f8k0808ex10i_guangzhou.htm


    
      SECURITIES
        PURCHASE AGREEMENT

      
         

         

        This
          Securities Purchase Agreement (this “Agreement”) is dated as of July 31,
          2007 between Guangzhou Global Telecom, Inc., a Florida corporation (the
          “Company”), and each purchaser identified on the signature pages hereto
          (each, including its successors and assigns, a “Purchaser” and
          collectively the “Purchasers”).

             

      

      WHEREAS,
        subject to the terms and conditions set forth in this Agreement and pursuant
        to
        Section 4(2) of the Securities Act of 1933, as amended (the “Securities
        Act”), and Rule 506 promulgated thereunder, the Company desires to issue
        and
        sell to each Purchaser, and each Purchaser, severally and not jointly, desires
        to purchase from the Company, securities of the Company as more fully described
        in this Agreement.

       

      NOW,
        THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
        and for other good and valuable consideration, the receipt and adequacy of
        which
        are hereby acknowledged, the Company and each Purchaser agree as
        follows:

       

       

      ARTICLE
        I.

      DEFINITIONS

       

      1.1   Definitions.  In
        addition to the terms defined elsewhere in this Agreement: (a) capitalized
        terms
        that are not otherwise defined herein have the meanings given to such terms
        in
        the Debentures (as defined herein), and (b) the following terms have the
        meanings set forth in this Section 1.1:

       

      “Action”
        shall have the meaning ascribed to such term in Section 3.1(j).

       

      “Affiliate”
        means any Person that, directly or indirectly through one or more
        intermediaries, controls or is controlled by or is under common control with
        a
        Person, as such terms are used in and construed under Rule 405 under the
        Securities Act.  With respect to a Purchaser, any investment fund or
        managed account that is managed on a discretionary basis by the same investment
        manager as such Purchaser will be deemed to be an Affiliate of such
        Purchaser.

       

      “Board
        of Directors” means the board of directors of the Company.

       

      “Business
        Day” means any day except any Saturday, any Sunday, any day which is a
        federal legal holiday in the United States or any day on which banking
        institutions in the State of New York are authorized or required by law or
        other
        governmental action to close.

       

      “Closing
        Dates” means, collectively, the dates of the First Closing and the Second
        Closing.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      “Closing(s)”
        means the closing(s) of the purchase and sale of the Securities pursuant
        to
        Section 2.1.

       

      “Commission”
        means the Securities and Exchange Commission.

       

      “Common
        Stock” means the common stock of the Company, par value $0.01 per share, and
        any other class of securities into which such securities may hereafter be
        reclassified or changed into.

       

      “Common
        Stock Equivalents” means any securities of the Company or the Subsidiaries
        which would entitle the holder thereof to acquire at any time Common Stock,
        including, without limitation, any debt, preferred stock, rights, options,
        warrants or other instrument that is at any time convertible into or exercisable
        or exchangeable for, or otherwise entitles the holder thereof to receive,
        Common
        Stock.

       

      “Company
        Counsel” means Anslow & Jaclin, LLP, with offices located at 195 Route 9
        South, Suite 204, Manalapan, New Jersey 07726.

       

      “Conversion
        Price” shall have the meaning ascribed to such term in the
        Debentures.

       

      “Debentures”
        means the 8% Senior Secured Convertible Debentures due, subject to the terms
        therein, 2 years from their date of issuance, issued by the Company to the
        Purchasers hereunder, in the form of Exhibit A attached
        hereto.

       

      “Disclosure
        Schedules” shall have the meaning ascribed to such term in Section
        3.1.

       

      “Effective
        Date” means the date that the initial Registration Statement filed by the
        Company pursuant to the Registration Rights Agreement is first declared
        effective by the Commission.

       

      “Evaluation
        Date” shall have the meaning ascribed to such term in Section
        3.1(r).

       

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

      


      “Exempt
        Issuance” means the issuance of (a) shares of Common Stock or options to
        employees, officers or directors of the Company pursuant to any stock or
        option
        plan duly adopted for such purpose by a majority of the non-employee members
        of
        the Board of Directors or a majority of the members of a committee of
        non-employee directors established for such purpose, (b) securities upon
        the
        exercise or exchange of or conversion of any Securities issued hereunder
        and/or
        other securities exercisable or exchangeable for or convertible into shares
        of
        Common Stock issued and outstanding on the date of this Agreement, provided
        that
        such securities have not been amended since the date of this Agreement to
        increase the number of such securities or to decrease the exercise, exchange
        or
        conversion price of such securities, and 

       

       

      
        
          
          

        

        
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      (c)
        securities issued pursuant to acquisitions or strategic transactions approved
        by
        a majority of the disinterested directors of the Company, provided that any
        such
        issuance shall only be to a Person which is, itself or through its subsidiaries,
        an operating company in a business synergistic with the business of the Company
        and in which the Company receives benefits in addition to the investment
        of
        funds, but shall not include a transaction in which the Company is issuing
        securities primarily for the purpose of raising capital or to an entity whose
        primary business is investing in securities.

       

       “FWS”
        means Feldman Weinstein & Smith LLP with offices located at 420 Lexington
        Avenue, Suite 2620, New York, New York 10170-0002.

       

      “GAAP”
        shall have the meaning ascribed to such term in Section 3.1(h).

       

      “Indebtedness”
        shall have the meaning ascribed to such term in Section 3.1(aa).

       

      “Intellectual
        Property Rights” shall have the meaning ascribed to such term in Section
        3.1(o).

       

      “Legend
        Removal Date” shall have the meaning ascribed to such term in Section
        4.1(c).

       

      “Liens”
        means a lien, charge, security interest, encumbrance, right of first refusal,
        preemptive right or other restriction.

       

      “Material
        Adverse Effect” shall have the meaning assigned to such term in Section
        3.1(b).

       

      “Material
        Permits” shall have the meaning ascribed to such term in Section
        3.1(m).

       

      “Maximum
        Rate” shall have the meaning ascribed to such term in Section
        5.17.

       

      “Participation
        Maximum” shall have the meaning ascribed to such term in Section
        4.12.

       

      “Person”
        means an individual or corporation, partnership, trust, incorporated or
        unincorporated association, joint venture, limited liability company, joint
        stock company, government (or an agency or subdivision thereof) or other
        entity
        of any kind.

       

      “Placement
        Agent” shall mean Midtown Partners & Co., LLC.

       

      “Pre-Notice”
        shall have the meaning ascribed to such term in Section 4.12.

       

      “Principal
        Amount” shall mean, as to each Purchaser, the amounts set forth below such
        Purchaser’s signature block on the signature pages hereto and next to the
        heading “Principal Amount,” in United States Dollars, which shall equal such
        Purchaser’s Subscription amount multiplied by 1.142857.

       

       

      
        
          
          

        

        
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      “Proceeding”
        means an action, claim, suit, investigation or proceeding (including, without
        limitation, an informal investigation or partial proceeding, such as a
        deposition), whether commenced or threatened.

       

      “Purchaser
        Party” shall have the meaning ascribed to such term in Section
        4.10.

       

      “Registration
        Rights Agreement” means the Registration Rights Agreement, dated the date
        hereof, among the Company and the Purchasers, in the form of Exhibit B
        attached hereto.

       

      “Registration
        Statement” means a registration statement meeting the requirements set forth
        in the Registration Rights Agreement and covering the resale of the Underlying
        Shares by each Purchaser as provided for in the Registration Rights
        Agreement.

       

      “Required
        Approvals” shall have the meaning ascribed to such term in Section
        3.1(e).

       

      “Required
        Minimum” means, as of any date, the maximum aggregate number of shares of
        Common Stock then issued or potentially issuable in the future pursuant to
        the
        Transaction Documents, including any Underlying Shares issuable upon exercise
        or
        conversion in full of all Warrants and Debentures (including Underlying Shares
        issuable as payment of interest), ignoring any conversion or exercise limits
        set
        forth therein, and assuming that the Conversion Price is at all times on
        and
        after the date of determination 75% of the then Conversion Price on the Trading
        Day immediately prior to the date of determination.

       

      “Rule
        144” means Rule 144 promulgated by the Commission pursuant to the Securities
        Act, as such Rule may be amended from time to time, or any similar rule or
        regulation hereafter adopted by the Commission having substantially the same
        effect as such Rule.

       

      “SEC
        Reports” shall have the meaning ascribed to such term in Section
        3.1(h).

       

      “Securities”
        means the Debentures, the Warrants, the Warrant Shares and the Underlying
        Shares.

       

      “Securities
        Act” means the Securities Act of 1933, as amended, and the rules and
        regulations promulgated thereunder.

       

      “Security
        Agreement” means the Security Agreement, dated the date hereof, among the
        Company and the Purchasers, in the form of Exhibit E attached
        hereto.

      


      “Security
        Documents” shall mean the Security Agreement, the Subsidiary Guarantees and
        any other documents and filing required thereunder in order to grant the
        Purchasers a first priority security interest in the assets of the Company
        and
        the Subsidiaries as provided in the Security Agreement, including all UCC-1
        filing receipts.

       

       

      
        
          
          

        

        
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      “Short
        Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
        under the Exchange Act (but shall not be deemed to include the location and/or
        reservation of borrowable shares of Common Stock). 

       

       “Subscription
        Amount” means, as to each Purchaser, the aggregate amount to be paid for
        Debentures and Warrants purchased hereunder as specified below such Purchaser’s
        name on the signature page of this Agreement and next to the heading
“Subscription Amount,” in United States dollars and in immediately available
        funds.

       

      “Subsequent
        Financing” shall have the meaning ascribed to such term in Section
        4.12.

       

      “Subsequent
        Financing Notice” shall have the meaning ascribed to such term in Section
        4.12.

       

      “Subsidiary”
        means any subsidiary of the Company as set forth on Schedule 3.1(a) and
        shall, where applicable, include any direct or indirect subsidiary of the
        Company formed or acquired after the date hereof.

       

      “Subsidiary
        Guarantee” means the Subsidiary Guarantee, dated the date hereof, by each
        Subsidiary in favor of the Purchasers, in the form of Exhibit F attached
        hereto.

       

      “Trading
        Day” means a day on which the New York Stock Exchange is open for
        trading.

       

      “Trading
        Market” means the following markets or exchanges on which the Common Stock
        is listed or quoted for trading on the date in question: the American Stock
        Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
        Global
        Select Market, the New York Stock Exchange or the OTC Bulletin
        Board.

       

       “Transaction
        Documents” means this Agreement, the Debentures, the Warrants, the
        Registration Rights Agreement, the Security Agreement, the Subsidiary
        Guarantee,  all exhibits and schedules thereto and hereto and any
        other documents or agreements executed in connection with the transactions
        contemplated hereunder.

       

      “Transfer
        Agent” means Interwest Transfer Co., Inc., the current transfer agent of the
        Company with a mailing address of 1981 East 4800 South, Suite 100, Salt Lake
        City, Utah 84117 and a facsimile number of (801) 277-3147, and any successor
        transfer agent of the Company.

       

      “Underlying
        Shares” means the shares of Common Stock issued and issuable upon conversion
        or redemption of the Debentures and upon exercise of the Warrants and issued
        and
        issuable in lieu of the cash payment of interest on the Debentures in accordance
        with the terms of the Debentures.

       

      “Variable
        Rate Transaction” shall have the meaning ascribed to such term in Section
        4.13(b).

       

       

      
        
          
          

        

        
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      “VWAP”
        means, for any date, the price determined by the first of the following clauses
        that applies: (a) if the Common Stock is then listed or quoted on a Trading
        Market, the daily volume weighted average price of the Common Stock for such
        date (or the nearest preceding date) on the Trading Market on which the Common
        Stock is then listed or quoted as reported by Bloomberg L.P. (based on a
        Trading
        Day from 9:30 a.m. New York City time to 4:02 p.m. New York City time);
        (b)  if the OTC Bulletin Board is not a Trading Market, the volume weighted
        average price of the Common Stock for such date (or the nearest preceding
        date)
        on the OTC Bulletin Board; (c) if the Common Stock is not then listed or
        quoted
        on the OTC Bulletin Board and if prices for the Common Stock are then reported
        in the “Pink Sheets” published by Pink Sheets, LLC (or a similar organization or
        agency succeeding to its functions of reporting prices), the most recent
        bid
        price per share of the Common Stock so reported; or (d) in all other cases,
        the fair market value of a share of Common Stock as determined by an independent
        appraiser selected in good faith by the Purchasers of a majority in interest
        of
        the Securities then outstanding and reasonably acceptable to the Company,
        the
        fees and expenses of which shall be paid by the Company.

