Unassociated Document


    


    EXHIBIT
      10.1

    


    TRANSACTION
      AGREEMENT 

    


    This
      TRANSACTION
      AGREEMENT
      (the
“Agreement”),
      dated
      as of July 25, 2007, by and among Workstream Inc., a corporation existing
      pursuant to the Canada Business Corporations Act, with offices located at 495
      March Road, Ottawa, Ontario, Canada K2K-3G1 (the “Company”),
      and
      the investors listed on the Schedule of Buyers attached hereto (individually,
      a
“Buyer”
and
      collectively, the “Buyers”).

    


    RECITALS

    


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

    


    B. The
      Company has authorized the sale of special warrants, in the form attached hereto
      as Exhibit
      A
      (the
“Special Warrants”),
      which
      Special Warrants shall be convertible into the Company’s common shares, no par
      value (the “Common
      Shares”),
      at
      the Conversion Rate (as defined in the Special Warrants) in accordance with
      the
      terms thereof.

    


    C.
       Each
      Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
      conditions stated in this Agreement, (i) a Special Warrant with the Conversion
      Amount (as defined in the Special Warrants) set forth opposite such Buyer’s name
      in column (3) on the Schedule of Buyers convertible into Common Shares (as
      converted, collectively, the “Conversion
      Shares”)
      and
      (ii) a warrant to acquire up to that number of Common Shares set forth opposite
      such Buyer’s name in column (4) on the Schedule of Buyers (the “Warrants”),
      in
      the form attached hereto as Exhibit
      B
      (as
      exercised, collectively, the “Warrant
      Shares”).

    


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

    


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

    


    AGREEMENT

    


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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              1.

            	
              PURCHASE
                AND SALE OF SPECIAL WARRANTS AND
                WARRANTS.

            


    

    


    (a) Special
      Warrants and Warrants. Subject to the satisfaction (or waiver) of the
      conditions set forth in Sections 6
      and
7
      below,
      the Company shall issue and sell to each Buyer, and each Buyer severally, but
      not jointly, agrees to purchase from the Company on the Closing Date (as defined
      below), a Special Warrant for the Conversion Amount as is set forth opposite
      such Buyer’s name in column (3) on the Schedule of Buyers, along
      with the
      Warrants to acquire that number of Warrant Shares as is set forth opposite
      such
      Buyer’s name in column (4), on the Schedule of Buyers.

    


    (b) Closing.
      The closing (the “Closing”)
      of the
      purchase of the Special Warrants and the Warrants by the Buyers shall occur
      at
      the offices of Greenberg Traurig, LLP, 77 W. Wacker Drive, Suite 2400, Chicago,
      Illinois 60601. The date and time of the Closing (the “Closing
      Date”)
      shall
      be 10:00 a.m., Chicago Time, on the first (1st)
      Business Day on which the conditions to the Closing set forth in Sections
6
      and
7
      below
      are satisfied or waived (or such later date as is mutually agreed to by the
      Company and each Buyer). As used herein “Business
      Day”
means
      any day other than a Saturday, Sunday or other day on which commercial banks
      in
      Chicago, Illinois are authorized or required by law to remain
      closed.

    


    (c) Purchase
      Price. The aggregate purchase price for the Special Warrants and the
      Warrants to be purchased by each Buyer (the “Purchase
      Price”)
      shall
      be the amount set forth opposite such Buyer’s name in column (5) on the Schedule
      of Buyers. Each Buyer shall pay its respective Purchase Price for the Special
      Warrant and related Warrants to be purchased by such Buyer at the
      Closing.

    


    (d) Form
      of Payment. On the Closing Date, (i) each Buyer shall pay its respective
      Purchase Price to the Company for the Special Warrants and the Warrants to
      be
      issued and sold to such Buyer at the Closing, by wire transfer of immediately
      available funds in accordance with the Company’s written wire instructions and
      (ii) the Company shall issue and deliver to each Buyer (A) a Special
      Warrant for the Conversion Amount as is set forth opposite such Buyer’s name in
      column (3) of the Schedule of Buyers) and (B) a Warrant pursuant to which such
      Buyer shall have the right to acquire such number of Warrant Shares as is set
      forth opposite such Buyer’s name in column (4) of the Schedule of Buyers, in all
      cases duly executed on behalf of the Company and registered in the name of
      such
      Buyer or its designee.

     

    
      	
              2.

            	
              BUYER’S
                REPRESENTATIONS AND
                WARRANTIES.

            


    

    


    Each
      Buyer represents and warrants to the Company with respect to only itself that:
      

     

    (a) Organization;
      Authority. Such Buyer is an entity duly organized, validly existing and in
      good standing under the laws of the jurisdiction of its organization with the
      requisite power and authority to enter into and to consummate the transactions
      contemplated by the Transaction Documents (as defined below) to which it is
      a
      party and otherwise to carry out its obligations hereunder and
      thereunder.
      For
      purposes of this Agreement, “Transaction
      Documents”
means
      this Agreement, the Special Warrants, the Warrants, the Registration Rights
      Agreement, the Irrevocable Transfer Agent Instructions (as defined in Section
      5(b)),
      and
      each of the other agreements and instruments entered into by the parties hereto
      in connection with the transactions contemplated hereby and
      thereby.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    (b) No
      Public Sale or Distribution.
      Such
      Buyer is (i) acquiring the Special Warrants and the Warrants, (ii) upon
      conversion of the Special Warrants will acquire the Conversion Shares issuable
      upon conversion thereof, and (iii) upon exercise of the Warrants will
      acquire the Warrant Shares issuable upon exercise thereof, in each case, for
      its
      own account and not with a view towards, or for resale in connection with,
      the
      public sale or distribution thereof, except pursuant to sales registered or
      exempted under the 1933 Act; provided, however, that by making the
      representations herein, such Buyer does not agree, or make any representation
      or
      warranty (except as set forth in Section 4(o)),
      to
      hold any of the Securities for any minimum or other specific term and reserves
      the right to dispose of the Securities at any time in accordance with or
      pursuant to a registration statement or an exemption under the 1933 Act. Such
      Buyer is not a broker-dealer registered, or required to be registered, with
      the
      SEC under the 1934 Act. Such Buyer is acquiring the Securities hereunder in
      the
      ordinary course of its business. Such Buyer does not presently have any
      agreement or understanding, directly or indirectly, with any Person to
      distribute any of the Securities.

    


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

    


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

     

    (e) Information.
      Such
      Buyer and its advisors, if any, have been furnished with all materials relating
      to the business, finances and operations of the Company and materials relating
      to the offer and sale of the Securities which have been requested by such Buyer.
      Such Buyer and its advisors, if any, have been afforded the opportunity to
      ask
      questions of the Company. Neither such inquiries nor any other due diligence
      investigations conducted by such Buyer or its advisors, if any, or its
      representatives shall modify, amend or affect such Buyer’s right to rely on the
      Company’s representations and warranties contained herein or any representations
      and warranties contained in any other Transaction Document or any other document
      or instrument executed and/or delivered in connection with this Agreement or
      the
      consummation of the transaction contemplated hereby. Such Buyer understands
      that
      its investment in the Securities involves a high degree of risk. Such Buyer
      has
      sought such accounting, legal and tax advice as it has considered necessary
      to
      make an informed investment decision with respect to its acquisition of the
      Securities.

     

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

     

    (g) Transfer
      or Resale.
      Such
      Buyer understands that except as provided in the Registration Rights Agreement
      and Section 4(h)
      hereof:
      (i) the Securities have not been and are not being registered under the 1933
      Act
      or any state securities laws, and may not be offered for sale, sold, assigned
      or
      transferred unless (A) subsequently registered thereunder, (B) such Buyer shall
      have delivered to the Company an opinion of counsel to such Buyer, in a form
      reasonably acceptable to the Company, to the effect that such Securities to
      be
      sold, assigned or transferred may be sold, assigned or transferred pursuant
      to
      an exemption from such registration, or (C) such Buyer provides the Company
      with
      reasonable assurance that such Securities can be sold, assigned or transferred
      pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor
      rule thereto) (collectively, “Rule
      144”);
      (ii)
      any sale of the Securities made in reliance on Rule 144 may be made only in
      accordance with the terms of Rule 144 and further, if Rule 144 is not
      applicable, any resale of the Securities under circumstances in which the seller
      (or the Person (as defined in Section 3(s))
      through
      whom the sale is made) may be deemed to be an underwriter (as that term is
      defined in the 1933 Act) may require compliance with some other exemption under
      the 1933 Act or the rules and regulations of the SEC promulgated thereunder;
      and
      (iii) neither the Company nor any other Person is under any obligation to
      register the Securities under the 1933 Act or any state securities laws or
      to
      comply with the terms and conditions of any exemption thereunder.

     

    
      
        
        

      

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

    


    (i) No
      Conflicts. The execution, delivery and performance by such Buyer of this
      Agreement and the Registration Rights Agreement and the consummation by such
      Buyer of the transactions contemplated hereby and thereby will not (i) result
      in
      a violation of the organizational documents of such Buyer or (ii) conflict
      with,
      or constitute a default (or an event which with notice or lapse of time or
      both
      would become a default) under, or give to others any rights of termination,
      amendment, acceleration or cancellation of, any agreement, indenture or
      instrument to which such Buyer is a party, or (iii) result in a violation of
      any
      law, rule, regulation, order, judgment or decree (including federal and state
      securities laws) applicable to such Buyer, except in the case of clauses (ii)
      and (iii) above, for such conflicts, defaults, rights or violations which would
      not, individually or in the aggregate, reasonably be expected to have a material
      adverse effect on the ability of such Buyer to perform its obligations
      hereunder.

    


    (j) Residency.
      Such Buyer is a resident of that jurisdiction specified below its address on
      the
      Schedule of Buyers.

     

    (k) Certain
      Trading Activities. Such Buyer has not directly or indirectly, nor has any
      Person acting on behalf of or pursuant to any understanding with such Buyer,
      engaged in any transactions in the securities of the Company (including without
      limitation, any Short Sales involving the Company’s securities) since the time
      that the Buyer was first contacted regarding the investment in the Company
      contemplated herein. “Short
      Sales”
      include, without limitation, all “short sales” as defined in Rule 200
      promulgated under Regulation SHO under the 1934 Act (“Regulation
      SHO”)
      and
      all types of direct and indirect stock pledges, forward sale contracts, options,
      puts, calls, swaps and similar arrangements (including on a total return basis),
      and sales and other transactions through non-U.S. broker dealers or foreign
      regulated brokers. Such Buyer does not as of the date hereof, and will not
      immediately following the Closing, own 10% or more of the Company’s issued and
      outstanding Common Shares (calculated based on the assumption that all
      Equivalents (as defined below) owned by such Buyer, whether or not presently
      exercisable or convertible, have been fully exercised or converted (as the
      case
      may be) but taking into account any limitations on exercise or conversion
      (including “blockers”) contained therein).

     

    
      
        
        

      

      
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    (l) General
      Solicitation. No Buyer is purchasing the Securities as a result of any
      advertisement, article, notice or other communication regarding the Securities
      published in any newspaper, magazine or similar media or broadcast over
      television or radio or presented at any seminar.

     

    
      	
              3.

            	
              REPRESENTATIONS
                AND WARRANTIES OF THE
                COMPANY.

            


    

    


    The
      Company represents and warrants to each of the Buyers that:

     

    (a) Organization
      and Qualification.
      The
      Company and each Subsidiary are entities duly organized and validly existing
      and
      in good standing under the laws of the jurisdiction in which they are formed,
      and have the requisite power and authorization to own their properties and
      to
      carry on their business as now being conducted and as presently proposed to
      be
      conducted. Each of the Company and each of the Subsidiaries is duly qualified
      as
      a foreign entity to do business and is in good standing in every jurisdiction
      in
      which its ownership of property or the nature of the business conducted by
      it
      makes such qualification necessary, except to the extent that the failure to
      be
      so qualified or be in good standing would not have a Material Adverse Effect.
      As
      used in this Agreement, “Material
      Adverse Effect”
means
      any material adverse effect on (i) the business, properties, assets,
      liabilities, operations (including results thereof), condition (financial or
      otherwise) or prospects of the Company or any Subsidiary, individually or taken
      as a whole, (ii) the transactions contemplated hereby or in the other
      Transaction Documents or (iii) the authority or ability of the Company to
      perform its obligations under the Transaction Documents (as defined below).
      Other than the Subsidiaries, there is no Person in which the Company, directly
      or indirectly, owns capital stock or holds an equity or similar interest. For
      purposes of this Agreement, Workstream USA, Inc., a Delaware corporation, Paula
      Allen Holdings, Inc., a Florida corporation, The Omni Partners, Inc., a Florida
      corporation, and 6FigureJobs.com, Inc., a Delaware corporation, are collectively
      referred to herein as the “Subsidiaries”
and
      individually as a “Subsidiary.”
      

     

    (b) Authorization;
      Enforcement; Validity.
      The
      Company has the requisite power and authority to enter into and perform its
      obligations under the Transaction Documents and to issue the Securities in
      accordance with the terms hereof and thereof. The execution and delivery of
      this
      Agreement and the other Transaction Documents by the Company, and the
      consummation by the Company of the transactions contemplated hereby and thereby,
      including, without limitation, the issuance of the Special Warrants and the
      reservation for issuance and issuance of the Conversion Shares issuable upon
      conversion of the Special Warrants, the issuance of the Warrants and the
      reservation for issuance and issuance of the Warrant Shares issuable upon
      exercise of the Warrants, have been duly authorized by the Company’s Board of
      Directors, and (other than the filing with the SEC of one or more Registration
      Statements in accordance with the requirements of the Registration Rights
      Agreement and any other filings as may be required by any state securities
      agencies) no further filing, consent or authorization is required by the
      Company, its Board of Directors or its stockholders. This Agreement and the
      other Transaction Documents have been duly executed and delivered by the
      Company, and constitute the legal, valid and binding obligations of the Company,
      enforceable against the Company in accordance with their respective terms,
      except as such enforceability may be limited by general principles of equity
      or
      applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
      or
      similar laws relating to, or affecting generally, the enforcement of applicable
      creditors’ rights and remedies and except as rights to indemnification and to
      contribution may be limited by federal or state securities law. 

