Unassociated Document


    SECURITIES
      PURCHASE AGREEMENT

     

    THIS
      SECURITIES PURCHASE AGREEMENT
      (“Agreement”)
      is
      made as of the ___ day of June, 2008, by and among Emerald Dairy Inc., a Nevada
      corporation, with an address at 11990 Market Street, Suite 205, Reston, VA
      20190
      (the “Company”),
      and
      the Investors set forth on the signature pages affixed hereto (each an
“Investor”
and
      collectively the “Investors”).

    


    Recitals:

    


    A. The
      Company and the Investors are executing and delivering this Agreement in
      connection with an offering of securities of the Company (the “Offering”),
      in
      reliance upon the exemption from securities registration afforded by the
      provisions of Section 4(2) of the Securities Act of 1933, as amended (the
“1933
      Act”),
      or
      Regulation D promulgated thereunder (“Regulation
      D”);
      and

    


    B. The
      Investors wish to purchase from the Company, and the Company wishes to sell
      and
      issue to the Investors, in one or more Closings to occur on or prior to June
      30,
      2008 (provided the Minimum Loan Amount has been received by the Company on
      or
      before June 15, 2008), upon the terms and conditions stated in this
      Agreement:

    


    (i) Promissory
      notes of up to an aggregate principal amount of $3,000,000, with an interest
      rate of 8% per annum (“Notes”),
      in
      substantially the form attached hereto as Exhibit
      A;
      and

    


    (ii) Warrants
      to purchase that number of shares of the Company’s Common Stock equal to ten
      (10%) percent of the principal dollar amount of the Notes purchased, at an
      exercise price of $2.61 per share (“Warrants”),
      in
      substantially the form attached hereto as Exhibit
      A;
      and

    


    C. Pursuant
      to its terms: (a) not less than an aggregate of $1,000,000 of Notes (the
“Minimum
      Loan Amount”)
      and
      100,000 Warrants (“Minimum
      Warrants”);
      and
      (b) not more than an aggregate of $3,000,000 of Notes (the “Maximum
      Loan Amount”)
      and
      300,000 Warrants (“Maximum Warrants”), may be sold in this
      Offering.

     

    In
      consideration of the mutual promises made herein and for other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      the
      parties hereto agree as follows:

    


    1. Definitions.
      In
      addition to those terms defined above and elsewhere in this Agreement, for
      the
      purposes of this Agreement, the following terms shall have the meanings set
      forth below:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Affiliate”
means,
      with respect to any Person, any other Person which directly or indirectly
      through one or more intermediaries Controls, is controlled by, or is under
      common control with, such Person.

    


    “Business
      Day”
means
      a
      day, other than a Saturday or Sunday, on which banks in New York City are open
      for the general transaction of business.

    


    “Common
      Stock”
means
      the Company’s common stock, par value $0.001 per share, and any securities into
      which the common stock may be reclassified.

    


    “Company’s
      Knowledge”
means
      the actual knowledge of the executive officers (as defined in Rule 405 under
      the
      1933 Act) of the Company, after due inquiry.

    


    “Confidential
      Information”
means
      trade secrets, confidential information and know-how (including but not limited
      to ideas, formulae, compositions, processes, procedures and techniques, research
      and development information, computer program code, performance specifications,
      support documentation, drawings, specifications, designs, business and marketing
      plans, and customer and supplier lists and related information).

    


    “Control”
      (including the terms “controlling”, “controlled by” or “under common control
      with”) means the possession, direct or indirect, of the power to direct or cause
      the direction of the management and policies of a Person, whether through the
      ownership of voting securities, by contract or otherwise.

    


    “Escrow
      Agent”
means
      Hodgson Russ, LLP.

    


    “Escrow
      Agreement”
means
      the Escrow Agreement the Company, the Investors and the Escrow Agent will enter
      into at the Closing, in substantially the form attached hereto as Exhibit
      C.

    


    “Interest”
means
      interest at a rate of 8% per annum.

    


    “Intellectual
      Property”
means
      all of the following: (i) patents, patent applications, patent disclosures
      and
      inventions (whether or not patentable and whether or not reduced to practice);
      (ii) trademarks, service marks, trade dress, trade names, corporate names,
      logos, slogans and Internet domain names, together with all goodwill associated
      with each of the foregoing; (iii) copyrights and copyrightable works; (iv)
      registrations, applications and renewals for any of the foregoing; and (v)
      proprietary computer software (including but not limited to data, data bases
      and
      documentation).

    


    “Loan
      Amount”
means
      a
      minimum of $1,000,000 and a maximum of $3,000,000.

    


    “Material
      Adverse Effect”
means
      a
      material adverse effect on (i) the assets, liabilities, results of operations,
      condition (financial or otherwise), business, or prospects of the Company and
      its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform
      its obligations under the Transaction Documents.

     

    
      
         

      

      
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    “Notes”
means
      the promissory notes purchased in connection with the Offering.

    


    “Person”
means
      an individual, corporation, partnership, limited liability company, trust,
      business trust, association, joint stock company, joint venture, sole
      proprietorship, unincorporated organization, governmental authority or any
      other
      form of entity not specifically listed herein.

    


    “SEC
      Filings”
has
      the
      meaning set forth in Section 4.6.

    


    “Securities”
means
      the Notes, the Warrants and the Warrant Shares.

    


    “Subsidiary”
of
      any
      Person means another Person, an amount of the voting securities, other voting
      ownership or voting partnership interests of which is sufficient to elect at
      least a majority of its Board of Directors or other governing body (or, if
      there
      are no such voting interests, 50% or more of the equity interests of which)
      is
      owned directly or indirectly by such first Person.

    


    “Transaction
      Documents”
means
      this Agreement, the Notes, the Warrants, the Escrow Agreement, and certain
      other
      papers, agreements, documents, instruments and certificates necessary to carry
      out the purposes thereof.

    


    “Warrants”
means
      the warrants to purchase shares of Common Stock to be purchased in connection
      with the Offering.

    


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

    


    “1933
      Act”
has
      the
      meaning set forth in the Recitals above.

    


    “1934
      Act”
means
      the Securities Exchange Act of 1934, as amended, or any successor statute,
      and
      the rules and regulations promulgated thereunder.

    


    2. Purchase
      and Sale of Notes and Warrants.
      

    


    2.1 Purchase
      and Sale. Subject
      to the terms and conditions of this Agreement, on each Closing Date, the
      applicable Investors shall severally, and not jointly, purchase, and the Company
      shall sell and issue to such Investors, the Notes and Warrants in the respective
      amounts set forth opposite the Investors’ names on the signature pages attached
      hereto in exchange for each Investor’s pro rata share of the Loan Amount as
      further set forth in Section 3 below; provided,
      however,
      that
      not less than $1,000,000 and not more than $3,000,000 of Notes, in the
      aggregate, shall be purchased in this Offering.

     

    
      
         

      

      
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    3. Closing.
      Each
      Investor shall deliver, or cause to be delivered, their pro rata share of the
      Loan Amount to the Escrow Agent, in immediately available funds, to be held
      and
      disbursed by the Escrow Agent as provided in the Escrow Agreement. The Escrow
      Agent shall promptly notify the Company of its receipt of the Loan Amount from
      any Investor and shall deposit such amount in an interest bearing account,
      as
      further set forth in the Escrow Agreement. Upon receipt by the escrow Agent
      of
      the Loan Amount from an Investor, the Company shall deliver Notes and Warrants
      to the Escrow Agent to be held and disbursed by the Escrow Agent as provided
      in
      the Escrow Agreement. The Loan Amount, Notes and Warrants are hereafter referred
      to collectively as, the “Escrow
      Property”).
      The
      Escrow Agent shall hold the Escrow Property in accordance with the terms and
      conditions of the Escrow Agreement. On the date (each a “Closing
      Date”)
      the
      Escrow Agent receives instructions from the Company directing the manner in
      which the Escrow Agent shall distribute the Escrow Property, and provided each
      of the conditions set forth in Section 6 hereof have been satisfied or waived
      by
      the appropriate party or parties, the Escrow Property shall be released to
      the
      Investor(s) and the Company, as applicable (each, a “Closing”).
      The
      Closing(s) shall take place at the offices of Hodgson Russ LLP, 1540 Broadway,
      24th
      Floor,
      New York, New York 10036, or at such other location and on such other date
      as
      the Company and the Investors shall mutually agree.

    


    The
      Company shall have the right to conduct multiple Closings; provided, however,
      that (i) on the first Closing Date, which shall take place on or before June
      15,
      2008, the Company shall receive at least the Minimum Loan Amount, (ii) any
      Investor making an investment in the Notes and Warrants shall become a party
      to
      this Agreement and the additional Transaction Documents, as applicable, (iii)
      any additional Closing(s) shall occur on or prior to June 30, 2008, and (iv)
      the
      Company shall not have the right to receive an aggregate investment in
      connection with this Offering of more than the Maximum Loan Amount.