       

      “Warrants”
        means, collectively, the Common Stock purchase warrants delivered to the
        Purchasers at the First Closing in accordance with Section 2.2(a) hereof,
        which
        Warrants shall be exercisable immediately and have a term of exercise equal
        to 5
        years, in the form of Exhibit C attached hereto.

       

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

       

       

      ARTICLE
        II.

      PURCHASE
        AND SALE

       

      2.1  Closings.  On
        each Closing Date, upon the terms and subject to the conditions set forth
        herein, substantially concurrent with the execution and delivery of this
        Agreement by the parties hereto, the Company agrees to sell, and each Purchaser,
        severally and not jointly, agrees to purchase, the Principal Amount of the
        Debentures set forth on such Purchaser’s signature page hereto and corresponding
        to the applicable Closing.  Each Purchaser shall deliver to the
        Company, via wire transfer or a certified check, immediately available funds
        equal to the Subscription Amount applicable to such Closing and the Company
        shall deliver to each Purchaser its respective Debenture, as determined pursuant
        to Section 2.2(a), and the Company and each Purchaser shall deliver the other
        items set forth in Section 2.2 deliverable at the applicable
        Closing.  Upon satisfaction of the conditions set forth in Sections
        2.2 and 2.3, each Closing shall occur at the offices of FWS or such other
        location as the parties shall mutually agree as follows:

       

      (a)  First
        Closing.  The First Closing shall be for up to, in the aggregate,
        $2,285,714 Principal Amount of Debentures and shall occur on, or as soon
        as
        reasonably practicable following, the date hereof (the “First Closing”);
        and

       

       

      
        
          
          

        

        
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           (b)           Second
        Closing.  The Second Closing shall be for up to, in the aggregate,
        $1,142,857 Principal Amount of Debentures and shall occur on, or as soon
        as
        reasonably practicable following the Effective Date (the “Second
        Closing”).

       

      2.2  Deliveries

       

      (a)  On
        each
        Closing Date (except as otherwise specified below), the Company shall deliver
        or
        cause to be delivered to each Purchaser the following:

       

      (i)  as
        to the
        First Closing, this Agreement duly executed by the Company;

       

      (ii)  as
        to the
        First Closing, a legal opinion of Company Counsel, in substantially the form
        of
Exhibit D attached hereto;

       

      (iii)  a
        Debenture with a principal amount equal to such Purchaser’s Principal Amount as
        to such Closing, registered in the name of such Purchaser;

       

      (iv)  a
        Warrant
        registered in the name of such Purchaser to purchase up to a number of shares
        of
        Common Stock equal to 50% of such Purchaser’s Principal Amount at the First and
        Second Closings, divided by the initial Conversion Price, with an exercise
        price
        equal to $1.12,
        subject to adjustment
        therein;

       

      (v)  as
        to the
        First Closing only, the Security Agreement, duly executed by the Company
        and
        each Subsidiary, along with all of the Security Documents, including the
        Subsidiary Guarantee, duly executed by the parties thereto; and

       

      (vi)  as
        to the
        First Closing only, the Registration Rights Agreement duly executed by the
        Company.

       

      (b)  On
        each
        Closing Date (except as otherwise specified below), each Purchaser shall
        deliver
        or cause to be delivered to the Company the following:

       

      (i)   as
        to the
        First Closing only, this Agreement duly executed by such
        Purchaser;

       

      (ii)  such
        Purchaser’s Subscription Amount as to the applicable Closing by wire transfer to
        the account as specified in writing by the Company;

       

      (iii)  as
        to the
        First Closing only, the Security Agreement duly executed by such Purchaser;
        and

       

      (iv)  as
        to the
        First Closing only, the Registration Rights Agreement duly executed by such
        Purchaser.

       

      2.3  Closing
        Conditions.

       

       

      
        
          
          

        

        
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      (a)  The
        obligations of the Company hereunder in connection with applicable Closing
        are
        subject to the following conditions being met:

       

      (i)  the
        accuracy in all material respects on the applicable Closing Date of the
        representations and warranties of the Purchasers contained herein;

       

      (ii)  all
        obligations, covenants and agreements of each Purchaser required to be performed
        at or prior to the applicable Closing Date shall have been performed;
        and

       

      (iii)  the
        delivery by each Purchaser of the items set forth in Section 2.2(b) of this
        Agreement.

       

      (b)  The
        respective obligations of the Purchasers hereunder in connection with applicable
        Closing are subject to the following conditions being met:

       

      (i)  the
        accuracy in all material respects when made and on applicable Closing Date
        of
        the representations and warranties of the Company contained herein;

       

      (ii)  all
        obligations, covenants and agreements of the Company required to be performed
        at
        or prior to applicable Closing Date shall have been performed;

       

      (iii)  the
        delivery by the Company of the items set forth in Section 2.2(a) of this
        Agreement;

       

      (iv)  there
        shall have been no Material Adverse Effect with respect to the Company since
        the
        date hereof;

       

      (v)  as
        to the
        Second Closing only, the Company shall have filed with the Commission a
        Registration Statement registering 130% of the Registrable Securities (as
        defined in the Registration Rights Agreement) and such Registration Statement
        shall have been declared effective by the Commission as to all such Registrable
        Securities on or before February 1, 2008 and shall have thereafter remained
        effective (for avoidance of doubt, in the event of a cutback as a result
        of SEC
        Guidance, this condition shall not be met until such time as all Conversion
        Shares underlying all Debentures are then subject to an effective Registration
        Statement); and

       

      (vi)  from
        the
        date hereof to applicable Closing Date, trading in the Common Stock shall
        not
        have been suspended by the Commission  or the Company’s principal
        Trading Market (except for any suspension of trading of limited duration
        agreed
        to by the Company, which suspension shall be terminated prior to applicable
        Closing), and, at any time prior to applicable Closing Date, trading in
        securities generally as reported by Bloomberg L.P. shall not have been suspended
        or limited, or minimum prices shall not have been established on securities
        whose trades are reported by such service, or on any Trading Market, nor
        shall a
        banking moratorium have been declared either by the United States or New
        York
        State authorities nor shall there have occurred any material outbreak or
        escalation of hostilities or other national or international calamity of
        such
        magnitude in its effect on, or any material adverse change in, any financial
        market which, in each case, in the reasonable judgment of each Purchaser,
        makes
        it impracticable or inadvisable to purchase the Securities at applicable
        Closing.

       

      
        
          
          

        

        
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      ARTICLE
        III.

      REPRESENTATIONS
        AND WARRANTIES

       

      3.1  Representations
        and Warranties of the Company.

       

      Except
        as set forth under the corresponding section of the disclosure schedules
        delivered to the Purchasers concurrently herewith (the “Disclosure Schedules”)
        which Disclosure Schedules shall be deemed a part hereof, the Company hereby
        makes the representations and warranties set forth below to each
        PurchaserExcept as set forth in the Disclosure Schedules, which Disclosure
        Schedules shall be deemed a part hereof and shall qualify any representation
        or
        otherwise made herein to the extent of the disclosure contained in the
        corresponding section of the Disclosure Schedules, the Company hereby makes
        the
        following representations and warranties to each Purchaser:

       

      (a)  Subsidiaries.  All
        of the direct and indirect subsidiaries of the Company are set forth on
Schedule 3.1(a).  The Company owns, directly or indirectly, all
        of the capital stock or other equity interests of each Subsidiary free and
        clear
        of any Liens, and all of the issued and outstanding shares of capital stock
        of
        each Subsidiary are validly issued and are fully paid, non-assessable and
        free
        of preemptive and similar rights to subscribe for or purchase
        securities.  If the Company has no subsidiaries, all other references
        to the Subsidiaries or any of them in the Transaction Documents shall be
        disregarded.

       

      (b)  Organization
        and Qualification.  The Company and each of the Subsidiaries is an
        entity duly incorporated or otherwise organized, validly existing and in
        good
        standing under the laws of the jurisdiction of its incorporation or organization
        (as applicable), with the requisite power and authority to own and use its
        properties and assets and to carry on its business as currently
        conducted.  Neither the Company nor any Subsidiary is in violation or
        default of any of the provisions of its respective certificate or articles
        of
        incorporation, bylaws or other organizational or charter
        documents.  Each of the Company and the Subsidiaries is duly qualified
        to conduct business and is in good standing as a foreign corporation or other
        entity in each jurisdiction in which the nature of the business conducted
        or
        property owned by it makes such qualification necessary, except where the
        failure to be so qualified or in good standing, as the case may be, could
        not
        have or reasonably be expected to result in (i) a material adverse effect
        on the
        legality, validity or enforceability of any Transaction Document, (ii) a
        material adverse effect on the results of operations, assets, business,
        prospects or condition (financial or otherwise) of the Company and the
        Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
        Company’s ability to perform in any material respect on a timely basis its
        obligations under any Transaction Document (any of (i), (ii) or (iii), a
        “Material Adverse Effect”) and no Proceeding has been instituted in any
        such jurisdiction revoking, limiting or curtailing or seeking to revoke,
        limit
        or curtail such power and authority or qualification.

       

       

      
        
          
          

        

        
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      (c)  Authorization;
        Enforcement.  The Company has the requisite corporate power and
        authority to enter into and to consummate the transactions contemplated by
        each
        of the Transaction Documents and otherwise to carry out its obligations
        hereunder and thereunder.  The execution and delivery of each of the
        Transaction Documents by the Company and the consummation by it of the
        transactions contemplated hereby and thereby have been duly authorized by
        all
        necessary action on the part of the Company and no further action is required
        by
        the Company, the Board of Directors or the Company’s stockholders in connection
        therewith other than in connection with the Required Approvals.  Each
        Transaction Document has been (or upon delivery will have been) duly executed
        by
        the Company and, when delivered in accordance with the terms hereof and thereof,
        will constitute the valid and binding obligation of the Company enforceable
        against the Company in accordance with its terms, except (i) as limited by
        general equitable principles and applicable bankruptcy, insolvency,
        reorganization, moratorium and other laws of general application affecting
        enforcement of creditors’ rights generally, (ii) as limited by laws relating to
        the availability of specific performance, injunctive relief or other equitable
        remedies and (iii) insofar as indemnification and contribution provisions
        may be
        limited by applicable law.

       

      (d)  No
        Conflicts.  The execution, delivery and performance of the
        Transaction Documents by the Company and the consummation by the Company
        of the
        other transactions contemplated hereby and thereby do not and will not: (i)
        conflict with or violate any provision of the Company’s or any Subsidiary’s
        certificate or articles of incorporation, bylaws or other organizational
        or
        charter documents, or (ii) conflict with, or constitute a default (or an
        event
        that with notice or lapse of time or both would become a default) under,
        result
        in the creation of any Lien upon any of the properties or assets of the Company
        or any Subsidiary, or give to others any rights of termination, amendment,
        acceleration or cancellation (with or without notice, lapse of time or both)
        of,
        any agreement, credit facility, debt or other instrument (evidencing a Company
        or Subsidiary debt or otherwise) or other understanding to which the Company
        or
        any Subsidiary is a party or by which any property or asset of the Company
        or
        any Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
        conflict with or result in a violation of any law, rule, regulation, order,
        judgment, injunction, decree or other restriction of any court or governmental
        authority to which the Company or a Subsidiary is subject (including federal
        and
        state securities laws and regulations), or by which any property or asset
        of the
        Company or a Subsidiary is bound or affected; except in the case of each
        of
        clauses (ii) and (iii), such as could not have or reasonably be expected
        to
        result in a Material Adverse Effect.