     

    
      
        
        

      

      
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    (c) Issuance
      of Securities. The issuance of the Special Warrants and the Warrants has
      been duly authorized and, upon issuance in accordance with the terms of the
      Transaction Documents, the Special Warrants and the Warrants shall be validly
      issued, fully paid and non-assessable and free from all taxes, liens, charges
      and other encumbrances with respect to the issue thereof. As of the Closing,
      the
      Company shall have reserved from its duly authorized capital stock not less
      than
      110% of the sum of (i) the maximum number of Conversion Shares issuable upon
      conversion of the Special Warrants (assuming for purposes hereof that the
      Special Warrants are convertible at the initial Conversion Price (as defined
      in
      the Special Warrants) and without taking into account any limitations on the
      conversion of the Special Warrants set forth therein) and (ii) the maximum
      number of Warrant Shares issuable upon exercise of the Warrants (without regard
      to any limitations on the exercise of the Warrants set forth therein). Upon
      conversion in accordance with the Special Warrants or exercise in accordance
      with the Warrants (as the case may be), the Conversion Shares and the Warrant
      Shares will be validly issued, fully paid and nonassessable and free from all
      preemptive or similar rights, taxes, liens, charges and other encumbrances
      with
      respect to the issue thereof, with the holders being entitled to all rights
      accorded to a holder of Common Shares. Subject to the accuracy of the
      representations and warranties of the Buyers in this Agreement, the offer and
      issuance by the Company of the Securities is exempt from registration under
      the
      1933 Act.

    


    (d) No
      Conflicts. The execution, delivery and performance of the Transaction
      Documents by the Company and the consummation by the Company of the transactions
      contemplated hereby and thereby (including, without limitation, the issuance
      of
      the Special Warrants, the Warrants, the Conversion Shares and Warrant Shares
      and
      the reservation for issuance of the Conversion Shares and Warrant Shares) will
      not (i) result in a violation of the Articles of Incorporation (as defined
      in
      Section 3(r))
      or
      other organizational documents of the Company or any of the Subsidiaries, any
      capital stock of the Company or any of the Subsidiaries or Bylaws (as defined
      in
      Section 3(r))
      of the
      Company or bylaws of any of the Subsidiaries, (ii) conflict with, or constitute
      a default (or an event which with notice or lapse of time or both would become
      a
      default) under, or give to others any rights of termination, amendment,
      acceleration or cancellation of, any agreement, indenture or instrument to
      which
      the Company or any of the Subsidiaries is a party, except to the extent such
      conflict, default or termination right would not reasonably be expected to
      have
      a Material Adverse Effect, or (iii) result in a violation of any law, rule,
      regulation, order, judgment or decree (including federal and state securities
      laws and regulations and the rules and regulations of The
      Nasdaq Capital Market
      and the
      Boston Stock Exchange (together, the “Principal
      Market”)
      and
      including all applicable Canadian laws, rules and regulations) applicable to
      the
      Company or any of the Subsidiaries or by which any property or asset of the
      Company or any of the Subsidiaries is bound or affected except, in the case
      of
      clause (ii) or (iii) above, to the extent such violations that could not
      reasonably be expected to have a Material Adverse Effect. 

     

    
      
        
        

      

      
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    (e) Consents.
      The Company is not required to obtain any consent, authorization or order of,
      or
      make any filing or registration with, any court, governmental agency or any
      regulatory or self-regulatory agency or any other Person in order for it to
      execute, deliver or perform any of its obligations under or contemplated by
      the
      Transaction Documents, in each case, in accordance with the terms hereof or
      thereof. All consents, authorizations, orders, filings and registrations which
      the Company is required to obtain pursuant to the preceding sentence have been
      obtained or effected on or prior to the Closing Date, and the Company is not
      aware of any facts or circumstances which might prevent the Company from
      obtaining or effecting any of the registration, application or filings pursuant
      to the preceding sentence. The Company is not in violation of the requirements
      of the Principal Market and has no knowledge of any facts or circumstances
      which
      could reasonably lead to delisting or suspension of the Common Shares in the
      foreseeable future. 

    


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

    


    (g) No
      General Solicitation; Placement Agent’s Fees. Neither the Company, nor any
      of the Subsidiaries or affiliates, nor any Person acting on its or their behalf,
      has engaged in any form of general solicitation or general advertising (within
      the meaning of Regulation D) in connection with the offer or sale of the
      Securities. The Company shall be responsible for the payment of any placement
      agent’s fees, financial advisory fees, or brokers’ commissions (other than for
      persons engaged by any Buyer or its investment advisor) relating to or arising
      out of the transactions contemplated hereby. Neither the Company nor any of
      the
      Subsidiaries has engaged any placement agent or other agent in connection with
      the sale of the Securities.

    


    (h) No
      Integrated Offering. None of the Company, the Subsidiaries or any of their
      affiliates, nor any Person acting on its or their behalf has, directly or
      indirectly, made any offers or sales of any security or solicited any offers
      to
      buy any security, under circumstances that would require registration of any
      of
      the Securities under the 1933 Act or cause this offering of the Securities
      to be
      integrated with prior offerings by the Company for purposes of the 1933 Act
      or
      any applicable stockholder approval provisions, including, without limitation,
      under the rules and regulations of any exchange or automated quotation system
      on
      which any of the securities of the Company are listed or designated. None of
      the
      Company, the Subsidiaries, their affiliates nor any Person acting on their
      behalf will take any action or steps referred to in the preceding sentence
      that
      would require registration of any of the Securities under the 1933 Act or cause
      the offering of any of the Securities to be integrated with other
      offerings.

     

    
      
        
        

      

      
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    (i) Dilutive
      Effect. The Company understands and acknowledges that the number of
      Conversion Shares and Warrant Shares will increase in certain circumstances.
      The
      Company further acknowledges that its obligation to issue the Conversion Shares
      upon conversion of the Special Warrants and the Warrant Shares upon exercise
      of
      the Warrants in accordance with this Agreement, the Special Warrants and the
      Warrants is, absolute and unconditional regardless of the dilutive effect that
      such issuance may have on the ownership interests of other stockholders of
      the
      Company.

    


    (j) Application
      of Takeover Protections; Rights Agreement. The Company and its board of
      directors have taken all necessary action, if any, in order to render
      inapplicable any control share acquisition, business combination, poison pill
      (including any distribution under a rights agreement) or other similar
      anti-takeover provision under the Articles of Incorporation or other
      organizational document or the laws of the jurisdiction of its incorporation
      or
      otherwise which is or could become applicable to any Buyer as a result of the
      transactions contemplated by this Agreement, including, without limitation,
      the
      Company’s issuance of the Securities and any Buyer’s ownership of the
      Securities. Neither the Company nor any Subsidiary has adopted a stockholder
      rights plan or similar arrangement relating to accumulations of beneficial
      ownership of Common Shares or a change in control of the Company or any of
      the
      Subsidiaries.

    


    (k) SEC
      Documents; Financial Statements. During the two (2) years prior to the date
      hereof, the Company has timely filed all reports, schedules, forms, statements
      and other documents required to be filed by it with the SEC pursuant to the
      reporting requirements of the 1934 Act (all of the foregoing filed prior to
      the
      date hereof and all exhibits included therein and financial statements, notes
      and schedules thereto and documents incorporated by reference therein being
      hereinafter referred to as the “SEC
      Documents”).
      The
      Company has delivered to the Buyers or their respective representatives true,
      correct and complete copies of each of the SEC Documents not available on the
      EDGAR system. As of their respective dates, the SEC Documents complied in all
      material respects with the requirements of the 1934 Act and the rules and
      regulations of the SEC promulgated thereunder applicable to the SEC Documents,
      and none of the SEC Documents, at the time they were filed with the SEC,
      contained any untrue statement of a material fact or omitted to state a material
      fact required to be stated therein or necessary in order to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading. As of their respective dates, the financial statements of the
      Company included in the SEC Documents complied as to form in all material
      respects with applicable accounting requirements and the published rules and
      regulations of the SEC with respect thereto as in effect as of the time of
      filing. Such financial statements have been prepared in accordance with
      generally accepted accounting principles, consistently applied, during the
      periods involved (except (i) as may be otherwise indicated in such financial
      statements or the notes thereto, or (ii) in the case of unaudited interim
      statements, to the extent they may exclude footnotes or may be condensed or
      summary statements) and fairly present in all material respects the financial
      position of the Company as of the dates thereof and the results of its
      operations and cash flows for the periods then ended (subject, in the case
      of
      unaudited statements, to normal year-end audit adjustments which will not be
      material, either individually or in the aggregate). No other information
      provided by or on behalf of the Company to the Buyers which is not included
      in
      the SEC Documents, including, without limitation, information referred to in
      Section 2(e)
      of this
      Agreement, contains any untrue statement of a material fact or omits to state
      any material fact necessary in order to make the statements therein not
      misleading, in the light of the circumstance under which they are or were
      made.

     

    
      
        
        

      

      
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    (l) Absence
      of Certain Changes.
      Since
      the date of the Company’s most recent audited financial statements contained in
      a Form 10-K, there has been no material adverse change and no material adverse
      development in the business, assets, liabilities, properties, operations
      (including results thereof), condition (financial or otherwise) or prospects
      of
      the Company or any of the Subsidiaries. Since the date of the Company’s most
      recent audited financial statements contained in a Form 10-K, neither the
      Company nor any of the Subsidiaries has (i) declared or paid any dividends,
      (ii)
      sold any material assets outside of the ordinary course of business or (iii)
      made any material capital expenditures. Neither the Company nor any of the
      Subsidiaries has taken any steps to seek protection pursuant to any law or
      statute relating to bankruptcy, insolvency, reorganization, liquidation or
      winding up, nor does the Company or any Subsidiary have any knowledge or reason
      to believe that any of their respective creditors intend to initiate involuntary
      bankruptcy proceedings or any actual knowledge of any fact which would
      reasonably lead a creditor to do so. The Company and the Subsidiaries,
      individually and on a consolidated basis, are not as of the date hereof, and
      after giving effect to the transactions contemplated hereby to occur at the
      Closing, will not be Insolvent (as defined below). For purposes of this Section
      3(l),
      “Insolvent”
means,
      (I) with respect to the Company and the Subsidiaries, on a consolidated basis,
      (i) the present fair saleable value of the Company’s and the Subsidiaries’
assets is less than the amount required to pay the Company’s and the
      Subsidiaries’ total Indebtedness (as defined in Section 3(s)),
      (ii)
      the Company and the Subsidiaries are unable to pay their debts and liabilities,
      subordinated, contingent or otherwise, as such debts and liabilities become
      absolute and matured or (iii) the Company and the Subsidiaries intend to incur
      or believe that they will incur debts that would be beyond their ability to
      pay
      as such debts mature; and (II) with respect to the Company and each Subsidiary,
      individually, (i) the present fair saleable value of the Company’s or any of the
      Subsidiaries’ assets is less than the amount required to pay each of their
      respective total Indebtedness, (ii) the Company or any of the Subsidiaries
      are
      unable to pay their respective debts and liabilities, subordinated, contingent
      or otherwise, as such debts and liabilities become absolute and matured or
      (iii)
      the Company or any of the Subsidiaries intend to incur or believe that they
      will
      incur debts that would be beyond their respective ability to pay as such debts
      mature. Neither the Company nor any of the Subsidiaries has engaged in business
      or in any transaction, and is not about to engage in business or in any
      transaction, for which the Company’s or such Subsidiary’s remaining assets
      constitute unreasonably small capital.

    


    (m) No
      Undisclosed Events, Liabilities, Developments or Circumstances. No event,
      liability, development or circumstance has occurred or exists, or is reasonably
      foreseeable to exist or occur with respect to the Company, any of the
      Subsidiaries or their respective business, properties, liabilities, prospects,
      operations (including results thereof) or condition (financial or otherwise),
      that (i) would be required to be disclosed by the Company under applicable
      securities laws on a registration statement on Form S-1 filed with the SEC
      relating to an issuance and sale by the Company of its Common Shares and which
      has not been publicly announced or (ii) could have a Material Adverse
      Effect.

     

    
      
        
        

      

      
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    (n) Conduct
      of Business; Regulatory Permits.
      Neither
      the Company nor any of the Subsidiaries is in violation of any term of or in
      default under its Articles of Incorporation, any certificate of designation,
      preferences or rights of any other outstanding series of preferred stock of
      the
      Company or any of the Subsidiaries or Bylaws or their organizational charter,
      certificate of formation or certificate of incorporation or bylaws,
      respectively. Neither the Company nor any of the Subsidiaries is in violation
      of
      any judgment, decree or order or any statute, ordinance, rule or regulation
      applicable to the Company or any of the Subsidiaries, and neither the Company
      nor any of the Subsidiaries will conduct its business in violation of any of
      the
      foregoing, except in all cases for possible violations which would not,
      individually or in the aggregate, have a Material Adverse Effect. Without
      limiting the generality of the foregoing, the Company is not in violation of
      any
      of the rules, regulations or requirements of the Principal Market and has no
      knowledge of any facts or circumstances that could reasonably lead to delisting
      or suspension of the Common Shares by the Principal Market in the foreseeable
      future. Except as set forth on Schedule 3(n),
      since
      January 1, 2006, (i) the Common Shares have been designated for quotation on
      the
      Principal Market, (ii) trading in the Common Shares has not been suspended
      by
      the SEC or the Principal Market and (iii) the Company has received no
      communication, written or oral, from the SEC or the Principal Market regarding
      the suspension or delisting of the Common Shares from the Principal Market.
      The
      Company and each of the Subsidiaries possess all certificates, authorizations
      and permits issued by the appropriate regulatory authorities necessary to
      conduct their respective businesses, except where the failure to possess such
      certificates, authorizations or permits would not have, individually or in
      the
      aggregate, a Material Adverse Effect, and neither the Company nor any such
      Subsidiary has received any notice of proceedings relating to the revocation
      or
      modification of any such certificate, authorization or permit.