    


    4. Representations
      and Warranties of the Company.
      The
      Company hereby represents and warrants to the Investors that, except as set
      forth in the schedules delivered herewith (collectively, the “Disclosure
      Schedules”):

    


    4.1 Organization,
      Good Standing and Qualification.
      Each of
      the Company and its Subsidiaries is a corporation duly organized, validly
      existing and in good standing under the laws of the jurisdiction of its
      incorporation and has all requisite corporate power and authority to carry
      on
      its business as now conducted and to own its properties. Each of the Company
      and
      its Subsidiaries is duly qualified to do business as a foreign corporation
      and
      is in good standing in each jurisdiction in which the conduct of its business
      or
      its ownership or leasing of property makes such qualification or leasing
      necessary unless the failure to so qualify has not had and could not reasonably
      be expected to have a Material Adverse Effect. The Company’s Subsidiaries are
      listed on Schedule
      4.1
      hereto.

    


    4.2 Authorization.
      The
      Company has full power and authority and,
      except as described in Schedule
      4.2,
      has
      taken
      all requisite action on the part of the Company, its officers, directors and
      stockholders necessary for (i) the authorization, execution and delivery of
      the
      Transaction Documents, (ii) the authorization of the performance of all
      obligations of the Company hereunder or thereunder, and (iii) the authorization,
      issuance (or reservation for issuance) and delivery of the
      Securities.
      The
      Transaction Documents constitute the legal, valid and binding obligations of
      the
      Company, enforceable against the Company in accordance with their terms, subject
      to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
      and
      similar laws of general applicability, relating to or affecting creditors’
rights generally.

     

    
      
         

      

      
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    4.3 Capitalization.
      Schedule
      4.3
      sets
      forth (a) the authorized capital stock of the Company on the date hereof; (b)
      the number of shares of capital stock issued and outstanding; (c) the number
      of
      shares of capital stock issuable pursuant to the Company’s stock plans; and (d)
      the number of shares of capital stock issuable and reserved for issuance
      pursuant to securities (other than the Securities) exercisable for, or
      convertible into or exchangeable for any shares of capital stock of the Company.
      All of the issued and outstanding shares of the Company’s capital stock have
      been duly authorized and validly issued and are fully paid, nonassessable and
      free of pre-emptive rights and were issued in full compliance with applicable
      state and federal securities law and any rights of third parties. Except as
      described on Schedule
      4.3,
      all of
      the issued and outstanding shares of capital stock of each Subsidiary have
      been
      duly authorized and validly issued and are fully paid, nonassessable and free
      of
      pre-emptive rights, were issued in full compliance with applicable state and
      federal securities law and any rights of third parties and are owned by the
      Company, beneficially and of record, subject to no lien, encumbrance or other
      adverse claim. Except as described on Schedule
      4.3,
      no
      Person is entitled to pre-emptive or similar statutory or contractual rights
      with respect to any securities of the Company. Except as described on
Schedule
      4.3,
      there
      are no outstanding warrants, options, convertible securities or other rights,
      agreements or arrangements of any character under which the Company or any
      of
      its Subsidiaries is or may be obligated to issue any equity securities of any
      kind and except as contemplated by this Agreement, neither the Company nor
      any
      of its Subsidiaries is currently in negotiations for the issuance of any equity
      securities of any kind. Except as described on Schedule
      4.3,
      there
      are no voting agreements, buy-sell agreements, option or right of first purchase
      agreements or other agreements of any kind among the Company and any of the
      securityholders of the Company relating to the securities of the Company held
      by
      them. Except as described on Schedule
      4.3,
      no
      Person has the right to require the Company to register any securities of the
      Company under the 1933 Act, whether on a demand basis or in connection with
      the
      registration of securities of the Company for its own account or for the account
      of any other Person.

    


    Except
      as
      described on Schedule
      4.3,
      the
      issuance and sale of the Securities hereunder will not obligate the Company
      to
      issue shares of Common Stock or other securities to any other Person (other
      than
      the Investors) and will not result in the adjustment of the exercise,
      conversion, exchange or reset price of any outstanding security.

    


    Except
      as
      described on Schedule
      4.3,
      the
      Company does not have outstanding stockholder purchase rights or “poison pill”
or any similar arrangement in effect giving any Person the right to purchase
      any
      equity interest in the Company upon the occurrence of certain
      events.

    


    4.4 Valid
      Issuance.
      The
      Notes have been duly and validly authorized and shall be free and clear of
      all
      encumbrances and restrictions (other than those created by the Investors),
      except for restrictions on transfer set forth in the Transaction Documents.
      The
      Warrants have been duly and validly authorized. Upon the due exercise of the
      Warrants, the Warrant Shares will be validly issued, fully paid and
      non-assessable free and clear of all encumbrances and restrictions, except
      for
      restrictions on transfer set forth in the Transaction Documents or imposed
      by
      applicable securities laws and except for those created by the Investors. The
      Company has reserved a sufficient number of shares of Common Stock for issuance
      upon the exercise of the Warrants, free and clear of all encumbrances and
      restrictions, except for restrictions on transfer set forth in the Transaction
      Documents or imposed by applicable securities laws and except for those created
      by the Investors.

     

    
      
         

      

      
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    4.5 Consents.
      Except
      as described in Schedule
      4.5,
      the
      execution, delivery and performance by the Company of the Transaction Documents,
      and the offer, issuance and sale of the Securities, require no consent of,
      action by or in respect of, or filing with, any Person, governmental body,
      agency, or official other than filings that have been made pursuant to
      applicable state securities laws and post-sale filings pursuant to applicable
      state and federal securities laws or any other notices required thereby, all
      of
      which the Company undertakes to file within the applicable time periods. Subject
      to the accuracy of the representations and warranties of each Investor set
      forth
      in Section 5 hereof, the Company has taken all action necessary to exempt (i)
      the issuance and sale of the Notes and Warrants, (ii) the issuance of the
      Warrant Shares upon due exercise of the Warrants, and (iii) the other
      transactions contemplated by the Transaction Documents from the provisions
      of
      any stockholder rights plan or other “poison pill” arrangement, any
      anti-takeover, business combination or control share law or statute binding
      on
      the Company or to which the Company or any of its assets and properties may
      be
      subject and any provision of the Company’s Certificate of Incorporation, as
      amended, or Bylaws that is or could reasonably be expected to become applicable
      to the Investors as a result of the transactions contemplated hereby, including
      without limitation, the issuance of the Securities and the ownership,
      disposition or voting of the Securities by the Investors or the exercise of
      any
      right granted to the Investors pursuant to this Agreement or the other
      Transaction Documents.

    


    4.6 Delivery
      of SEC Filings; Business.
      The
      Company has made available to the Investors through the EDGAR system, true
      and
      complete copies of the Company’s Annual Report on Form 10-KSB for the fiscal
      year ended December 31, 2007 (the “10-KSB”),
      and
      all other reports filed by the Company pursuant to the 1934 Act since the filing
      of the 10-KSB and prior to the date hereof (collectively, the “SEC
      Filings”).
      Except as indicated in the SEC Filings, the SEC Filings are the only filings
      required of the Company pursuant to the 1934 Act for such period. The Company
      and its Subsidiaries are engaged in all material respects only in the business
      described in the SEC Filings and the SEC Filings contain a complete and accurate
      description in all material respects of the business of the Company and its
      Subsidiaries, taken as a whole.

    


    4.7 Use
      of
      Proceeds.
      The net
      proceeds from this Offering will be used primarily for: (a) construction of
      a
      new production facility, (b) expenses related to the Offering, and (c) general
      working capital purposes.

    


    4.8 No
      Material Adverse Change.
      Since
      March 31, 2008, except as identified and described on Schedule
      4.8,
      there
      has not been:

    


    (a) any
      change in the consolidated assets, liabilities, financial condition or operating
      results of the Company from that reflected in the financial statements included
      in the Company’s Quarterly Report of Form 10-Q for the fiscal quarter ended
      March 31, 2008, except for changes in the ordinary course of business which
      have
      not had and could not reasonably be expected to have a Material Adverse Effect,
      individually or in the aggregate;

     

    
      
         

      

      
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    (b) any
      declaration or payment of any dividend, or any authorization or payment of
      any
      distribution, on any of the capital stock of the Company, or any redemption
      or
      repurchase of any securities of the Company;

    


    (c) any
      material damage, destruction or loss, whether or not covered by insurance to
      any
      assets or properties of the Company or its Subsidiaries;

    


    (d) any
      waiver, not in the ordinary course of business, by the Company or any Subsidiary
      of a material right or of a material debt owed to it;

    


    (e) any
      satisfaction or discharge of any lien, claim or encumbrance or payment of any
      obligation by the Company or a Subsidiary, except in the ordinary course of
      business and which is not material to the assets, properties, financial
      condition, operating results or business of the Company and its Subsidiaries
      taken as a whole (as such business is presently conducted and as it is proposed
      to be conducted);

    


    (f) any
      change or amendment to the Company’s Certificate of Incorporation, as amended,
      or Bylaws, or material change to any material contract or arrangement by which
      the Company or any Subsidiary is bound or to which any of their respective
      assets or properties is subject;

    


    (g) any
      material labor difficulties or labor union organizing activities with respect
      to
      employees of the Company or any Subsidiary;

    


    (h) any
      material transaction entered into by the Company or a Subsidiary other than
      in
      the ordinary course of business; 

    


    (i) the
      loss
      of the services of any key employee, or material change in the composition
      or
      duties of the senior management of the Company or any Subsidiary;

    


    (j) the
      loss
      or threatened loss of any customer which has had or could reasonably be expected
      to have a Material Adverse Effect; or

    


    (k) any
      other
      event or condition of any character that has had or could reasonably be expected
      to have a Material Adverse Effect.