       

      (e)  Filings,
        Consents and Approvals.  The Company is not required to obtain any
        consent, waiver, authorization or order of, give any notice to, or make any
        filing or registration with, any court or other federal, state, local or
        other
        governmental authority or other Person in connection with the execution,
        delivery and performance by the Company of the Transaction Documents, other
        than
        (i) filings required pursuant to Section 4.6, (ii) the filing with the
        Commission of the Registration Statement, (iii) the notice and/or application(s)
        to each applicable Trading Market for the issuance and sale of the Securities
        and the listing of the Underlying Shares for trading thereon in the time
        and
        manner required thereby and (iv) the filing of Form D with the Commission
        and
        such filings as are required to be made under applicable state securities
        laws
        (collectively, the “Required Approvals”).

       

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      (f)  Issuance
        of the Securities.  The Securities are duly authorized and, when
        issued and paid for in accordance with the applicable Transaction Documents,
        will be duly and validly issued, fully paid and nonassessable, free and clear
        of
        all Liens imposed by the Company other than restrictions on transfer provided
        for in the Transaction Documents.  The Underlying Shares, when issued
        in accordance with the terms of the Transaction Documents, will be validly
        issued, fully paid and nonassessable, free and clear of all Liens imposed
        by the
        Company other than restrictions on transfer provided for in the Transaction
        Documents.  The Company has reserved from its duly authorized capital
        stock a number of shares of Common Stock for issuance of the Underlying Shares
        at least equal to the Required Minimum on the date hereof.

       

      (g)  Capitalization.  The
        capitalization of the Company is as set forth on Schedule 3.1(g), which
Schedule 3.1(g) shall also include the number of shares of Common Stock
        owned beneficially, and of record, by Affiliates of the Company as of the
        date
        hereof. The Company has not issued any capital stock since its most recently
        filed periodic report under the Exchange Act, other than pursuant to the
        exercise of employee stock options under the Company’s stock option plans, the
        issuance of shares of Common Stock to employees pursuant to the Company’s
        employee stock purchase plans and pursuant to the conversion or exercise
        of
        Common Stock Equivalents outstanding as of the date of the most recently
        filed
        periodic report under the Exchange Act.  No Person has any right of
        first refusal, preemptive right, right of participation, or any similar right
        to
        participate in the transactions contemplated by the Transaction
        Documents.  Except as a result of the purchase and sale of the
        Securities, there are no outstanding options, warrants, scrip rights to
        subscribe to, calls or commitments of any character whatsoever relating to,
        or
        securities, rights or obligations convertible into or exercisable or
        exchangeable for, or giving any Person any right to subscribe for or acquire,
        any shares of Common Stock, or contracts, commitments, understandings or
        arrangements by which the Company or any Subsidiary is or may become bound
        to
        issue additional shares of Common Stock or Common Stock Equivalents. The
        issuance and sale of the Securities will not obligate the Company to issue
        shares of Common Stock or other securities to any Person (other than the
        Purchasers) and will not result in a right of any holder of Company securities
        to adjust the exercise, conversion, exchange or reset price under any of
        such
        securities. All of the outstanding shares of capital stock of the Company
        are
        validly issued, fully paid and nonassessable, have been issued in compliance
        with all federal and state securities laws, and none of such outstanding
        shares
        was issued in violation of any preemptive rights or similar rights to subscribe
        for or purchase securities.  No further approval or authorization of
        any stockholder, the Board of Directors or others is required for the issuance
        and sale of the Securities.  There are no stockholders agreements,
        voting agreements or other similar agreements with respect to the Company’s
        capital stock to which the Company is a party or, to the knowledge of the
        Company, between or among any of the Company’s stockholders.

       

      
        
          
          

        

        
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      (h)  SEC
        Reports; Financial Statements.  The Company has filed all reports,
        schedules, forms, statements and other documents required to be filed by
        the
        Company under the Securities Act and the Exchange Act, including pursuant
        to
        Section 13(a) or 15(d) thereof, for the two years preceding the date hereof
        (or
        such shorter period as the Company was required by law or regulation to file
        such material) (the foregoing materials, including the exhibits thereto and
        documents incorporated by reference therein, being collectively referred
        to
        herein as the “SEC Reports”) on a timely basis or has received a valid
        extension of such time of filing and has filed any such SEC Reports prior
        to the
        expiration of any such extension.  As of their respective dates, the
        SEC Reports complied in all material respects with the requirements of the
        Securities Act and the Exchange Act, as applicable, and none of the SEC Reports,
        when filed, contained any untrue statement of a material fact or omitted
        to
        state a material fact required to be stated therein or necessary in order
        to
        make the statements therein, in the light of the circumstances under which
        they
        were made, not misleading.  The financial statements of the Company
        included in the SEC Reports comply in all material respects with applicable
        accounting requirements and the rules and regulations of the Commission with
        respect thereto as in effect at the time of filing.  Such financial
        statements have been prepared in accordance with United States generally
        accepted accounting principles applied on a consistent basis during the periods
        involved (“GAAP”), except as may be otherwise specified in such financial
        statements or the notes thereto and except that unaudited financial statements
        may not contain all footnotes required by GAAP, and fairly present in all
        material respects the financial position of the Company and its consolidated
        Subsidiaries as of and for the dates thereof and the results of operations
        and
        cash flows for the periods then ended, subject, in the case of unaudited
        statements, to normal, immaterial, year-end audit adjustments.

       

      (i)  Material
        Changes.  Since the date of the latest audited financial
        statements included within the SEC Reports, except as specifically disclosed
        in
        a subsequent SEC Report filed prior to the date hereof, (i) there has been
        no
        event, occurrence or development that has had or that could reasonably be
        expected to result in a Material Adverse Effect, (ii) the Company has not
        incurred any liabilities (contingent or otherwise) other than (A) trade payables
        and accrued expenses incurred in the ordinary course of business consistent
        with
        past practice and (B) liabilities not required to be reflected in the Company’s
        financial statements pursuant to GAAP or disclosed in filings made with the
        Commission, (iii) the Company has not altered its method of accounting, (iv)
        the
        Company has not declared or made any dividend or distribution of cash or
        other
        property to its stockholders or purchased, redeemed or made any agreements
        to
        purchase or redeem any shares of its capital stock and (v) the Company has
        not
        issued any equity securities to any officer, director or Affiliate, except
        pursuant to existing Company stock option plans. The Company does not have
        pending before the Commission any request for confidential treatment of
        information.  Except for the issuance of the Securities contemplated
        by this Agreement or as set forth on Schedule 3.1(i), no event, liability
        or development has occurred or exists with respect to the Company or its
        Subsidiaries or their respective business, properties, operations or financial
        condition, that would be required to be disclosed by the Company under
        applicable securities laws at the time this representation is made or deemed
        made that has not been publicly disclosed at least one Trading Day prior
        to the
        date that this representation is made.

       

      
        
          
          

        

        
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      (j)  Litigation.  There
        is no action, suit, inquiry, notice of violation, proceeding or investigation
        pending or, to the knowledge of the Company, threatened against or affecting
        the
        Company, any Subsidiary or any of their respective properties before or by
        any
        court, arbitrator, governmental or administrative agency or regulatory authority
        (federal, state, county, local or foreign) (collectively, an “Action”)
        which (i) adversely affects or challenges the legality, validity or
        enforceability of any of the Transaction Documents or the Securities or (ii)
        could, if there were an unfavorable decision, have or reasonably be expected
        to
        result in a Material Adverse Effect.  Neither the Company nor any
        Subsidiary, nor any director or officer thereof, is or has been the subject
        of
        any Action involving a claim of violation of or liability under federal or
        state
        securities laws or a claim of breach of fiduciary duty.  There has not
        been, and to the knowledge of the Company, there is not pending or contemplated,
        any investigation by the Commission involving the Company or any current
        or
        former director or officer of the Company.  The Commission has not
        issued any stop order or other order suspending the effectiveness of any
        registration statement filed by the Company or any Subsidiary under the Exchange
        Act or the Securities Act.

       

      (k)  Labor
        Relations.  No material labor dispute exists or, to the knowledge
        of the Company, is imminent with respect to any of the employees of the Company
        which could reasonably be expected to result in a Material Adverse
        Effect.  None of the Company’s or its Subsidiaries’ employees is a
        member of a union that relates to such employee’s relationship with the Company
        or such Subsidiary, and neither the Company nor any of its Subsidiaries is
        a
        party to a collective bargaining agreement, and the Company and its Subsidiaries
        believe that their relationships with their employees are good.  No
        executive officer, to the knowledge of the Company, is, or is now expected
        to
        be, in violation of any material term of any employment contract,
        confidentiality, disclosure or proprietary information agreement or
        non-competition agreement, or any other contract or agreement or any restrictive
        covenant in favor of any third party, and the continued employment of each
        such
        executive officer does not subject the Company or any of its Subsidiaries
        to any
        liability with respect to any of the foregoing matters.  The Company
        and its Subsidiaries are in compliance with all U.S. federal, state, local
        and
        foreign laws and regulations relating to employment and employment practices,
        terms and conditions of employment and wages and hours, except where the
        failure
        to be in compliance could not, individually or in the aggregate, reasonably
        be
        expected to have a Material Adverse Effect.

       

      (l)  Compliance.  Neither
        the Company nor any Subsidiary (i) is in default under or in violation of
        (and
        no event has occurred that has not been waived that, with notice or lapse
        of
        time or both, would result in a default by the Company or any Subsidiary
        under),
        nor has the Company or any Subsidiary received notice of a claim that it
        is in
        default under or that it is in violation of, any indenture, loan or credit
        agreement or any other agreement or instrument to which it is a party or
        by
        which it or any of its properties is bound (whether or not such default or
        violation has been waived), 

       

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

       

      (ii)
        is
        in violation of any order of any court, arbitrator or governmental body,
        or
        (iii) is or has been in violation of any statute, rule or regulation of any
        governmental authority, including without limitation all foreign, federal,
        state
        and local laws applicable to its business and all such laws that affect the
        environment, except in each case as could not have or reasonably be expected
        to
        result in a Material Adverse Effect.

       

      (m)  Regulatory
        Permits.  The Company and the Subsidiaries possess all
        certificates, authorizations and permits issued by the appropriate federal,
        state, local or foreign regulatory authorities necessary to conduct their
        respective businesses as described in the SEC Reports, except where the failure
        to possess such permits could not reasonably be expected to result in a Material
        Adverse Effect (“Material Permits”), and neither the Company nor any
        Subsidiary has received any notice of proceedings relating to the revocation
        or
        modification of any Material Permit.

       

      (n)  Title
        to Assets.  The Company and the Subsidiaries have good and
        marketable title in fee simple to all real property owned by them and good
        and
        marketable title in all personal property owned by them that is material
        to the
        business of the Company and the Subsidiaries, in each case free and clear
        of all
        Liens, except for Liens as do not materially affect the value of such property
        and do not materially interfere with the use made and proposed to be made
        of
        such property by the Company and the Subsidiaries and Liens for the payment
        of
        federal, state or other taxes, the payment of which is neither delinquent
        nor
        subject to penalties.  Any real property and facilities held under
        lease by the Company and the Subsidiaries are held by them under valid,
        subsisting and enforceable leases with which the Company and the Subsidiaries
        are in compliance.

       

      (o)  Patents
        and Trademarks.  The Company and the Subsidiaries have, or have
        rights to use, all patents, patent applications, trademarks, trademark
        applications, service marks, trade names, trade secrets, inventions, copyrights,
        licenses and other intellectual property rights and similar rights necessary
        or
        material for use in connection with their respective businesses as described
        in
        the SEC Reports and which the failure to so have could have a Material Adverse
        Effect (collectively, the “Intellectual Property
        Rights”).  Neither the Company nor any Subsidiary has received a
        notice (written or otherwise) that any of the Intellectual Property Rights
        used
        by the Company or any Subsidiary violates or infringes upon the rights of
        any
        Person. To the knowledge of the Company, all such Intellectual Property Rights
        are enforceable and there is no existing infringement by another Person of
        any
        of the Intellectual Property Rights.  The Company and its Subsidiaries
        have taken reasonable security measures to protect the secrecy, confidentiality
        and value of all of their intellectual properties, except where failure to
        do so
        could not, individually or in the aggregate, reasonably be expected to have
        a
        Material Adverse Effect.

