Exhibit 10.1


    Exhibit
      10(i)

    


    INVESTMENT
      AGREEMENT 

     

    INVESTMENT
      AGREEMENT (this "AGREEMENT"), dated as of August__, 2005 by and between Nexia
      Holdings, Inc., a Nevada corporation (the "Company"), and Dutchess Private
      Equities Fund, LP, a Delaware limited partnership (the "Investor").


     

    Whereas,
      the parties desire that, upon the terms and subject to the conditions contained
      herein, the Investor shall invest up to Ten Million dollars ($10,000,000) to
      purchase the Company's Common Stock, $.001 par value per share (the "Common
      Stock"); 

     

    Whereas,
      such investments will be made in reliance upon the provisions of Section 4(2)
      under the Securities Act of 1933, as amended (the "1933 Act"), Rule 506 of
      Regulation D, and the rules and regulations promulgated thereunder, and/or
      upon
      such other exemption from the registration requirements of the 1933 Act as
      may
      be available with respect to any or all of the investments in Common Stock
      to be
      made hereunder; and 

     

    Whereas,
      contemporaneously with the execution and delivery of this Agreement, the parties
      hereto are executing and delivering a Registration Rights Agreement
      substantially in the form attached hereto (as amended from time to time, the
      "Registration Rights Agreement") pursuant to which the Company has agreed to
      provide certain registration rights under the 1933 Act, and the rules and
      regulations promulgated thereunder, and applicable state securities laws.


     

    NOW
      THEREFORE, in consideration of the foregoing recitals, which shall be considered
      an integral part of this Agreement, the covenants and agreements set forth
      hereafter, and other good and valuable consideration, the receipt and
      sufficiency of which is hereby acknowledged, the Company and the Investor hereby
      agree as follows: 

     

    SECTION
      1. DEFINITIONS. 

     

    As
      used
      in this Agreement, the following terms shall have the following meanings
      specified or indicated below, and such meanings shall be equally applicable
      to
      the singular and plural forms of such defined terms.

    


    “1933
      Act”
shall
      have the meaning set forth in the preamble of this agreement.

    


    “1934
      Act”
shall
      mean the Securities Exchange Act of 1934, as it may be amended.

    


    “Affiliate”
shall
      have the meaning specified in Section 5(h), below.

    


    “Agreement”
shall
      mean this Investment Agreement.

    


    “Best
      Bid”
      shall
      mean the highest posted bid price of the Common Stock.

    


    “Buy
      In”
shall
      have the meaning specified in Section 6, below.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    


    “Buy
      In
      Adjustment Amount”
shall
      have the meaning specified in Section 6.

    


    “By-laws”
      shall have the meaning specified in Section 4(c).

    


    “Certificate
      of Incorporation” shall have the meaning specified in Section 4(c).

    


    “Closing”
shall
      have the meaning specified in Section 2(h).

    


    “Closing
      Date”
shall
      mean no more than seven (7) Trading Days following the Put Notice
      Date.

    


    “Common
      Stock”
shall
      have the meaning set forth in the preamble of this Agreement.

    


    “Control”
or
      “Controls”
shall
      have the meaning specified in Section 5(h).

    


    “Covering
      Shares”
shall
      have the meaning specified in Section 6.

    


    “Effective
      Date”
shall
      mean the date the SEC declares effective under the 1933 Act the Registration
      Statement covering the Securities.

    


    “Environmental
      Laws”
shall
      have the meaning specified in Section 4(m).

    


    “Execution
      Date”
shall
      mean the date indicated in the preamble to this Agreement.

    


    “Indemnities”
shall
      have the meaning specified in Section 11.

    


    “Indemnified
      Liabilities”
shall
      have the meaning specified in Section 11.

     

    “Ineffective
      Period”
shall
      mean any period of time that the Registration Statement or any Supplemental
      Registration Statement (as defined in the Registration Rights Agreement) becomes
      ineffective or unavailable for use for the sale or resale, as applicable, of
      any
      or all of the Registrable Securities (as defined in the Registration Rights
      Agreement) for any reason (or in the event the prospectus under either of the
      above is not current and deliverable) during any time period required under
      the
      Registration Rights Agreement.

    


    “Investor”
shall
      have the meaning indicated in the preamble of this Agreement.

    


    “Material
      Adverse Effect”
shall
      have the meaning specified in Section 4(a).

    


    “Maximum
      Common Stock Issuance”
shall
      have the meaning specified in Section 2(I).

    


    “Minimum
      Acceptable Price”
with
      respect to any Put Notice Date shall mean seventy-five percent (75%) of the
      lowest closing bid prices for the ten (10) Trading Day period immediately
      preceding such Put Notice Date.

    


    “Open
      Period”
shall
      mean the period beginning on and including the Trading Day immediately following
      the Effective Date and ending on the earlier to occur of (i)
      the date
      which is thirty-six (36) months from the Effective Date; or (ii)
      termination of the Agreement in accordance with Section 9, below.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    


    “Pricing
      Period”
shall
      mean the period beginning on the Put Notice Date and ending on and including
      the
      date that is five (5) Trading Days after such Put Notice Date.

    


    “Principal
      Market”
shall
      mean the American Stock Exchange, Inc., the National Association of Securities
      Dealers, Inc. Over-the-Counter Bulletin Board, the NASDAQ National Market System
      or the NASDAQ SmallCap Market, whichever is the principal market on which the
      Common Stock is listed.

    


    “Prospectus”
shall
      mean the prospectus, preliminary prospectus and supplemental prospectus used
      in
      connection with the Registration Statement.

    


    “Purchase
      Amount”
shall
      mean the total amount being paid by the Investor on a particular Closing Date
      to
      purchase the Securities.

    


    “Purchase
      Price”
shall
      mean ninety-five percent (95%) of the lowest closing Best Bid price of the
      Common Stock during the Pricing Period. 

    


    “Put”
      shall have the meaning set forth in Section 2(b)(1) hereof. 

    


    “Put
      Amount”
shall
      have the meaning set forth in Section 2(b) hereof. 

    


    “Put
      Notice”
shall
      mean a written notice sent to the Investor by the Company stating the Put Amount
      in U.S. dollars, the Company intends to sell to the Investor pursuant to the
      terms of the Agreement and stating the current number of Shares issued and
      outstanding on such date.

     

    “Put
      Notice Date”
shall
      mean the Trading Day immediately following the day on which the Investor
      receives a Put Notice, however a Put Notice shall be deemed delivered
      on
      (a)
      the
      Trading Day it is received by facsimile or otherwise by the Investor if such
      notice is received prior to 9:00 am Eastern Time, or (b)
      the
      immediately succeeding Trading Day if it is received by facsimile or otherwise
      after 9:00 am Eastern Time on a Trading Day. No Put Notice may be deemed
      delivered on a day that is not a Trading Day. 

    


    “Put
      Restriction”
shall
      mean the days between the beginning of the Pricing Period and Closing Date.
      During this time, the Company shall not be entitled to deliver another Put
      Notice.

    


    “Registration
      Period”
shall
      have the meaning specified in Section 5(c), below.

    


    “Registration
      Rights Agreement”
shall
      have the meaning set forth in the recitals, above.

    


    “Registration
      Statement”
means
      the registration statement of the Company filed under the 1933 Act covering
      the
      Common Stock issuable hereunder.

    


    “Related
      Party”
shall
      have the meaning specified in Section 5(h).

    


    “Resolution”
shall
      have the meaning specified in Section 8(e).

    


    “SEC”
shall
      mean the U.S. Securities & Exchange Commission.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    


    “SEC
      Documents”
shall
      have the meaning specified in Section 4(f).

    


    “Securities”
shall
      mean the shares of Common Stock issued pursuant to the terms of the
      Agreement.

    


    “Shares”
shall
      mean the shares of the Company’s Common Stock.

    


    “Sold
      Shares”
shall
      have the meaning specified in Section 6.

    


    “Subsidiaries”
shall
      have the meaning specified in Section 4(a).

    


    “Trading
      Day”
shall
      mean any day on which the Principal Market for the Common Stock is open for
      trading, from the hours of 9:30 am until 4:00 pm.

    


    “Transaction
      Documents”
shall
      mean this Agreement, the Registration Rights Agreement, and each of the other
      agreements entered into by the parties hereto in connection with this
      Agreement.

     

    SECTION
      2. PURCHASE AND SALE OF COMMON STOCK.

