in such state and without giving effect to the principles
thereof regarding the conflict of laws.  Each of the parties consents to the
exclusive personal jurisdiction of the federal courts whose districts encompass
any part of Salt Lake County or the state courts of the State of Utah sitting in
Salt Lake County in connection with any dispute arising under this Agreement,
and hereby waives, to the maximum extent permitted by law, any objection,
including any objection based on forum non conveniens, to the bringing of any
such proceeding in such jurisdictions or to any claim that such venue of the
suit, action or proceeding is improper. Nothing in this subsection shall affect
or limit any right to serve process in any other manner permitted by law. THE
COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.

b.            No Waiver.  Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in exercising such right
or remedy, shall not operate as a waiver thereof.

c.            Successors and Assigns.  This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties hereto.

d.            Pronouns.  All pronouns and any variations thereof in this
Agreement refer to the masculine, feminine or neuter, singular or plural, as the
context may permit or require.

e.            Counterparts.  This Agreement may be signed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall be deemed to constitute one instrument.  Facsimile and email
copies of signed signature pages will be deemed binding originals.

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

g.            Severability.  Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such provision shall be modified to achieve
the objective of the parties to the fullest extent permitted and such invalidity
or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.

h.            Amendment.  This Agreement may be amended only by an instrument in
writing signed by the Company and the Buyer.
 
 
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i.            Entire Agreement.  This Agreement together with the other
Transaction Documents constitute and contain the entire agreement between the
Company and the Buyer and supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof.

j.            Currency.  All dollar amounts referred to or contemplated by this
Agreement or any other Transaction Documents shall be deemed to refer to US
Dollars, unless otherwise explicitly stated to the contrary.

k.           Buyer’s Expenses.  In the event the Company or the Buyer elects not
to effect the Closing for any reason, the Company shall pay $7,500 in cash to
the Buyer for the Buyer’s legal, administrative and due diligence
expenses.  Except as provided in the immediately preceding sentence, and except
for $7,500 which has been added to and included in the principal amount of the
Note for the Buyer’s legal, administrative and due diligence expenses, the
Company and the Buyer shall be responsible for paying such party’s own fees and
expenses (including legal expenses) incurred in connection with the preparation
and negotiation of this Agreement and the other Transaction Documents and the
closing of the transactions contemplated hereby and thereby.

l.            Assignment by the Company.  Notwithstanding anything to the
contrary herein, the rights, interests or obligations of the Company hereunder
may not be assigned, by operation of law or otherwise, in whole or in part, by
the Company without the prior written consent of the Buyer, which consent may be
withheld at the sole discretion of the Buyer; provided, however, that in the
case of a merger, sale of substantially all of the Company’s assets or other
corporate reorganization, the Buyer shall not unreasonably withhold, condition
or delay such consent.

m.          Advice of Counsel. In connection with the preparation of this
Agreement and all other Transaction Documents, the Company, for itself and on
behalf of its stockholders, officers, subsidiaries, agents, and representatives
(collectively, the “Company Parties”), acknowledges and agrees that the attorney
that prepared this Agreement and all of the other Transaction Documents acted as
legal counsel to the Buyer only.  The Company (i) hereby acknowledges that each
of the Company and all other Company Parties has been, and hereby is, advised to
seek legal counsel and to review this Agreement and all of the other Transaction
Documents with legal counsel of his/her/its choice, and (ii) either has sought
such legal counsel or hereby waives or has otherwise waived the right to do so.

n.           No Strict Construction. The language used in this Agreement is the
language chosen mutually by the parties hereto and no doctrine of construction
shall be applied for or against any party.

o.           Attorney’s Fees.  In the event of any action at law or in equity to
enforce or interpret the terms of this Agreement or any of the other Transaction
Documents, the parties agree that the party who is awarded the most money shall
be deemed the prevailing party for all purposes and shall therefore be entitled
to an additional award of the full amount of the attorneys’ fees and expenses 
paid by such prevailing party in connection with the litigation and/or dispute
without reduction or apportionment based upon the individual claims or defenses 
giving rise to the fees and expenses.  Nothing herein shall restrict or impair a
court’s power to award fees and expenses for frivolous or bad faith pleading.