       

      (p)  Insurance.  The
        Company and the Subsidiaries are insured by insurers of recognized financial
        responsibility against such losses and risks and in such amounts as are prudent
        and customary in the businesses in which the Company and the Subsidiaries
        are
        engaged, including, but not limited to, directors and officers insurance
        coverage at least equal to the aggregate Subscription
        Amount.  

       

       

      
        
          
          

        

        
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      Neither
        the Company nor any Subsidiary has any reason to believe that it will not
        be
        able 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 without a significant increase in cost.

       

      (q)  Transactions
        with Affiliates and Employees.  Except as set forth in the SEC
        Reports, none of the officers or directors of the Company and, to the knowledge
        of the Company, none of the employees of the Company is presently a party
        to any
        transaction with the Company or any Subsidiary (other than for services as
        employees, officers and directors), including any contract, agreement or
        other
        arrangement providing for the furnishing of services to or by, providing
        for
        rental of real or personal property to or from, or otherwise requiring payments
        to or from any officer, director or such employee or, to the knowledge of
        the
        Company, any entity in which any officer, director, or any such employee
        has a
        substantial interest or is an officer, director, trustee or partner, in each
        case in excess of $60,000 other than for (i) payment of salary or consulting
        fees for services rendered, (ii) reimbursement for expenses incurred on behalf
        of the Company and (iii) other employee benefits, including stock option
        agreements under any stock option plan of the Company.

       

      (r)  Sarbanes-Oxley;
        Internal Accounting Controls.  The Company is in material
        compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are
        applicable to it as of applicable Closing Date.  The Company and the
        Subsidiaries maintain a system of internal accounting controls sufficient
        to
        provide reasonable assurance that (i) transactions are executed in accordance
        with management’s general or specific authorizations, (ii) transactions are
        recorded as necessary to permit preparation of financial statements in
        conformity with GAAP and to maintain asset accountability, (iii) access to
        assets is permitted only in accordance with management’s general or specific
        authorization, and (iv) the recorded accountability for assets is compared
        with
        the existing assets at reasonable intervals and appropriate action is taken
        with
        respect to any differences. The Company has established disclosure controls
        and
        procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for
        the
        Company and designed such disclosure controls and procedures to ensure that
        information required to be disclosed by the Company in the reports it files
        or
        submits under the Exchange Act is recorded, processed, summarized and reported,
        within the time periods specified in the Commission’s rules and
        forms.  The Company’s certifying officers have evaluated the
        effectiveness of the Company’s disclosure controls and procedures as of the end
        of the period covered by the Company’s most recently filed periodic report under
        the Exchange Act (such date, the “Evaluation Date”).  The
        Company presented in its most recently filed periodic report under the Exchange
        Act the conclusions of the certifying officers about the effectiveness of
        the
        disclosure controls and procedures based on their evaluations as of the
        Evaluation Date.  Since the Evaluation Date, there have been no
        changes in the Company’s internal control over financial reporting (as such term
        is defined in the Exchange Act) that has materially affected, or is reasonably
        likely to materially affect, the Company’s internal control over financial
        reporting.

       

      
        
          
          

        

        
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      (s)  Certain
        Fees.  No brokerage or finder’s fees or commissions are or will be
        payable by the Company to any broker, financial advisor or consultant, finder,
        placement agent, investment banker, bank or other Person with respect to
        the
        transactions contemplated by the Transaction Documents.  The
        Purchasers shall have no obligation with respect to any fees or with respect
        to
        any claims made by or on behalf of other Persons for fees of a type contemplated
        in this Section that may be due in connection with the transactions contemplated
        by the Transaction Documents.

       

      (t)  Private
        Placement.  Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, no registration
        under
        the Securities Act is required for the offer and sale of the Securities by
        the
        Company to the Purchasers as contemplated hereby. The issuance and sale of
        the
        Securities hereunder does not contravene the rules and regulations of the
        Trading Market.

       

      (u)  Investment
        Company. The Company is not, and is not an Affiliate of, and immediately
        after receipt of payment for the Securities, will not be or be an Affiliate
        of,
        an “investment company” within the meaning of the Investment Company Act of
        1940, as amended.  The Company shall conduct its business in a manner
        so that it will not become subject to the Investment Company Act of 1940,
        as
        amended.

       

      (v)  Registration
        Rights.  Other than each of the Purchasers, no Person has any
        right to cause the Company to effect the registration under the Securities
        Act
        of any securities of the Company.

       

      (w)  Listing
        and Maintenance Requirements.  The Common Stock is registered
        pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has
        taken no action designed to, or which to its knowledge is likely to have
        the
        effect of, terminating the registration of the Common Stock under the Exchange
        Act nor has the Company received any notification that the Commission is
        contemplating terminating such registration.  The Company has not, in
        the 12 months preceding the date hereof, received notice from any Trading
        Market
        on which the Common Stock is or has been listed or quoted to the effect that
        the
        Company is not in compliance with the listing or maintenance requirements
        of
        such Trading Market. The Company is, and has no reason to believe that it
        will
        not in the foreseeable future continue to be, in compliance with all such
        listing and maintenance requirements.

       

      (x)  Application
        of Takeover Protections.  The Company and the 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 Company’s certificate of incorporation (or similar charter documents)
        or the laws of its state of incorporation that is or could become applicable
        to
        the Purchasers as a result of the Purchasers and the Company fulfilling their
        obligations or exercising their rights under the Transaction Documents,
        including without limitation as a result of the Company’s issuance of the
        Securities and the Purchasers’ ownership of the Securities.

       

      
        
          
          

        

        
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      (y)  Disclosure.  Except
        with respect to the material terms and conditions of the transactions
        contemplated by the Transaction Documents, the Company confirms that neither
        it
        nor any other Person acting on its behalf has provided any of the Purchasers
        or
        their agents or counsel with any information that it believes constitutes
        or
        might constitute material, nonpublic information.  The Company
        understands and confirms that the Purchasers will rely on the foregoing
        representation in effecting transactions in securities of the
        Company.  All disclosure furnished by or on behalf of the Company to
        the Purchasers regarding the Company, its business and the transactions
        contemplated hereby, including the Disclosure Schedules to this Agreement,
        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 light of the circumstances under which they were made, not
        misleading.   The press releases disseminated by the Company
        during the twelve months preceding the date of this Agreement taken as a
        whole
        do not 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 light of the circumstances under which they were made
        and
        when made, not misleading.  The Company acknowledges and agrees that
        no Purchaser makes or has made any representations or warranties with respect
        to
        the transactions contemplated hereby other than those specifically set forth
        in
        Section 3.2 hereof.

       

      (z)  No
        Integrated Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, neither the
        Company,
        nor any of its Affiliates, nor any Person acting on its or their behalf has,
        directly or indirectly, made any offers or sales of any security or solicited
        any offers to buy any security, under circumstances that would cause this
        offering of the Securities to be integrated with prior offerings by the Company
        for purposes of (i) the Securities Act which would require the registration
        of
        any such securities under the Securities Act, or (ii) any applicable shareholder
        approval provisions of any Trading Market on which any of the securities
        of the
        Company are listed or designated.

       

      (aa)  Solvency.  Based
        on the consolidated financial condition of the Company as of applicable Closing
        Date after giving effect to the receipt by the Company of the proceeds from
        the
        sale of the Securities hereunder, (i) the fair saleable value of the Company’s
        assets exceeds the amount that will be required to be paid on or in respect
        of
        the Company’s existing debts and other liabilities (including known contingent
        liabilities) as they mature, (ii) the Company’s assets do not constitute
        unreasonably small capital to carry on its business as now conducted and
        as
        proposed to be conducted including its capital needs taking into account
        the
        particular capital requirements of the business conducted by the Company,
        and
        projected capital requirements and capital availability thereof, and (iii)
        the
        current cash flow of the Company, together with the proceeds the Company
        would
        receive, were it to liquidate all of its assets, after taking into account
        all
        anticipated uses of the cash, would be sufficient to pay all amounts on or
        in
        respect of its liabilities when such amounts are required to be
        paid.  The Company does not intend to incur debts beyond its ability
        to pay such debts as they mature (taking into account the timing and amounts
        of
        cash to be payable on or in respect of its debt).  

       

       

      
        
          
          

        

        
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      The
        Company has no knowledge of any facts or circumstances which lead it to believe
        that it will file for reorganization or liquidation under the bankruptcy
        or
        reorganization laws of any jurisdiction within one year from applicable Closing
        Date.  Schedule 3.1(aa) sets forth as of the date hereof all
        outstanding secured and unsecured Indebtedness of the Company or any Subsidiary,
        or for which the Company or any Subsidiary has commitments.  For the
        purposes of this Agreement, “Indebtedness” means (a) any liabilities for
        borrowed money or amounts owed in excess of $50,000 (other than trade accounts
        payable incurred in the ordinary course of business), (b) all guaranties,
        endorsements and other contingent obligations in respect of indebtedness
        of
        others, whether or not the same are or should be reflected in the Company’s
        balance sheet (or the notes thereto), except guaranties by endorsement of
        negotiable instruments for deposit or collection or similar transactions
        in the
        ordinary course of business; and (c) the present value of any lease payments
        in
        excess of $50,000 due under leases required to be capitalized in accordance
        with
        GAAP.  Neither the Company nor any Subsidiary is in default with
        respect to any Indebtedness.

       

      (bb)  Tax
        Status.   Except for matters that would not, individually or
        in the aggregate, have or reasonably be expected to result in a Material
        Adverse
        Effect, the Company and each Subsidiary has filed all necessary federal,
        state
        and foreign income and franchise tax returns and has paid or accrued all
        taxes
        shown as due thereon, and the Company has no knowledge of a tax deficiency
        which
        has been asserted or threatened against the Company or any
        Subsidiary.

       

      (cc)  No
        General Solicitation. Neither the Company nor any person acting on behalf of
        the Company has offered or sold any of the Securities by any form of general
        solicitation or general advertising.  The Company has offered the
        Securities for sale only to the Purchasers and certain other “accredited
        investors” within the meaning of Rule 501 under the Securities Act.

       

      (dd)  Foreign
        Corrupt Practices.  Neither the Company, nor to the knowledge of
        the Company, any agent or other person acting on behalf of the Company, has
        (i)
        directly or indirectly, used any funds for unlawful contributions, gifts,
        entertainment or other unlawful expenses related to foreign or domestic
        political activity, (ii) made any unlawful payment to foreign or domestic
        government officials or employees or to any foreign or domestic political
        parties or campaigns from corporate funds, (iii) failed to disclose fully
        any
        contribution made by the Company (or made by any person acting on its behalf
        of
        which the Company is aware) which is  in violation of law, or (iv)
        violated in any material respect any provision of the Foreign Corrupt Practices
        Act of 1977, as amended.

       

      (ee)  Accountants.  The
        Company’s accounting firm is set forth on Schedule 3.1(ee) of the
        Disclosure Schedule.  To the knowledge and belief of the Company, such
        accounting firm (i) is a registered public accounting firm as required by
        the
        Exchange Act and (ii) shall express its opinion with respect to the financial
        statements to be included in the Company’s Annual Report on Form 10-KSB for the
        year ending December 31, 2007.

       

      (ff)  Seniority.  As
        of applicable Closing Date, no Indebtedness or other claim against the Company
        is senior to the Debentures in right of payment, whether with respect to
        interest or upon liquidation or dissolution, or otherwise, other than
        indebtedness secured by purchase money security interests (which is senior
        only
        as to underlying assets covered thereby) and capital lease obligations (which
        is
        senior only as to the property covered thereby).

       

      
        
          
          

        

        
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      (gg)  No
        Disagreements with Accountants and Lawyers.  There are no
        disagreements of any kind presently existing, or reasonably anticipated by
        the
        Company to arise, between the Company and the accountants and lawyers formerly
        or presently employed by the Company and the Company is current with respect
        to
        any fees owed to its accountants and lawyers which could affect the Company’s
        ability to perform any of its obligations under any of the Transaction
        Documents.