    


    (o) Foreign
      Corrupt Practices. Neither the Company nor any of the Subsidiaries nor any
      director, officer, agent, employee or other Person acting on behalf of the
      Company or any of the Subsidiaries has, in the course of its actions for, or
      on
      behalf of, the Company or any of the Subsidiaries (i) used any corporate funds
      for any unlawful contribution, gift, entertainment or other unlawful expenses
      relating to political activity; (ii) made any direct or indirect unlawful
      payment to any foreign or domestic government official or employee from
      corporate funds; (iii) violated or is in violation of any provision of the
      U.S.
      Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful
      bribe, rebate, payoff, influence payment, kickback or other unlawful payment
      to
      any foreign or domestic government official or employee.

    


    (p) Sarbanes-Oxley
      Act. The Company and each Subsidiary is in compliance in all material
      respects with all applicable requirements of the Sarbanes-Oxley Act of 2002
      that
      are effective as of the date hereof, and all applicable rules and regulations
      promulgated by the SEC thereunder that are effective as of the date
      hereof.

     

    (q) Transactions
      With Affiliates.
      Other
      than as set forth on Schedule 3(q),
      none of
      the officers, directors or employees of the Company or any of the Subsidiaries
      is presently a party to any transaction with the Company or any of the
      Subsidiaries (other than for ordinary course services as employees, officers
      or
      directors), including any contract, agreement or other arrangement providing
      for
      the furnishing of services to or by, providing for rental of real or personal
      property to or from, or otherwise requiring payments to or from any such
      officer, director or employee or, to the knowledge of the Company or any of
      the
      Subsidiaries, any corporation, partnership, trust or other entity in which
      any
      such officer, director, or employee has a substantial interest or is an officer,
      director, trustee or partner.

     

    
      
        
        

      

      
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    (r) Equity
      Capitalization.
      As of
      the date hereof, the authorized capital stock of the Company consists of (i)
      unlimited Common Shares, of which as of the date hereof, 51,963,081, including
      323,625 shares held in treasury, are issued and outstanding and 11,434,044
      shares are reserved for issuance pursuant to securities (other than the Special
      Warrants and the Warrants) exercisable or exchangeable for, or convertible
      into,
      Common Shares, and (ii) unlimited shares of preferred stock, none of which,
      as
      of the date hereof, are issued and outstanding. All of such outstanding shares
      are duly authorized and have been, or upon issuance will be, validly issued
      and
      are fully paid and nonassessable. 9,810,971 shares of the Company’s issued and
      outstanding Common Shares on the date hereof are as of the date hereof owned
      by
      Persons who are “affiliates” (as defined in Rule 405 of the 1933 Act and
      calculated based on the assumption that only officers, directors and holders
      of
      at least 10% of
      the
      Company’s issued and outstanding Common Shares
      are
“affiliates” without conceding that any such Persons are “affiliates” for
      purposes of federal securities laws) of the Company or any of the Subsidiaries.
      To
      the
      Company’s knowledge, as of the date hereof no Person (other than the Persons
      identified in the Schedule 13G/A filed with the SEC on February 14, 2007 by
      Janus Capital Management LLC) owns 10% or more of the Company’s issued and
      outstanding Common Shares (calculated based on the assumption that all
      Equivalents, whether or not presently exercisable or convertible, have been
      fully exercised or converted (as the case may be) but taking account
      of any limitations on exercise or conversion (including “blockers”) contained
      therein without conceding that such identified Person is a 10% stockholder
      for
      purposes of federal securities laws).
      Except
      as disclosed in Schedule 3(r):
      (i)
      none of the Company’s or any Subsidiary’s capital stock is subject to preemptive
      rights or any other similar rights or any liens or encumbrances suffered or
      permitted by the Company or any Subsidiary; (ii) there are no outstanding
      options, warrants, scrip, rights to subscribe to, calls or commitments of any
      character whatsoever relating to, or securities or rights convertible into,
      or
      exercisable or exchangeable for, any capital stock of the Company or any of
      the
      Subsidiaries, or contracts, commitments, understandings or arrangements by
      which
      the Company or any of the Subsidiaries is or may become bound to issue
      additional capital stock of the Company or any of the Subsidiaries or options,
      warrants, scrip, rights to subscribe to, calls or commitments of any character
      whatsoever relating to, or securities or rights convertible into, or exercisable
      or exchangeable for, any capital stock of the Company or any of the
      Subsidiaries; (iii) there are no outstanding debt securities, notes, credit
      agreements, credit facilities or other agreements, documents or instruments
      evidencing Indebtedness (as defined in Section 3(s))
      of the
      Company or any of the Subsidiaries or by which the Company or any of the
      Subsidiaries is or may become bound; (iv) there are no financing statements
      securing obligations in any material amounts, either individually or in the
      aggregate, filed in connection with the Company or any of the Subsidiaries;
      (v)
      there are no agreements or arrangements under which the Company or any of the
      Subsidiaries is obligated to register the sale of any of their securities under
      the 1933 Act (except pursuant to the Registration Rights Agreement); (vi) there
      are no outstanding securities or instruments of the Company or any of the
      Subsidiaries which contain any redemption or similar provisions, and there
      are
      no contracts, commitments, understandings or arrangements by which the Company
      or any of the Subsidiaries is or may become bound to redeem a security of the
      Company or any of the Subsidiaries; (vii) there are no securities or instruments
      containing anti-dilution or similar provisions that will be triggered by the
      issuance of the Securities; (viii) neither the Company nor any Subsidiary has
      any stock appreciation rights or “phantom stock” plans or agreements or any
      similar plan or agreement; and (ix) neither the Company nor any of the
      Subsidiaries have any liabilities or obligations required to be disclosed in
      the
      SEC Documents which are not so disclosed in the SEC Documents, other than those
      incurred in the ordinary course of the Company’s or the Subsidiaries’ respective
      businesses and which, individually or in the aggregate, do not or could not
      have
      a Material Adverse Effect. The Company has furnished to the Buyers true, correct
      and complete copies of the Company’s Articles of Amendment, Articles of
      Incorporation, as amended and as in effect on the date hereof (the “Articles of
      Incorporation”),
      and
      the Company’s bylaws, as amended and as in effect on the date hereof (the
“Bylaws”),
      and
      the terms of all securities convertible into, or exercisable or exchangeable
      for, Common Shares and the material rights of the holders thereof in respect
      thereto.

     

    (s) Indebtedness
      and Other Contracts.
      Except
      as disclosed on Schedule 3(s),
      neither
      the Company nor any of the Subsidiaries (i) has any outstanding Indebtedness
      (as
      defined below), (ii) is a party to any contract, agreement or instrument, the
      violation of which, or default under which, by the other party(ies) to such
      contract, agreement or instrument could reasonably be expected to result in
      a
      Material Adverse Effect, (iii) is in violation of any term of or in default
      under any contract, agreement or instrument relating to any Indebtedness, except
      where such violations and defaults would not result, individually or in the
      aggregate, in a Material Adverse Effect, or (iv) is a party to any contract,
      agreement or instrument relating to any Indebtedness, the performance of which,
      in the judgment of the Company’s officers, has or is expected to have a Material
      Adverse Effect. For purposes of this Agreement: (x) “Indebtedness”
of
      any
      Person means, without duplication (A) all indebtedness for borrowed money,
      (B)
      all obligations issued, undertaken or assumed as the deferred purchase price
      of
      property or services (including, without limitation, “capital leases” in
      accordance with generally accepted accounting principles) (other than trade
      payables entered into in the ordinary course of business), (C) all reimbursement
      or payment obligations with respect to letters of credit, surety bonds and
      other
      similar instruments, (D) all obligations evidenced by notes, bonds, debentures
      or similar instruments, including obligations so evidenced incurred in
      connection with the acquisition of property, assets or businesses, (E) all
      indebtedness created or arising under any conditional sale or other title
      retention agreement, or incurred as financing, in either case with respect
      to
      any property or assets acquired with the proceeds of such indebtedness (even
      though the rights and remedies of the seller or bank under such agreement in
      the
      event of default are limited to repossession or sale of such property), (F)
      all
      monetary obligations under any leasing or similar arrangement which, in
      connection with generally accepted accounting principles, consistently applied
      for the periods covered thereby, is classified as a capital lease, (G) all
      indebtedness referred to in clauses (A) through (F) above secured by (or for
      which the holder of such Indebtedness has an existing right, contingent or
      otherwise, to be secured by) any mortgage, lien, pledge, charge, security
      interest or other encumbrance upon or in any property or assets (including
      accounts and contract rights) owned by any Person, even though the Person which
      owns such assets or property has not assumed or become liable for the payment
      of
      such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
      or obligations of others of the kinds referred to in clauses (A) through (G)
      above; (y) “Contingent
      Obligation”
means,
      as to any Person, any direct or indirect liability, contingent or otherwise,
      of
      that Person with respect to any indebtedness, lease, dividend or other
      obligation of another Person if the primary purpose or intent of the Person
      incurring such liability, or the primary effect thereof, is to provide assurance
      to the obligee of such liability that such liability will be paid or discharged,
      or that any agreements relating thereto will be complied with, or that the
      holders of such liability will be protected (in whole or in part) against loss
      with respect thereto; and (z) “Person”
means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization and a government or any
      department or agency thereof.

     

    
      
        
        

      

      
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    (t) Absence
      of Litigation.
      Except
      as set forth on Schedule 3(t),
      there
      is no action, suit, proceeding, inquiry or investigation before or by the
      Principal Market, any court, public board, government agency, self-regulatory
      organization or body pending or, to the knowledge of the Company, threatened
      against or affecting the Company or any of the Subsidiaries, the Common Shares
      or any of the Company’s or the Subsidiaries’ officers or directors which is
      outside of the ordinary course of business or individually or in the aggregate
      material to the Company or any of the Subsidiaries.

    


    (u) Insurance.
      The Company and each of the Subsidiaries are insured by insurers of recognized
      financial responsibility against such losses and risks and in such amounts
      as
      management of the Company believes to be prudent and customary in the businesses
      in which the Company and the Subsidiaries are engaged. Neither the Company
      nor
      any such Subsidiary has been refused any insurance coverage sought or applied
      for, and neither the Company nor any such Subsidiary has any reason to believe
      that it will be unable to renew its existing insurance coverage as and when
      such
      coverage expires or to obtain similar coverage from similar insurers as may
      be
      necessary to continue its business at a cost that would not have a Material
      Adverse Effect.

    


    (v) Employee
      Relations. Neither the Company nor any of the Subsidiaries is a party to any
      collective bargaining agreement or employs any member of a union. The Company
      and the Subsidiaries believe that their relations with their employees are
      good.
      No executive officer (as defined in Rule 501(f) promulgated under the 1933
      Act)
      or other key employee of the Company or any of the Subsidiaries has notified
      the
      Company or any such Subsidiary that such officer intends to leave the Company
      or
      any such Subsidiary or otherwise terminate such officer’s employment with the
      Company or any such Subsidiary. No executive officer or other key employee
      of
      the Company or any of the Subsidiaries is, or is now expected to be, in
      violation of any material term of any employment contract, confidentiality,
      disclosure or proprietary information agreement, non-competition agreement,
      or
      any other contract or agreement or any restrictive covenant, and the continued
      employment of each such executive officer or other key employee (as the case
      may
      be) does not subject the Company or any of the Subsidiaries to any liability
      with respect to any of the foregoing matters. The Company and the Subsidiaries
      are in compliance with all federal, state, local and foreign laws and
      regulations respecting labor, employment and employment practices and benefits,
      terms and conditions of employment and wages and hours, except where failure
      to
      be in compliance would not, either individually or in the aggregate, reasonably
      be expected to result in a Material Adverse Effect.

     

    (w) Title.
      Except
      as set forth on Schedule 3(w),
      the
      Company and the Subsidiaries have good and marketable title in fee simple to
      all
      real property and good and marketable title to all personal property owned
      by
      them which is material to the business of the Company and the Subsidiaries,
      in
      each case, free and clear of all liens, encumbrances and defects except such
      as
      do not materially affect the value of such property and do not interfere with
      the use made and proposed to be made of such property by the Company and any
      of
      the Subsidiaries. Any real property and facilities held under lease by the
      Company or any of the Subsidiaries are held by them under valid, subsisting
      and
      enforceable leases with such exceptions as are not material and do not interfere
      with the use made and proposed to be made of such property and buildings by
      the
      Company or any of the Subsidiaries. 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (x) Intellectual
      Property Rights. The Company and the Subsidiaries own or possess adequate
      rights or licenses to use all trademarks, trade names, service marks, service
      mark registrations, service names, patents, patent rights, copyrights,
      inventions, licenses, approvals, governmental authorizations, trade secrets
      and
      other intellectual property rights (“Intellectual
      Property Rights”)
      necessary to conduct their respective businesses as now conducted and as
      presently proposed to be conducted. None of the Company’s or the Subsidiaries’
Intellectual Property Rights have expired, terminated or been abandoned, or
      are
      expected to expire, terminate or be abandoned, within three years from the
      date
      of this Agreement. The Company does not have any knowledge of any infringement
      by the Company or any of the Subsidiaries of Intellectual Property Rights of
      others. There is no claim, action or proceeding being made or brought, or to
      the
      knowledge of the Company, being threatened, against the Company or any of the
      Subsidiaries regarding their Intellectual Property Rights. The Company is
      unaware of any facts or circumstances which might give rise to any of the
      foregoing infringements or claims, actions or proceedings. The Company and
      each
      of the Subsidiaries have taken reasonable security measures to protect the
      secrecy, confidentiality and value of all of their Intellectual Property
      Rights.