     

    (A)
      PURCHASE AND SALE OF COMMON STOCK. Subject to the terms and conditions set
      forth
      herein, the Company shall issue and sell to the Investor, and the Investor
      shall
      purchase from the Company, up to that number of Shares having an aggregate
      Purchase Price of Ten Million dollars ($10,000,000).

     

    (B)
      DELIVERY OF PUT NOTICES. 

     

    (I)
      Subject to the terms and conditions of the Transaction Documents, and from
      time
      to time during the Open Period, the Company may, in its sole discretion, deliver
      a Put Notice to the Investor which states the dollar amount (designated in
      U.S.
      Dollars) (the "Put Amount") ,which the Company intends to sell to the Investor
      on a Closing Date (the "Put"). The Put Notice shall be in the form attached
      hereto as Exhibit F and incorporated herein by reference. The amount that the
      Company shall be entitled to Put to the Investor (the "Put Amount") shall be
      equal to, at the Company's election, either: (A) Two Hundred percent (200%)
      of
      the average daily volume (U.S. market only) of the Common Stock for the twenty
      (20) Trading Days prior to the applicable Put Notice Date, multiplied by the
      average of the three (3) daily closing bid prices immediately preceding the
      Put
      Date, or (B) One Hundred Thousand dollars ($100,000); provided that in no event
      will the Put Amount be more than One Million Dollars ($1,000,000) with respect
      to any single Put. During the Open Period, the Company shall not be entitled
      to
      submit a Put Notice until after the previous Closing has been completed. The
      Purchase Price for the Common Stock identified in the Put Notice shall be equal
      to ninety-five percent (95)% of the lowest closing Best Bid price of the Common
      Stock during the Pricing Period. 

     

    (II)
      If
      any closing bid price during the applicable Pricing Period with respect to
      that
      Put Notice is less than Seventy-Five percent (75%) of the any closing bid prices
      of the Common Stock for the ten (10) Trading Days prior to the Put Notice Date
      (the "Minimum Acceptable Price"), the Put Notice will terminate at the Company's
      request, by sending written notice to the Investor to cancel the Put Notice.
      

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (C)
      RESERVED 

     

    (D)
      INVESTOR'S OBLIGATION TO PURCHASE SHARES. Subject to the conditions set forth
      in
      this Agreement, following the Investor's receipt of a validly delivered Put
      Notice, the Investor shall be required to purchase from the Company during
      the
      related Pricing Period that number of Shares having an aggregate Purchase Price
      equal to the lesser of (i) the Put Amount set forth in the Put Notice, and
      (ii)
      twenty percent (20%) of the aggregate trading volume of the Common Stock during
      the applicable Pricing Period times (x) the lowest closing bid price of the
      Company's Common Stock during the specified Pricing Period, but only if said
      Shares bear no restrictive legend, are not subject to stop transfer
      instructions, pursuant to Section 2(h), prior to the applicable Closing Date.
      

     

    (E)
      Reserved

     

    (F)
      CONDITIONS TO INVESTOR'S OBLIGATION TO PURCHASE SHARES. Notwithstanding anything
      to the contrary in this Agreement, the Company shall not be entitled to deliver
      a Put Notice and the Investor shall not be obligated to purchase any Shares
      at a
      Closing (as defined in Section 2(h)) unless each of the following conditions
      are
      satisfied: 

     

    (I)
      a
      Registration Statement shall have been declared effective and shall remain
      effective and available for the resale of all the Registrable Securities (as
      defined in the Registration Rights Agreement) at all times until the Closing
      with respect to the subject Put Notice; 

     

    (II)
      at
      all times during the period beginning on the related Put Notice Date and ending
      on and including the related Closing Date, the Common Stock shall have been
      listed on the Principal Market and shall not have been suspended from trading
      thereon for a period of two (2) consecutive Trading Days during the Open Period
      and the Company shall not have been notified of any pending or threatened
      proceeding or other action to suspend the trading of the Common Stock;


     

    (III)
      the
      Company has complied with its obligations and is otherwise not in breach of
      a
      material provision of, or in default under, this Agreement, the Registration
      Rights Agreement or any other agreement executed in connection herewith which
      has not been corrected prior to delivery of the Put Notice Date; 

     

    (IV)
      no
      injunction shall have been issued and remain in force, or action commenced
      by a
      governmental authority which has not been stayed or abandoned, prohibiting
      the
      purchase or the issuance of the Securities; and 

     

    (V)
      the
      issuance of the Securities will not violate any shareholder approval
      requirements of the Principal Market. 

     

    If
      any of
      the events described in clauses (i) through (v) above occurs during a Pricing
      Period, then the Investor shall have no obligation to purchase the Put Amount
      of
      Common Stock set forth in the applicable Put Notice. 

     

    (G)
      RESERVED

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (H)
      MECHANICS OF PURCHASE OF SHARES BY INVESTOR. Subject to the satisfaction of
      the
      conditions set forth in Sections 2(f), 7 and 8, the closing of the purchase
      by
      the Investor of Shares (a "Closing") shall occur on the date which is no later
      than seven (7) Trading Days following the applicable Put Notice Date (each
      a
      "Closing Date"). Prior to each Closing Date, (I) the Company shall deliver
      to
      the Investor pursuant to this Agreement, certificates representing the Shares
      to
      be issued to the Investor on such date and registered in the name of the
      Investor; and (II) the Investor shall deliver to the Company the Purchase Price
      to be paid for such Shares, determined as set forth in Sections 2(b) and 2(d).
      In lieu of delivering physical certificates representing the Securities and
      provided that the Company's transfer agent then is participating in The
      Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST")
      program, upon request of the Investor, the Company shall use its commercially
      reasonable efforts to cause its transfer agent to electronically transmit the
      Securities by crediting the account of the Investor's prime broker (which shall
      be specified by the Investor a reasonably sufficient time in advance) with
      DTC
      through its Deposit Withdrawal Agent Commission ("DWAC") system. 

     

    The
      Company understands that a delay in the issuance of Securities beyond the
      Closing Date could result in economic loss to the Investor. After the Effective
      Date, as compensation to the Investor for such loss, the Company agrees to
      pay
      late payments to the Investor for late issuance of Securities (delivery of
      Securities after the applicable Closing Date) in accordance with the following
      schedule (where "No. of Days Late" is defined as the number of trading days
      beyond the Closing Date. The Amounts are cumulative.): 

     

    
      
        	
                LATE
                  PAYMENT FOR EACH

              	 
	
                NO.
                  OF DAYS LATE 

              	
                $10,000
                  OF COMMON STOCK

              
	 	 
	
                1
                  

              	
                $100

              
	
                2
                  

              	
                $200

              
	
                3
                  

              	
                $300

              
	
                4
                  

              	
                $400

              
	
                5
                  

              	
                $500

              
	
                6
                  

              	
                $600

              
	
                7
                  

              	
                $700

              
	
                8
                  

              	
                $800

              
	
                9
                  

              	
                $900

              
	
                10
                  

              	
                $1,000

              
	
                Over
                  10 

              	
                $1,000
                  + $200 for each

              
	
                 

              	
                Business
                  Day late beyond 10 days

              


      

    

     

    The
      Company shall pay any payments incurred under this Section in immediately
      available funds upon demand by the Investor. Nothing herein shall limit the
      Investor's right to pursue actual damages for the Company's failure to issue
      and
      deliver the Securities to the Investor, except to the extent that such late
      payments shall constitute payment for and offset any such actual damages alleged
      by the Investor, and any Buy In Adjustment Amount. 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (I)
      OVERALL LIMIT ON COMMON STOCK ISSUABLE. Notwithstanding anything contained
      herein to the contrary, if during the Open Period the Company becomes listed
      on
      an exchange that limits the number of shares of Common Stock that may be issued
      without shareholder approval, then the number of Shares issuable by the Company
      and purchasable by the Investor, including the shares of Common Stock issuable
      to the Investors, shall not exceed that number of the shares of Common Stock
      that may be issuable without shareholder approval, subject to appropriate
      adjustment for stock splits, stock dividends, combinations or other similar
      recapitalization affecting the Common Stock (the "Maximum Common Stock
      Issuance"), in excess of the Maximum Common Stock Issuance shall first be
      approved by the Company's shareholders in accordance with applicable law and
      the
      By-laws and Amended and Restated Certificate of Incorporation of the Company,
      if
      such issuance of shares of Common Stock could cause a delisting on the Principal
      Market. The parties understand and agree that the Company's failure to seek
      or
      obtain such shareholder approval shall in no way adversely affect the validity
      and due authorization of the issuance and sale of Securities or the Investor's
      obligation in accordance with the terms and conditions hereof to purchase a
      number of Shares in the aggregate up to the Maximum Common Stock Issuance
      limitation, and that such approval pertains only to the applicability of the
      Maximum Common Stock Issuance limitation provided in this Section 2(I).