       

      (hh)  Acknowledgment
        Regarding Purchasers’ Purchase of Securities.  The Company
        acknowledges and agrees that each of the Purchasers is acting solely in the
        capacity of an arm’s length purchaser with respect to the Transaction Documents
        and the transactions contemplated thereby.  The Company further
        acknowledges that no Purchaser is acting as a financial advisor or fiduciary
        of
        the Company (or in any similar capacity) with respect to the Transaction
        Documents and the transactions contemplated thereby and any advice given
        by any
        Purchaser or any of their respective representatives or agents in connection
        with the Transaction Documents and the transactions contemplated thereby
        is
        merely incidental to the Purchasers’ purchase of the Securities.  The
        Company further represents to each Purchaser that the Company’s decision to
        enter into this Agreement and the other Transaction Documents has been based
        solely on the independent evaluation of the transactions contemplated hereby
        by
        the Company and its representatives.

       

      (ii)  Acknowledgment
        Regarding Purchasers’ Trading Activity.  Notwithstanding anything
        in this Agreement or elsewhere herein to the contrary (except for
        Sections 3.2(f) and 4.15 hereof), it is understood and acknowledged by the
        Company that (i) none of the Purchasers has been asked to agree by the Company,
        nor has any Purchaser agreed, 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)
        past or future open market or other transactions by any Purchaser, specifically
        including, without limitation, Short Sales or “derivative” transactions, before
        or after the closing of this or future private placement transactions, may
        negatively impact the market price of the Company’s publicly-traded securities,
        (iii) any Purchaser, and counter-parties in “derivative” transactions to which
        any such Purchaser is a party, directly or indirectly, may presently have
        a
“short” position in the Common Stock, and (iv) each Purchaser 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 (a) one or more Purchasers may engage in
        hedging activities at various times during the period that the Securities
        are
        outstanding, including, without limitation, during the periods that the value
        of
        the Underlying Shares deliverable with respect to Securities are being
        determined and (b) such hedging activities (if any) could reduce the value
        of
        the existing stockholders' equity interests in the Company at and after the
        time
        that the hedging activities are being conducted.  The Company acknowledges
        that such aforementioned hedging activities do not constitute a breach of
        any of
        the Transaction Documents.

       

      
        
          
          

        

        
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      (jj)  Regulation
        M Compliance.  The Company has not, and to its knowledge no one acting
        on its 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 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 of the Company or (iii) paid
        or
        agreed to pay to any Person any compensation for soliciting another to purchase
        any other securities of the Company, other than, in the case of clauses (ii)
        and
        (iii), compensation paid to the Company’s placement agent in connection with the
        placement of the Securities.

       

      


      3.2  Representations
        and Warranties of the Purchasers.    Each Purchaser, for
        itself and for no other Purchaser hereby, represents and warrants as of the
        date
        hereof and as of applicable Closing Date to the Company as follows:

       

      (a)  Organization;
        Authority.  Such Purchaser is an entity duly organized, validly
        existing and in good standing under the laws of the jurisdiction of its
        organization with full right, corporate or partnership power and authority
        to
        enter into and to consummate the transactions contemplated by the Transaction
        Documents and otherwise to carry out its obligations hereunder and thereunder.
        The execution and delivery of the Transaction Documents and performance by
        such
        Purchaser of the transactions contemplated by the Transaction Documents have
        been duly authorized by all necessary corporate or similar action on the
        part of
        such Purchaser.  Each Transaction Document to which it is a party has
        been duly executed by such Purchaser, and when delivered by such Purchaser
        in
        accordance with the terms hereof, will constitute the valid and legally binding
        obligation of such Purchaser, enforceable against it in accordance with its
        terms, except (i) as limited by general equitable principles and applicable
        bankruptcy, insolvency, reorganization, moratorium and other laws of general
        application affecting enforcement of creditors’ rights generally, (ii) as
        limited by laws relating to the availability of specific performance, injunctive
        relief or other equitable remedies and (iii) insofar as indemnification and
        contribution provisions may be limited by applicable law.

       

      (b)  Own
        Account.  Such Purchaser understands that the Securities are
“restricted securities” and have not been registered under the Securities Act or
        any applicable state securities law and is acquiring the Securities as principal
        for its own account and not with a view to or for distributing or reselling
        such
        Securities or any part thereof in violation of the Securities Act or any
        applicable state securities law, has no present intention of distributing
        any of
        such Securities in violation of the Securities Act or any applicable state
        securities law and has no direct or indirect arrangement or understandings
        with
        any other persons to distribute or regarding the distribution of such Securities
        (this representation and warranty not limiting such Purchaser’s right to sell
        the Securities pursuant to the Registration Statement or otherwise in compliance
        with applicable federal and state securities laws) in violation of the
        Securities Act or any applicable state securities law.  Such Purchaser
        is acquiring the Securities hereunder in the ordinary course of its
        business.

       

      
        
          
          

        

        
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      (c)  Purchaser
        Status.  At the time such Purchaser was offered the Securities, it
        was, and at the date hereof it is, and on each date on which it exercises
        any
        Warrants or converts any Debentures it will be either: (i) an “accredited
        investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under
        the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule
        144A(a) under the Securities Act.  Such Purchaser is not required to
        be registered as a broker-dealer under Section 15 of the Exchange
        Act.

       

      (d)  Experience
        of Such Purchaser.  Such Purchaser, either alone or together with
        its representatives, has such knowledge, sophistication and experience in
        business and financial matters so as to be capable of evaluating the merits
        and
        risks of the prospective investment in the Securities, and has so evaluated
        the
        merits and risks of such investment.  Such Purchaser is able to bear
        the economic risk of an investment in the Securities and, at the present
        time,
        is able to afford a complete loss of such investment.

       

      (e)  General
        Solicitation.  Such Purchaser is not 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 or any other
        general solicitation or general advertisement.

       

      (f)  Short
        Sales and Confidentiality Prior To The Date Hereof.  Other
        than consummating the transactions contemplated hereunder, such Purchaser
        has
        not directly or indirectly, nor has any Person acting on behalf of or pursuant
        to any understanding with such Purchaser, executed any purchases or sales,
        including Short Sales, of the securities of the Company during the period
        commencing from the time that such Purchaser first received a term sheet
        (written or oral) from the Company or any other Person representing the Company
        setting forth the material terms of the transactions contemplated hereunder
        until the date hereof (“Discussion Time”).  Notwithstanding the
        foregoing, in the case of a Purchaser that is a multi-managed investment
        vehicle
        whereby separate portfolio managers manage separate portions of such Purchaser's
        assets and the portfolio managers have no direct knowledge of the investment
        decisions made by the portfolio managers managing other portions of such
        Purchaser's assets, the representation set forth above shall only apply with
        respect to the portion of assets managed by the portfolio manager that made
        the
        investment decision to purchase the Securities covered by this
        Agreement.  Other than to other Persons party to this Agreement, such
        Purchaser has maintained the confidentiality of all disclosures made to it
        in
        connection with this transaction (including the existence and terms of this
        transaction).

       

       

      ARTICLE
        IV.

      OTHER
        AGREEMENTS OF THE PARTIES

       

      4.1  Transfer
        Restrictions.

       

      
        
          
          

        

        
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      (a)  The
        Securities may only be disposed of in compliance with state and federal
        securities laws.  In connection with any transfer of Securities other
        than pursuant to an effective registration statement or Rule 144, to the
        Company
        or to an Affiliate of a Purchaser or in connection with a pledge as contemplated
        in Section 4.1(b), the Company may require the transferor thereof to provide
        to
        the Company an opinion of counsel selected by the transferor and reasonably
        acceptable to the Company, the form and substance of which opinion shall
        be
        reasonably satisfactory to the Company, to the effect that such transfer
        does
        not require registration of such transferred Securities under the Securities
        Act.  As a condition of transfer, any such transferee shall agree in
        writing to be bound by the terms of this Agreement and shall have the rights
        of
        a Purchaser under this Agreement and the Registration Rights
        Agreement.

       

      (b)  The
        Purchasers agree to the imprinting, so long as is required by this Section
        4.1,
        of a legend on any of the Securities in the following form:

       

      [NEITHER]
        THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE]
        [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
        COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
        EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
        (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
        TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
        TO
        AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
        REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
        APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
        TO
        THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
        ACCEPTABLE TO THE COMPANY.  THIS SECURITY [AND THE SECURITIES ISSUABLE
        UPON [EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION
        WITH
        A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
        SECURITIES.

       

      The
        Company acknowledges and agrees that a Purchaser may from time to time pledge
        pursuant to a bona fide margin agreement with a registered broker-dealer
        or
        grant a security interest in some or all of the Securities to a financial
        institution that is an “accredited investor” as defined in Rule 501(a) under the
        Securities Act and who agrees to be bound by the provisions of this Agreement
        and the Registration Rights Agreement and, if required under the terms of
        such
        arrangement, such Purchaser may transfer pledged or secured Securities to
        the
        pledgees or secured parties.  Such a pledge or transfer would not be
        subject to approval of the Company and no legal opinion of legal counsel
        of the
        pledgee, secured party or pledgor shall be required in connection
        therewith.  Further, no notice shall be required of such
        pledge.  

       

       

      
        
          
          

        

        
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      At
        the
        appropriate Purchaser’s expense, the Company will execute and deliver such
        reasonable documentation as a pledgee or secured party of Securities may
        reasonably request in connection with a pledge or transfer of the Securities,
        including, if the Securities are subject to registration pursuant to the
        Registration Rights Agreement, the preparation and filing of any required
        prospectus supplement under Rule 424(b)(3) under the Securities Act or other
        applicable provision of the Securities Act to appropriately amend the list
        of
        Selling Stockholders thereunder.

       

      (c)  Certificates
        evidencing the Underlying Shares shall not contain any legend (including
        the
        legend set forth in Section 4.1(b) hereof): (i) while a registration statement
        (including the Registration Statement) covering the resale of such security
        is
        effective under the Securities Act, or (ii) following any sale of such
        Underlying Shares pursuant to Rule 144, or (iii) if such Underlying Shares
        are
        eligible for sale under Rule 144(k), or (iv) if such legend is not required
        under applicable requirements of the Securities Act (including judicial
        interpretations and pronouncements issued by the staff of the Commission).
        The
        Company shall cause its counsel to issue a legal opinion to the Transfer
        Agent
        promptly after the Effective Date if required by the Transfer Agent to effect
        the removal of the legend hereunder.  If all or any portion of a
        Debenture or Warrant is converted or exercised (as applicable) at a time
        when
        there is an effective registration statement to cover the resale of the
        Underlying Shares, or if such Underlying Shares may be sold under Rule 144(k)
        or
        if such legend is not otherwise required under applicable requirements of
        the
        Securities Act (including judicial interpretations and pronouncements issued
        by
        the staff of the Commission) then such Underlying Shares shall be issued
        free of
        all legends.  The Company agrees that following the Effective Date or
        at such time as such legend is no longer required under this Section 4.1(c),
        it
        will, no later than three Trading Days following the delivery by a Purchaser
        to
        the Company or the Transfer Agent of a certificate representing Underlying
        Shares, as applicable, issued with a restrictive legend (such third Trading
        Day,
        the “Legend Removal Date”), deliver or cause to be delivered to such
        Purchaser a certificate representing such shares that is free from all
        restrictive and other legends.  The Company may not make any notation
        on its records or give instructions to the Transfer Agent that enlarge the
        restrictions on transfer set forth in this Section.  Certificates for
        Underlying Shares subject to legend removal hereunder shall be transmitted
        by
        the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s
        prime broker with the Depository Trust Company System as directed by such
        Purchaser.

      


      (d)  In
        addition to such Purchaser’s other available remedies, the Company shall pay to
        a Purchaser, in cash, as partial liquidated damages and not as a penalty,
        for
        each $1,000 of Underlying Shares (based on the VWAP of the Common Stock on
        the
        date such Securities are submitted to the Transfer Agent) delivered for removal
        of the restrictive legend and subject to Section 4.1(c), $10 per Trading
        Day
        (increasing to $20 per Trading Day 5 Trading Days after such damages have
        begun
        to accrue) for each Trading Day after the Legend Removal Date until such
        certificate is delivered without a legend.  Nothing herein shall limit
        such Purchaser’s right to pursue actual damages for the Company’s failure to
        deliver certificates representing any Securities as required by the Transaction
        Documents, and such Purchaser shall have the right to pursue all remedies
        available to it at law or in equity including, without limitation, a decree
        of
        specific performance and/or injunctive relief.