    


    (y) Environmental
      Laws. The Company and the Subsidiaries (i) are in compliance with all
      Environmental Laws (as hereinafter defined), (ii) have received all permits,
      licenses or other approvals required of them under applicable Environmental
      Laws
      to conduct their respective businesses and (iii) are in compliance with all
      terms and conditions of any such permit, license or approval where, in each
      of
      the foregoing clauses (i), (ii) and (iii), the failure to so comply could be
      reasonably expected to have, individually or in the aggregate, a Material
      Adverse Effect. The term “Environmental
      Laws”
means
      all federal, state, local or foreign laws relating to pollution or protection
      of
      human health or the environment (including, without limitation, ambient air,
      surface water, groundwater, land surface or subsurface strata), including,
      without limitation, laws relating to emissions, discharges, releases or
      threatened releases of chemicals, pollutants, contaminants, or toxic or
      hazardous substances or wastes (collectively, “Hazardous
      Materials”)
      into
      the environment, or otherwise relating to the manufacture, processing,
      distribution, use, treatment, storage, disposal, transport or handling of
      Hazardous Materials, as well as all authorizations, codes, decrees, demands
      or
      demand letters, injunctions, judgments, licenses, notices or notice letters,
      orders, permits, plans or regulations issued, entered, promulgated or approved
      thereunder.

    


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

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (aa) Tax
      Status. The Company and each of the Subsidiaries (i) has timely made or
      filed all foreign, federal and state income and all other tax returns, reports
      and declarations required by any jurisdiction to which it is subject, (ii)
      has
      timely paid all taxes and other governmental assessments and charges that are
      material in amount, shown or determined to be due on such returns, reports
      and
      declarations, except those being contested in good faith and (iii) has set
      aside
      on its books provision reasonably adequate for the payment of all taxes for
      periods subsequent to the periods to which such returns, reports or declarations
      apply. There are no unpaid taxes in any material amount claimed to be due by
      the
      taxing authority of any jurisdiction, and the officers of the Company and the
      Subsidiaries know of no basis for any such claim. The Company is not operated
      in
      such a manner as to qualify as a passive foreign investment company, as defined
      in Section 1297 of the U.S. Internal Revenue Code of 1986, as
      amended.

     

    (bb) Internal
      Accounting and Disclosure Controls.
      The
      Company and each of the Subsidiaries maintains a system of internal accounting
      controls reasonably 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 generally accepted
      accounting principles and to maintain asset and liability accountability, (iii)
      access to assets or incurrence of liabilities is permitted only in accordance
      with management’s general or specific authorization and (iv) the recorded
      accountability for assets and liabilities is compared with the existing assets
      and liabilities at reasonable intervals and appropriate action is taken with
      respect to any difference. The Company maintains disclosure controls and
      procedures (as such term is defined in Rule 13a-14 under the 1934 Act) that
      are
      reasonably effective in ensuring that information required to be disclosed
      by
      the Company in the reports that it files or submits under the 1934 Act is
      recorded, processed, summarized and reported, within the time periods specified
      in the rules and forms of the SEC, including, without limitation, controls
      and
      procedures designed to ensure that information required to be disclosed by
      the
      Company in the reports that it files or submits under the 1934 Act is
      accumulated and communicated to the Company’s management, including its
      principal executive officer or officers and its principal financial officer
      or
      officers, as appropriate, to allow timely decisions regarding required
      disclosure. Neither the Company nor any of the Subsidiaries has received any
      notice or correspondence from any accountant relating to any potential material
      weakness in any part of the system of internal accounting controls of the
      Company or any of the Subsidiaries.

    


    (cc) Off
      Balance Sheet Arrangements. There is no transaction, arrangement, or other
      relationship between the Company or any of the Subsidiaries and an
      unconsolidated or other off balance sheet entity that is required to be
      disclosed by the Company in its 1934 Act filings and is not so disclosed or
      that
      otherwise could be reasonably likely to have a Material Adverse
      Effect.

    


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

    


    (ee) Acknowledgement
      Regarding Buyers’ Trading Activity. It is understood and acknowledged by the
      Company (i) that, other than as contemplated by Section 2(k)
      and
      Section 4(o),
      following the public disclosure of the transactions contemplated by the
      Transaction Documents, in accordance with the terms thereof, none of the Buyers
      have been asked by the Company or any of the Subsidiaries to agree, nor has
      any
      Buyer agreed with the Company or any of the Subsidiaries, to desist from
      purchasing or selling, long and/or short, securities of the Company, or
“derivative” securities based on securities issued by the Company or to hold the
      Securities for any specified term; (ii) that any Buyer, and counter parties
      in
“derivative” transactions to which any such Buyer is a party, directly or
      indirectly, presently may have a “short” position in the Common Shares which
      were established prior to such Buyer’s knowledge of the transactions
      contemplated by the Transaction Documents, and (iii) that each Buyer shall
      not
      be deemed to have any affiliation with or control over any arm’s length counter
      party in any “derivative” transaction. The Company further understands and
      acknowledges that, except as set forth in Section 4(o),
      following the public disclosure of the transactions contemplated by the
      Transaction Documents pursuant to the Press Release one or more Buyers may
      engage in hedging and/or trading activities at various times during the period
      that the Securities are outstanding, including, without limitation, during
      the
      periods that the value of the Warrant Shares or Conversion Shares, as
      applicable, deliverable with respect to the Securities are being determined
      and
      (b) such hedging and/or trading activities, if any, can reduce the value of
      the
      existing stockholders’ equity interest in the Company both at and after the time
      the hedging and/or trading activities are being conducted. Subject to the
      provisions of Section 2(b)
      and
      Section 4(o),
      the
      Company acknowledges that such aforementioned hedging and/or trading activities
      do not constitute a breach of this Agreement or any other Transaction Document
      or any of the documents executed in connection herewith or
      therewith.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

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

    


    (gg) U.S.
      Real Property Holding Corporation. Neither the Company nor any of the
      Subsidiaries is, or has ever been, a U.S. real property holding corporation
      within the meaning of Section 897 of the Internal Revenue Code of 1986, as
      amended, and the Company and each Subsidiary shall so certify upon any Buyer’s
      request.

    


    (hh) Registration
      Eligibility. The Company is eligible to register the Registrable Securities
      for resale by the Buyers using Form S-3 promulgated under the 1933
      Act.

    


    (ii) Disclosure.
      The Company confirms that neither it nor any other Person acting on its behalf
      has provided any of the Buyers or their agents or counsel with any information
      that constitutes or could reasonably be expected to constitute material,
      nonpublic information. The Company understands and confirms that each of the
      Buyers will rely on the foregoing representations in effecting transactions
      in
      securities of the Company. All disclosure provided to the Buyers regarding
      the
      Company and the Subsidiaries, their businesses and the transactions contemplated
      hereby, including the Schedules to this Agreement, furnished by or on behalf
      of
      the Company or any of the Subsidiaries is true and correct and does not contain
      any untrue statement of a material fact or omit to state any material fact
      necessary in order to make the statements made therein, in the light of the
      circumstances under which they were made, not misleading. Each press release
      issued by the Company or any of the Subsidiaries during the twelve (12) months
      preceding the date of this Agreement did not at the time of release contain
      any
      untrue statement of a material fact or omit to state a material fact required
      to
      be stated therein or necessary in order to make the statements therein, in
      the
      light of the circumstances under which they are made, not misleading. No event
      or circumstance has occurred or information exists with respect to the Company
      or any of the Subsidiaries or its or their business, properties, liabilities,
      prospects, operations (including results thereof) or conditions (financial
      or
      otherwise), which, under applicable law, rule or regulation, requires public
      disclosure at or before the date hereof or announcement by the Company but
      which
      has not been so publicly announced or disclosed. The Company acknowledges and
      agrees that no Buyer makes or has made any representations or warranties with
      respect to the transactions contemplated hereby other than those specifically
      set forth in Sections 2
      and
4(o).

     

    
      
        
        

      

      
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              4.

            	
              COVENANTS.

            


    

    


    (a) Best
      Efforts. Each party shall use its best efforts timely to satisfy each of the
      conditions to be satisfied by it as provided in Sections 6
      and
7
      of this
      Agreement.

     

    (b) Form
      D
      and Blue Sky.
      The
      Company agrees to file a Form D with respect to the Securities as required
      under
      Regulation D and to provide a copy thereof to each Buyer promptly after such
      filing. The Company shall, on or before the Closing Date, take such action
      as
      the Company shall reasonably determine is necessary in order to obtain an
      exemption for, or to, qualify the Securities for sale to the Buyers at the
      Closing pursuant to this Agreement under applicable securities or “Blue Sky”
laws of the states of the United States (or to obtain an exemption from such
      qualification), and shall provide evidence of any such action so taken to the
      Buyers on or prior to the Closing Date. The Company shall make all filings
      and
      reports relating to the offer and sale of the Securities required under
      applicable securities or “Blue Sky” laws of the states of the United States
      following the Closing Date. 

    


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

     

    (d) Use
      of
      Proceeds.
      The
      Company shall use the proceeds from the sale of the Securities solely as set
      forth on Schedule 4(d),
      and the
      Company shall repay the Indebtedness set forth on such schedule immediately
      following the Closing.

    


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

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (f) Listing.
      The
      Company shall promptly secure the listing of all of the Registrable Securities
      (as defined in the Registration Rights Agreement) upon each national securities
      exchange and automated quotation system, if any, upon which the Common Shares
      are then listed (subject to official notice of issuance) and shall maintain
      such
      listing of all Registrable Securities from time to time issuable under the
      terms
      of the Transaction Documents on such national securities exchange or automated
      quotation system. The Company shall maintain the Common Shares’ authorization
      for quotation on the Principal Market, the New York Stock Exchange, the Nasdaq
      Global Market or the Nasdaq Global Select Market (each, an “Eligible
      Market”).
      The
      Company shall not take any action which could be reasonably expected to result
      in the delisting or suspension of the Common Shares on an Eligible Market.
      The
      Company shall pay all fees and expenses in connection with satisfying its
      obligations under this Section 4(f).

     

    (g) Fees.
      The
      Company shall reimburse Magnetar Capital Master Fund, Ltd or its designee(s)
      (in
      addition to any other expense amounts paid to any Buyer prior to the date of
      this Agreement) for all reasonable costs and expenses incurred by it or its
      affiliates in connection with the transactions contemplated by the Transaction
      Documents (including, without limitation, all reasonable legal fees and
      disbursements in connection therewith, documentation and implementation of
      the
      transactions contemplated by the Transaction Documents and due diligence in
      connection therewith), which amount shall be withheld by Magnetar Capital Master
      Fund, Ltd from its Purchase Price at the Closing or paid by the Company upon
      termination of this Agreement so long as such termination did not occur as
      a
      result of a material breach by Magnetar Capital Master Fund, Ltd of any of
      its
      obligations hereunder (as the case may be). The Company shall be responsible
      for
      the payment of any placement agent’s fees, financial advisory fees, or broker’s
      commissions (other than for Persons engaged by any Buyer) relating to or arising
      out of the transactions contemplated hereby. The Company shall pay, and hold
      each Buyer harmless against, any liability, loss or expense (including, without
      limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in
      connection with any claim relating to any such payment.

     

    (h) Pledge
      of Securities.
      Notwithstanding anything to the contrary contained in Section 2(g),
      the
      Company acknowledges and agrees that the Securities may be pledged by a Buyer
      in
      connection with a bona fide margin agreement or other loan or financing
      arrangement that is secured by the Securities. The pledge of Securities shall
      not be deemed to be a transfer, sale or assignment of the Securities hereunder,
      and no Buyer effecting a pledge of Securities shall be required to provide
      the
      Company with any notice thereof or otherwise make any delivery to the Company
      pursuant to this Agreement or any other Transaction Document. The Company hereby
      agrees to execute and deliver such documentation as a pledgee of the Securities
      may reasonably request in connection with a pledge of the Securities to such
      pledgee by a Buyer.