     

    SECTION
      3. INVESTOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS. 

     

    The
      Investor represents and warrants to the Company, and covenants, that:


     

    (A)
      SOPHISTICATED INVESTOR. The Investor has, by reason of its business and
      financial experience, such knowledge, sophistication and experience in financial
      and business matters and in making investment decisions of this type that it
      is
      capable of (I) evaluating the merits and risks of an investment in the
      Securities and making an informed investment decision; (II) protecting its
      own
      interest; and (III) bearing the economic risk of such investment for an
      indefinite period of time. 

     

    (B)
      AUTHORIZATION; ENFORCEMENT. This Agreement has been duly and validly authorized,
      executed and delivered on behalf of the Investor and is a valid and binding
      agreement of the Investor enforceable against the Investor in accordance with
      its terms, subject as to enforceability to general principles of equity and
      to
      applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
      and
      other similar laws relating to, or affecting generally, the enforcement of
      applicable creditors' rights and remedies. 

     

    (C)
      SECTION 9 OF THE 1934 ACT. During the term of this Agreement, the Investor
      will
      comply with the provisions of Section 9 of the 1934 Act, and the rules
      promulgated thereunder, with respect to transactions involving the Common Stock.
      The Investor agrees not to short, either directly or indirectly through its
      affiliates, principals or advisors, the Company's common stock during the term
      of this Agreement. 

     

    (D)
      ACCREDITED INVESTOR. Investor is an "Accredited Investor" as that term is
      defined in Rule 501(a)(3) of Regulation D of the 1933 Act. 

     

    (E)
      NO
      CONFLICTS. The execution, delivery and performance of the Transaction Documents
      by the Investor and the consummation by the Investor of the transactions
      contemplated hereby and thereby will not result in a violation of Partnership
      Agreement or other organizational documents of the Investor. 

     

    (F)
      OPPORTUNITY TO DISCUSS. The Investor has received all materials relating to
      the
      Company's business, finance and operations which it has requested. The Investor
      has had an opportunity to discuss the business, management and financial affairs
      of the Company with the Company's management. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (G)
      INVESTMENT PURPOSES. The Investor is purchasing the Securities for its own
      account for investment purposes and not with a view towards distribution and
      agrees to resell or otherwise dispose of the Securities solely in accordance
      with the registration provisions of the 1933 Act (or pursuant to an exemption
      from such registration provisions). 

     

    (H)
      NO
      REGISTRATION AS A DEALER. The Investor is not and will not be required to be
      registered as a "dealer" under the 1934 Act, either as a result of its execution
      and performance of its obligations under this Agreement or otherwise.


     

    (I)
      GOOD
      STANDING The
      Investor is a Limited Partnership, duly organized, validly existing and in
      good
      standing in the State of Delaware.

     

    (J)
      TAX
      LIABILITIES. The Investor understands that it is liable for its own tax
      liabilities.

     

    (K)
      REGULATION M. The Investor will comply with Regulation M under the 1934 Act,
      if
      applicable. 


     

     

    SECTION
      4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. 

     

    Except
      as
      set forth in the Schedules attached hereto, or as disclosed on the Company's
      SEC
      Documents, the Company represents and warrants to the Investor that:


     

    (A)
      ORGANIZATION AND QUALIFICATION. The Company is a corporation duly organized
      and
      validly existing in good standing under the laws of the State of Nevada,
      and has
      the requisite corporate power and authorization to own its properties and to
      carry on its business as now being conducted. Both the Company and the companies
      it owns or controls, its “Subsidiaries,” are duly qualified to do business and
      are in good standing in every jurisdiction in which its ownership of property
      or
      the nature of the business conducted by it makes such qualification necessary,
      except to the extent that the failure to be so qualified or be in good standing
      would not have a Material Adverse Effect. As used in this Agreement, "Material
      Adverse Effect" means any material adverse effect on the business, properties,
      assets, operations, results of operations, financial condition or prospects
      of
      the Company and its Subsidiaries, if any, taken as a whole, or on the
      transactions contemplated hereby or by the agreements and instruments to be
      entered into in connection herewith, or on the authority or ability of the
      Company to perform its obligations under the Transaction Documents (as defined
      in Section 1 and 4(b), below). 

     

    (B)
      AUTHORIZATION; ENFORCEMENT; COMPLIANCE WITH OTHER INSTRUMENTS. 

     

    (I)
      The
      Company has the requisite corporate power and authority to enter into and
      perform this Agreement, the Registration Rights Agreement, and each of the
      other
      agreements entered into by the parties hereto in connection with the
      transactions contemplated by this Agreement (collectively, the "Transaction
      Documents"), and to issue the Securities in accordance with the terms hereof
      and
      thereof. 

     

    (II)
      The
      execution and delivery of the Transaction Documents by the Company and the
      consummation by it, of the transactions contemplated hereby and thereby,
      including without limitation the reservation for issuance and the issuance
      of
      the Securities pursuant to this Agreement, have been duly and validly authorized
      by the Company's Board of Directors and no further consent or authorization
      is
      required by the Company, its Board of Directors, or its shareholders.


     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (III)
      The
      Transaction Documents have been duly and validly executed and delivered by
      the
      Company. 

     

    (IV)
      The
      Transaction Documents constitute the valid and binding obligations of the
      Company enforceable against the Company in accordance with their terms, except
      as such enforceability may be limited by general principles of equity or
      applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
      or
      similar laws relating to, or affecting generally, the enforcement of creditors'
      rights and remedies. 

     

    (C)
      CAPITALIZATION. As of the date hereof, the authorized capital stock of the
      Company consists of (i) 12,503,650,000 shares of Common Stock, $0.001 par value
      per share, of which as of the date hereof, 3,189,045,834 and 1,747,945,834
      shares are issued and outstanding, respectively; 50,000,000 shares of Preferred
      B Stock authorized, $0.001 par value per share of which 8,000,000 shares are
      issued and outstanding 5,000,000 shares of Preferred C Stock authorized, $0.001
      par value per share of which 100,000 shares are issued and outstanding; (as
      of
      March 31, 2005) shares reserved for issuance pursuant to options, warrants
      and
      other convertible securities. All of such outstanding shares have been, or
      upon
      issuance will be, validly issued and are fully paid and nonassessable. Except
      as
      disclosed in the Company's publicly available filings with Periodic Filings,
      

     

    (I)
      no
      shares of the Company's capital stock are subject to preemptive rights or any
      other similar rights or any liens or encumbrances suffered or permitted by
      the
      Company; (II) there are no outstanding debt securities; (III) there are no
      outstanding shares of capital stock, options, warrants, scrip, rights to
      subscribe to, calls or commitments of any character whatsoever relating to,
      or
      securities or rights convertible into, any shares of capital stock of the
      Company or any of its Subsidiaries, or contracts, commitments, understandings
      or
      arrangements by which the Company or any of its Subsidiaries is or may become
      bound to issue additional shares of capital stock of the Company or any of
      its
      Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
      commitments of any character whatsoever relating to, or securities or rights
      convertible into, any shares of capital stock of the Company or any of its
      Subsidiaries; (IV) there are no agreements or arrangements under which the
      Company or any of its Subsidiaries is obligated to register the sale of any
      of
      their securities under the 1933 Act (except the Registration Rights Agreement),
      (V) there are no outstanding securities of the Company or any of its
      Subsidiaries which contain any redemption or similar provisions, and there
      are
      no contracts, commitments, understandings or arrangements by which the Company
      or any of its Subsidiaries is or may become bound to redeem a security of the
      Company or any of its Subsidiaries; (VI) there are no securities or instruments
      containing anti-dilution or similar provisions that will be triggered by the
      issuance of the Securities as described in this Agreement; (VII) the Company
      does not have any stock appreciation rights or "phantom stock" plans or
      agreements or any similar plan or agreement; and (VIII) there is no dispute
      as
      to the classification of any shares of the Company's capital stock. The Company
      has furnished to the Investor, or the Investor has had access through EDGAR
      to,
      true and correct copies of the Company's Amended and Restated Certificate of
      Incorporation, as in effect on the date hereof (the "Certificate of
      Incorporation"), and the Company's By-laws, as in effect on the date hereof
      (the
      "By-laws"), and the terms of all securities convertible into or exercisable
      for
      Common Stock and the material rights of the holders thereof in respect thereto.
      