    


    4.9 SEC
      Filings.

    


    (a) At
      the
      time of filing thereof, the SEC Filings complied as to form in all material
      respects with the requirements of the 1934 Act and did 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.

     

    
      
         

      

      
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    (b) To
      the
      Company’s Knowledge, each registration statement and any amendment thereto filed
      by the Company pursuant to the 1933 Act and/or 1934 Act, and the rules and
      regulations thereunder, as of the date such statement or amendment became
      effective, complied as to form in all material respects with the 1933 Act and/or
      1934 Act, and did not contain any untrue statement of a material fact or omit
      to
      state any material fact required to be stated therein or necessary in order
      to
      make the statements made therein not misleading; and each prospectus filed
      pursuant to Rule 424(b) under the 1933 Act, as of its issue date and as of
      the
      closing of any sale of securities pursuant thereto did not contain any untrue
      statement of a material fact or omit to state any material fact required to
      be
      stated therein or necessary in order to make the statements made therein, in
      the
      light of the circumstances under which they were made, not
      misleading.

    


    4.10 No
      Conflict, Breach, Violation or Default.
      The
      execution, delivery and performance of the Transaction Documents by the Company
      and the issuance and sale of the Securities will not conflict with or result
      in
      a breach or violation of any of the terms and provisions of, or constitute
      a
      default under (i) the Company’s Certificate of Incorporation, as amended, or the
      Company’s Bylaws, both as in effect on the date hereof (true and complete copies
      of which have been made available to the Investors), or (ii)(a) any statute,
      rule, regulation or order of any governmental agency or body or any court,
      domestic or foreign, having jurisdiction over the Company, any Subsidiary or
      any
      of their respective assets or properties, or (b) any agreement or instrument
      to
      which the Company or any Subsidiary is a party or by which the Company or a
      Subsidiary is bound or to which any of their respective assets or properties
      is
      subject.

    


    4.11 Tax
      Matters.
      The
      Company and each Subsidiary has timely prepared and filed all tax returns
      required to have been filed by the Company or such Subsidiary with all
      appropriate governmental agencies and timely paid all taxes shown thereon or
      otherwise owed by it. The charges, accruals and reserves on the books of the
      Company in respect of taxes for all fiscal periods are adequate in all material
      respects, and there are no material unpaid assessments against the Company
      or
      any Subsidiary nor, to the Company’s Knowledge, any basis for the assessment of
      any additional taxes, penalties or interest for any fiscal period or audits
      by
      any federal, state or local taxing authority except for any assessment which
      is
      not material to the Company and its Subsidiaries, taken as a whole. All taxes
      and other assessments and levies that the Company or any Subsidiary is required
      to withhold or to collect for payment have been duly withheld and collected
      and
      paid to the proper governmental entity or third party when due. There are no
      tax
      liens or claims pending or, to the Company’s Knowledge, threatened against the
      Company or any Subsidiary or any of their respective assets or property. Except
      as described on Schedule
      4.11,
      there
      are no outstanding tax sharing agreements or other such arrangements between
      the
      Company and any Subsidiary or other corporation or entity.

    


    4.12 Title
      to Properties.
      Except
      as disclosed in Schedule
      4.12,
      the
      Company and each Subsidiary has good and marketable title to all real properties
      and all other properties and assets owned by it, in each case free from liens,
      encumbrances and defects that would materially affect the value thereof or
      materially interfere with the use made or currently planned to be made thereof
      by them; and except as disclosed in Schedule
      4.12,
      the
      Company and each Subsidiary holds any leased real or personal property under
      valid and enforceable leases with no exceptions that would materially interfere
      with the use made or currently planned to be made thereof by them.

     

    
      
         

      

      
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    4.13 Certificates,
      Authorities and Permits.
      The
      Company and each Subsidiary possess adequate certificates, authorities or
      permits issued by appropriate governmental agencies or bodies necessary to
      conduct the business now operated by it, and neither the Company nor any
      Subsidiary has received any notice of proceedings relating to the revocation
      or
      modification of any such certificate, authority or permit that, if determined
      adversely to the Company or such Subsidiary, could reasonably be expected to
      have a Material Adverse Effect, individually or in the aggregate.

    


    4.14 Labor
      Matters.

     

    (a) Except
      as set forth on Schedule
      4.14,
      the Company is not a party to or bound by any collective bargaining agreements
      or other agreements with labor organizations. The Company has not violated
      in
      any material respect any laws, regulations, orders or contract terms, affecting
      the collective bargaining rights of employees, labor organizations or any laws,
      regulations or orders affecting employment discrimination, equal opportunity
      employment, or employees’ health, safety, welfare, wages and hours.

     

    (b) (i)
      There are no labor disputes existing, or to the Company’s Knowledge, threatened,
      involving strikes, slow-downs, work stoppages, job actions, disputes, lockouts
      or any other disruptions of or by the Company’s employees, (ii) there are no
      unfair labor practices or petitions for election pending or, to the Company’s
      Knowledge, threatened before any governmental agency or labor commission
      relating to the Company’s employees, (iii) no demand for recognition or
      certification heretofore made by any labor organization or group of employees
      is
      pending with respect to the Company, and (iv) to the Company’s Knowledge, the
      Company enjoys good labor and employee relations with its employees and labor
      organizations.

     

    (c) The
      Company is, and at all times has been, in compliance in all material respects
      with all applicable laws respecting employment (including laws relating to
      classification of employees and independent contractors) and employment
      practices, terms and conditions of employment, wages and hours, and immigration
      and naturalization.

     

    (d) Except
      as disclosed in the SEC Filings or as described on Schedule
      4.14,
      the Company is not a party to, or bound by, any employment or other contract
      or
      agreement that contains any severance, termination pay or change of control
      liability or obligation, including, without limitation, any “excess parachute
      payment,” as defined in Section 2806(b) of the Internal Revenue
      Code.

    


    (e) Except
      as specified in Schedule
      4.14,
      to the Company’s Knowledge, none of the Company’s employees is a Person who is
      either a United States citizen or a permanent resident entitled to work in
      the
      United States. To the Company’s Knowledge, the Company has no liability for the
      improper classification by the Company of such employees as independent
      contractors or leased employees prior to the Closing.

     

    
      
         

      

      
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    4.15 Intellectual
      Property. Except
      as
      specified in Schedule
      4.15:

    


    (a) All
      Intellectual Property of the Company and its Subsidiaries is currently in
      compliance with all legal requirements (including timely filings, proofs and
      payments of fees) and is valid and enforceable. No Intellectual Property of
      the
      Company or its Subsidiaries which is necessary for the conduct of Company’s and
      each of its Subsidiaries’ respective businesses as currently conducted or as
      currently proposed to be conducted has been or is now involved in any
      cancellation, dispute or litigation, and, to the Company’s Knowledge, no such
      action is threatened. No patent of the Company or its Subsidiaries has been
      or
      is now involved in any interference, reissue, re-examination or opposition
      proceeding.

    


    (b) All
      of
      the licenses and sublicenses and consent, royalty or other agreements concerning
      Intellectual Property which are necessary for the conduct of the Company’s and
      each of its Subsidiaries’ respective businesses as currently conducted or as
      currently proposed to be conducted to which the Company or any Subsidiary is
      a
      party or by which any of their assets are bound (other than  generally
      commercially available, non-custom, off-the-shelf software application programs
      having a retail acquisition price of less than $10,000 per license)
      (collectively, “License
      Agreements”)
      are
      valid and binding obligations of the Company or its Subsidiaries that are
      parties thereto and, to the Company’s Knowledge, the other parties thereto,
      enforceable in accordance with their terms, except to the extent that
      enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
      moratorium, fraudulent conveyance or other similar laws affecting the
      enforcement of creditors’ rights generally, and there exists no event or
      condition which will result in a material violation or breach of or constitute
      (with or without due notice or lapse of time or both) a default by the Company
      or any of its Subsidiaries under any such License Agreement.

    


    (c) The
      Company and its Subsidiaries own or have the valid right to use all of the
      Intellectual Property that is necessary for the conduct of the Company’s and
      each of its Subsidiaries’ respective businesses as currently conducted or as
      currently proposed to be conducted and for the ownership, maintenance and
      operation of the Company’s and its Subsidiaries’ properties and assets, free and
      clear of all liens, encumbrances, adverse claims or obligations to license
      all
      such owned Intellectual Property and Confidential Information, other than
      licenses entered into in the ordinary course of the Company’s and its
      Subsidiaries’ businesses. The Company and its Subsidiaries have a valid and
      enforceable right to use all third party Intellectual Property and Confidential
      Information used or held for use in the respective businesses of the Company
      and
      its Subsidiaries.

    


    (d) To
      the
      Company’s Knowledge, the conduct of the Company’s and its Subsidiaries’
businesses as currently conducted does not infringe or otherwise impair or
      conflict with (collectively, “Infringe”)
      any
      Intellectual Property rights of any third party or any confidentiality
      obligation owed to a third party, and, to the Company’s Knowledge, the
      Intellectual Property and Confidential Information of the Company and its
      Subsidiaries which are necessary for the conduct of Company’s and each of its
      Subsidiaries’ respective businesses as currently conducted or as currently
      proposed to be conducted are not being Infringed by any third party. There
      is no
      litigation or order pending or outstanding or, to the Company’s Knowledge,
      threatened or imminent, that seeks to limit or challenge or that concerns the
      ownership, use, validity or enforceability of any Intellectual Property or
      Confidential Information of the Company and its Subsidiaries and the Company’s
      and its Subsidiaries’ use of any Intellectual Property or Confidential
      Information owned by a third party, and, to the Company’s Knowledge, there is no
      valid basis for the same.