     

    
      
        
        

      

      
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    (i) Disclosure
      of Transactions and Other Material Information.
      The
      Company shall, on or before 8:30 a.m., New York City Time, on the first
      (1st)
      Business Day after the date of this Agreement, issue a press release (the
“Press
      Release”)
      reasonably acceptable to each of the Buyers disclosing all the material terms
      of
      the transactions contemplated by the Transaction Documents. On
      or
      before 8:30 a.m., New York City Time, on the fourth (4th)
      Business Day following the date of this Agreement, the Company shall file a
      Current Report on Form 8-K describing all the material terms of the transactions
      contemplated by the Transaction Documents in the form required by the 1934
      Act
      and attaching all the material Transaction Documents (including, without
      limitation, this Agreement (and all schedules to this Agreement), the form
      of
      the Special Warrants, the form of Warrants and the Registration Rights
      Agreement) (including all attachments, the “8-K
      Filing”).
      From
      and after the issuance of the Press Release, the Company shall have disclosed
      all material, nonpublic information delivered to any of the Buyers by the
      Company or any of the Subsidiaries, or any of their respective officers,
      directors, employees or agents (if any) in connection with the transactions
      contemplated by the Transaction Documents. The Company shall not, and the
      Company shall cause each of the Subsidiaries and each of its and their
      respective officers, directors, employees and agents not to, provide any Buyer
      with any material, nonpublic information regarding the Company or any of the
      Subsidiaries from and after the issuance of the Press Release without the
      express prior written consent of such Buyer, except as expressly contemplated
      by
      Section 4(p)(viii).
      If a
      Buyer has, or believes it has, received any material, nonpublic information
      regarding the Company or any of its Subsidiaries in breach of the immediately
      preceding sentence, such Buyer shall provide the Company with written notice
      thereof in which case the Company shall, within two (2) Trading Days (as defined
      in the Special Warrants) of the receipt of such notice, make a public disclosure
      of all such material, nonpublic information so provided. In the event of a
      breach of any of the foregoing covenants by the Company, any of the
      Subsidiaries, or any of its or their respective officers, directors, employees
      and agents (as determined in the reasonable good faith judgment of such Buyer),
      in addition to any other remedy provided herein or in the Transaction Documents,
      such Buyer shall have the right to make a public disclosure, in the form of
      a
      press release, public advertisement or otherwise, of such material, nonpublic
      information without the prior approval by the Company, any of the Subsidiaries,
      or any of its or their respective officers, directors, employees or agents.
      No
      Buyer shall have any liability to the Company, any of the Subsidiaries, or
      any
      of its or their respective officers, directors, employees, stockholders or
      agents, for any such disclosure. Subject to the foregoing, neither the Company,
      the Subsidiaries nor any Buyer shall issue any press releases or any other
      public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the
      prior approval of any Buyer, to make any press release or other public
      disclosure with respect to such transactions (i) in substantial conformity
      with
      the 8-K Filing and contemporaneously therewith and (ii) as is required by
      applicable law and regulations (provided that in the case of clause (i)
      each Buyer shall be consulted by the Company in connection with any such press
      release or other public disclosure prior to its release). Without the prior
      written consent of any applicable Buyer, the Company shall not (and shall cause
      each of the Subsidiaries to not) disclose the name of such Buyer in any filing,
      announcement, release or otherwise unless required by applicable law or
      regulations. 

    


    (j) Additional
      Registration Statements. Until the Effective Date (as defined in the
      Registration Rights Agreement) of the initial Registration Statement required
      to
      be filed by the Company pursuant to Section 2(a) of the Registration Rights
      Agreement which covers all of the securities required to be covered thereunder
      and at any time while such Registration Statement is not effective, the Company
      shall not file a registration statement under the 1933 Act relating to
      securities that are not the Registrable Securities; provided, however, that
      the
      Company shall be permitted to file post-effective amendments with respect to
      registration statements filed prior to the date hereof so long as no such
      amendment (i) increases the amount of securities covered by any such
      registration statements or (ii) adds any securities to any such registration
      statements.

     

    
      
        
        

      

      
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    (k) Additional
      Issuance of Securities.
      The
      Company agrees that for the period commencing on the date hereof and ending
      twelve (12) months after the Closing Date (the “Restricted Period”),
      neither the Company nor any of the Subsidiaries shall directly or indirectly
      issue, offer, sell, grant any option to purchase, or otherwise dispose of (or
      announce any issuance, offer, sale, grant or any option to purchase or other
      disposition of) any of their respective equity or equity equivalent securities,
      including, without limitation, any debt, preferred stock, rights, options,
      warrants or other instrument that is at any time and under any circumstances
      convertible into or exchangeable for, or otherwise entitles the holder thereof
      to receive, capital stock and other securities of the Company (including,
      without limitation, any securities of the Company or any Subsidiary which
      entitle the holder thereof to acquire Common Shares at any time, including
      without limitation, any debt, preferred stock, rights, options, warrants or
      other instrument that is at any time convertible into or exchangeable for,
      or
      otherwise entitles the holder thereof to receive, Common Shares or other
      securities that entitle the holder to receive, directly or indirectly, Common
      Shares) (collectively with such capital stock or other securities of the
      Company, “Equivalents”)
      (any
      such issuance, offer, sale, grant, disposition or announcement being referred
      to
      as a “Subsequent
      Placement”).
      Notwithstanding the foregoing, this Section 4(k)
      shall
      not apply in respect of the issuance of (A) Common Shares or standard options
      to
      purchase Common Shares issued to directors, officers, employees or consultants
      of the Company in connection with their service as directors or officers of
      the
      Company, their employment by the Company or their retention as consultants
      by
      the Company pursuant to an equity compensation program or other contract or
      arrangement approved by the Board of Directors of the Company (or the
      compensation committee of the Board of Directors of the Company),
provided that all such issuances after the date hereof pursuant to this
      clause (A) do not, in the aggregate, exceed more than 5% of the Common Shares
      issued and outstanding immediately prior to the date hereof, (B) Common Shares
      in connection with strategic alliances, acquisitions, mergers, strategic
      partnerships, joint ventures, vendor and supplier arrangements and as equity
      kickers in lease and financing transactions, the primary purpose of which is
      not
      to raise capital, and which are approved in good faith by the Company’s Board of
      Directors, provided that all such issuances after the date hereof
      pursuant to this clause (B) do not, in the aggregate, exceed more than 10%
      of
      the Common Shares issued and outstanding immediately prior to the date hereof,
      (C) Common Shares issued upon the conversion or exercise of Equivalents issued
      prior to the date hereof, provided that such Equivalents have not been
      amended since the date of this Agreement to increase the number of shares
      issuable thereunder or to lower the exercise or conversion price thereof or
      otherwise materially change the terms or conditions thereof in any manner that
      adversely affects any of the Buyers, (D) Common Shares issued or issuable by
      reason of a dividend, stock split or other distribution on Common Shares, (E)
      Common Shares or standard warrants to purchase Common Shares issued to the
      plaintiffs in connection with the settlement of (1) the class action lawsuit
      filed on or about August 10, 2005 against the Company, its chief executive
      officer and former chief financial officer, (2) the lawsuit filed on September
      27, 2006 by Sunrise Equity Partners, L.P. against the Company and its former
      chief executive officer and (3) the lawsuit filed on April 11, 2007 by Nathan
      A.
      Low and Sunrise Foundation Trust, in each case, alleging, among other things,
      violations of the 1934 Act (all as further described in the Company’s most
      recently filed Form 10-Q), provided that all such Common Shares issued
      after the date hereof pursuant to this clause (E) (including pursuant to the
      exercise of any such warrants so issued) do not, in the aggregate, exceed more
      than 2,000,000 Common Shares, provided further that no such warrants (i)
      shall contain (I) any anti-dilution or other adjustment provisions, other than
      provisions providing for standard adjustments in the event of stock dividends,
      stock splits and stock combinations or (II) an exercise price that is less
      than
      the fair market value of the Common Shares on the date such warrant is issued
      or
      (ii) are amended to increase the number of shares issuable thereunder or to
      lower the exercise price thereof or the terms or conditions thereof are
      otherwise materially changed in any manner that adversely affects any of the
      Buyers, (F) Conversion Shares or (G) Warrant Shares (each of the foregoing
      in
      clauses (A) through (G), collectively the “Excluded
      Securities”).

     

    
      
        
        

      

      
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    (l) Reservation
      of Shares. The Company shall take all action necessary to at all times have
      authorized, and reserved for the purpose of issuance, no less than 110% of
      (i)
      the maximum number of Common Shares issuable upon conversion of the Special
      Warrants (assuming for purposes hereof, that the Special Warrants are
      convertible at the Conversion Price (as defined in the Special Warrants) and
      without regard to any limitations on the exercise of the Special Warrants set
      forth therein) and (ii) the maximum number of Common Shares issuable upon
      exercise of the Warrants (without regard to any limitations on the exercise
      of
      the Warrants set forth therein).

    


    (m) Conduct
      of Business. The business of the Company and the Subsidiaries shall not be
      conducted in violation of any law, ordinance or regulation of any governmental
      entity, except where such violations would not result, either individually
      or in
      the aggregate, in a Material Adverse Effect.

    


    (n) Variable
      Rate Transaction. From the date hereof until 24 months after the Effective
      Date of the initial Registration Statement required to be filed by the Company
      pursuant to Section 2(a) of the Registration Rights Agreement which covers
      all
      of the securities required to be covered thereunder, the Company and each
      Subsidiary shall be prohibited from effecting or entering into an agreement
      to
      effect any Subsequent Placement involving a “Variable
      Rate Transaction.”
The
      term “Variable
      Rate Transaction”
shall
      mean a transaction in which the Company or any Subsidiary (i) issues or sells
      any Equivalents either (A) at a conversion, exercise or exchange rate or other
      price that is based upon and/or varies with the trading prices of or quotations
      for the Common Shares at any time after the initial issuance of such
      Equivalents, or (B) with a conversion, exercise or exchange price that is
      subject to being reset at some future date after the initial issuance of such
      Equivalents or upon the occurrence of specified or contingent events directly
      or
      indirectly related to the business of the Company or the market for the Common
      Shares, other than pursuant to a customary “weighted average” anti-dilution
      provision or (ii) enters into any agreement (including, but not limited to,
      an
      equity line of credit) whereby the Company or any Subsidiary may sell securities
      at a future determined price (other than standard and customary “preemptive” or
“participation” rights). Each Buyer shall be entitled to obtain injunctive
      relief against the Company and the Subsidiaries to preclude any such issuance,
      which remedy shall be in addition to any right to collect damages. 

     

    
      
        
        

      

      
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    (o) Trading
      Restrictions. Each Buyer represents and warrants to, and covenants with, the
      Company that it will not (and its affiliates acting on its behalf or pursuant
      to
      any understanding with it will not) engage in or effect, directly or indirectly,
      any transactions in any securities of the Company (including, without
      limitation, any Short Sales, “locking-up” borrow or hedging activities involving
      the Company’s securities) during the period commencing on the date hereof and
      ending on the earlier to occur of (i) one (1) year after the Effective Date
      (as
      defined in the Registration Rights Agreement) of the initial Registration
      Statement covering the Registrable Securities to be filed by the Company
      pursuant to Section 2(a) of the Registration Rights Agreement, (ii) two (2)
      years from the Closing Date, (iii) the date (if any) on which the Common Shares
      are trading at a price that is at least two (2) times the initial Conversion
      Price (as defined in the Special Warrants) (subject to adjustment as provided
      therein) but only if such date is after the applicable Effectiveness Deadline
      (as defined in the Registration Rights Agreement) of the initial Registration
      Statement covering the Registrable Securities to be filed by the Company
      pursuant to Section 2(a) of the Registration Rights Agreement and such
      Registration Statement has not been declared effective by the SEC and (iv)
      the
      date this Agreement is terminated pursuant to Section 8.
      In
      furtherance (and without limitation) of the foregoing, during such restricted
      period, neither such Buyer nor any of such affiliates, (a) will directly or
      indirectly, sell, agree to sell, grant any call option or purchase any put
      option with respect to, pledge, borrow or otherwise dispose of any securities
      of
      the Company, or (b) will establish or increase any “put equivalent position” or
      liquidate or decrease any “call equivalent position” with respect to any such
      securities (in each case within the meaning of Section 16 of the Exchange Act
      and the rules and regulations promulgated thereunder), or otherwise enter into
      any swap, derivative or other transaction or arrangement that transfers to
      another, in whole or in part, any economic consequence of ownership of any
      such
      securities, whether or not such transaction is to be settled by delivery of
      any
      such securities, other securities, cash or other consideration. Notwithstanding
      the foregoing, it is understood and agreed that nothing contained in this
      Section 4(o)
      shall
      prohibit such Buyer (or such affiliates) from (1) purchasing or agreeing to
      purchase unrestricted securities of the Company or securities which are covered
      by an effective registration statement and the prospectus included therein
      is
      available for use on the date of such purchase (including through block trades
      or privately negotiated transactions), (2) purchasing or agreeing to purchase
      securities of the Company pursuant to Section 4(p)
      or
      otherwise from the Company, (3) converting any or all Special Warrants to
      acquire Conversion Shares or otherwise acting under or enforcing, or receiving
      any right or benefit or adjustment under, the Special Warrants (including,
      without limitation, the redemption, purchase and repurchase rights set forth
      therein), (4) exercising any or all Warrants to acquire Warrant Shares or
      otherwise acting under or enforcing, or receiving any right or benefit or
      adjustment under, the Warrants, (5) selling or agreeing to sell “long”
securities of the Company (because such Buyer or such affiliate is “deemed to
      own such securities” pursuant to paragraph (b) of Rule 200 under Regulation
      SHO), including, without limitation, (I) any Special Warrants, Conversion
      Shares, Warrants or Warrant Shares acquired hereunder or pursuant to the
      transactions contemplated hereby or any of the Transaction Documents (including,
      without limitation, pursuant to the terms of a Fundamental Transaction (as
      defined in the Warrants)) or (II) securities acquired after the date hereof
      in
      accordance with this paragraph, (6) pledging or hypothecating any securities
      of
      the Company in connection with leverage arrangements engaged in by such Buyer
      (or such affiliates) without the purpose of transferring economic risk relating
      to such securities, (7) from transferring any of the Securities to any affiliate
      who agrees in writing to be bound by this Section 4(o),
      in each
      case, provided such sale is in compliance with all applicable securities
      laws and following the public announcement of the transaction contemplated
      hereby pursuant to Section 4(i)
      or (8)
      disposing of, or hedging against (including, without limitation, via Short
      Sales
      or otherwise), in accordance with applicable securities laws, any securities,
      swaps, derivates or similar financial instruments involving or related to the
      Company’s securities, provided that the position was held by such Buyer prior to
      the date hereof and such
      dispositions and hedging are limited in amount to, and do not do more than
      fully
      offset, the position owned by such Buyer prior to the date hereof.