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (D)
      ISSUANCE OF SHARES. The Company has reserved _______ Shares for issuance
      pursuant to this Agreement has been duly authorized and reserved for issuance
      (subject to adjustment pursuant to the Company's covenant set forth in Section
      5(f) below) pursuant to this Agreement. Upon issuance in accordance with this
      Agreement, the Securities will be validly issued, fully paid and non-assessable
      and free from all taxes, liens and charges with respect to the issue thereof.
      In
      the event the Company cannot register a sufficient number of Shares for issuance
      pursuant to this Agreement, the Company will use its best efforts to authorize
      and reserve for issuance the number of Shares required for the Company to
      perform its obligations hereunder as soon as reasonably practicable.


     

    (E)
      NO
      CONFLICTS. The execution, delivery and performance of the Transaction Documents
      by the Company and the consummation by the Company of the transactions
      contemplated hereby and thereby will not (I) result in a violation of the
      Certificate of Incorporation, any Certificate of Designations, Preferences
      and
      Rights of any outstanding series of preferred stock of the Company or the
      By-laws; or (II) conflict with, or constitute a material default (or an event
      which with notice or lapse of time or both would become a material default)
      under, or give to others any rights of termination, amendment, acceleration
      or
      cancellation of, any material agreement, contract, indenture mortgage,
      indebtedness or instrument to which the Company or any of its Subsidiaries
      is a
      party, or to the Company's knowledge result in a violation of any law, rule,
      regulation, order, judgment or decree (including United States federal and
      state
      securities laws and regulations and the rules and regulations of the Principal
      Market or principal securities exchange or trading market on which the Common
      Stock is traded or listed) applicable to the Company or any of its Subsidiaries
      or by which any property or asset of the Company or any of its Subsidiaries
      is
      bound or affected. Except as disclosed in Schedule 4(e), neither the Company
      nor
      its Subsidiaries is in violation of any term of, or in default under, the
      Certificate of Incorporation, any Certificate of Designations, Preferences
      and
      Rights of any outstanding series of preferred stock of the Company or the
      By-laws or their organizational charter or by-laws, respectively, or any
      contract, agreement, mortgage, indebtedness, indenture, instrument, judgment,
      decree or order or any statute, rule or regulation applicable to the Company
      or
      its Subsidiaries, except for possible conflicts, defaults, terminations,
      amendments, accelerations, cancellations and violations that would not
      individually or in the aggregate have a Material Adverse Effect. The business
      of
      the Company and its Subsidiaries is not being conducted, and shall not be
      conducted, in violation of any law, statute, ordinance, rule, order or
      regulation of any governmental authority or agency, regulatory or
      self-regulatory agency, or court, except for possible violations the sanctions
      for which either individually or in the aggregate would not have a Material
      Adverse Effect. Except as specifically contemplated by this Agreement and as
      required under the 1933 Act or any securities laws of any states to the
      Company's knowledge, the Company is not required to obtain any consent,
      authorization, permit or order of, or make any filing or registration (except
      the filing of a registration statement) with, any court, governmental authority
      or agency, regulatory or self-regulatory agency or other third party in order
      for it to execute, deliver or perform any of its obligations under, or
      contemplated by, the Transaction Documents in accordance with the terms hereof
      or thereof. All consents, authorizations, permits, orders, filings and
      registrations which the Company is required to obtain pursuant to the preceding
      sentence have been obtained or effected on or prior to the date hereof and
      are
      in full force and effect as of the date hereof. Except as disclosed in Schedule
      4(e), the Company and its Subsidiaries are unaware of any facts or circumstances
      which might give rise to any of the foregoing. The Company is not, and will
      not
      be, in violation of the listing requirements of the Principal Market as in
      effect on the date hereof and on each of the Closing Dates and is not aware
      of
      any facts which would reasonably lead to delisting of the Common Stock by the
      Principal Market in the foreseeable future. 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (F)
      SEC
      DOCUMENTS; FINANCIAL STATEMENTS. As of the date hereof, the Company has filed
      all reports, schedules, forms, statements and other documents required to be
      filed by it with the SEC pursuant to the reporting requirements of the 1934
      Act
      (all of the foregoing filed prior to the date hereof and all exhibits included
      therein and financial statements and schedules thereto and documents
      incorporated by reference therein being hereinafter referred to as the "SEC
      Documents"). The Company has delivered to the Investor or its representatives,
      or they have had access through EDGAR to, true and complete copies of the SEC
      Documents. As of their respective dates, the SEC Documents complied in all
      material respects with the requirements of the 1934 Act and the rules and
      regulations of the SEC promulgated thereunder applicable to the SEC Documents,
      and none of the SEC Documents, at the time they were filed with the SEC,
      contained any untrue statement of a material fact or omitted to state a material
      fact required to be stated therein or necessary to make the statements therein,
      in light of the circumstances under which they were made, not misleading. As
      of
      their respective dates, the financial statements of the Company included in
      the
      SEC Documents complied as to form in all material respects with applicable
      accounting requirements and the published rules and regulations of the SEC
      with
      respect thereto. Such financial statements have been prepared in accordance
      with
      generally accepted accounting principles, by a firm that is a member of the
      Public Companies Accounting Oversight Board ("PCAOB") consistently applied,
      during the periods involved (except (I) as may be otherwise indicated in such
      financial statements or the notes thereto, or (II) in the case of unaudited
      interim statements, to the extent they may exclude footnotes or may be condensed
      or summary statements) and fairly present in all material respects the financial
      position of the Company as of the dates thereof and the results of its
      operations and cash flows for the periods then ended (subject, in the case
      of
      unaudited statements, to normal year-end audit adjustments). No other written
      information provided by or on behalf of the Company to the Investor which is
      not
      included in the SEC Documents, including, without limitation, information
      referred to in Section 4(d) of this Agreement, contains any untrue statement
      of
      a material fact or omits to state any material fact necessary to make the
      statements therein, in the light of the circumstance under which they are or
      were made, not misleading. Neither the Company nor any of its Subsidiaries
      or
      any of their officers, directors, employees or agents have provided the Investor
      with any material, nonpublic information which was not publicly disclosed prior
      to the date hereof and any material, nonpublic information provided to the
      Investor by the Company or its Subsidiaries or any of their officers, directors,
      employees or agents prior to any Closing Date shall be publicly disclosed by
      the
      Company prior to such Closing Date. 

     

    (G)
      ABSENCE OF CERTAIN CHANGES. Except as set forth in the SEC Documents, the
      Company does not intend to change the business operations of the Company in
      any
      material way. The Company has not taken any steps, and does not currently expect
      to take any steps, to seek protection pursuant to any bankruptcy law nor does
      the Company or its Subsidiaries have any knowledge or reason to believe that
      its
      creditors intend to initiate involuntary bankruptcy proceedings. 

     

    (H)
      ABSENCE OF LITIGATION. Except as set forth in the SEC Documents, there is no
      action, suit, proceeding, inquiry or investigation before or by any court,
      public board, government agency, self-regulatory organization or body pending
      or, to the knowledge of the executive officers of Company or any of its
      Subsidiaries, threatened against or affecting the Company, the Common Stock
      or
      any of the Company's Subsidiaries or any of the Company's or the Company's
      Subsidiaries' officers or directors in their capacities as such, in which an
      adverse decision could have a Material Adverse Effect. 

     

    (I)
      ACKNOWLEDGMENT REGARDING INVESTOR'S PURCHASE OF SHARES. The Company acknowledges
      and agrees that the Investor is acting solely in the capacity of arm's length
      purchaser with respect to the Transaction Documents and the transactions
      contemplated hereby and thereby. The Company further acknowledges that the
      Investor is not 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 hereby and thereby and any advice given by the
      Investor or any of its respective representatives or agents in connection with
      the Transaction Documents and the transactions contemplated hereby and thereby
      is merely incidental to the Investor's purchase of the Securities. The Company
      further represents to the Investor that the Company's decision to enter into
      the
      Transaction Documents has been based solely on the independent evaluation by
      the
      Company and its representatives. 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (J)
      NO
      UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR CIRCUMSTANCES. Except as set
      forth in the SEC Documents, as of the date hereof, no event, liability,
      development or circumstance has occurred or exists, or to the Company's
      knowledge is contemplated to occur, with respect to the Company or its
      Subsidiaries or their respective business, properties, assets, prospects,
      operations or financial condition, that would be required to be disclosed by
      the
      Company under applicable securities laws on a registration statement filed
      with
      the SEC relating to an issuance and sale by the Company of its Common Stock
      and
      which has not been publicly announced. 