     

    
      
         

      

      
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    (e) The
      consummation of the transactions contemplated hereby and by the other
      Transaction Documents will not result in the alteration, loss, impairment of
      or
      restriction on the Company’s or any of its Subsidiaries’ ownership or right to
      use any of the Intellectual Property or Confidential Information which is
      necessary for the conduct of Company’s and each of its Subsidiaries’ respective
      businesses as currently conducted or as currently proposed to be
      conducted.

    


    (f) The
      Company and its Subsidiaries have taken reasonable steps to protect the
      Company’s and its Subsidiaries’ rights in their Intellectual Property and
      Confidential Information. Each employee, consultant and contractor who has
      had
      access to Confidential Information which is necessary for the conduct of
      Company’s and each of its Subsidiaries’ respective businesses as currently
      conducted or as currently proposed to be conducted has executed an agreement
      to
      maintain the confidentiality of such Confidential Information and has executed
      appropriate agreements that are substantially consistent with the Company’s
      standard forms thereof, except where the failure to do so has not had and could
      not reasonably be expected to have a Material Adverse Effect, individually
      or in
      the aggregate. Except under confidentiality obligations, there has been no
      material disclosure of any of the Company’s or its Subsidiaries’ Confidential
      Information to any third party.

    


    4.16 Environmental
      Matters.
      Except
      as specified in Schedule
      4.16,
      to the
      Company’s Knowledge, neither the Company nor any Subsidiary (i) is in violation
      of any statute, rule, regulation, decision or order of any governmental agency
      or body or any court, domestic or foreign, relating to the use, disposal or
      release of hazardous or toxic substances or relating to the protection or
      restoration of the environment or human exposure to hazardous or toxic
      substances (collectively, “Environmental
      Laws”),
      (ii)
      owns or operates any real property contaminated with any substance that is
      subject to any Environmental Laws, (iii) is liable for any off-site disposal
      or
      contamination pursuant to any Environmental Laws, or (iv) is subject to any
      claim relating to any Environmental Laws, which violation, contamination,
      liability or claim has had or could reasonably be expected to have a Material
      Adverse Effect, individually or in the aggregate; and there is no pending or,
      to
      the Company’s Knowledge, threatened investigation that might lead to such a
      claim.

    


    4.17 Litigation.
      Except
      as described on Schedule
      4.17,
      there
      are no pending actions, suits or proceedings against or affecting the Company,
      its Subsidiaries or any of its or their properties; and to the Company’s
      Knowledge, no such actions, suits or proceedings are threatened or
      contemplated.

    


    4.18 Financial
      Statements.
      The
      financial statements included in each SEC Filing present fairly, in all material
      respects, the consolidated financial position of the Company as of the dates
      shown and its consolidated results of operations and cash flows for the periods
      shown, and such financial statements have been prepared in conformity with
      United States generally accepted accounting principles applied on a consistent
      basis (“GAAP”)
      (except as may be disclosed therein or in the notes thereto, and, in the case
      of
      quarterly financial statements, as permitted by Form 10-QSB under the 1934
      Act).
      Except as set forth in the financial statements of the Company included in
      the
      SEC Filings filed prior to the date hereof or as described on Schedule
      4.18,
      neither
      the Company nor any of its Subsidiaries has incurred any liabilities, contingent
      or otherwise, except those incurred in the ordinary course of business,
      consistent (as to amount and nature) with past practices since the date of
      such
      financial statements, none of which, individually or in the aggregate, have
      had
      or could reasonably be expected to have a Material Adverse Effect.

     

    
      
         

      

      
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    4.19 Insurance
      Coverage.
      Except
      as set forth on Schedule
      4.19,
      the
      Company and each Subsidiary maintains in full force and effect insurance
      coverage that is customary for comparably situated companies for the business
      being conducted and properties owned or leased by the Company and each
      Subsidiary, and the Company reasonably believes such insurance coverage to
      be
      adequate against all liabilities, claims and risks against which it is customary
      for comparably situated companies to insure.

    


    4.20 Brokers
      and Finders.
      No
      Person will have, as a result of the transactions contemplated by the
      Transaction Documents, any valid right, interest or claim against or upon the
      Company, any Subsidiary or an Investor for any commission, fee or other
      compensation pursuant to any agreement, arrangement or understanding entered
      into by or on behalf of the Company, other than as described in Schedule
      4.20.

    


    4.21 No
      Directed Selling Efforts or General Solicitation.
      Neither
      the Company nor any Person acting on its behalf has conducted any general
      solicitation or general advertising (as those terms are used in Regulation
      D) in
      connection with the offer or sale of any of the Securities.

    


    4.22 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 offers or sales of any Company
      security or solicited any offers to buy any security, under circumstances that
      would adversely affect reliance by the Company on Section 4(2) for the exemption
      from registration for the transactions contemplated hereby or would require
      registration of the Securities under the 1933 Act.

    


    4.23 Private
      Placement.
      The
      offer and sale of the Securities to the Investors as contemplated hereby is
      exempt from the registration requirements of the 1933 Act.

    


    4.24 Questionable
      Payments.
      Neither
      the Company nor any of its Subsidiaries nor, to the Company’s Knowledge, any of
      their respective current or former stockholders, directors, officers, employees,
      agents or other Persons acting on behalf of the Company or any Subsidiary,
      has
      on behalf of the Company or any Subsidiary or in connection with their
      respective businesses: (a) used any corporate funds for unlawful contributions,
      gifts, entertainment or other unlawful expenses relating to political activity;
      (b) made any direct or indirect unlawful payments to any governmental officials
      or employees from corporate funds; (c) established or maintained any unlawful
      or
      unrecorded fund of corporate monies or other assets; (d) made any false or
      fictitious entries on the books and records of the Company or any Subsidiary;
      (e) made any unlawful bribe, rebate, payoff, influence payment, kickback or
      other unlawful payment of any nature; or (f) taken any actions that would
      violate the U.S. Foreign Corrupt Practices Act of 1977, as amended.

     

    
      
         

      

      
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    4.25 Transactions
      with Affiliates.
      Except
      as disclosed in the SEC Filings or as disclosed on Schedule
      4.25,
      none of
      the officers or directors of the Company and, to the Company’s Knowledge, none
      of the employees of the Company is presently a party to any transaction with
      the
      Company or any Subsidiary (other than as holders of stock options and/or
      warrants, and for services as employees, officers and directors), including
      any
      contract, agreement or other arrangement providing for the furnishing of
      services to or by, providing for rental of real or personal property to or
      from,
      or otherwise requiring payments to or from any officer, director or such
      employee or, to the Company’s Knowledge, any entity in which any officer,
      director, or any such employee has a substantial interest or is an officer,
      director, trustee or partner.

    


    4.26 Internal
      Controls.
      Except
      as set forth in the SEC Filings, the Company is
      in material compliance with the provisions of the Sarbanes-Oxley Act of 2002
      currently applicable to the Company. The Company and
      the
      Subsidiaries maintain a system of internal accounting controls sufficient to
      provide reasonable assurance that (i) transactions are executed in accordance
      with management’s general or specific authorizations, (ii) transactions are
      recorded as necessary to permit preparation of financial statements in
      conformity with GAAP and to maintain asset accountability, (iii) access to
      assets is permitted only in accordance with management’s general or specific
      authorization, and (iv) the recorded accountability for assets is compared
      with
      the existing assets at reasonable intervals and appropriate action is taken
      with
      respect to any differences. The Company has established disclosure controls
      and
      procedures (as defined in 1934 Act Rules 13a-14 and 15d-14) for the Company
      and
      designed such disclosure controls and procedures to ensure that material
      information relating to the Company, including the Subsidiaries, is made known
      to the certifying officers by others within those entities, particularly during
      the period in which the Company’s most recently filed periodic report under the
      1934 Act, as the case may be, is being prepared. The Company’s certifying
      officers have evaluated the effectiveness of the Company's controls and
      procedures as of the end of the period covered by the most recently filed
      periodic report under the 1934 Act (such date, the “Evaluation
      Date”).
      The
      Company presented in its most recently filed periodic report under the 1934
      Act
      the conclusions of the certifying officers about the effectiveness of the
      disclosure controls and procedures based on their evaluations as of the
      Evaluation Date. Since the Evaluation Date, there have been no significant
      changes in the Company’s internal controls (as such term is defined in Item 308
      of Regulation S-B) or, to the Company’s Knowledge, in other factors that could
      significantly affect the Company’s internal controls. The Company maintains and
      will continue to maintain a standard system of accounting established and
      administered in accordance with GAAP and the applicable requirements of the
      1934
      Act.

    


    4.27 Disclosures.
      Neither
      the Company nor any Person acting on its behalf has provided the Investors
      or
      their agents or counsel with any information that constitutes or might
      constitute material, non-public information. The written materials delivered
      to
      the Investors in connection with the transactions contemplated by the
      Transaction Documents do not contain any untrue statement of a material fact
      or
      omit to state a material fact necessary in order to make the statements
      contained therein, in light of the circumstances under which they were made,
      not
      misleading.