     

    
      
        
        

      

      
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    (p) Participation
      Right. From the date hereof until the two year anniversary of the Closing
      Date, neither the Company nor any Subsidiary shall, directly or indirectly,
      effect any Subsequent Placement unless the Company shall have first complied
      with this Section 4(p).
      The
      Company acknowledges and agrees that the right set forth in this Section
4(p)
      is a
      right granted by the Company, separately, to each Buyer.

     

    (i) The
      Company shall deliver to each Buyer a written notice (the “Offer
      Notice”)
      of any
      proposed or intended issuance or sale or exchange (the “Offer”)
      of the
      securities being offered (the “Offered
      Securities”)
      in a
      Subsequent Placement, which Offer Notice shall (w) identify and describe the
      Offered Securities, (x) describe the price and other terms upon which they
      are
      to be issued, sold or exchanged, and the number or amount of the Offered
      Securities to be issued, sold or exchanged, (y) identify the Persons (if known)
      to which or with which the Offered Securities are to be offered, issued, sold
      or
      exchanged and (z) offer to issue and sell to or exchange with such Buyer in
      accordance with the terms of the Offer at least 50% of the Offered Securities,
      provided
      that the
      number of Offered Securities which such Buyer shall have the right to subscribe
      for under this Section 4(p)
      shall be
      (a) based on such Buyer’s pro rata portion of the aggregate Conversion Amounts
      of the Special Warrants purchased hereunder by all Buyers (the “Basic
      Amount”),
      and
      (b) with respect to each Buyer that elects to purchase its Basic Amount, any
      additional portion of the Offered Securities attributable to the Basic Amounts
      of other Buyers as such Buyer shall indicate it will purchase or acquire should
      the other Buyers subscribe for less than their Basic Amounts (the “Undersubscription
      Amount”).

    


    (ii) To
      accept
      an Offer, in whole or in part, such Buyer must deliver a written notice to
      the
      Company prior to the end of the fifth (5th)
      Business Day after such Buyer’s receipt of the Offer Notice (the “Offer
      Period”),
      setting forth the portion of such Buyer’s Basic Amount that such Buyer elects to
      purchase and, if such Buyer shall elect to purchase all of its Basic Amount,
      the
      Undersubscription Amount, if any, that such Buyer elects to purchase (in either
      case, the “Notice
      of Acceptance”).
      If
      the Basic Amounts subscribed for by all Buyers are less than the total of all
      of
      the Basic Amounts, then such Buyer who has set forth an Undersubscription Amount
      in its Notice of Acceptance shall be entitled to purchase, in addition to the
      Basic Amounts subscribed for, the Undersubscription Amount it has subscribed
      for; provided,
      however,
      that if
      the Undersubscription Amounts subscribed for exceed the difference between
      the
      total of all the Basic Amounts and the Basic Amounts subscribed for (the
“Available
      Undersubscription Amount”),
      such
      Buyer who has subscribed for any Undersubscription Amount shall be entitled
      to
      purchase only that portion of the Available Undersubscription Amount as the
      Basic Amount of such Buyer bears to the total Basic Amounts of all Buyers that
      have subscribed for Undersubscription Amounts, subject to rounding by the
      Company to the extent it deems reasonably necessary. Notwithstanding the
      foregoing, if the Company desires to modify or amend the terms and conditions
      of
      the Offer in any material respect prior to the expiration of the Offer Period,
      the Company may deliver to each Buyer a new Offer Notice and the Offer Period
      shall expire on the fifth (5th)
      Business Day after such Buyer’s receipt of such new Offer Notice.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (iii) The
      Company shall have ten (10) Business Days from the expiration of the Offer
      Period above (i) to offer, issue, sell or exchange all or any part of such
      Offered Securities as to which a Notice of Acceptance has not been given by
      a
      Buyer (the “Refused
      Securities”)
      pursuant to a definitive agreement(s) (the “Subsequent
      Placement Agreement”),
      but
      only to the offerees described in the Offer Notice (if so described therein)
      and
      only upon terms and conditions (including, without limitation, unit prices
      and
      interest rates) that are not materially more favorable to the acquiring Person
      or Persons or materially less favorable to the Company than those set forth
      in
      the Offer Notice and (ii) to publicly announce (a) the execution of such
      Subsequent Placement Agreement, and (b) either (x) the consummation of the
      transactions contemplated by such Subsequent Placement Agreement or (y) the
      termination of such Subsequent Placement Agreement, which shall be filed with
      the SEC on a Current Report on Form 8-K with such Subsequent Placement Agreement
      and any documents contemplated therein filed as exhibits thereto.

    


    (iv) In
      the
      event the Company shall propose to sell less than all the Refused Securities
      (any such sale to be in the manner and on the terms specified in Section
4(p)(iii)
      above),
      then such Buyer may, at its sole option and in its sole discretion, reduce
      the
      number or amount of the Offered Securities specified in its Notice of Acceptance
      to an amount that shall be not less than the number or amount of the Offered
      Securities that such Buyer elected to purchase pursuant to Section 4(p)(ii)
      above
      multiplied by a fraction, (i) the numerator of which shall be the number or
      amount of Offered Securities the Company actually proposes to issue, sell or
      exchange (including Offered Securities to be issued or sold to Buyers pursuant
      to this Section 4(p)
      prior to
      such reduction) and (ii) the denominator of which shall be the original amount
      of the Offered Securities. In the event that any Buyer so elects to reduce
      the
      number or amount of Offered Securities specified in its Notice of Acceptance,
      the Company may not issue, sell or exchange more than the reduced number or
      amount of the Offered Securities unless and until such securities have again
      been offered to the Buyers in accordance with Section 4(p)(i)
      above.

    


    (v) Upon
      the
      closing of the issuance, sale or exchange of all or less than all of the Refused
      Securities, such Buyer shall acquire from the Company, and the Company shall
      issue to such Buyer, the number or amount of Offered Securities specified in
      the
      Notices of Acceptance. The purchase by such Buyer of any Offered Securities
      is
      subject in all cases to the preparation, execution and delivery by the Company
      and such Buyer of a separate purchase agreement relating to such Offered
      Securities reasonably satisfactory in form and substance to such Buyer and
      its
      counsel.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (vi) Any
      Offered Securities not acquired by a Buyer or other Persons in accordance with
      this Section 4(p)
      may not
      be issued, sold or exchanged until they are again offered to such Buyer under
      the procedures specified in this Agreement.

    


    (vii) The
      Company and each Buyer agree that if any Buyer elects to participate in the
      Offer, neither the Subsequent Placement Agreement with respect to such Offer
      nor
      any other transaction documents related thereto (collectively, the “Subsequent
      Placement Documents”)
      shall
      include any term or provision whereby such Buyer shall be required to agree
      to
      any restrictions on trading as to any securities of the Company owned by such
      Buyer prior to such Subsequent Placement more restrictive in any material
      respect than the restrictions contained in the Transaction
      Documents.

    


    (viii) Notwithstanding
      anything to the contrary in this Section 4(p)
      and
      unless otherwise agreed to by such Buyer, the Company shall either confirm
      in
      writing to such Buyer that the transaction with respect to the Subsequent
      Placement has been abandoned or shall publicly disclose its intention to issue
      the Offered Securities, in either case in such a manner such that such Buyer
      will not be in possession of any material, non-public information, by the tenth
      (10th)
      day
      following delivery of the Offer Notice. If by such tenth (10th)
      day, no
      public disclosure regarding a transaction with respect to the Offered Securities
      has been made, and no notice regarding the abandonment of such transaction
      has
      been received by such Buyer, such transaction shall be deemed to have been
      abandoned and such Buyer shall not be deemed to be in possession of any
      material, non-public information with respect to the Company or any of the
      Subsidiaries. Should the Company decide to pursue such transaction with respect
      to the Offered Securities, the Company shall provide such Buyer with another
      Offer Notice and such Buyer will again have the right of participation set
      forth
      in this Section 4(p).
      The
      Company shall not be permitted to deliver more than one such Offer Notice to
      such Buyer in any sixty (60) day period.

    


    (ix) The
      restrictions contained in this Section 4(p)
      shall
      not apply in connection with the issuance of any Excluded Securities. The
      Company shall not circumvent the provisions of this Section 4(p)
      by
      providing terms or conditions to one Buyer that are not provided to
      all.

    


    (q) Passive
      Foreign Investment Company. The Company shall conduct its business in such a
      manner as will ensure that the Company will not be deemed to constitute a
      passive foreign investment company within the meaning of Section 1297 of the
      U.S. Internal Revenue Code of 1986, as amended.

     

    
      	
              5.

            	
              REGISTER;
                TRANSFER AGENT INSTRUCTIONS;
                LEGEND.

            


    

    


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

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

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

     

    (c) Legends.
      Each
      Buyer understands that the certificates or other instruments representing the
      Special Warrants and the Warrants and, until such time as the resale of the
      Conversion Shares and the Warrant Shares have been registered under the 1933
      Act
      as contemplated by the Registration Rights Agreement, the stock certificates
      representing the Conversion Shares and the Warrant Shares, except as set forth
      below, shall bear any legend as required by the “blue sky” laws of any state and
      a restrictive legend in substantially the following form (and a stop-transfer
      order may be placed against transfer of such stock certificates):

    
       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

    

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

     

    (d) Removal
      of Legends.
      Certificates evidencing the Conversion Shares or Warrant Shares shall not be
      required to contain the legend set forth in Section 5(c)
      above or
      any other legend (i) while a registration statement (including the Registration
      Statement) covering the resale of such Securities is effective under the
      Securities Act and the applicable Buyer indicates in its conversion or exercise
      notice that it intends to, immediately following such conversion or exercise,
      sell the number of Conversion Shares or Warrant Shares specified in such notice
      under such Registration Statement, (ii) following any sale of such Securities
      pursuant to Rule 144 (assuming the transferor is not an affiliate of the
      Company), (iii) if such Securities are eligible to be sold, assigned or
      transferred under Rule 144(k) (provided that a Buyer provides the Company
      with reasonable assurances that such Securities are eligible for sale,
      assignment or transfer under Rule 144(k) which shall not include an opinion
      of
      counsel), (iv) in connection with a sale, assignment or other transfer (other
      than under Rule 144) provided such Buyer provides the Company with an
      opinion of counsel to such Buyer, in a generally acceptable form, to the effect
      that such sale, assignment or transfer of the Securities may be made without
      registration under the applicable requirements of the 1933 Act or (v) if such
      legend is not required under applicable requirements of the 1933 Act (including,
      without limitation, controlling judicial interpretations and pronouncements
      issued by the SEC). If a legend is not required pursuant to the foregoing,
      the
      Company shall no later than two (2) Trading Days following the delivery by
      a
      Buyer to the Company or the transfer agent (with notice to the Company) of
      a
      legended certificate representing such Securities (endorsed or with stock powers
      attached, signatures guaranteed, and otherwise in form necessary to affect
      the
      reissuance and/or transfer, if applicable), together with any other deliveries
      from such Buyer as may be required above in this Section 5(d),
      as
      directed by such Buyer, either: (A) deliver (or cause to be delivered to) such
      Buyer a certificate representing such Securities that is free from all
      restrictive and other legends or (B) credit the balance account of such Buyer’s
      or such Buyer’s nominee with DTC with a number of Common Shares equal to the
      number of Conversion Shares or Warrant Shares (as the case may be) represented
      by the certificate or conversion or exercise notice so delivered by such Buyer
      (the date by which such certificate is required to be delivered to such Buyer
      or
      such credit is so required to be made to the balance account of such Buyer’s or
      such Buyer’s nominee with DTC pursuant to the foregoing is referred to herein as
      the “Required
      Delivery Date”).
      

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    (e) Failure
      to Timely Deliver; Buy-In.
      If the
      Company fails to use its best efforts to (i) issue and deliver (or cause to
      be
      delivered) to a Buyer by the Required Delivery Date a certificate representing
      the Conversion Shares or Warrant Shares required to be so delivered by the
      Company to such Buyer that is free from all restrictive and other legends or
      (ii) credit the balance account of such Buyer’s or such Buyer’s nominee with DTC
      for such number of shares of Conversion Shares or Warrant Shares required to
      be
      so delivered by the Company, then, in addition to all other remedies available
      to such Buyer, the Company shall pay in cash to such Buyer on each day after
      the
      Required Delivery Date that the issuance or credit of such shares is not timely
      effected an amount equal to 1% of the initial Conversion Amount of such Buyer’s
      Special Warrant. In addition to the foregoing, if the Company fails to so
      properly deliver such unlegended certificates or so properly credit the balance
      account of such Buyer’s or such Buyer’s nominee with DTC by the Required
      Delivery Date, and if on or after the Required Delivery Date such Buyer
      purchases (in an open market transaction or otherwise) Common Shares to deliver
      in satisfaction of a sale by such Buyer of Common Shares that such Buyer
      anticipated receiving from the Company without any restrictive legend (a
“Buy-In”),
      then
      the Company shall, within three (3) Trading Days after such Buyer’s request and
      in such Buyer’s sole discretion, either (i) pay cash to such Buyer in an amount
      equal to such Buyer’s total purchase price (including brokerage commissions, if
      any) for the Common Shares so purchased (the “Buy-In
      Price”),
      at
      which point the Company’s obligation to deliver such certificate or credit such
      Buyer’s balance account shall terminate and such shares shall be cancelled, or
      (ii) promptly honor its obligation to deliver to such Buyer a certificate or
      certificates or credit such Buyer’s DTC account representing such number of
      Common Shares that would have been issued if the Company timely complied with
      its obligations hereunder and pay cash to such Buyer in an amount equal to
      the
      excess (if any) of the Buy-In Price over the product of (A) such number of
      shares of Conversion Shares or Warrant Shares (as the case may be) that the
      Company was required to deliver to such Buyer by the Required Delivery Date
      times (B) the VWAP of the Common Shares for the five (5) Trading Day period
      immediately preceding the Required Delivery Date. 