     

    (K)
      EMPLOYEE RELATIONS. Neither the Company nor any of its Subsidiaries is involved
      in any union labor dispute nor, to the knowledge of the Company or any of its
      Subsidiaries, is any such dispute threatened. Neither the Company nor any of
      its
      Subsidiaries is a party to a collective bargaining agreement, and the Company
      and its Subsidiaries believe that relations with their employees are good.
      No
      executive officer (as defined in Rule 501(f) of the 1933 Act) has notified
      the
      Company that such officer intends to leave the Company's employ or otherwise
      terminate such officer's employment with the Company. 

     

    (L)
      INTELLECTUAL PROPERTY RIGHTS. The Company and its Subsidiaries own or possess
      adequate rights or licenses to use all trademarks, trade names, service marks,
      service mark registrations, service names, patents, patent rights, copyrights,
      inventions, licenses, approvals, governmental authorizations, trade secrets
      and
      rights necessary to conduct their respective businesses as now conducted. Except
      as set forth in the SEC Documents, none of the Company's trademarks, trade
      names, service marks, service mark registrations, service names, patents, patent
      rights, copyrights, inventions, licenses, approvals, government authorizations,
      trade secrets or other intellectual property rights necessary to conduct its
      business as now or as proposed to be conducted have expired or terminated,
      or
      are expected to expire or terminate within two (2) years from the date of this
      Agreement. The Company and its Subsidiaries do not have any knowledge of any
      infringement by the Company or its Subsidiaries of trademark, trade name rights,
      patents, patent rights, copyrights, inventions, licenses, service names, service
      marks, service mark registrations, trade secret or other similar rights of
      others, or of any such development of similar or identical trade secrets or
      technical information by others and, except as set forth in the SEC Documents,
      there is no claim, action or proceeding being made or brought against, or to
      the
      Company's knowledge, being threatened against, the Company or its Subsidiaries
      regarding trademark, trade name, patents, patent rights, invention, copyright,
      license, service names, service marks, service mark registrations, trade secret
      or other infringement; and the Company and its Subsidiaries are unaware of
      any
      facts or circumstances which might give rise to any of the foregoing. The
      Company and its Subsidiaries have taken commercially reasonable security
      measures to protect the secrecy, confidentiality and value of all of their
      intellectual properties. 

     

    (M)
      ENVIRONMENTAL LAWS. The Company and its Subsidiaries (I) are, to the knowledge
      of management of the Company, in compliance with any and all applicable foreign,
      federal, state and local laws and regulations relating to the protection of
      human health and safety, the environment or hazardous or toxic substances or
      wastes, pollutants or contaminants ("Environmental Laws"); (II) have, to the
      knowledge of management of the Company, received all permits, licenses or other
      approvals required of them under applicable Environmental Laws to conduct their
      respective businesses; and (III) are in compliance, to the knowledge of the
      Company, with all terms and conditions of any such permit, license or approval
      where, in each of the three (3) foregoing cases, the failure to so comply would
      have, individually or in the aggregate, a Material Adverse Effect. 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (N)
      TITLE. The Company and its Subsidiaries have good and marketable title to all
      personal property owned by them which is material to the business of the Company
      and its Subsidiaries, in each case free and clear of all liens, encumbrances
      and
      defects except such as are described in the SEC Documents or such as do not
      materially affect the value of such property and do not interfere with the
      use
      made and proposed to be made of such property by the Company or any of its
      Subsidiaries. Any real property and facilities held under lease by the Company
      or any of its Subsidiaries are held by them under valid, subsisting and
      enforceable leases with such exceptions as are not material and do not interfere
      with the use made and proposed to be made of such property and buildings by
      the
      Company and its Subsidiaries. 

     

    (O)
      INSURANCE. Each of the Company's Subsidiaries are insured by insurers of
      recognized financial responsibility against such losses and risks and in such
      amounts as management of the Company reasonably believes to be prudent and
      customary in the businesses in which the Company and its Subsidiaries are
      engaged. Neither the Company nor any such Subsidiary has been refused any
      insurance coverage sought or applied for and neither the Company nor any such
      Subsidiary has any reason to believe that it will 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 at a cost that would not have a Material Adverse Effect. 

     

    (P)
      REGULATORY PERMITS. The Company and its Subsidiaries have in full force and
      effect all certificates, approvals, authorizations and permits from the
      appropriate federal, state, local or foreign regulatory authorities and
      comparable foreign regulatory agencies, necessary to own, lease or operate
      their
      respective properties and assets and conduct their respective businesses, and
      neither the Company nor any such Subsidiary has received any notice of
      proceedings relating to the revocation or modification of any such certificate,
      approval, authorization or permit, except for such certificates, approvals,
      authorizations or permits which if not obtained, or such revocations or
      modifications which, would not have a Material Adverse Effect. 

     

    (Q)
      INTERNAL ACCOUNTING CONTROLS. The Company and each of its 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 generally
      accepted accounting principles by a firm with membership to the PCAOB 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. 

     

    (R)
      NO
      MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Company nor any of its
      Subsidiaries is subject to any charter, corporate or other legal restriction,
      or
      any judgment, decree, order, rule or regulation which in the judgment of the
      Company's officers has or is expected in the future to have a Material Adverse
      Effect. Neither the Company nor any of its Subsidiaries is a party to any
      contract or agreement which in the judgment of the Company's officers has or
      is
      expected to have a Material Adverse Effect. 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (S)
      TAX
      STATUS. The Company and each of its Subsidiaries has made or filed all United
      States federal and state income and all other tax returns, reports and
      declarations required by any jurisdiction to which it is subject (unless and
      only to the extent that the Company and each of its Subsidiaries has set aside
      on its books provisions reasonably adequate for the payment of all unpaid and
      unreported taxes) and has paid all taxes and other governmental assessments
      and
      charges that are material in amount, shown or determined to be due on such
      returns, reports and declarations, except those being contested in good faith
      and has set aside on its books provision reasonably adequate for the payment
      of
      all taxes for periods subsequent to the periods to which such returns, reports
      or declarations apply. There are no unpaid taxes in any material amount claimed
      to be due by the taxing authority of any jurisdiction, and the officers of
      the
      Company know of no basis for any such claim. 

     

    (T)
      CERTAIN TRANSACTIONS. Except as set forth in the SEC Documents filed at least
      ten (10) days prior to the date hereof and except for arm's length transactions
      pursuant to which the Company makes payments in the ordinary course of business
      upon terms no less favorable than the Company could obtain from third parties
      and other than the grant of stock options disclosed in the SEC Documents, none
      of the officers, directors, or employees of the Company is presently a party
      to
      any transaction with the Company or any of its Subsidiaries (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 corporation, partnership, trust or other entity
      in
      which any officer, director, or any such employee has a substantial interest
      or
      is an officer, director, trustee or partner. 