     

    
      
         

      

      
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    5. Representations
      and Warranties of the Investors.
      Each of
      the Investors hereby severally, and not jointly, represents and warrants to
      the
      Company that:

    


    5.1 Organization
      and Existence.
      Such
      Investor is an individual or a validly existing corporation, limited
      partnership, or limited liability company and has all requisite individual,
      corporate, partnership or limited liability company power and authority to
      invest in the Securities pursuant to this Agreement.

    


    5.2 Authorization.
      The
      execution, delivery and performance by such Investor of the Transaction
      Documents to which such Investor is a party have been duly authorized and will
      each constitute the valid and legally binding obligation of such Investor,
      enforceable against such Investor in accordance with their respective terms,
      subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
      moratorium and similar laws of general applicability, relating to or affecting
      creditors’ rights generally.

    


    5.3 Purchase
      Entirely for Own Account.
      The
      Securities to be received by such Investor hereunder will be acquired for such
      Investor’s own account, not as nominee or agent, and not with a view to the
      resale or distribution of any part thereof in violation of the 1933 Act, and
      such Investor has no present intention of selling, granting any participation
      in, or otherwise distributing the same in violation of the 1933 Act
      without prejudice, however, to such Investor’s right at all times to sell or
      otherwise dispose of all or any part of such Securities in compliance with
      applicable federal and state securities laws.
      Nothing
      contained herein shall be deemed a representation or warranty by such Investor
      to hold the Securities for any period of time. Such
      Investor
      is not a broker-dealer registered with the SEC under the 1934 Act or an entity
      engaged in a business that would require it to be so registered.

    


    5.4 Investment
      Experience.
      Such
      Investor acknowledges that it can bear the economic risk and complete loss
      of
      its investment in the Securities and has such knowledge and experience in
      financial or business matters that it is capable of evaluating the merits and
      risks of the investment contemplated hereby.

    


    5.5 Disclosure
      of Information.
      Such
      Investor has had an opportunity to receive all information related to the
      Company requested by it and to ask questions of and receive answers from the
      Company regarding the Company, its business and the terms and conditions of
      the
      offering of the Securities. Such Investor acknowledges receipt of copies of
      the
      SEC Filings. Neither such inquiries nor any other due diligence investigation
      conducted by such Investor shall modify, amend or affect such Investor’s right
      to rely on the Company’s representations and warranties contained in this
      Agreement.

    


    5.6 Restricted
      Securities.
      Such
      Investor understands that the Securities are characterized as “restricted
      securities” under the U.S. federal securities laws inasmuch as they are being
      acquired from the Company in a transaction not involving a public offering
      and
      that under such laws and applicable regulations such securities may be resold
      without registration under the 1933 Act only in certain limited
      circumstances.

     

    
      
         

      

      
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    5.7 Legends.
      It is
      understood that, except as provided below, certificates evidencing the
      Securities may bear the following or any similar legend:

    


    (a) “The
      securities represented hereby may not be transferred unless (i) such securities
      have been registered for sale pursuant to the 1933 Act, as amended, or (ii)
      the
      Company has received an opinion of counsel reasonably satisfactory to it that
      such transfer may lawfully be made without registration under the 1933 Act,
      as
      amended, or qualification under applicable state securities laws.”

    


    (b) If
      required by the authorities of any state in connection with the issuance of
      sale
      of the Securities, the legend required by such state authority.

    


    5.8 Accredited
      Investor.
      Such
      Investor is an “accredited investor” within the meaning of Rule 501(a) of
      Regulation D promulgated under the 1933 Act for the reasons checked on
Schedule
      1
      hereto,
      and would be considered either (a) a large institutional accredited investor,
      or
      (b) a "qualified institutional buyer" under Rule 144A under the 1933
      Act.

    


    5.9 No
      General Solicitation.
      Such
      Investor did not learn of the investment in the Securities as a result of any
      public advertising or general solicitation.

    


    5.10 Brokers
      and Finders.
      No
      Person will have, as a result of the transactions contemplated by the
      Transaction Documents, any valid right, interest or claim against or upon the
      Company, any Subsidiary or an Investor for any commission, fee or other
      compensation pursuant to any agreement, arrangement or understanding entered
      into by or on behalf of such Investor, other than as described on Schedule
      5.10.

    


    5.11 Prohibited
      Transactions.
      During
      the last thirty (30) days prior to the date hereof, neither such Investor nor
      any Affiliate of such Investor which (x) had knowledge of the transactions
      contemplated hereby, (y) has or shares discretion relating to such Investor’s
      investments or trading or information concerning such Investor’s investments,
      including in respect of the Securities, or (z) is subject to such Investor’s
      review or input concerning such Affiliate’s investments or trading
      (collectively, “Trading
      Affiliates”)
      has,
      directly or indirectly, effected or agreed to effect any short sale, whether
      or
      not against the box, established any “put equivalent position” (as defined in
      Rule 16a-1(h) under the 1934 Act) with respect to the Common Stock, granted
      any
      other right (including, without limitation, any put or call option) with respect
      to the Common Stock or with respect to any security that includes, relates
      to or
      derived any significant part of its value from the Common Stock or otherwise
      sought to hedge its position in the Securities (each, a “Prohibited
      Transaction”).
      Prior
      to the latest to occur of (i) the termination of this Agreement, (ii) the
      Company’s exercise of the Call Option (as defined in Section 18 of the
      Warrants), or (iii) the conclusion of the Effectiveness Period (as defined
      in
      Section 2 of the Registration Rights Agreement), such Investor shall not, and
      shall cause its Trading Affiliates not to, engage, directly or indirectly,
      in a
      Prohibited Transaction. Such Investor acknowledges that the representations,
      warranties and covenants contained in this Section 5.11 are being made for
      the
      benefit of the Investors as well as the Company and that each of the other
      Investors shall have an independent right to assert any claims against such
      Investor arising out of any breach or violation of the provisions of this
      Section 5.11.

     

    
      
         

      

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

    


    6.
       Conditions
      to Closing.

    


    6.1 Conditions
      to the Investors’ Obligations.
      The
      obligation of each Investor to purchase the Notes and the Warrants at the
      Closing is subject to the fulfillment to such Investor’s satisfaction, on or
      prior to the Closing Date, of the following conditions, any of which may be
      waived by such Investor (as to itself only):

    


    (a) The
      representations and warranties made by the Company in Section 4 hereof qualified
      as to materiality shall be true and correct at all times prior to and on the
      Closing Date, except to the extent any such representation or warranty expressly
      speaks as of a specific date, in which case such representation or warranty
      shall be true and correct as of such date, and, the representations and
      warranties made by the Company in Section 4 hereof not qualified as to
      materiality shall be true and correct in all material respects at all times
      prior to and on the Closing Date, except to the extent any such representation
      or warranty expressly speaks as of a specific date, in which case such
      representation or warranty shall be true and correct in all material respects
      as
      of such specific date. 

    


    (b) The
      Company shall have performed in all material respects all obligations and
      covenants herein required to be performed by it on or prior to the Closing
      Date.

    


    (c) The
      Company shall have obtained any and all consents, permits, approvals,
      registrations and waivers necessary
      or appropriate for consummation of the purchase and sale of the Notes and the
      Warrants and the consummation of the other transactions contemplated by the
      Transaction Documents to be consummated on or prior to the Closing Date, all
      of
      which shall be in full force and effect.

    


    (d) The
      Company shall have executed and delivered the Warrants.

    


    (e) The
      Company and the Escrow Agent shall have executed and delivered the Escrow
      Agreement.

    


    (f) No
      judgment, writ, order, injunction, award or decree of or by any court, or judge,
      justice or magistrate, including any bankruptcy court or judge, or any order
      of
      or by any governmental authority, shall have been issued, and no action or
      proceeding shall have been instituted by any governmental authority, enjoining
      or preventing the consummation of the transactions contemplated hereby or in
      the
      other Transaction Documents.

    
       

      
         

      

      
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    (g) The
      Company shall have delivered a Certificate, executed on behalf of the Company
      by
      its Chief Executive Officer or its Chief Financial Officer, dated as of the
      Closing Date, certifying to the fulfillment of the conditions specified in
      subsections (a), (b) and (c) of this Section 6.1.

    


    (h) The
      Company shall have delivered a Certificate, executed on behalf of the Company
      by
      its Secretary, dated as of the Closing Date, certifying the resolutions adopted
      by the Board of Directors of the Company approving the transactions contemplated
      by this Agreement and the other Transaction Documents and the issuance of the
      Securities, certifying the current versions of the Certificate of Incorporation,
      as amended, and Bylaws of the Company and certifying as to the signatures and
      authority of persons signing the Transaction Documents and related documents
      on
      behalf of the Company.

    


    (i) The
      Investors shall have received an opinion from Hodgson Russ LLP, the Company’s
      counsel, dated as of the Closing Date, in form and substance reasonably
      acceptable to the Investors and addressing such legal matters as the Investors
      may reasonably request.

    


    (j) No
      stop
      order or suspension of trading shall have been imposed by the SEC or any other
      governmental or regulatory body with respect to public trading in the Common
      Stock.

    


    (k) The
      Company shall have received not less than $1,000,000, or greater than
      $3,000,000, in the aggregate.