    


    For
      purposes of this Section 5(e),
      “VWAP”
      means,
      for any security as of any date, the dollar volume-weighted average price for
      such security on the Principal Market (or, if the Principal Market is not the
      principal trading market for the Common Shares, then on the principal securities
      exchange or securities market on which the Common Shares is then traded) during
      the period beginning at 9:30:01 a.m., New York City Time, and ending at 4:00:00
      p.m., New York City Time, as reported by Bloomberg through its “Volume at Price”
function or, if the foregoing does not apply, the dollar volume-weighted average
      price of such security in the over-the-counter market on the electronic bulletin
      board for such security during the period beginning at 9:30:01 a.m., New York
      City Time, and ending at 4:00:00 p.m., New York City Time, as reported by
      Bloomberg, or, if no dollar volume-weighted average price is reported for such
      security by Bloomberg for such hours, the average of the highest closing bid
      price and the lowest closing ask price of any of the market makers for such
      security as reported in the “pink sheets” by Pink Sheets LLC (formerly the
      National Quotation Bureau, Inc.). If VWAP cannot be calculated for such security
      on such date on any of the foregoing bases, the VWAP of such security on such
      date shall be the fair market value as mutually determined by the Company and
      the Buyer. If the Company and the Buyer are unable to agree upon the fair market
      value of such security, then they shall agree in good faith on a reputable
      investment bank to make such determination of fair market value, whose
      determination shall be final and binding and whose fees and expenses shall
      be
      borne by the Company. All such determinations shall be appropriately adjusted
      for any share dividend, share split or other similar transaction during such
      period. 

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    
      	
              6.

            	
              CONDITIONS
                TO THE COMPANY’S OBLIGATION TO
                SELL.

            


    

    


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

    


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

    


    (ii) Such
      Buyer and each other Buyer shall have delivered to the Company the Purchase
      Price (less, in the case of Magnetar Capital Master Fund, Ltd, the amount
      withheld pursuant to Section 4(g))
      for the
      Special Warrants and the related Warrants being
      purchased by such Buyer at the Closing by wire transfer of immediately available
      funds pursuant to the wire instructions provided by the Company.

    


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

     

    
      	
              7.

            	
              CONDITIONS
                TO EACH BUYER’S OBLIGATION TO PURCHASE. 

            


    

    


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

    


    (i) The
      Company shall have duly executed and delivered to such Buyer (A) each of
      the Transaction Documents and (B) the Special Warrants for such Conversion
      Amount as is set forth across from such Buyer’s name in column (3) of the
      Schedule of Buyers and
      the
      related Warrants (in such numbers as is set forth across from such Buyer’s name
      in column (4) of the Schedule of Buyers) being purchased by such Buyer at the
      Closing pursuant to this Agreement.

    


    (ii) Such
      Buyer shall have received the opinion of Cozen O’Connor, the Company’s outside
      U.S. counsel, and Perley-Robertson, Hill & McDougall LLP, the Company’s
      Canadian counsel, in each case dated as of the Closing Date, in forms reasonably
      acceptable to such Buyer.

    


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

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

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

    


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

     

    (vi) The
      Company shall have delivered to such Buyer a certified copy of the Articles
      of
      Incorporation within ten (10) days of the Closing Date.

    


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

    


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

    


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

    


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

    


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

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

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

    


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

    


    (xiv) The
      Company shall have obtained approval of the Principal Market to list the
      Conversion Shares and the Warrant Shares.

    


    (xv) The
      aggregate Purchase Price paid to the Company for the Securities by the Buyers
      at
      the Closing shall not be less than $20 million.

    


    (xvi) The
      Company shall have delivered to such Buyer such other documents relating to
      the
      transactions contemplated by this Agreement as such Buyer or its counsel may
      reasonably request.

     

    
      	
              8.

            	
              TERMINATION. 

            


    

    


    In
      the
      event that the Closing shall not have occurred with respect to a Buyer on or
      before ten (10) days from the date hereof due to the Company’s or such Buyer’s
      failure to satisfy the conditions set forth in Sections 6
      and
7
      above
      (and a non-breaching party’s failure to waive such unsatisfied condition(s)),
      any such non-breaching party at any time shall have the right to terminate
      its
      obligations under this Agreement with respect to such breaching party on or
      after the close of business on such date without liability of such non-breaching
      party to any other party; provided,
      however,
      that
      the abandonment of the sale and purchase of the Special Warrants and the
      Warrants shall be applicable only to such non-breaching party providing such
      written notice; provided
      further,
      notwithstanding any such termination the Company shall remain obligated to
      reimburse the non-breaching Buyers for the expenses described in Section
4(g)
      above.
      Nothing contained in this Section 8
      shall be
      deemed to release any party from any liability for any breach by such party
      of
      the terms and provisions of this Agreement or the other Transaction Documents
      or
      to impair the right of any party to compel specific performance by any other
      party of its obligations under this Agreement or the other Transaction
      Documents.

     

    
      	
              9.

            	
              MISCELLANEOUS.

            


    

    


    (a) Governing
      Law; Jurisdiction; Jury Trial. The parties hereby agree that pursuant to 735
      Illinois Compiled Statutes 105/5-5 they have chosen that all questions
      concerning the construction, validity, enforcement and interpretation of this
      Agreement shall be governed by the internal laws of the State of Illinois,
      without giving effect to any choice of law or conflict of law provision or
      rule
      (whether of the State of Illinois or any other jurisdictions) that would cause
      the application of the laws of any jurisdictions other than the State of
      Illinois. Each party hereby irrevocably submits to the exclusive jurisdiction
      of
      the state and federal courts sitting in Chicago, Illinois, for the adjudication
      of any dispute hereunder or in connection herewith or with any transaction
      contemplated hereby or discussed herein, and hereby irrevocably waives, and
      agrees not to assert in any suit, action or proceeding, any claim that it is
      not
      personally subject to the jurisdiction of any such court, that such suit, action
      or proceeding is brought in an inconvenient forum or that the venue of such
      suit, action or proceeding is improper. Each party hereby irrevocably waives
      personal service of process and consents to process being served in any such
      suit, action or proceeding by mailing a copy thereof to such party at the
      address for such notices to it under this Agreement and agrees that such service
      shall constitute good and sufficient service of process and notice thereof.
      Nothing contained herein shall be deemed to limit in any way any right to serve
      process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES
      ANY
      RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
      OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT
      OR ANY TRANSACTION CONTEMPLATED HEREBY. 

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

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

    


    (c) Headings;
      Gender. The headings of this Agreement are for convenience of reference and
      shall not form part of, or affect the interpretation of, this Agreement. Unless
      the context clearly indicates otherwise, each pronoun herein shall be deemed
      to
      include the masculine, feminine, neuter, singular and plural forms thereof.
      The
      terms “including,” “includes,” “include” and words of like
      import shall be construed broadly as if followed by the words “without
      limitation.” The terms “herein,” “hereunder,” “hereof” and
      words of like import refer to this entire Agreement instead of just the
      provision in which they are found. For purposes of this Agreement for each
      Buyer’s benefit, the word “state” or “states” includes any “province” or
“provinces” in Canada and the concept of “law, rules or regulations” includes
      laws, rules and regulations under applicable law, rules and regulations in
      Canada.

    


    (d) Severability.
      If any provision of this Agreement shall be invalid or unenforceable in any
      jurisdiction, such invalidity or unenforceability shall not affect the validity
      or enforceability of the remainder of this Agreement in that jurisdiction or
      the
      validity or enforceability of any provision of this Agreement in any other
      jurisdiction.

     

    (e) Entire
      Agreement; Amendments.
      This
      Agreement, the other Transaction Documents and the schedules and exhibits
      attached hereto and thereto and the instruments referenced herein and therein
      supersede all other prior oral or written agreements between the Buyers, the
      Company, their affiliates and Persons acting on their behalf with respect to
      the
      matters contained herein and therein, and this Agreement, the other Transaction
      Documents, the schedules and exhibits attached hereto and thereto and the
      instruments referenced herein and therein contain the entire understanding
      of
      the parties with respect to the matters covered herein and therein and, except
      as specifically set forth herein or therein, neither the Company nor any Buyer
      makes any representation, warranty, covenant or undertaking with respect to
      such
      matters. No provision of this Agreement may be amended or waived other than
      by
      an instrument in writing signed by the Company and the holders of at least
      a
      majority of the then outstanding Conversion Amounts of the Special Warrants
      issued hereunder, and any amendment to, or waiver of any provision of, this
      Agreement made in conformity with the provisions of this Section 9(e)
      shall be
      binding on all Buyers and holders of Securities, as applicable, provided
      that (i) any party may give a waiver in writing as to itself, and (ii) Section
      4(o)
      may not
      be amended or waived. No such amendment or waiver (unless given pursuant to
      the
      foregoing proviso) shall be effective to the extent that it applies to less
      than
      all of the holders of the Special Warrants then outstanding. No consideration
      shall be offered or paid to any Person to amend or consent to a waiver or
      modification of any provision of any of the Transaction Documents unless the
      same consideration also is offered to all of the parties to the Transaction
      Documents, holders of the Special Warrants or holders of the Warrants (as the
      case may be). The Company has not, directly or indirectly, made any agreements
      with any Buyers relating to the terms or conditions of the transactions
      contemplated by the Transaction Documents except as set forth in the Transaction
      Documents. Without limiting the foregoing, the Company confirms that, except
      as
      set forth in this Agreement, no Buyer has made any commitment or promise or
      has
      any other obligation to provide any financing to the Company, any Subsidiary
      or
      otherwise.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    (f) Notices.
      Any notices, consents, waivers or other communications required or permitted
      to
      be given under the terms of this Agreement must be in writing and will be deemed
      to have been delivered: (i) upon receipt, when delivered personally; (ii) upon
      receipt, when sent by facsimile (provided confirmation of transmission is
      mechanically or electronically generated and kept on file by the sending party);
      or (iii) one (1) Business Day after deposit with an overnight courier service
      with next day delivery specified, in each case, properly addressed to the party
      to receive the same. The addresses and facsimile numbers for such communications
      shall be:

     

    
      	
              If
                to the Company:

            
	 
	
              Workstream
                Inc.

            
	
              495
                March Road

            
	
              Ottawa,
                Ontario, Canada K2K-3G1

            
	
              Telephone:
                

            	
              613-270-0619

            
	
              Facsimile:
                

            	
              613-236-9819

            
	
              Attention:
                

            	
              CEO

            
	 	 
	
              With
                a copy (for informational purposes only) to:

            
	 
	
              Cozen
                O’Connor

            
	
              1900
                Market Street

            
	
              Philadelphia,
                Pennsylvania 19103

            
	
              Telephone:
                

            	
              (215)
                665-4141

            
	
              Facsimile:
                

            	
              (215)
                665-2013

            
	
              Attention:
                

            	
              Michael
                J. Heller, Esquire

            
	 	 
	
              If
                to the Transfer Agent:

            
	 
	
              American
                Stock Transfer and Trust Company 

            
	
              59
                Maiden Lane

            
	
              New
                York, NY 10038 

            
	
              Telephone:
                

            	
              (718) 921-8124 

            
	
              Facsimile:
                

            	
              (718) 921-8327
                

            
	
              Attention:
                

            	
              Joseph
                Comito

            


    

    


    


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

     

    
      	
              with
                a copy (for informational purposes only) to:

            
	 
	
              Greenberg
                Traurig, LLP 

            
	
              77
                W. Wacker Drive, Suite 2400

            
	
              Chicago,
                Illinois 60602

            
	
              Telephone:
                

            	
              (312)
                456-8400

            
	
              Facsimile:
                

            	
              (312)
                456-8435

            
	
              Attention:
                

            	
              Peter
                H. Lieberman, Esq.

            
	 	
              Todd
                A. Mazur, Esq.

            


    

     

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

    


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

    


    (h) No
      Third Party Beneficiaries. This Agreement is intended for the benefit of the
      parties hereto and their respective permitted successors and assigns, and is
      not
      for the benefit of, nor may any provision hereof be enforced by, any other
      Person, other than the Indemnitees referred to in Section 9(k).

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    (i) Survival.
      Unless this Agreement is terminated under Section 8
      in
      accordance with the terms thereof, the representations, warranties, agreements
      and covenants shall survive the Closing. Each Buyer shall be responsible only
      for its own representations, warranties, agreements and covenants
      hereunder.

    


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

     

    (k) Indemnification.
      In
      consideration of each Buyer’s execution and delivery of the Transaction
      Documents and acquiring the Securities thereunder and in addition to all of
      the
      Company’s other obligations under the Transaction Documents, the Company shall
      defend, protect, indemnify and hold harmless each Buyer and each affiliate
      of a
      Buyer that holds any Securities and all of their stockholders, partners,
      members, officers, directors, employees and direct or indirect investors and
      any
      of the foregoing Persons’ agents or other representatives (including, without
      limitation, those retained in connection with the transactions contemplated
      by
      this Agreement) (collectively, the “Indemnitees”)
      from
      and against any and all actions, causes of action, suits, claims, losses, costs,
      penalties, fees, liabilities and damages, and expenses in connection therewith
      (irrespective of whether any such Indemnitee is a party to the action for which
      indemnification hereunder is sought), and including reasonable attorneys’ fees
      and disbursements (the “Indemnified
      Liabilities”),
      incurred by any Indemnitee as a result of, or arising out of, or relating to
      (a)
      any misrepresentation or breach of any representation or warranty made by the
      Company in any of the Transaction Documents, (b) any breach of any covenant,
      agreement or obligation of the Company contained in any of the Transaction
      Documents or (c) any cause of action, suit or claim brought or made against
      such
      Indemnitee by a third party (including for these purposes a derivative action
      brought on behalf of the Company) and arising out of or resulting from (i)
      the
      execution, delivery, performance or enforcement of any of the Transaction
      Documents, (ii) any transaction financed or to be financed in whole or in part,
      directly or indirectly, with the proceeds of the issuance of the Securities,
      (iii) any disclosure properly made by such Buyer pursuant to Section
4(i),
      or (iv)
      the status of such Buyer or holder of the Securities as an investor in the
      Company pursuant to the transactions contemplated by the Transaction Documents;
      provided, that no Buyer shall be entitled to indemnification to the
      extent any of the foregoing is caused by its gross negligence or willful
      misconduct. To the extent that the foregoing undertaking by the Company may
      be
      unenforceable for any reason, the Company shall make the maximum contribution
      to
      the payment and satisfaction of each of the Indemnified Liabilities which is
      permissible under applicable law. Except as otherwise set forth herein, the
      mechanics and procedures with respect to the rights and obligations under this
      Section 9(k)
      shall be
      the same as those set forth in Section 6 of the Registration Rights
      Agreement.