     

    (U)
      DILUTIVE EFFECT. The Company understands and acknowledges that the number of
      shares of Common Stock issuable upon purchases pursuant to this Agreement will
      increase in certain circumstances including, but not necessarily limited to,
      the
      circumstance wherein the trading price of the Common Stock declines during
      the
      period between the Effective Date and the end of the Open Period. The Company's
      executive officers and directors have studied and fully understand the nature
      of
      the transactions contemplated by this Agreement and recognize that they have
      a
      potential dilutive effect. The Board of Directors of the Company has concluded,
      in its good faith business judgment, that such issuance is in the best interests
      of the Company. The Company specifically acknowledges that, subject to such
      limitations as are expressly set forth in the Transaction Documents, its
      obligation to issue shares of Common Stock upon purchases pursuant to this
      Agreement is absolute and unconditional regardless of the dilutive effect that
      such issuance may have on the ownership interests of other shareholders of
      the
      Company. 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (V)
      RIGHT
      OF FIRST REFUSAL. The Company shall not, directly or indirectly, without the
      prior written consent of Investor which will not be unreasonably withheld,
      offer, sell, grant any option to purchase, or otherwise dispose of (or announce
      any offer, sale, grant or any option to purchase or other disposition) any
      of
      its Common Stock or securities convertible into Common Stock at a price that
      is
      less than the market price of the Common Stock at the time of issuance of such
      security or investment (a "Subsequent Financing") for a period of one (1) year
      after the Effective Date, except (I) the granting of options or warrants to
      employees, officers, directors and consultants, and the issuance of shares
      upon
      exercise of options granted, under any stock option plan heretofore or hereafter
      duly adopted by the Company or for services rendered or to be rendered; (II)
      shares issued upon exercise of any currently outstanding warrants or options
      and
      upon conversion of any currently outstanding convertible debenture or
      convertible preferred stock, in each case disclosed pursuant to Section 4(c);
      (III) securities issued in connection with the capitalization or creation of
      a
      joint venture with a strategic partner; (IV) shares issued to pay part or all
      of
      the purchase price for the acquisition by the Company of another entity (which,
      for purposes of this clause (iv), shall not include an individual or group
      of
      individuals); and (V) shares issued in a bona fide public offering by the
      Company of its securities, unless (A) the Company delivers to Investor a written
      notice (the "Subsequent Financing Notice") of its intention to effect such
      Subsequent Financing, which Subsequent Financing Notice shall describe in
      reasonable detail the proposed terms of such Subsequent Financing, the amount
      of
      proceeds intended to be raised thereunder, the person with whom such Subsequent
      Financing shall be effected, and attached to which shall be a term sheet or
      similar document relating thereto; and (B) Investor shall not have notified
      the
      Company by 5:00 p.m. (Eastern Time) on the fifth Trading Day after its receipt
      of the Subsequent Financing Notice of its willingness to provide, subject to
      completion of mutually acceptable documentation, financing to the Company on
      substantially the terms set forth in the Subsequent Financing Notice; (VI)
      to
      enter into a loan, credit or lease facility with a bank or financing
      institution. If Investor shall fail to notify the Company of its intention
      to
      enter into such negotiations within such time period, then the Company may
      effect the Subsequent Financing substantially upon the terms set forth in the
      Subsequent Financing Notice; provided that the Company shall provide Investor
      with a second Subsequent Financing Notice, and Investor shall again have the
      right of first refusal set forth above in this Section, if the Subsequent
      Financing subject to the initial Subsequent Financing Notice shall not have
      been
      consummated for any reason on the terms set forth in such Subsequent Financing
      Notice within thirty Trading Days after the date of the initial Subsequent
      Financing Notice. The rights granted to Investor in this Section are not subject
      to any prior right of first refusal given to any other person disclosed on
      Schedule 4(c). 

     

    (W)
      LOCK-UP. The Company shall cause its officers, insiders, directors, and
      affiliates or other related parties under control of the Company, to refrain
      from selling Common Stock during each Pricing Period.

     

    (X)
      NO
      GENERAL SOLICITATION. Neither the Company, nor any of its affiliates, nor any
      person acting on its behalf, has engaged in any form of general solicitation
      or
      general advertising (within the meaning of Regulation D) in connection with
      the
      offer or sale of the Common Stock offered hereby. 

     

    (Y)
      NO
      BROKERS, FINDERS OR FINANCIAL ADVISORY FEES OR COMMISSIONS. No brokers, finders
      or financial advisory fees or commissions will be payable by the Company with
      respect to the transactions contemplated by this Agreement, other than disclosed
      in this Agreement. 

     

    SECTION
      5. COVENANTS OF THE COMPANY 

     

    (A)
      BEST
      EFFORTS. The Company shall use commercially reasonable efforts timely to satisfy
      each of the conditions to be satisfied by it as provided in Section 7 of this
      Agreement. 

     

    (B)
      BLUE
      SKY. The Company shall, at its sole cost and expense, on or before each of
      the
      Closing Dates, take such action as the Company shall reasonably determine is
      necessary to qualify the Securities for, or obtain exemption for the Securities
      for, sale to the Investor at each of the Closings pursuant to this Agreement
      under applicable securities or "Blue Sky" laws of such states of the United
      States, as reasonably specified by Investor, and shall provide evidence of
      any
      such action so taken to the Investor on or prior to the Closing Date.


     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (C)
      REPORTING STATUS. Until the earlier to occur of (I) the first date which is
      after the date this Agreement is terminated pursuant to Section 9 and on which
      the Holders (as that term is defined in the Registration Rights Agreement)
      may
      sell all of the Securities without restriction pursuant to Rule 144(k)
      promulgated under the 1933 Act (or successor thereto); and (II) the date on
      which (A) the Holders shall have sold all the Securities; and (B) this Agreement
      has been terminated pursuant to Section 9 (the "Registration Period"), the
      Company shall file all reports required to be filed with the SEC pursuant to
      the
      1934 Act, and the Company shall not terminate its status as a reporting company
      under the 1934 Act. 

     

    (D)
      USE
      OF PROCEEDS. The Company will use the proceeds from the sale of the Shares
      (excluding amounts paid by the Company for fees as set forth in the Transaction
      Documents) for general corporate and working capital purposes and acquisitions
      or assets, businesses or operations or for other purposes that the Board of
      Directors deem to be in the best interest of the Company. 

     

    (E)
      FINANCIAL INFORMATION. The Company agrees to make available to the Investor
      via
      EDGAR or other electronic means the following to the Investor during the
      Registration Period: (I) within five (5) Trading Days after the filing thereof
      with the SEC, a copy of its Annual Reports on Form 10-KSB, its Quarterly Reports
      on Form 10-QSB, any Current Reports on Form 8-K and any Registration Statements
      or amendments filed pursuant to the 1933 Act; (II) on the same day as the
      release thereof, facsimile copies of all press releases issued by the Company
      or
      any of its Subsidiaries; (III) copies of any notices and other information
      made
      available or given to the shareholders of the Company generally,
      contemporaneously with the making available or giving thereof to the
      shareholders; and (IV) within two (2) calendar days of filing or delivery
      thereof, copies of all documents filed with, and all correspondence sent to,
      the
      Principal Market, any securities exchange or market, or the National Association
      of Securities Dealers, Inc., unless such information is material nonpublic
      information. 

     

    (F)
      RESERVATION OF SHARES. Subject to the following sentence, the Company shall
      take
      all action necessary to at all times have authorized, and reserved for the
      purpose of issuance, a sufficient number of shares of Common Stock to provide
      for the issuance of the Securities hereunder. In the event that the Company
      determines that it does not have a sufficient number of authorized shares of
      Common Stock to reserve and keep available for issuance as described in this
      Section 5(f), the Company shall use its commercially reasonable efforts to
      increase the number of authorized shares of Common Stock by seeking shareholder
      approval for the authorization of such additional shares. 

     

    (G)
      LISTING. The Company shall promptly secure and maintain the listing of all
      of
      the Registrable Securities (as defined in the Registration Rights Agreement)
      upon the Principal Market and each other national securities exchange and
      automated quotation system, if any, upon which shares of Common Stock are then
      listed (subject to official notice of issuance) and shall maintain, such listing
      of all Registrable Securities from time to time issuable under the terms of
      the
      Transaction Documents. Neither the Company nor any of its Subsidiaries shall
      take any action which would be reasonably expected to result in the delisting
      or
      suspension of the Common Stock on the Principal Market (excluding suspensions
      of
      not more than one (1) trading day resulting from business announcements by
      the
      Company). The Company shall promptly provide to the Investor copies of any
      notices it receives from the Principal Market regarding the continued
      eligibility of the Common Stock for listing on such automated quotation system
      or securities exchange. The Company shall pay all fees and expenses in
      connection with satisfying its obligations under this Section 5(g).