    


    6.2 Conditions
      to Obligations of the Company.
      The
      Company’s obligation to sell and issue the Notes and the Warrants at the Closing
      is subject to the fulfillment to the satisfaction of the Company on or prior
      to
      the Closing Date of the following conditions, any of which may be waived by
      the
      Company:

    


    (a) The
      representations and warranties made by the Investors in Section 5 hereof, other
      than the representations and warranties contained in Sections 5.3, 5.4, 5.5,
      5.6, 5.7, 5.8 and 5.9 (the “Investment
      Representations”),
      shall
      be true and correct in all material respects when made, and shall be true and
      correct in all material respects on the Closing Date with the same force and
      effect as if they had been made on and as of said date. The Investment
      Representations shall be true and correct in all respects when made, and shall
      be true and correct in all respects on the Closing Date with the same force
      and
      effect as if they had been made on and as of said date. The Investors shall
      have
      performed in all material respects all obligations and covenants herein required
      to be performed by them on or prior to the Closing Date.

     

    
      
         

      

      
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    (b) The
      Investors and the Escrow Agent shall have executed and delivered the Escrow
      Agreement.

    


    (c) No
      judgment, writ, order, injunction, award or decree of or by any court, or judge,
      justice or magistrate, including any bankruptcy court or judge, or any order
      of
      or by any governmental authority, shall have been issued, and no action or
      proceeding shall have been instituted by any governmental authority, enjoining
      or preventing the consummation of the transactions contemplated hereby or in
      the
      other Transaction Documents.

    


    (g) The
      Company shall have received not less than $1,000,000, or greater than
      $3,000,000, in the aggregate.

    


    6.3 Termination
      of Obligations to Effect Closing; Effects.

    


    (a) The
      outstanding obligations of the Company, on the one hand, and the Investors,
      on
      the other hand, to effect the Closing shall terminate as follows:

    


    (i) Upon
      the
      mutual written consent of the Company and the Investors;

    


    (ii) By
      the
      Company if any of the conditions set forth in Section 6.2 shall have become
      incapable of fulfillment, and shall not have been waived by the
      Company;

    


    (iii) By
      an
      Investor (with respect to itself only) if any of the conditions set forth in
      Section 6.1 shall have become incapable of fulfillment, and shall not have
      been
      waived by the Investor; 

    


    (iv) By
      the
      Company if the Closing of the sale of the Minimum Units has not occurred on
      or
      prior to June 15, 2008;

     

    (v) Automatically,
      with respect to any Notes and Warrants not previously sold, on June 30,
      2008.

    


    provided,
      however,
      that,
      except in the case of clause (i) above, the party seeking to terminate its
      obligation to effect the Closing shall not then be in breach of any of its
      representations, warranties, covenants or agreements contained in this Agreement
      or the other Transaction Documents if such breach has resulted in the
      circumstances giving rise to such party’s seeking to terminate its obligation to
      effect the Closing.

    


    (b) In
      the
      event of termination by any Investor of its obligations to effect the Closing
      pursuant to this Section 6.3, written notice thereof shall forthwith be given
      to
      the other Investors and the other Investors shall have the right to terminate
      their obligations to effect such Closing upon written notice to the Company
      and
      the other Investors. Nothing in this Section 6.3 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.

     

    
      
         

      

      
        -
          18 -

        
          

        

      

      
         

      

    

     

    7. Covenants
      and Agreements of the Company.

    


    7.1 Reservation
      of Common Stock.
      The
      Company shall at all times reserve and keep available out of its authorized
      but
      unissued shares of Common Stock, solely for the purpose of providing for the
      exercise of the Warrants, such number of shares of Common Stock as shall from
      time to time equal the Warrant Shares issuable from time to time.

    


    7.2 Reports.
      The
      Company will furnish to the Investors and/or their assignees such information
      relating to the Company and its Subsidiaries as from time to time may reasonably
      be requested by the Investors and/or their assignees; provided, however, that
      the Company shall not disclose material nonpublic information to the Investors,
      or to advisors to or representatives of the Investors, unless prior to
      disclosure of such information the Company identifies such information as being
      material nonpublic information and provides the Investors, such advisors and
      representatives with the opportunity to accept or refuse to accept such material
      nonpublic information for review and any Investor wishing to obtain such
      information enters into an appropriate confidentiality agreement with the
      Company with respect thereto.

    


    7.3 No
      Conflicting Agreements.
      The
      Company will not take any action, enter into any agreement or make any
      commitment that would conflict or interfere in any material respect with the
      Company’s obligations to the Investors under the Transaction
      Documents.

    


    7.4 Insurance.
      The
      Company shall not materially reduce the insurance coverages described in Section
      4.19.

    


    7.5 Compliance
      with Laws.
      The
      Company will comply in all material respects with all applicable laws, rules,
      regulations, orders and decrees of all governmental authorities.

    


    7.6 Listing
      of Underlying Shares and Related Matters.
      If the
      Company applies to have its Common Stock or other securities traded on any
      stock
      exchange or market, it shall include in such application the Warrant Shares
      and
      will take such other action as is necessary to cause such Common Stock to be
      so
      listed. Thereafter, the Company will use commercially reasonable efforts to
      continue the listing and trading of its Common Stock on such exchange or market
      and, in accordance, therewith, will use commercially reasonable efforts to
      comply in all respects with the Company’s reporting, filing and other
      obligations under the bylaws or rules of such exchange or market, as
      applicable.

    


    7.7  Registration
      Rights.

    


    (a) Piggyback
      Registration Rights.
      

     

    
      
         

      

      
        -
          19 -

        
          

        

      

      
         

      

    

     

    (i) Each
      holder of Warrants or Warrant Shares is hereby granted the right to “piggyback”
the Warrant Shares issuable and/or issued upon exercise of the Warrants (such
      shares being referred to herein as “Registrable
      Securities”)
      on
      each registration statement filed by the Company so long as the registration
      form to be used is suitable for the registration of the Registrable Securities
      (a “Piggyback
      Registration”)
      (it
      being understood that the Form S-8 and Form S-4 may not be used for such
      purposes), all at the Company’s cost and expense (except commissions or
      discounts and fees of any of the holders’ own professionals, if any; it being
      understood that the Company shall not be obligated to pay the fees of more
      than
      one counsel for the holders of the Registrable Securities); provided,
      however,
      that
      this paragraph (i) shall not apply to any Registrable Securities if such
      Registrable Securities may then be sold within a six (6) month period under
      Rule
      144 (assuming the holder’s compliance with the provisions of the Rule) and the
      Company delivers an opinion to that effect to the transfer agent; and provided,
      further, that
      if
      the offering with respect to which a registration statement is filed is an
      underwritten primary or secondary offering of the Company’s securities and the
      managing underwriter advises the Company in writing that in its opinion the
      number of securities requested to be included in such registration exceeds
      the
      number that can be sold in such offering without adversely affecting such
      underwriter’s ability to effect an orderly distribution of such securities or
      otherwise adversely effecting such offering (including, without limitation,
      causing a diminution in the offering price of the Company’s securities) the
      Company will include in such registration statement: (A) first, the securities
      being sold for the account of the Company; (B) second, the number of securities
      with respect to which the Company has granted rights to participate in such
      registration (including the Registrable Securities) that, in the opinion of
      such
      underwriter, can be sold pro rata among the respective holders of such
      securities on the basis of the amount of such securities then owned by each
      such
      holder. The Company shall give each holder of Registrable Securities at least
      fifteen (15) days written notice of the intended filing date of any registration
      statement, other than a registration statement filed on Form S-4 or Form S-8
      and
      each holder of Registrable Securities shall have seven (7) days after receipt
      of
      such notice to notify the Company of its intent to include the Registrable
      Securities in the registration statement.

    


      (ii) If,
      at
      any time after giving written notice of its intention to register any securities
      and prior to the effective date of the registration statement filed in
      connection with such registration, the Company shall determine for any reason
      not to register or to delay registration of such securities, the Company may,
      at
      its election, give written notice of such determination to all holders of the
      Registrable Securities and (A) in the case of a determination not to register,
      shall be relieved of its obligation to register any Registrable Securities
      in
      connection with such abandoned registration and (B) in the case of a
      determination to delay such registration of its securities, shall be permitted
      to delay the registration of such Registrable Securities for the same period
      as
      the delay in registering such other Company securities.

    


    (b) Expenses.
      The
      Company shall bear all fees and expenses attendant to registering the
      Registrable Securities (except any underwriters’ discounts and commissions and
      fees of any of the holders’ own professionals, if any; it being understood that
      the Company shall not be obligated to pay the fees of more than one counsel
      for
      the holders of the Registrable Securities). The Company agrees to use its best
      efforts to cause the filing required herein to become effective promptly and
      to
      qualify to register the Registrable Securities in such States as are reasonably
      requested by the holder(s); provided,
      however,
      that in
      no event shall the Company be required to register the Registrable Securities
      in
      a State in which such registration would cause (i) the Company to be obligated
      to register or license to do business in such State, or (ii) the principal
      stockholders of the Company to be obligated to escrow any of their shares of
      capital stock of the Company.