    


    (l) No
      Strict Construction. The language used in this Agreement will be deemed to
      be the language chosen by the parties to express their mutual intent, and no
      rules of strict construction will be applied against any party.

    


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

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

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

    


    (o) Payment
      Set Aside. To the extent that the Company makes a payment or payments to the
      Buyers hereunder or pursuant to any of the other Transaction Documents or the
      Buyers enforce or exercise their rights hereunder or thereunder, and such
      payment or payments or the proceeds of such enforcement or exercise or any
      part
      thereof are subsequently invalidated, declared to be fraudulent or preferential,
      set aside, recovered from, disgorged by or are required to be refunded, repaid
      or otherwise restored to the Company, a trustee, receiver or any other Person
      under any law (including, without limitation, any bankruptcy law, foreign,
      state
      or federal law, common law or equitable cause of action), then to the extent
      of
      any such restoration the obligation or part thereof originally intended to
      be
      satisfied shall be revived and continued in full force and effect as if such
      payment had not been made or such enforcement or setoff had not
      occurred.

    


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

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    (q) Delivery
      of Securities. Notwithstanding anything contained in this Agreement or any
      other Transaction Document to the contrary, unless otherwise directed in writing
      by the applicable Buyer, the Company shall, and shall cause its agents and
      representatives to, deliver all of such Buyer’s securities purchased pursuant to
      this Agreement (and all securities which are issuable to such Buyer pursuant
      to
      the terms of this Agreement or any other Transaction Document) to the address
      for delivery of securities set forth on such Buyer’s signature page to this
      Agreement, and copies of the certificates representing such securities shall
      be
      sent to such Buyer to the address of such Buyer as set forth on such Buyer’s
      signature page to this Agreement. 

    


    [signature
      pages follow]

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    


    


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

     

    
      	 	 	 
	 	
              COMPANY:

            
	 	 
	 	WORKSTREAM INC.
	 
 	 
 	 
 
	 	By:  	/s/ Michael
              Mullarkey  
	 	
              
Name:
              Michael Mullarkey
	 	
              Title:
                Chairman

            


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


     

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

     

    
      	 	 	 
	 	
              BUYERS:

            
	 	 
	 	MAGNETAR CAPITAL MASTER FUND,
              LTD
	 	 	 
	 
 	 
By: 	 
Magnetar
              Financial LLC
	 	Its:	Investment Manager
	 	 	 
	 	 /s/ Doug
              Litowitz    
	 	By:	Doug Litowitz
	 	Its:	Counsel




    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

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

     

    
      	 	 	 
	 	
              BUYERS:

            
	 	 
	 	SRB Greenway Capital (QP),
              L.P.
	 	 	 
	 	By: 	SRB Management, L.P., General Partner
	 	By:	BC Advisors, L.L.C., General Partner
	 
 	 
 	 
 
	 	By:  	/s/ Steven
              R.
              Becker    
	 	
              
Name:
              Steven R. Becker
	 	Title:
              Member 




    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    


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

     

    
      
        	 	 	 
	 	
                BUYERS:

              
	 	 
	 	SRB Greenway Capital,
                L.P.
	 	 	 
	 	By: 	SRB Management, L.P., General Partner
	 	By:	BC Advisors, L.L.C., General Partner
	 
 	 
 	 
 
	 	By:  	/s/ Steven
                R.
                Becker    
	 	
                
Name:
                Steven R. Becker
	 	Title:
                Member 


      

       

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

     

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

    
       

      
        
          	 	 	 
	 	
                  BUYERS:

                
	 	 
	 	SRB Greenway Offshore Operating
                  Fund,
                  L.P.
	 	 	 
	 	By: 	SRB Management, L.P., General Partner
	 	By:	BC Advisors, L.L.C., General Partner
	 
 	 
 	 
 
	 	By:  	/s/ Steven
                  R.
                  Becker    
	 	
                  
Name:
                  Steven R. Becker
	 	Title:
                  Member 


        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

     

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

    
       

      
        
          	 	 	 
	 	
                  BUYERS:

                
	 	 
	 	TALKOT FUND, L.P.
	 
 	 
 	 
 
	 	By:  	/s/ Thomas
                  B.
                  Akin   
	 	
                  
Name:
                  Thomas B. Akin
	 	Title:
                  General Partner


        

         

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

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

    
      
         

        
          
            	 	 	 
	 	
                    BUYERS:

                  
	 	 
	 	TOM AKIN IRA INDIVIDUAL
                    ACCOUNT
	 
 	 
 	 
 
	 	By:  	/s/ Thomas
                    B.
                    Akin   
	 	
                    
Name:
                    Thomas B. Akin
	 	Title: 
                    


          

           

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

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

    
      
         

        
          
            	 	 	 
	 	
                    BUYERS:

                  
	 	 
	 	CRESTVIEW CAPITAL MASTER,
                    LLC
	 
 	 
 	 
 
	 	By:  	/s/ Stewart
                    Flink  
	 	
                    
Name:
                    Stewart Flink
	 	Title: Manager
                    


          

           

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

        

      

    

     

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

    
       

      
        
          	 	 	 
	 	
                  BUYERS:

                
	 	 
	 	FORT MASON PARTNERS,
                  LP
	 
 	 
 	 
 
	 	By:  	/s/ Dan
                  German 
	 	
                  
Name:
                  Dan German
	 	Title: Managing
                  Member


        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

      

    

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

    
       

      
        
          	 	 	 
	 	
                  BUYERS:

                
	 	 
	 	FORT MASON MASTER,
                  LP
	 
 	 
 	 
 
	 	By:  	/s/ Dan
                  German 
	 	
                  
Name:
                  Dan German
	 	Title: Managing
                  Member


        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

      

    

     

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

    
       

      
        
          	 	 	 
	 	
                  BUYERS:

                
	 	 
	 	CCM MASTER QUALIFIED FUND,
                  LTD
	 
 	 
 	 
 
	 	By:  	/s/ Clint
                  D.
                  Coghill 
	 	
                  
Name:
                  Clint D. Coghill
	 	Title: Director


        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

    


    SCHEDULE
      OF BUYERS

     

    
      	
              (1)

            	 	
              (2)

            	 	
              (3)

            	 	
              (4)

            	 	
              (5)

            	 	
              (6)

            
	 	 	 	 	 	 	 	 	 	 	 
	
              Buyer

            	 	
              Address
                and Facsimile Number

            	 	
              Conversion
                Amount of Special Warrants

            	 	
              Aggregate
                Number of Warrants

            	 	
              Purchase
                Price

            	 	
              Legal
                Representative’s

              Address
                and Facsimile Number

            
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	
              Magnetar
                Capital Master Fund, Ltd

            	 	
              1603
                Orrington Avenue, 13th
                Floor

              Evanston,
                IL 60201

              Attn:
                Michael Balkin

              Facsimile:
                (847) 905-5603

            	 	
              $5,000,000

            	 	
              1,000,000

            	 	
              $5,000,000

            	 	
              Greenberg
                Traurig, LLP

              77
                W. Wacker Drive, Suite 2500

              Chicago,
                Illinois 60601

              Attention:
                Peter H. Lieberman
        
                Todd
                A. Mazur

              Facsimile:
                (312) 456-8435

              Telephone:
                (312) 456-8400

            
	 	 	 	 	 	 	 	 	 	 	 
	
              SRB
                Greenway Capital (QP), L.P.

            	 	
              300
                Crescent Court, Suite 1111

              Dallas,
                Texas 75201

              Attn:
                George Lee

              Facsimile:
                (214) 756-6079

            	 	
              $1,728,300

            	 	
              345,660

            	 	
              $1,728,300

            	 	
              Lowenstein
                Sandler PC

              65
                Livingston Avenue

              Roseland,
                NJ 07068

              Attn:
                John D. Hogoboom

              Facsimile:
                (973) 597-2383

              Telephone:
                (973) 597-2382

            
	 	 	 	 	 	 	 	 	 	 	 
	
              SRB
                Greenway Capital, L.P.

            	 	
              300
                Crescent Court, Suite 1111

              Dallas,
                Texas 75201

              Attn:
                George Lee

              Facsimile:
                (214) 756-6079

            	 	
              $199,500

            	 	
              39,900

            	 	
              $199,500

            	 	
              Lowenstein
                Sandler PC

              65
                Livingston Avenue

              Roseland,
                NJ 07068

              Attn:
                John D. Hogoboom

              Facsimile:
                (973) 597-2383

              Telephone:
                (973) 597-2382

            
	 	 	 	 	 	 	 	 	 	 	 
	
              SRB
                Greenway Offshore Operating Fund, L.P.

            	 	
              300
                Crescent Court, Suite 1111

              Dallas,
                Texas 75201

              Attn:
                George Lee

              Facsimile:
                (214) 756-6079

            	 	
              $72,200

            	 	
              14,440

            	 	
              $72,200

            	 	
              Lowenstein
                Sandler PC

              65
                Livingston Avenue

              Roseland,
                NJ 07068

              Attn:
                John D. Hogoboom

              Facsimile:
                (973) 597-2383

              Telephone:
                (973) 597-2382

            
	 	 	 	 	 	 	 	 	 	 	 
	
              Tom
                Akin IRA Individual Account

            	 	
              2400
                Bridgeway

              Suite
                300

              Sausalito,
                CA 94965

              Attn:
                Thomas B. Akin

              Facsimile:
                (415) 332-6019

            	 	
              $1,000,000

            	 	
              200,000

            	 	
              $1,000,000

            	 	
              Elected
                Not To Provide

            
	 	 	 	 	 	 	 	 	 	 	 
	
              Talkot
                Fund, L.P.

            	 	
              2400
                Bridgeway

              Suite
                300

              Sausalito,
                CA 94965

              Attn:
                Thomas B. Akin

              Facsimile:
                (415) 332-6019

            	 	
              $2,000,000

            	 	
              400,000

            	 	
              $2,000,000

            	 	
              Elected
                Not To Provide

            
	 	 	 	 	 	 	 	 	 	 	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 	 	 	 	 	 	 	 	 
	
              Crestview
                Capital Master, LLC

            	 	
              95
                Revere Drive, Ste. A

              Northbrook,
                IL 60062

              Attn:
                Stewart Flink

              Facsimile:
                (847) 559-5807

            	 	
              $2,000,000

            	 	
              400,000

            	 	
              $2,000,000

            	 	
              Elected
                Not To Provide

            
	 	 	 	 	 	 	 	 	 	 	 
	
              Fort
                Mason Partners, LP

            	 	
              c/o
                Fort Mason Capital, LLC

              4
                Embarcadero Center

              Suite
                2050

              San
                Francisco, CA 94111

              Facsimile:
                (415) 288-8113

              mjensen@fortmasoncapital.com

              dsmolen@fortmasoncapital.com

            	 	
              $182,700

            	 	
              36,540

            	 	
              $182,700

            	 	
              Elected
                Not To Provide

            
	 	 	 	 	 	 	 	 	 	 	 
	
              Fort
                Mason Master, LP

            	 	
              c/o
                Fort Mason Capital, LLC

              4
                Embarcadero Center

              Suite
                2050

              San
                Francisco, CA 94111

              Facsimile:
                (415) 288-8113

              mjensen@fortmasoncapital.com

              dsmolen@fortmasoncapital.com

            	 	
              $2,817,300

            	 	
              563,460

            	 	
              $2,817,300

            	 	
              Elected
                Not To Provide

            
	 	 	 	 	 	 	 	 	 	 	 
	
              CCM
                Master Qualified Fund, Ltd

            	 	
              One
                North Wacker Drive

              Suite
                4350

              Chicago,
                IL 60606

              Attn:
                James Schuler

              Facsimile:
                (312) 324-2001

            	 	
              $5,000,000

            	 	
              1,000,000

            	 	
              $5,000,000

            	 	
              Seward
                & Kissel, LLP

              One
                Battery Park Plaza

              New
                York, New York 10004

              Attn:
                Craig A. Sklar

              Telephone: (212)
                574-1386

              Facsimile: (212)
                480-8421

            


    

     

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
 

    EXHIBITS

     

    
      	
              Exhibit
                A

            	
              Form
                of Special Warrants

            
	
              Exhibit
                B

            	
              Form
                of Warrant

            
	
              Exhibit
                C

            	
              Form
                of Registration Rights Agreement

            


    

     

    
      	
              Schedule
                3(n)

            	
              Notice
                from Principal Market

            
	
              Schedule
                3(q)

            	
              Transactions
                with Affiliates

            
	
              Schedule
                3(r)

            	
              Capitalization

            
	
              Schedule
                3(s)

            	
              Indebtedness
                and Other Contracts

            
	
              Schedule
                3(t)

            	
              Litigation

            
	
              Schedule
                3(w)

            	
              Title

            
	
              Schedule
                4(d)

            	
              Use
                of Proceeds