p.           Replacement of the Note. Subject to any restrictions on or
conditions to transfer set forth in the Note, the Holder of the Note, at its
option, may in person or by duly authorized attorney surrender the same for
exchange at the Company’s principal corporate office, and promptly thereafter
and at the Company’s expense, except as provided below, receive in exchange
therefor one or more new convertible promissory note(s), each in the principal
amount requested by such Holder, dated the date to which interest shall have
been paid on the Note so surrendered or, if no interest shall have yet been so
paid, dated the date of the Note so surrendered and registered in the name of
such person or persons as shall have been designated in writing by such Holder
or its attorney for the same principal amount as the then unpaid principal
amount of the Note so surrendered. As applicable, upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of the Note and (i) in the case of loss, theft or
destruction, of indemnity reasonably satisfactory to it; or (ii) in the case of
mutilation, upon surrender thereof, the Company, at its expense, will execute
and deliver in lieu thereof a new convertible promissory note executed in the
same manner as the Note being replaced, in the same principal amount as the
unpaid principal amount of such Note and dated the date to which interest shall
have been paid on the Note or, if no interest shall have yet been so paid, dated
the date of the Note.
 
 
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q.             Notices. Any notice required or permitted hereunder shall be
given in writing (unless otherwise specified herein) and shall be deemed
effectively given on the earliest of

(i)           the date delivered, if delivered by personal delivery as against
written receipt therefor or by confirmed facsimile or electronic mail
transmission,

(ii)          the fifth Trading Day after deposit, postage prepaid, in the
United States Postal Service by registered or certified mail, or

(iii)         the third Trading Day after mailing by domestic or international
express courier, with delivery costs and fees prepaid,

in each case, addressed to each of the other parties thereunto entitled at the
following addresses (or at such other addresses as such party may designate by
ten (10) calendar days’ advance written notice similarly given to each of the
other parties hereto):

If to the Company:

PuraMed BioScience, Inc.
Attn: Russ Mitchell
1326 Schofield Avenue
Schofield, Wisconsin 54476

with a copy to (which shall not constitute notice):

Lucosky Brookman LLP
Attn: Joseph Lucosky
33 Wood Avenue South, 6th Floor
Iselin, NJ 08830

If to the Buyer:

Tonaquint, Inc.
Attn: John M. Fife
303 East Wacker Drive, Suite 1200
Chicago, Illinois  60601
 
 
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with a copy to (which shall not constitute notice):

Hansen Black Anderson PLLC
Attn: Jonathan K. Hansen
2940 West Maple Loop Drive, Suite 103
Lehi, Utah 84043
Telephone: (801) 209-5558
 
r.            Further Assurance.  Each party to this Agreement agrees to perform
any further acts and execute and deliver any documents that may be reasonably
necessary to carry out the provisions of this Agreement and the other
Transaction Documents.

s.             Buyer’s Rights and Remedies Cumulative.  All rights, remedies,
and powers conferred in this Agreement and the Transaction Documents on the
Buyer are cumulative and not exclusive of any other rights or remedies, and
shall be in addition to every other right, power, and remedy that the Buyer may
have, whether specifically granted in this Agreement or any other Transaction
Document, or existing at law, in equity, or by statute; and any and all such
rights and remedies may be exercised from time to time and as often and in such
order as the Buyer may deem expedient.
 
16.           SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES. The
Company’s and the Buyer’s covenants, agreements, representations and warranties
contained herein shall survive the execution and delivery of this Agreement and
the other Transaction Documents and the Closing hereunder, and shall inure to
the benefit of the Buyer and the Company and their respective successors and
permitted assigns.

 
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
 
 
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IN WITNESS WHEREOF, each of the undersigned represents that the foregoing
statements made by it above are true and correct and that it has caused this
Agreement to be duly executed on its behalf (if an entity, by one of its
officers thereunto duly authorized) as of the date first above written.
 

PURCHASE PRICE: $150,000.00                 THE BUYER:           TONAQUINT, INC.
         
 
By:
        John M. Fife, President                     THE COMPANY:            
PURAMED BIOSCIENCE, INC.
            By:       Name:       Title:    

 
 
[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
 
 
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ANNEX I                              WIRE INSTRUCTIONS

ANNEX II                             NOTE

ANNEX III                           WARRANT

ANNEX IV                           TRANSFER AGENT LETTER

ANNEX V                             SECRETARY’S CERTIFICATE

ANNEX VI                            FORM OF ANTI-DILUTION CERTIFICATE
 
 
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