     

    
      
         

      

      
        -
          20 -

        
          

        

      

      
         

      

    

     

    (c) Indemnification.
      The
      Company shall indemnify and hold harmless each holder of the Registrable
      Securities to be sold pursuant to any Registration Statement hereunder and
      each
      of such holder’s officers, directors, employees, agents, partners, legal counsel
      and accountants, and each person, if any, who controls each of the foregoing
      within the meaning of Section 15 of the Securities Act or Section 20(a) of
      the
      1934 Act, as amended, against all loss, claim, damage, expense or liability
      (including all reasonable attorneys’ fees and other expenses reasonably incurred
      in investigating, preparing or defending against any claim whatsoever incurred
      by the indemnified party in any action or proceeding between the indemnitor
      and
      indemnified party or between the indemnified party and any third party or
      otherwise) to which any of them may become subject under the Securities Act,
      the
      Exchange Act or any other statute or at common law or otherwise under laws
      of
      foreign countries, arising from such registration statement or based upon any
      untrue statement or alleged untrue statement of a material fact contained in
      (i)
      any preliminary prospectus, registration statement or prospectus (as from time
      to time each may be amended and supplemented); (ii) in any post-effective
      amendment or amendments or any new registration statement and prospectus in
      which is included the Registrable Securities; or (iii) any application or other
      document or written communication (collectively called “application”)
      executed by the Company or based upon written information furnished by the
      Company in any jurisdiction in order to qualify the Registrable Securities
      under
      the securities laws thereof or filed with the commission, any state securities
      commission or agency, Nasdaq or any securities exchange; or the omission or
      alleged omission therefrom of a material fact required to be stated therein
      or
      necessary to make the statements therein, in light of the circumstances under
      which they were made, not misleading; unless such statement or omission is
      made
      in reliance upon, and in strict conformity with, written information furnished
      to the Company with respect to the holders expressly for use in a preliminary
      prospectus, registration statement or prospectus, or any amendment or supplement
      thereof, or in any application, as the case may be. The Company agrees promptly
      to notify the holders of the Registrable Securities of the commencement of
      any
      litigation proceedings against the Company or any of its officers, directors
      or
      controlling persons in connection with the issue and sale or resale of the
      Registrable Securities or in connection with any such registration statement
      or
      prospectus.

    


    8. Survival
      and Indemnification.

    


    8.1 Survival.
      The
      representations, warranties, covenants and agreements contained in this
      Agreement shall survive the Closing of the transactions contemplated by this
      Agreement.

    


    8.2 Indemnification.
      The
      Company agrees to indemnify and hold harmless each Investor and its Affiliates
      and their respective directors, officers, employees and agents from and against
      any and all losses, claims, damages, liabilities and expenses (including without
      limitation reasonable attorney fees and disbursements and other expenses
      incurred in connection with investigating, preparing or defending any action,
      claim or proceeding, pending or threatened and the costs of enforcement thereof)
      (collectively, “Losses”)
      to
      which such Person may become subject as a result of any breach of
      representation, warranty, covenant or agreement made by or to be performed
      on
      the part of the Company under the Transaction Documents, and will reimburse
      any
      such Person for all such amounts as they are incurred by such
      Person.

     

    
      
         

      

      
        -
          21 -

        
          

        

      

      
         

      

    

     

    8.3 Conduct
      of Indemnification Proceedings.
      Promptly
      after receipt by any Person (the “Indemnified
      Person”)
      of
      notice of any demand, claim or circumstances which would or might give rise
      to a
      claim or the commencement of any action, proceeding or investigation in respect
      of which indemnity may be sought pursuant to Section 8.2, such Indemnified
      Person shall promptly notify the Company in writing and the Company shall assume
      the defense thereof, including the employment of counsel reasonably satisfactory
      to such Indemnified Person, and shall assume the payment of all fees and
      expenses; provided,
      however, that
      the
      failure of any Indemnified Person so to notify the Company shall not relieve
      the
      Company of its obligations hereunder except to the extent that the Company
      is
      materially prejudiced by such failure to notify. In any such proceeding, any
      Indemnified Person shall have the right to retain its own counsel, but the
      fees
      and expenses of such counsel shall be at the expense of such Indemnified Person
      unless: (i) the Company and the Indemnified Person shall have mutually agreed
      to
      the retention of such counsel; or (ii) in the reasonable judgment of counsel
      to
      such Indemnified Person representation of both parties by the same counsel
      would
      be inappropriate due to actual or potential differing interests between them.
      The Company shall not be liable for any settlement of any proceeding effected
      without its written consent, which consent shall not be unreasonably withheld,
      but if settled with such consent, or if there be a final judgment for the
      plaintiff, the Company shall indemnify and hold harmless such Indemnified Person
      from and against any loss or liability (to the extent stated above) by reason
      of
      such settlement or judgment. Without the prior written consent of the
      Indemnified Person, which consent shall not be unreasonably withheld, the
      Company shall not effect any settlement of any pending or threatened proceeding
      in respect of which any Indemnified Person is or could have been a party and
      indemnity could have been sought hereunder by such Indemnified Party, unless
      such settlement includes an unconditional release of such Indemnified Person
      from all liability arising out of such proceeding.

    


    9. Miscellaneous.

    


    9.1 Successors
      and Assigns.
      This
      Agreement may not be assigned by a party hereto without the prior written
      consent of the Company or the Investors, as applicable, provided, however,
      that
      an Investor may assign its rights and delegate its duties hereunder in whole
      or
      in part to an Affiliate or to a third party acquiring some or all of its
      Securities in a private transaction without the prior written consent of the
      Company or the other Investors, after notice duly given by such Investor to
      the
      Company provided, that no such assignment or obligation shall affect the
      obligations of such Investor hereunder. The provisions of this Agreement shall
      inure to the benefit of and be binding upon the respective permitted successors
      and assigns of the parties. Nothing in this Agreement, express or implied,
      is
      intended to confer upon any party other than the parties hereto or their
      respective successors and assigns any rights, remedies, obligations, or
      liabilities under or by reason of this Agreement, except as expressly provided
      in this Agreement.

     

    
      
         

      

      
        -
          22 -

        
          

        

      

      
         

      

    

     

    9.2 Counterparts;
      Faxes.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument. This Agreement may also be executed via facsimile, which shall
      be
      deemed an original.

    


    9.3 Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this
      Agreement.

    


    9.4 Notices.
      Unless
      otherwise provided, any notice required or permitted under this Agreement shall
      be given in writing and shall be deemed effectively given as hereinafter
      described (i) if given by personal delivery, then such notice shall be deemed
      given upon such delivery, (ii) if given by telex or telecopier, then such notice
      shall be deemed given upon receipt of confirmation of complete transmittal,
      (iii) if given by mail, then such notice shall be deemed given upon the earlier
      of (A) receipt of such notice by the recipient or (B) three days after such
      notice is deposited in first class mail, postage prepaid, and (iv) if given
      by
      an internationally recognized overnight air courier, then such notice shall
      be
      deemed given one Business Day after delivery to such carrier. All notices shall
      be addressed to the party to be notified at the address as follows, or at such
      other address as such party may designate by ten days’ advance written notice to
      the other party:

    


    If
      to the
      Company:

    


    Emerald
      Dairy Inc.

    11990
      Market Street, Suite 205

    Reston,
      VA 20190

    
      	 	
              Attn:

            	
              Shu
                Kaneko, Chief Financial Officer 

            


    

    
      	 	
              Fax:

            	
              (678)
                868-0633

            


    

    


    With
      a
      copy to:

    


    Hodgson
      Russ LLP

    1540
      Broadway, 24th Floor

    New
      York,
      NY 10036

    
      	 	
              Attn:

            	
              Jeffrey
                A. Rinde, Esq.

            


    

    
      	 	
              Fax:

            	
              (212)
                751-0928

            


    

    


    If
      to the
      Investors:

    


    to
      the
      addresses set forth on the signature pages hereto.

    


    9.5 Expenses.
      The
      parties hereto shall pay their own costs and expenses in connection herewith.
      In
      the event that legal proceedings are commenced by any party to this Agreement
      against another party to this Agreement in connection with this Agreement or
      the
      other Transaction Documents, the party or parties which do not prevail in such
      proceedings shall severally, but not jointly, pay their pro rata share of the
      reasonable attorneys’ fees and other reasonable out-of-pocket costs and expenses
      incurred by the prevailing party in such proceedings.

     

    
      
         

      

      
        -
          23 -

        
          

        

      

      
         

      

    

     

    9.6 Amendments
      and Waivers.
      Any
      term of this Agreement may be amended and the observance of any term of this
      Agreement may be waived (either generally or in a particular instance and either
      retroactively or prospectively), only with the written consent of the Company
      and the Investors. Any amendment or waiver effected in accordance with this
      paragraph shall be binding upon each holder of any Securities purchased under
      this Agreement at the time outstanding, each future holder of all such
      Securities, and the Company. Notwithstanding the foregoing, no consideration
      shall be offered or paid by the Company to any Investor to amend or consent
      to a
      waiver or modification of any provision of any of this Agreement unless the
      same
      consideration also is offered to all of the holders of the Notes and/or
      Warrants.

    


    9.7 Publicity.
      No
      public release or announcement concerning the transactions contemplated hereby
      shall be issued by the Company or the Investors without the prior consent of
      the
      Company (in the case of a release or announcement by the Investors) or the
      Investors (in the case of a release or announcement by the Company) (which
      consents shall not be unreasonably withheld), except as such release or
      announcement may be required by law or the applicable rules or regulations
      of
      any securities exchange or securities market, in which case the Company or
      the
      Investors, as the case may be, shall allow the Investors or the Company, as
      applicable, to the extent reasonably practicable in the circumstances,
      reasonable time to comment on such release or announcement in advance of such
      issuance. 