       

      
        
          
          

        

        
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      (e)  Each
        Purchaser, severally and not jointly with the other Purchasers, agrees that
        such
        Purchaser will sell any Securities pursuant to either the registration
        requirements of the Securities Act, including any applicable prospectus delivery
        requirements, or an exemption therefrom, and that if Securities are sold
        pursuant to a Registration Statement, they will be sold in compliance with
        the
        plan of distribution set forth therein, and acknowledges that the removal
        of the
        restrictive legend from certificates representing Securities as set forth
        in
        this Section 4.1 is predicated upon the Company’s reliance upon this
        understanding.

       

      4.2  Acknowledgment
        of Dilution.  The Company acknowledges that the issuance of the
        Securities may result in dilution of the outstanding shares of Common Stock,
        which dilution may be substantial under certain market
        conditions.  The Company further acknowledges that its obligations
        under the Transaction Documents, including without limitation its obligation
        to
        issue the Underlying Shares pursuant to the Transaction Documents, are
        unconditional and absolute and not subject to any right of set off,
        counterclaim, delay or reduction, regardless of the effect of any such dilution
        or any claim the Company may have against any Purchaser and regardless of
        the
        dilutive effect that such issuance may have on the ownership of the other
        stockholders of the Company.

       

      4.3  Furnishing
        of Information.  Until the earliest of the time that (i) no
        Purchaser owns Securities, the Company covenants to timely file (or obtain
        extensions in respect thereof and file within the applicable grace period)
        all
        reports required to be filed by the Company after the date hereof pursuant
        to
        the Exchange Act even if the Company is not then subject to the reporting
        requirements of the Exchange Act.    As long as any
        Purchaser owns Securities, if the Company is not required to file reports
        pursuant to the Exchange Act, it will prepare and furnish to the Purchasers
        and
        make publicly available in accordance with Rule 144(c) such information as
        is
        required for the Purchasers to sell the Securities under Rule
        144.  The Company further covenants that it will take such further
        action as any holder of Securities may reasonably request, to the extent
        required from time to time to enable such Person to sell such Securities
        without
        registration under the Securities Act within the requirements of the exemption
        provided by Rule 144.

       

      4.4  Integration.  The
        Company shall not sell, offer for sale or solicit offers to buy or otherwise
        negotiate in respect of any security (as defined in Section 2 of the Securities
        Act) that would be integrated with the offer or sale of the Securities to
        the
        Purchasers in a manner that would require the registration under the Securities
        Act of the sale of the Securities to the Purchasers or that would be integrated
        with the offer or sale of the Securities for purposes of the rules and
        regulations of any Trading Market.

       

      4.5  Conversion
        and Exercise Procedures.  The form of Notice of Exercise included
        in the Warrants and the form of Notice of Conversion included in the
        Debentures set forth the totality of the procedures
        required of the Purchasers in order to exercise the Warrants or convert the
        Debentures.  No additional legal opinion or other information or
        instructions shall be required of the Purchasers to exercise their Warrants
        or
        convert their Debentures.  The Company shall honor exercises of the
        Warrants and conversions of the Debentures and shall deliver Underlying Shares
        in accordance with the terms, conditions and time periods set forth in the
        Transaction Documents.

       

      
        
          
          

        

        
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      4.6  Securities
        Laws Disclosure; Publicity.  The Company shall, by 8:30 a.m. (New
        York City time) on the Trading Day following the date hereof, issue a Current
        Report on Form 8-K disclosing the material terms of the transactions
        contemplated hereby and attaching the Transaction Documents as exhibits
        thereto.  The Company and each Purchaser shall consult with each other
        in issuing any other press releases with respect to the transactions
        contemplated hereby, and neither the Company nor any Purchaser shall issue
        any
        such press release or otherwise make any such public statement without the
        prior
        consent of the Company, with respect to any press release of any Purchaser,
        or
        without the prior consent of each Purchaser, with respect to any press release
        of the Company, which consent shall not unreasonably be withheld or delayed,
        except if such disclosure is required by law, in which case the disclosing
        party
        shall promptly provide the other party with prior notice of such public
        statement or communication.  Notwithstanding the foregoing, the
        Company shall not publicly disclose the name of any Purchaser, or include
        the
        name of any Purchaser in any filing with the Commission or any regulatory
        agency
        or Trading Market, without the prior written consent of such Purchaser, except
        (i) as required by federal securities law in connection with (A) any
        registration statement contemplated by the Registration Rights Agreement
        and (B)
        the filing of final Transaction Documents (including signature pages thereto)
        with the Commission and (ii) to the extent such disclosure is required by
        law or
        Trading Market regulations, in which case the Company shall provide the
        Purchasers with prior notice of such disclosure permitted under this clause
        (ii).

       

      4.7  Shareholder
        Rights Plan.  No claim will be made or enforced by the Company or,
        with the consent of the Company, any other Person, that any Purchaser is
        an
“Acquiring Person” under any control share acquisition, business combination,
        poison pill (including any distribution under a rights agreement) or similar
        anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
        or that any Purchaser could be deemed to trigger the provisions of any such
        plan
        or arrangement, by virtue of receiving Securities under the Transaction
        Documents or under any other agreement between the Company and the
        Purchasers.

       

      4.8  Non-Public
        Information.  Except with respect to the material terms and
        conditions of the transactions contemplated by the Transaction Documents,
        the
        Company covenants and agrees that neither it nor any other Person acting
        on its
        behalf will provide any Purchaser or its agents or counsel with any information
        that the Company believes constitutes material non-public information, unless
        prior thereto such Purchaser shall have executed a written agreement regarding
        the confidentiality and use of such information.  The Company
        understands and confirms that each Purchaser shall be relying on the foregoing
        covenant in effecting transactions in securities of the Company.

       

      4.9  Use
        of
        Proceeds.  Except as set forth on Schedule 4.9 attached
        hereto, the Company shall use the net proceeds from the sale of the Securities
        hereunder for working capital purposes and shall not use such proceeds for
        (a)
        the satisfaction of any portion of the Company’s debt (other than payment of
        trade payables in the ordinary course of the Company’s business and prior
        practices), (b) the redemption of any Common Stock or Common Stock Equivalents
        or (c) the settlement of any outstanding litigation.

       

      
        
          
          

        

        
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      4.10  Indemnification
        of Purchasers.   Subject to the provisions of this Section
        4.10, the Company will indemnify and hold each Purchaser and its directors,
        officers, shareholders, members, partners, employees and agents (and any
        other
        Persons with a functionally equivalent role of a Person holding such titles
        notwithstanding a lack of such title or any other title), each Person who
        controls such Purchaser (within the meaning of Section 15 of the Securities
        Act
        and Section 20 of the Exchange Act), and the directors, officers, shareholders,
        agents, members, partners or employees (and any other Persons with a
        functionally equivalent role of a Person holding such titles notwithstanding
        a
        lack of such title or any other title) of such controlling person (each,
        a
“Purchaser Party”) harmless from any and all losses, liabilities,
        obligations, claims, contingencies, damages, costs and expenses, including
        all
        judgments, amounts paid in settlements, court costs and reasonable attorneys’
fees and costs of investigation that any such Purchaser Party may suffer
        or
        incur as a result of or relating to (a) any breach of any of the
        representations, warranties, covenants or agreements made by the Company
        in this
        Agreement or in the other Transaction Documents or (b) any action instituted
        against a Purchaser in any capacity, or any of them or their respective
        Affiliates, by any stockholder of the Company who is not an Affiliate of
        such
        Purchaser, with respect to any of the transactions contemplated by the
        Transaction Documents (unless such action is based upon a breach of such
        Purchaser’s representations, warranties or covenants under the Transaction
        Documents or any agreements or understandings such Purchaser may have with
        any
        such stockholder or any violations by the Purchaser of state or federal
        securities laws or any conduct by such Purchaser which constitutes fraud,
        gross
        negligence, willful misconduct or malfeasance).  If any action shall
        be brought against any Purchaser Party in respect of which indemnity may
        be
        sought pursuant to this Agreement, such Purchaser Party shall promptly notify
        the Company in writing, and the Company shall have the right to assume the
        defense thereof with counsel of its own choosing reasonably acceptable to
        the
        Purchaser Party.  Any Purchaser Party shall have the right to employ
        separate counsel in any such action and participate in the defense thereof,
        but
        the fees and expenses of such counsel shall be at the expense of such Purchaser
        Party except to the extent that (i) the employment thereof has been specifically
        authorized by the Company in writing, (ii) the Company has failed after a
        reasonable period of time to assume such defense and to employ counsel or
        (iii)
        in such action there is, in the reasonable opinion of such separate counsel,
        a
        material conflict on any material issue between the position of the Company
        and
        the position of such Purchaser Party, in which case the Company shall be
        responsible for the reasonable fees and expenses of no more than one such
        separate counsel.  The Company will not be liable to any Purchaser
        Party under this Agreement (i) for any settlement by a Purchaser Party effected
        without the Company’s prior written consent, which shall not be unreasonably
        withheld or delayed; or (ii) to the extent, but only to the extent that a
        loss,
        claim, damage or liability is attributable to any Purchaser Party’s breach of
        any of the representations, warranties, covenants or agreements made by such
        Purchaser Party in this Agreement or in the other Transaction
        Documents.

       

      4.11  Reservation
        and Listing of Securities.

       

      (a)  The
        Company shall maintain a reserve from its duly authorized shares of Common
        Stock
        for issuance pursuant to the Transaction Documents in such amount as may
        be
        required to fulfill its obligations in full under the Transaction
        Documents.

       

      
        
          
          

        

        
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      (b)  If,
        on
        any date, the number of authorized but unissued (and otherwise unreserved)
        shares of Common Stock is less than the Required Minimum on such date, then
        the
        Board of Directors shall use commercially reasonable efforts to amend the
        Company’s certificate or articles of incorporation to increase the number of
        authorized but unissued shares of Common Stock to at least the Required Minimum
        at such time, as soon as possible and in any event not later than the 75th
        day
        after such date.

       

      (c)  The
        Company shall, if applicable: (i) in the time and manner required by the
        principal Trading Market, prepare and file with such Trading Market an
        additional shares listing application covering a number of shares of Common
        Stock at least equal to the Required Minimum on the date of such application,
        (ii) take all steps necessary to cause such shares of Common Stock to be
        approved for listing on such Trading Market as soon as possible thereafter,
        (iii) provide to the Purchasers evidence of such listing, and (iv) maintain
        the
        listing of such Common Stock on any date at least equal to the Required Minimum
        on such date on such Trading Market or another Trading Market.

       

      4.12  Participation
        in Future Financing.

       

      (a)  From
        the
        date hereof until the date that is the 12 month anniversary of the Effective
        Date, upon any issuance by the Company or any of its Subsidiaries of Common
        Stock or Common Stock Equivalents (a “Subsequent Financing”), each
        Purchaser shall have the right to participate in up to an amount of the
        Subsequent Financing equal to 100% of the Subsequent Financing (the
“Participation Maximum”) on the same terms, conditions and price provided
        for in the Subsequent Financing.

       

      (b)  At
        least
        5 Trading Days prior to the closing of the Subsequent Financing, the Company
        shall deliver to each Purchaser a written notice of its intention to effect
        a
        Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such
        Purchaser if it wants to review the details of such financing (such additional
        notice, a “Subsequent Financing Notice”).  Upon the request of
        a Purchaser, and only upon a request by such Purchaser, for a Subsequent
        Financing Notice, the Company shall promptly, but no later than 1 Trading
        Day
        after such request, deliver a Subsequent Financing Notice to such
        Purchaser.  The Subsequent Financing Notice shall describe in
        reasonable detail the proposed terms of such Subsequent Financing, the amount
        of
        proceeds intended to be raised thereunder and the Person or Persons through
        or
        with whom such Subsequent Financing is proposed to be effected and shall
        include
        a term sheet or similar document relating thereto as an attachment.