     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (H)
      TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall cause each of
      its
      Subsidiaries not to, enter into, amend, modify or supplement, or permit any
      Subsidiary to enter into, amend, modify or supplement, any agreement,
      transaction, commitment or arrangement with any of its or any Subsidiary's
      officers, directors, persons who were officers or directors at any time during
      the previous two (2) years, shareholders who beneficially own 5% or more of
      the
      Common Stock, or Affiliates or with any individual related by blood, marriage
      or
      adoption to any such individual or with any entity in which any such entity
      or
      individual owns a 5% or more beneficial interest (each a "Related Party"),
      except for (I) customary employment arrangements and benefit programs on
      reasonable terms, (II) any agreement, transaction, commitment or arrangement
      on
      an arms-length basis on terms no less favorable than terms which would have
      been
      obtainable from a person other than such Related Party, or (III) any agreement,
      transaction, commitment or arrangement which is approved by a majority of the
      disinterested directors of the Company. For purposes hereof, any director who
      is
      also an officer of the Company or any Subsidiary of the Company shall not be
      a
      disinterested director with respect to any such agreement, transaction,
      commitment or arrangement. "Affiliate" for purposes hereof means, with respect
      to any person or entity, another person or entity that, directly or indirectly,
      (I) has a 5% or more equity interest in that person or entity, (II) has 5%
      or
      more common ownership with that person or entity, (III) controls that person
      or
      entity, or (IV) is under common control with that person or entity. "Control"
      or
      "Controls" for purposes hereof means that a person or entity has the power,
      direct or indirect, to conduct or govern the policies of another person or
      entity. 

     

    (I)
      FILING OF FORM 8-K. On or before the date which is four (4) Trading Days after
      the Execution Date, the Company shall file a Current Report on Form 8-K with
      the
      SEC describing the terms of the transaction contemplated by the Transaction
      Documents in the form required by the 1934 Act, if such filing is required.
      

     

    (J)
      CORPORATE EXISTENCE. The Company shall use its commercially reasonable efforts
      to preserve and continue the corporate existence of the Company. 

     

    (K)
      NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF RIGHT TO MAKE
      A
      PUT. The Company shall promptly notify Investor upon the occurrence of any
      of
      the following events in respect of a Registration Statement or related
      prospectus in respect of an offering of the Securities: (I) receipt of any
      request for additional information by the SEC or any other federal or state
      governmental authority during the period of effectiveness of the Registration
      Statement for amendments or supplements to the Registration Statement or related
      prospectus; (II) the issuance by the SEC or any other federal or state
      governmental authority of any stop order suspending the effectiveness of any
      Registration Statement or the initiation of any proceedings for that purpose;
      (III) receipt of any notification with respect to the suspension of the
      qualification or exemption from qualification of any of the Securities for
      sale
      in any jurisdiction or the initiation or notice of any proceeding for such
      purpose; (IV) the happening of any event that makes any statement made in such
      Registration Statement or related prospectus or any document incorporated or
      deemed to be incorporated therein by reference untrue in any material respect
      or
      that requires the making of any changes in the Registration Statement, related
      prospectus or documents so that, in the case of a Registration Statement, it
      will not contain any untrue statement of a material fact or omit to state any
      material fact required to be stated therein or necessary to make the statements
      therein not misleading, and that in the case of the related prospectus, it
      will
      not contain any untrue statement of a material fact or omit to state any
      material fact required to be stated therein or necessary to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading; and (V) the Company's reasonable determination that a post-effective
      amendment to the Registration Statement would be appropriate, and the Company
      shall promptly make available to Investor any such supplement or amendment
      to
      the related prospectus. The Company shall not deliver to Investor any Put Notice
      during the continuation of any of the foregoing events. 

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (L)
      REIMBURSEMENT. If (I) Investor becomes involved in any capacity in any action,
      proceeding or investigation brought by any shareholder of the Company, in
      connection with or as a result of the consummation of the transactions
      contemplated by the Transaction Documents, or if Investor is impleaded in any
      such action, proceeding or investigation by any person (other than as a result
      of a breach of the Investor’s representations and warranties set forth in this
      Agreement); or (II)Investor becomes involved in any capacity in any action,
      proceeding or investigation brought by the SEC against or involving the Company
      or in connection with or as a result of the consummation of the transactions
      contemplated by the Transaction Documents (other than as a result of a breach
      of
      the Investor’s representations and warranties set forth in this Agreement), or
      if Investor is impleaded in any such action, proceeding or investigation by
      any
      person, then in any such case, the Company will reimburse Investor for its
      reasonable legal and other expenses (including the cost of any investigation
      and
      preparation) incurred in connection therewith, as such expenses are incurred.
      In
      addition, other than with respect to any matter in which Investor is a named
      party, the Company will pay to Investor the charges, as reasonably determined
      by
      Investor, for the time of any officers or employees of Investor devoted to
      appearing and preparing to appear as witnesses, assisting in preparation for
      hearings, trials or pretrial matters, or otherwise with respect to inquiries,
      hearing, trials, and other proceedings relating to the subject matter of this
      Agreement. The reimbursement obligations of the Company under this section
      shall
      be in addition to any liability which the Company may otherwise have, shall
      extend upon the same terms and conditions to any affiliates of Investor that
      are
      actually named in such action, proceeding or investigation, and partners,
      directors, agents, employees, attorneys, accountants, auditors and controlling
      persons (if any), as the case may be, of Investor and any such affiliate, and
      shall be binding upon and inure to the benefit of any successors of the Company,
      Investor and any such affiliate and any such person.

    


    (M)
      TRANSFER AGENT. Upon effectiveness of the Registration Statement, and for so
      long as the Registration Statement is effective, the Company shall deliver
      instructions to its transfer agent to issue Shares to the Investor that are
      covered for resale by the Registration Statement free of restrictive
      legends.

     

    SECTION
      6. COVER. 

     

    If
      the
      number of Shares represented by any Put Notice (s) become restricted or such
      Shares are no longer free trading for any reason, and after the applicable
      Closing Date, the Investor purchases, in an open market transaction or
      otherwise, the Company's Common Stock (the "Covering Shares") in order to make
      delivery in satisfaction of a sale of Common Stock by the Investor (the "Sold
      Shares"), which delivery such Investor anticipated to make using the Shares
      represented by the Put Notice (a "Buy-In"), the Company shall pay to the
      Investor the Buy-In Adjustment Amount (as defined below). The "Buy-In Adjustment
      Amount" is the amount equal to the excess, if any, of (A) the Investor's total
      purchase price (including brokerage commissions, if any) for the Covering Shares
      over (B) the net proceeds (after brokerage commissions, if any) received by
      the
      Investor from the sale of the Sold Shares. The Company shall pay the Buy-In
      Adjustment Amount to the Investor in immediately available funds immediately
      upon demand by the Investor. By way of illustration and not in limitation of
      the
      foregoing, if the Investor purchases Common Stock having a total purchase price
      (including brokerage commissions) of $11,000 to cover a Buy-In with respect
      to
      the Common Stock it sold for net proceeds of $10,000, the Buy-In Adjustment
      Amount which the Company will be required to pay to the Investor will be $1,000.
      


     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    SECTION
      7. CONDITIONS OF THE COMPANY'S OBLIGATION TO SELL. 

     

    The
      obligation hereunder of the Company to issue and sell the Securities to the
      Investor is further subject to the satisfaction, at or before each Closing
      Date,
      of each of the following conditions set forth below. These conditions are for
      the Company's sole benefit and may be waived by the Company at any time in
      its
      sole discretion. 

     

    (A)
      The
      Investor shall have executed each of this Agreement and the Registration Rights
      Agreement and delivered the same to the Company. 

     

    (B)
      The
      Investor shall have delivered to the Company the Purchase Price for the
      Securities being purchased by the Investor between the end of the Pricing Period
      and the Closing Date via a Put Settlement Sheet (hereto attached as Exhibit
      G)
      After receipt of confirmation of delivery of such Securities to the Investor,
      the Investor, by wire transfer of immediately available funds pursuant to the
      wire instructions provided by the Company will disburse the funds constituting
      the Purchase Amount. 

     

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

     

    SECTION
      8. FURTHER CONDITIONS OF THE INVESTOR'S OBLIGATION TO PURCHASE. 

     

    The
      obligation of the Investor hereunder to purchase Shares is subject to the
      satisfaction, on or before each Closing Date, of each of the following
      conditions set forth below. 

     

    (A)
      The
      Company shall have executed each of the Transaction Documents and delivered
      the
      same to the Investor.

     

    (B)
      The
      Common Stock shall be authorized for quotation on the Principal Market and
      trading in the Common Stock shall not have been suspended by the Principal
      Market or the SEC, at any time beginning on the date hereof and through and
      including the respective Closing Date (excluding suspensions of not more than
      one (1) Trading Day resulting from business announcements by the Company,
      provided that such suspensions occur prior to the Company's delivery of the
      Put
      Notice related to such Closing). 