    


    9.8 Severability.
      Any
      provision of this Agreement that is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof but shall be interpreted as if it were written so as to be
      enforceable to the maximum extent permitted by applicable law, and any such
      prohibition or unenforceability in any jurisdiction shall not invalidate or
      render unenforceable such provision in any other jurisdiction. To the extent
      permitted by applicable law, the parties hereby waive any provision of law
      which
      renders any provision hereof prohibited or unenforceable in any
      respect.

    


    9.9 Entire
      Agreement.
      This
      Agreement, including the Exhibits and the Disclosure Schedules, and the other
      Transaction Documents constitute the entire agreement among the parties hereof
      with respect to the subject matter hereof and thereof and supersede all prior
      agreements and understandings, both oral and written, between the parties with
      respect to the subject matter hereof and thereof.

    


    9.10 Further
      Assurances.
      The
      parties shall execute and deliver all such further instruments and documents
      and
      take all such other actions as may reasonably be required to carry out the
      transactions contemplated hereby and to evidence the fulfillment of the
      agreements herein contained.

    


    
      
         

      

      
        -
          24 -

        
          

        

      

      
         

      

    


    9.11 Governing
      Law; Consent to Jurisdiction; Waiver of Jury Trial.
      This
      Agreement shall be governed by, and construed in accordance with, the internal
      laws of the State of New York without regard to the choice of law principles
      thereof. Each of the parties hereto irrevocably submits to the exclusive
      jurisdiction of the courts of the State of New York located in New York County
      and the United States District Court for the Southern District of New York
      for
      the purpose of any suit, action, proceeding or judgment relating to or arising
      out of this Agreement and the transactions contemplated hereby. Service of
      process in connection with any such suit, action or proceeding may be served
      on
      each party hereto anywhere in the world by the same methods as are specified
      for
      the giving of notices under this Agreement. Each of the parties hereto
      irrevocably consents to the jurisdiction of any such court in any such suit,
      action or proceeding and to the laying of venue in such court. Each party hereto
      irrevocably waives any objection to the laying of venue of any such suit, action
      or proceeding brought in such courts and irrevocably waives any claim that
      any
      such suit, action or proceeding brought in any such court has been brought
      in an
      inconvenient forum. EACH
      OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
      LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN
      CONSULTED SPECIFICALLY AS TO THIS WAIVER.

    


    9.12 Independent
      Nature of Investors’ Obligations and Rights.
      The obligations of each Investor under any Transaction Document are several
      and
      not joint with the obligations of any other Investor, and no Investor shall
      be
      responsible in any way for the performance of the obligations of any other
      Investor under any Transaction Document. The decision of each Investor to
      purchase Securities pursuant to the Transaction Documents has been made by
      such
      Investor independently of any other Investor. Nothing contained herein or in
      any
      Transaction Document, and no action taken by any Investor pursuant thereto,
      shall be deemed to constitute the Investors as a partnership, an association,
      a
      joint venture or any other kind of entity, or create a presumption that the
      Investors are in any way acting in concert or as a group with respect to such
      obligations or the transactions contemplated by the Transaction Documents.
      Each
      Investor acknowledges that no other Investor has acted as agent for such
      Investor in connection with making its investment hereunder and that no Investor
      will be acting as agent of such Investor in connection with monitoring its
      investment in the Securities or enforcing its rights under the Transaction
      Documents. Each Investor shall be entitled to independently protect and enforce
      its rights, including, without limitation, the rights arising out of this
      Agreement or out of the other Transaction Documents, and it shall not be
      necessary for any other Investor to be joined as an additional party in any
      proceeding for such purpose. The Company acknowledges that each of the Investors
      has been provided with the same Transaction Documents for the purpose of closing
      a transaction with multiple Investors and not because it was required or
      requested to do so by any Investor.

    


    
      
         

      

      
        -
          25 -

        
          

        

      

      
         

      

    


    9.13 Acceptance
      of Investment.
      Except as otherwise set forth herein, at any time prior to the Closing Date,
      the
      Company, in its sole discretion, may (i) accept or reject any Investor’s
      purchase of Notes and Warrants in whole or in part, or (ii) allot to any
      Investor a lesser number of Notes and Warrants than the number of Notes and
      Warrants set forth on the Investor’s signature page attached
      hereto.

    


    


    [signature
      page follows]

     

    
      
         

      

      
        -
          26 -

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF,
      the
      parties have executed this Agreement or caused their duly authorized officers
      to
      execute this Agreement as of the date first above written.

     

    
      	 	 	 
	 	EMERALD
              DAIRY INC. 
	 
 	 
 	 
 
	
            	By:  	 
	 	
              
Name:
              Yang Yong Shan
	 	Title:
              Chief Executive Officer


    

     

    
      
         

      

      
        -
          27 -

        
          

        

      

      
         

      

    

     

    SECURITIES
      PURCHASE AGREEMENT

    COUNTERPART
      SIGNATURE PAGE

     

    By
      signing below, the undersigned agrees to the terms of the Securities Purchase
      Agreement and to purchase the Note and Warrants set forth below.

     

    
      	 	
              INVESTOR: 

            
	 	 
	 	 
	
              Principal
                amount of Note being
                purchased: 

            	 
	 	 
	 	 


    

    
      	Warrant
              Shares:  	By:  	
            
	 	 	Name: 
	 	 	
              Title: 

            


    

    
      	 	 	Address:  	 
	 	 	 	 
	Loan
              Amount: 	 	Facsimile: 	 
	 	
              with
                a copy to:

            	
               

            


    

     

    
      	 	
              Please
                complete the following:

            	 
	 	 	 	 
	 	
              1.

            	
              The
                exact name that your Note and Warrants are 

              to
                be registered in (this is the name that will 

              appear
                on your Note and Warrant certificates). 

              You
                may use a nominee name if appropriate:

            	 
	 	 	 	 
	 	
              2.

            	
              The
                relationship between the Investors and the 

              Registered
                Holder listed in response to item 1 

              above:

            	 
	 	 	 	 
	 	
              3.

            	
              The
                mailing address and facsimile number of the 

            	 
	 	 	   Registered
              Holder listed in response to item 1	 
	 	 	
               above
                (if different from above):

            	
              Facsimile:

            	 
	 	 	 	 
	 	
              4.

            	
              (For
                United States Investors:)
                The Social 

              Security
                Number or Tax Identification Number 

              of
                the Registered Holder listed in the response to 

              item
                1 above:

            	 


    

     

    
      
         

      

      
        -
          28 -

        
          

        

      

      
         

      

    


    Exhibit
      A

    


    (Form
      of Note)

    


    
      
         

      

      
        -
          29 -

        
          

        

      

      
         

      

    


    Exhibit
      B

    


    (Form
      of Warrant)

     

    
      
         

      

      
        -
          30 -

        
          

        

      

      
         

      

    


    Exhibit
      C

    


    (Form
      of Escrow Agreement)

    


    
      
         

      

      
        -
          31 -

        
          

        

      

      
         

      

    


    Schedule
      1

    


    Accredited
      Investor Status

    


    


    
      	
              Investor
                Name (please print):

            	 	 


    

    


    Please
      initial below the items which apply to your status as an Accredited
      Investor.

     

    
      	 	 	An
              individual having a net worth with spouse
              (excluding automobiles, principal residence and furnishings) at the
              time
              of purchase, 
	
               

            	 	
              individually
                or jointly, in excess of $1,000,000.

            
	 	 	 
	 	 	An
              individual whose individual net income was in
              excess of $200,000 in each of the two most recent years, or whose joint
              net  
	
               

            	 	
              income
                with his or her spouse was in excess of $300,000 in each of those
                years,
                and who reasonably expects his individual or joint income with such
                investor’s spouse to reach such level in the current
                year.

            
	 	 	 
	 	 	A
              corporation or partnership, not formed for the
              specific purpose of acquiring the purchased securities, having total
              assets in excess 
	
               

            	 	
              of
                $5,000,000.

            
	 	 	 
	 	 	A
              small business investment company licensed by
              the U.S. Small Business Administration under section 301(c) or (d)
              of the
              Small 
	
               

            	 	
              Business
                Investment Act of 1958.

            
	 	 	 
	 	 	A
              self-directed benefit plan within the meaning
              of ERISA, with investment decisions made solely by persons who are
              accredited 
	
               

            	 	
              investors
                as defined in Rule 501(2) of Regulations D.

            
	 	 	 
	 	 	A
              trust with total assets in excess of $5,000,000
              not formed for the specific purpose of acquiring the purchased securities,
              whose 
	
               

            	 	
              purchase
                is directed by a sophisticated person (i.e., a person who has such
                knowledge and experience in financial and business matters that he,
                she or
                it is capable of evaluating the merits and risks of an investment
                in the
                purchased securities).

            
	 	 	 
	
               

            	 	
              An
                entity in which all of the equity owners are accredited
                investors.

            
	 	 	 


    

    
      	
              
                 

              

            	 	
              Other
                (describe): 

            	 
	 	 	 
	 	 	 


    

    


    
      
         

      

      
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