       

      (c)  Any
        Purchaser desiring to participate in such Subsequent Financing must provide
        written notice to the Company by not later than 5:30 p.m. (New York City
        time)
        on the 5th
        Trading Day after all of the Purchasers have received the Pre-Notice that
        the
        Purchaser is willing to participate in the Subsequent Financing, the amount
        of
        the Purchaser’s participation, and that the Purchaser has such funds ready,
        willing, and available for investment on the terms set forth in the Subsequent
        Financing Notice.  If the Company receives no notice from a Purchaser
        as of such 5th
        Trading Day, such Purchaser shall be deemed to have notified the Company
        that it
        does not elect to participate.

       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

       

      (d)  If
        by
        5:30 p.m. (New York City time) on the 5th Trading
        Day after
        all of the Purchasers have received the Pre-Notice, notifications by the
        Purchasers of their willingness to participate in the Subsequent Financing
        (or
        to cause their designees to participate) is, in the aggregate, less than
        the
        total amount of the Subsequent Financing, then the Company may effect the
        remaining portion of such Subsequent Financing on the terms and with the
        Persons
        set forth in the Subsequent Financing Notice.

       

      (e)  If
        by
        5:30 p.m. (New York City time) on the 5th Trading
        Day after
        all of the Purchasers have received the Pre-Notice, the Company receives
        responses to a Subsequent Financing Notice from Purchasers seeking to purchase
        more than the aggregate amount of the Participation Maximum, each such Purchaser
        shall have the right to purchase its Pro Rata Portion (as defined below)
        of the
        Participation Maximum.  “Pro Rata Portion” means the ratio of (x)
        the Subscription Amount of Securities purchased on the First Closing Date
        by a
        Purchaser participating under this Section 4.12 and (y) the sum of the aggregate
        Subscription Amounts of Securities purchased on the First Closing Date by
        all
        Purchasers participating under this Section 4.12.

       

      (f)  The
        Company must provide the Purchasers with a second Subsequent Financing Notice,
        and the Purchasers will again have the right of participation set forth above
        in
        this Section 4.12, if the Subsequent Financing subject to the initial Subsequent
        Financing Notice is not consummated for any reason on the terms set forth
        in
        such Subsequent Financing Notice within 60 Trading Days after the date of
        the
        initial Subsequent Financing Notice.

       

      (g)  Notwithstanding
        the foregoing, this Section 4.12 shall not apply in respect of (i) an Exempt
        Issuance or (ii) an underwritten public offering of Common Stock.

       

      4.13  Subsequent
        Equity Sales.

       

      (a)  From
        the
        date hereof until 90 days after the Effective Date, neither the Company nor
        any
        Subsidiary shall issue shares of Common Stock or Common Stock Equivalents;
        provided, however, the 90 day period set forth in this Section
        4.13 shall be extended for the number of Trading Days during such period
        in
        which (i) trading in the Common Stock is suspended by any Trading Market,
        or
        (ii) following the Effective Date, the Registration Statement is not effective
        or the prospectus included in the Registration Statement may not be used
        by the
        Purchasers for the resale of the Underlying Shares.

       

      (b)  From
        the
        date hereof until such time as no Purchaser holds any of the Securities,
        the
        Company shall be prohibited from effecting or entering into an agreement
        to
        effect any Subsequent Financing involving a Variable Rate Transaction.
“Variable Rate Transaction” means a transaction in which the Company
        issues or sells (i) any debt or equity securities that are convertible into,
        exchangeable or exercisable for, or include the right to receive additional
        shares of Common Stock either (A) at a conversion, exercise or exchange rate
        or
        other price that is based upon and/or varies with the trading prices of or
        quotations for the shares of Common Stock at any time after the initial issuance
        of such debt or equity securities, or (B) with a conversion, exercise or
        exchange price that is subject to being reset at some future date after the
        initial issuance of such debt or equity security or upon the occurrence of
        specified or contingent events directly or indirectly related to the business
        of
        the Company or the market for the Common Stock or (ii) enters into any
        agreement, including, but not limited to, an equity line of credit, whereby
        the
        Company may sell securities at a future determined price.

       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

       

      (c)  Notwithstanding
        the foregoing, this Section 4.13 shall not apply in respect of an Exempt
        Issuance, except that no Variable Rate Transaction shall be an Exempt
        Issuance.

       

      4.14  Equal
        Treatment of Purchasers.  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
        is
        also offered to all of the parties to the Transaction Documents. Further,
        the
        Company shall not make any payment of principal or interest on the Debentures
        in
        amounts which are disproportionate to the respective principal amounts
        outstanding on the Debentures at any applicable time.  For
        clarification purposes, this provision constitutes a separate right granted
        to
        each Purchaser by the Company and negotiated separately by each Purchaser,
        and
        is intended for the Company to treat the Purchasers as a class and shall
        not in
        any way be construed as the Purchasers acting in concert or as a group with
        respect to the purchase, disposition or voting of Securities or
        otherwise.

       

      4.15  Short
        Sales and Confidentiality After The Date Hereof. Each Purchaser, severally
        and not jointly with the other Purchasers, covenants that neither it nor
        any
        Affiliate acting on its behalf or pursuant to any understanding with it will
        execute any Short Sales during the period commencing at the Discussion Time
        and
        ending at the time that the transactions contemplated by this Agreement are
        first publicly announced as described in Section 4.6.  Each Purchaser,
        severally and not jointly with the other Purchasers, covenants that until
        such
        time as the transactions contemplated by this Agreement are publicly disclosed
        by the Company as described in Section 4.6, such Purchaser will maintain
        the
        confidentiality of the existence and terms of this transaction and the
        information included in the Disclosure Schedules.  Each Purchaser severally
        and not jointly with any other Purchaser understands and acknowledges, and
        agrees, to act in a manner that will not violate the positions of the Commission
        as set forth in Item 65, Section A, of the Manual of Publicly Available
        Telephone Interpretations, dated July 1997, compiled by the Office of Chief
        Counsel, Division of Corporation Finance. Notwithstanding the foregoing,
        no
        Purchaser makes any representation, warranty or covenant hereby that it will
        not
        engage in Short Sales in the securities of the Company after the time that
        the
        transactions contemplated by this Agreement are first publicly announced
        as
        described in Section 4.6.  Notwithstanding the foregoing, in the case of a
        Purchaser that is a multi-managed investment vehicle whereby separate portfolio
        managers manage separate portions of such Purchaser’s assets and the portfolio
        managers have no direct knowledge of the investment decisions made by the
        portfolio managers managing other portions of such Purchaser’s assets, the
        covenant set forth above shall only apply with respect to the portion of
        assets
        managed by the portfolio manager that made the investment decision to purchase
        the Securities covered by this Agreement.

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

       

       

      4.16  Form
        D; Blue Sky Filings.  The Company agrees to timely file a Form D
        with respect to the Securities as required under Regulation D and to provide
        a
        copy thereof, promptly upon request of any Purchaser. The Company shall 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
        Purchasers at applicable Closing under applicable securities or “Blue Sky” laws
        of the states of the United States, and shall provide evidence of such actions
        promptly upon request of any Purchaser.

       

      4.18           Capital
        Changes.  Until the one year anniversary of the Effective Date,
        the Company shall not undertake a reverse or forward stock split or
        reclassification of the Common Stock without the prior written consent of
        the
        Purchasers holding a majority in principal amount outstanding of the
        Debentures.

       

       

      ARTICLE
        V.

      MISCELLANEOUS

       

      5.1  Termination. 
        This Agreement may be terminated by any Purchaser, as to such Purchaser’s
        obligations hereunder only and without any effect whatsoever on the obligations
        between the Company and the other Purchasers, by written notice to the other
        parties, if the First Closing has not been consummated on or before August
        2,
        2007; provided, however, that such termination will not affect the
        right of any party to sue for any breach by the other party (or
        parties).

       

      5.2  Fees
        and Expenses.  At the First Closing, the Company has agreed to
        reimburse Enable Capital Management, LLC (“Enable”) the non-accountable
        sum of $40,000 for its legal fees and expenses, $10,000 of which has been
        paid
        prior to the First Closing.  The Company shall deliver to each
        Purchaser, prior to the Closing, a completed and executed copy of the Closing
        Statement attached hereto as Annex A.   Except as
        expressly set forth in the Transaction Documents to the contrary, each party
        shall pay the fees and expenses of its advisers, counsel, accountants and
        other
        experts, if any, and all other expenses incurred by such party incident to
        the
        negotiation, preparation, execution, delivery and performance of this
        Agreement.  The Company shall pay all transfer agent fees, stamp taxes
        and other taxes and duties levied in connection with the delivery of any
        Securities to the Purchasers.

       

      5.3  Entire
        Agreement.  The Transaction Documents, together with the exhibits
        and schedules thereto, contain the entire understanding of the parties with
        respect to the subject matter hereof and supersede all prior agreements and
        understandings, oral or written, with respect to such matters, which the
        parties
        acknowledge have been merged into such documents, exhibits and
        schedules.

       

      5.4  Notices.  Any
        and all notices or other communications or deliveries required or permitted
        to
        be provided hereunder shall be in writing and shall be deemed given and
        effective on the earliest of (a) the date of transmission, if such notice
        or
        communication is delivered via facsimile at the facsimile number set forth
        on
        the signature pages attached hereto prior to 5:30 p.m. (New York City time)
        on a
        Trading Day, (b) the next Trading Day after the date of transmission, if
        such
        notice or communication is delivered via facsimile at the facsimile number
        set
        forth on the signature pages attached hereto on a day that is not a Trading
        Day
        or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the
        second
        Trading Day following the date of mailing, if sent by U.S. nationally recognized
        overnight courier service, or (d) upon actual receipt by the party to whom
        such
        notice is required to be given.  

       

       

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

       

      The
        address for such notices and communications shall be as set forth on the
        signature pages attached hereto.

       

      5.5  Amendments;
        Waivers.  No provision of this Agreement may be waived, modified,
        supplemented or amended except in a written instrument signed, in the case
        of an
        amendment, by the Company and the Purchasers of at least 75% in interest
        of the
        Securities still held by Purchasers or, in the case of a waiver, by the party
        against whom enforcement of any such waived provision is sought.  No
        waiver of any default with respect to any provision, condition or requirement
        of
        this Agreement shall be deemed to be a continuing waiver in the future or
        a
        waiver of any subsequent default or a waiver of any other provision, condition
        or requirement hereof, nor shall any delay or omission of any party to exercise
        any right hereunder in any manner impair the exercise of any such
        right.

       

      5.6  Headings.  The
        headings herein are for convenience only, do not constitute a part of this
        Agreement and shall not be deemed to limit or affect any of the provisions
        hereof.

       

      5.7  Successors
        and Assigns.  This Agreement shall be binding upon and inure to
        the benefit of the parties and their successors and permitted
        assigns.  The Company may not assign this Agreement or any rights or
        obligations hereunder without the prior written consent of each Purchaser
        (other
        than by merger).  Any Purchaser may assign any or all of its rights
        under this Agreement to any Person to whom such Purchaser assigns or transfers
        any Securities, provided that such transferee agrees in writing to be bound,
        with respect to the transferred Securities, by the provisions of the Transaction
        Documents that apply to the “Purchasers.”

       

      5.8  No
        Third-Party Beneficiaries.  This Agreement is intended for the
        benefit of the parties hereto and their respective successors and permitted
        assigns and is not for the benefit of, nor may any provision hereof be enforced
        by, any other Person, except as otherwise set forth in Section
        4.10.

       

      5.9  Governing
        Law.  All questions concerning the construction, validity,
        enforcement and interpretation of the Transaction Documents shall be governed
        by
        and construed and enforced in accordance with the internal laws of the State
        of
        New York, without regard to the principles of conflicts of law
        thereof.  Each party agrees that all legal proceedings concerning the
        interpretations, enforcement and defense of the transactions contemplated
        by
        this Agreement and any other Transaction Documents (whether brought against
        a
        party hereto or its respective affiliates, directors, officers, shareholders,
        employees or agents) shall be commenced exclusively in the state and federal
        courts sitting in the City of New York.  Each party hereby irrevocably
        submits to the exclusive jurisdiction of the state and federal courts sitting
        in
        the City of New York, borough of Manhattan for the adjudication of any dispute
        hereunder or in connection herewith or with any transaction contemplated
        hereby
        or discussed herein (including with respect to the enforcement of any of
        the
        Transaction Documents), 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
        improper or is an inconvenient venue for such
        proceeding.  

       

       

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

       

       

      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 via registered or certified mail or overnight delivery (with evidence
        of
        delivery) to such party at the address in effect for 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 other manner
        permitted by law.   If either party shall commence an action or
        proceeding to enforce any provisions of the Transaction Documents, then the
        prevailing party in such action or proceeding shall be reimbursed by the
        other
        party for its reasonable attorneys’ fees and other costs and expenses incurred
        with the investigation, preparation and prosecution of such action or
        proceeding.

       

      5.10  Survival.  The
        representations and warranties shall survive the Closings and the delivery
        of
        the Securities for the applicable statue of limitations.

       

      5.11  Execution.  This
        Agreement may be executed in two or more counterparts, all of which when
        taken
        together 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, it being understood that both parties need not sign the same
        counterpart.  In the event that any signature is delivered by
        facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
        signature shall create a valid and binding obligation of the party executing
        (or
        on whose behalf such signature is executed) with the same force and effect
        as if
        such facsimile or “.pdf” signature page were an original thereof.

       

      5.12  Severability.
        If any term, provision, covenant or restriction of this Agreement is held
        by a
        court of competent jurisdiction to be invalid, illegal, void or unenforceable,
        the remainder of the terms, provisions, covenants and restrictions set forth
        herein shall remain in full force and effect and shall in no way be affected,
        impaired or invalidated, and the parties hereto shall use their commercially
        reasonable efforts to find and employ an alternative means to achieve the
        same
        or substantially the same result as that contemplated by such term, provision,
        covenant or restriction. It is hereby stipulated and declared to be the
        intention of the parties that they would have executed the remaining terms,
        provisions, covenants and restrictions without including any of such that
        may be
        hereafter declared invalid, illegal, void or unenforceable.

       

      5.13  Rescission
        and Withdrawal Right.  Notwithstanding anything to the contrary
        contained in (and without limiting any similar provisions of) any of the
        other
        Transaction Documents, whenever any Purchaser 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
        Purchaser 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; provided,
however, in the case of a rescission of a conversion of a Debenture
        or
        exercise of a Warrant, the Purchaser shall be required to return any shares
        of
        Common Stock delivered in connection with any such rescinded conversion or
        exercise notice.

       

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

       

      5.14  Replacement
        of Securities.  If any certificate or instrument evidencing any
        Securities is mutilated, lost, stolen or destroyed, the Company shall issue
        or
        cause to be issued in exchange and substitution for and upon cancellation
        thereof (in the case of mutilation), or in lieu of and substitution therefor,
        a
        new certificate or instrument, but only upon receipt of evidence reasonably
        satisfactory to the Company of such loss, theft or destruction.  The
        applicant for a new certificate or instrument under such circumstances shall
        also pay any reasonable third-party costs (including customary indemnity)
        associated with the issuance of such replacement Securities.

       

      5.15  Remedies.  In
        addition to being entitled to exercise all rights provided herein or granted
        by
        law, including recovery of damages, each of the Purchasers and the Company
        will
        be entitled to specific performance under the Transaction
        Documents.  The parties agree that monetary damages may not be
        adequate compensation for any loss incurred by reason of any breach of
        obligations contained in the Transaction Documents and hereby agrees to waive
        and not to assert in any action for specific performance of any such obligation
        the defense that a remedy at law would be adequate.

       

      5.16  Payment
        Set Aside. To the extent that the Company makes a payment or payments to any
        Purchaser pursuant to any Transaction Document or a Purchaser enforces or
        exercises its rights 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, 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.

       

      5.17  Usury.  To
        the extent it may lawfully do so, the Company hereby agrees not to insist
        upon
        or plead or in any manner whatsoever claim, and will resist any and all efforts
        to be compelled to take the benefit or advantage of, usury laws wherever
        enacted, now or at any time hereafter in force, in connection with any claim,
        action or proceeding that may be brought by any Purchaser in order to enforce
        any right or remedy under any Transaction Document.  Notwithstanding
        any provision to the contrary contained in any Transaction Document, it is
        expressly agreed and provided that the total liability of the Company under
        the
        Transaction Documents for payments in the nature of interest shall not exceed
        the maximum lawful rate authorized under applicable law (the “Maximum
        Rate”), and, without limiting the foregoing, in no event shall any rate of
        interest or default interest, or both of them, when aggregated with any other
        sums in the nature of interest that the Company may be obligated to pay under
        the Transaction Documents exceed such Maximum Rate.  It is agreed that
        if the maximum contract rate of interest allowed by law and applicable to
        the
        Transaction Documents is increased or decreased by statute or any official
        governmental action subsequent to the date hereof, the new maximum contract
        rate
        of interest allowed by law will be the Maximum Rate applicable to the
        Transaction Documents from the effective date forward, unless such application
        is precluded by applicable law.  If under any circumstances
        whatsoever, interest in excess of the Maximum Rate is paid by the Company
        to any
        Purchaser with respect to indebtedness evidenced by the Transaction Documents,
        such excess shall be applied by such Purchaser to the unpaid principal balance
        of any such indebtedness or be refunded to the Company, the manner of handling
        such excess to be at such Purchaser’s election.

       

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

       

       

      5.18  Independent
        Nature of Purchasers’ Obligations and Rights.  The obligations of
        each Purchaser under any Transaction Document are several and not joint with
        the
        obligations of any other Purchaser, and no Purchaser shall be responsible
        in any
        way for the performance or non-performance of the obligations of any other
        Purchaser under any Transaction Document.  Nothing contained herein or
        in any other Transaction Document, and no action taken by any Purchaser pursuant
        thereto, shall be deemed to constitute the Purchasers as a partnership, an
        association, a joint venture or any other kind of entity, or create a
        presumption that the Purchasers are in any way acting in concert or as a
        group
        with respect to such obligations or the transactions contemplated by the
        Transaction Documents.  Each Purchaser shall be entitled to
        independently protect and enforce its rights, including without limitation
        the
        rights arising out of this Agreement or out of the other Transaction Documents,
        and it shall not be necessary for any other Purchaser to be joined as an
        additional party in any proceeding for such purpose.  Each Purchaser
        has been represented by its own separate legal counsel in their review and
        negotiation of the Transaction Documents.  For reasons of
        administrative convenience only, Purchasers and their respective counsel
        have
        chosen to communicate with the Company through FWS.  FWS does not
        represent all of the Purchasers but only Enable.  The Company has
        elected to provide all Purchasers with the same terms and Transaction Documents
        for the convenience of the Company and not because it was required or requested
        to do so by the Purchasers.

       

      5.19  Liquidated
        Damages.  The Company’s obligations to pay any partial liquidated
        damages or other amounts owing under the Transaction Documents is a continuing
        obligation of the Company and shall not terminate until all unpaid partial
        liquidated damages and other amounts have been paid notwithstanding the fact
        that the instrument or security pursuant to which such partial liquidated
        damages or other amounts are due and payable shall have been
        canceled.

       

      5.20  Saturdays,
        Sundays, Holidays, etc.   If the last or appointed day for
        the taking of any action or the expiration of any right required or granted
        herein shall not be a Business Day, then such action may be taken or such
        right
        may be exercised on the next succeeding Business Day.

       

      5.21  Construction.
        The parties agree that each of them and/or their respective counsel has reviewed
        and had an opportunity to revise the Transaction Documents and, therefore,
        the
        normal rule of construction to the effect that any ambiguities are to be
        resolved against the drafting party shall not be employed in the interpretation
        of the Transaction Documents or any amendments hereto.

       

      5.22  Waiver
        of Jury Trial.  In any action, suit or proceeding in any
        jurisdiction brought by any party against any other party, the parties each
        knowingly and intentionally, to the greatest extent permitted by applicable
        law,
        hereby absolutely, unconditionally, irrevocably and expressly waives forever
        trial by jury.

       

      


       

      (Signature
        Pages Follow)

       

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

       

       

       

      IN
        WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
        Agreement to be duly executed by their respective authorized signatories
        as of
        the date first indicated above.

       

      
        	
                GUANGZHOU
                  GLOBAL TELECOM, INC.

                 

                 

              	
                Address
                  for Notice:

                APT
                  29D, Block E

                No.11
                  Hao Jing Street, Zhu Jiang Di Jing Yuan

                YiZhou
                  Road, HaiZhu District,

                Guangzhou
                  China, 510310

                 

              
	
                By:/s/ 
                  Li Yanquan                        

                     Name:
                  Li Yankuan

                     Title:
                  Chief Executive Officer

                 

              	
                Fax:

                Attn:
                  Li Yankuan

                Tel:
                  (011) 86 20 61299413

                e-mail:
                  lyk1688@163.com

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

                Anslow
                  & Jaclin, LLP

                195
                  Route 9 South, Suite 204

                Manalapan,
                  New Jersey 07726

                Attn:
                  Richard I. Anslow, Esq.

                FAX:
                  (732) 577-1188

                 

                 

              	 


      

      


       

       

       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK

      SIGNATURE
        PAGE FOR PURCHASER FOLLOWS]

       

      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

       

       

      [PURCHASER
        SIGNATURE PAGES TO GZGT SECURITIES PURCHASE AGREEMENT]

      


      IN
        WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
        to be duly executed by their respective authorized signatories as of the
        date
        first indicated above.

       

      Name
        of
        Purchaser: ________________________________________________________

      Signature
        of Authorized Signatory of Purchaser:
        __________________________________

      Name
        of
        Authorized Signatory:
        ____________________________________________________

      Title
        of
        Authorized Signatory:
        _____________________________________________________

      Email
        Address of Purchaser:
        ________________________________________________

      Facsimile
        Number of Purchaser:
        ________________________________________________

      


      Address
        for Notice of Purchaser:

      


      


      


      Address
        for Delivery of Securities for Purchaser (if not same as address for
        notice):

      


      


      


      Subscription
        Amount:

      


         First
        Closing:
        _____________

                 Second
        Closing: ______________

      


      Principal
        Amount (Subscription Amount x 1.142857):

       

         First
        Closing:
        _____________

                 Second
        Closing: ______________

      


      


      Warrant
        Shares: _________________

      


      


      EIN
        Number:

      [SIGNATURE
        PAGES CONTINUE]

       

       

      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

       

       

      Annex
        A

      


      CLOSING
        STATEMENT

      


      Pursuant
        to the attached Securities Purchase Agreement, dated as of the date hereto,
        the
        purchasers shall purchase up to $3,000,000 of Debentures and Warrants from
        Guangzhou Global Telecom, Inc. (the “Company”).  All funds will
        be wired into an account maintained by the Company.  All funds will be
        disbursed in accordance with this Closing Statement.

      


      
        	
                Disbursement
                  Date:

              	
                August
                  ___, 2007

              


      

      


      
        
          	
                  I.   PURCHASE
                    PRICE

                   

                	 	 	 
	
                  Gross
                    Proceeds to be Received

                	 	$	
                	 
	 	 	 	 	 
	
                  II.   DISBURSEMENTS

                   

                	 	 	 	 
	
                   Enable
                    Capital

                	 	$	
                  30,000

                	 
	
                   Midtown
                    Partners

                	 	$	
                	 
	 	 	$	
                	 
	 	 	$	
                	 
	 	 	$	
                	 
	 	 	 	 	 
	
                  Total
                    Amount Disbursed:

                	 	$	
                	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                  WIRE
                    INSTRUCTIONS:

                   

                   

                	 	 	 	 
	
                  To:
                    _____________________________________

                   

                   

                	 	 	 	 
	 	 	 	 	 


        

      

       

      EXECUTED
        THIS ___ DAY OF AUGUST, 2007

       

      
        	
                GUANGZHOU
                  GLOBAL TELECOM, INC.

                 

              
	
                By:/s/ 
                  Li Yanquan                        

                     Name:
                  Li Yankuan

                     Title:
                  Chief Executive Officer

              


      

      
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