     

    (C)
      The
      representations and warranties of the Company shall be true and correct as
      of
      the date when made and as of the applicable Closing Date as though made at
      that
      time (except for (I) representations and warranties that speak as of a specific
      date and (II) with respect to the representations made in Sections 4(g), (h)
      and
      (j) and the third sentence of Section 4(k) hereof, events which occur on or
      after the date of this Agreement and are disclosed in SEC filings made by the
      Company at least ten (10) Trading Days prior to the applicable Put Notice Date)
      and the Company shall have performed, satisfied and complied with the covenants,
      agreements and conditions required by the Transaction Documents to be performed,
      satisfied or complied with by the Company on or before such Closing Date. The
      Investor may request an update as of such Closing Date regarding the
      representation contained in Section 4(c) above. 

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (D)
      The
      Company shall have executed and delivered to the Investor the certificates
      representing, or have executed electronic book-entry transfer of, the Securities
      (in such denominations as such Investor shall request) being purchased by the
      Investor at such Closing. 

     

    (E)
      The
      Board of Directors of the Company shall have adopted resolutions consistent
      with
      Section 4(b)(ii) above (the "Resolutions") and such Resolutions shall not have
      been amended or rescinded prior to such Closing Date. 

     

    (F)
      Reserved 

     

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

     

    (H)
      The
      Registration Statement shall be effective on each Closing Date and no stop
      order
      suspending the effectiveness of the Registration statement shall be in effect
      or
      to the Company's knowledge shall be pending or threatened. Furthermore, on
      each
      Closing Date (I) neither the Company nor Investor shall have received notice
      that the SEC has issued or intends to issue a stop order with respect to such
      Registration Statement or that the SEC otherwise has suspended or withdrawn
      the
      effectiveness of such Registration Statement, either temporarily or permanently,
      or intends or has threatened to do so (unless the SEC's concerns have been
      addressed and Investor is reasonably satisfied that the SEC no longer is
      considering or intends to take such action), and (II) no other suspension of
      the
      use or withdrawal of the effectiveness of such Registration Statement or related
      prospectus shall exist. 

     

    (I)
      At
      the time of each Closing, the Registration Statement (including information
      or
      documents incorporated by reference therein) and any amendments or supplements
      thereto shall not contain any untrue statement of a material fact or omit to
      state any material fact required to be stated therein or necessary to make
      the
      statements therein not misleading or which would require public disclosure
      or an
      update supplement to the prospectus. 

    


    (J)
      If
      applicable, the shareholders of the Company shall have approved the issuance
      of
      any Shares in excess of the Maximum Common Stock Issuance in accordance with
      Section 2(i) or the Company shall have obtained appropriate approval pursuant
      to
      the requirements of Nevada law and the Company’s Articles of Incorporation and
      By-laws.

    


    (K)
      The
      conditions to such Closing set forth in Section 2(f) shall have been satisfied
      on or before such Closing Date.

    


    (L)
      The
      Company shall have certified to the Investor the number of Shares of Common
      Stock outstanding when a Put Notice is given to the Investor.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    SECTION
      9. TERMINATION. This Agreement shall terminate upon any of the following
      events:

     

    (I)
      when
      the Investor has purchased an aggregate of Ten Million dollars ($10,000,000)
      in
      the Common Stock of the Company pursuant to this Agreement; or,

     

    (II)
      on
      the date which is thirty-six (36) months after the Effective Date; 

     

    SECTION
      10. SUSPENSION

    


    This
      Agreement shall be suspended upon any of the following events, and shall remain
      suspended until such event is rectified:

    


    (I)
      the
      trading of the Common Stock is suspended by the SEC, the Principal Market or
      the
      NASD for a period of two (2) consecutive Trading Days during the Open Period;
      or,

    


    (II)
      The
      Common Stock ceases to be registered under the 1934 Act or listed or traded
      on
      the Principal Market. Upon the occurrence of one of the above-described events,
      the Company shall send written notice of such event to the
      Investor.

     

    SECTION
      11. INDEMNIFICATION. 

     

    In
      consideration of the parties mutual obligations set forth In the Transaction
      Documents, each of the parties (in such capacity, an "Indemnitor") shall defend,
      protect, indemnify and hold harmless the other and all of the other party's
      shareholders, officers, directors, employees, counsel, and direct or indirect
      investors and any of the foregoing person's agents or other representatives
      (including, without limitation, those retained in connection with the
      transactions contemplated by this Agreement) (collectively, the "Indemnitees")
      from and against any and all actions, causes of action, suits, claims, losses,
      costs, penalties, fees, liabilities and damages, and reasonable expenses in
      connection therewith (irrespective of whether any such Indemnitee is a party
      to
      the action for which indemnification hereunder is sought), and including
      reasonable attorneys' fees and disbursements (the "Indemnified Liabilities"),
      incurred by any Indemnitee as a result of, or arising out of, or relating to
      (I)
      any misrepresentation or breach of any representation or warranty made by the
      Indemnitor or any other certificate, instrument or document contemplated hereby
      or thereby; (II) any breach of any covenant, agreement or obligation of the
      Indemnitor contained in the Transaction Documents or any other certificate,
      instrument or document contemplated hereby or thereby; or (III) any cause of
      action, suit or claim brought or made against such Indemnitee by a third party
      and arising out of or resulting from the execution, delivery, performance or
      enforcement of the Transaction Documents or any other certificate, instrument
      or
      document contemplated hereby or thereby, except insofar as any such
      misrepresentation, breach or any untrue statement, alleged untrue statement,
      omission or alleged omission is made in reliance upon and in conformity with
      information furnished to Indemnitor which is specifically intended for use
      in
      the preparation of any such Registration Statement, preliminary prospectus,
      prospectus or amendments to the prospectus. To the extent that the foregoing
      undertaking by the Indemnitor may be unenforceable for any reason, the
      Indemnitor shall make the maximum contribution to the payment and satisfaction
      of each of the Indemnified Liabilities which is permissible under applicable
      law. The indemnity provisions contained herein shall be in addition to any
      cause
      of action or similar rights Indemnitor may have, and any liabilities the
      Indemnitor or the Indemnitees may be subject to. 

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    SECTION
      12. GOVERNING LAW; MISCELLANEOUS. 

     

    (A)
      GOVERNING LAW. This Agreement shall be governed by and interpreted in accordance
      with the laws of the Commonwealth of Massachusetts without regard to the
      principles of conflict of laws. Each party hereby irrevocably submits to the
      exclusive jurisdiction of the state and federal courts sitting in the City
      of
      Boston, County of Suffolk, for the adjudication of any dispute hereunder or
      in
      connection herewith or with any transaction contemplated hereby or discussed
      herein, and hereby irrevocably waives, and agrees not to assert in any suit,
      action or proceeding, any claim that it is not personally subject to the
      jurisdiction of any such court, that such suit, action or proceeding is brought
      in an inconvenient forum or that the venue of such suit, action or proceeding
      is
      improper. Each party hereby irrevocably waives personal service of process
      and
      consents to process being served in any such suit, action or proceeding by
      mailing a copy thereof to such party at the address for such notices to it
      under
      this Agreement and agrees that such service shall constitute good and sufficient
      service of process and notice thereof. Nothing contained herein shall be deemed
      to limit in any way any right to serve process in any manner permitted by law.
      If any provision of this Agreement shall be invalid or unenforceable in any
      jurisdiction, such invalidity or unenforceability shall not affect the validity
      or enforceability of the remainder of this Agreement in that jurisdiction or
      the
      validity or enforceability of any provision of this Agreement in any other
      jurisdiction. 

     

    (B)
      LEGAL
      FEES; AND MISCELLANEOUS FEES. Except as otherwise set forth in the Transaction
      Documents, each party shall pay the fees and expenses of its advisers, counsel,
      the 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. Any attorneys' fees and expenses incurred by
      either the Company or by the Investor in connection with the preparation,
      negotiation, execution and delivery of any amendments to this Agreement or
      relating to the enforcement of the rights of any party, after the occurrence
      of
      any breach of the terms of this Agreement by another party or any default by
      another party in respect of the transactions contemplated hereunder, shall
      be
      paid on demand by the party which breached the Agreement and/or defaulted,
      as
      the case may be. The Company shall pay all stamp and other taxes and duties
      levied in connection with the issuance of any Securities. 

     

    (C)
      COUNTERPARTS. This Agreement may be executed in two or more identical
      counterparts, all of which shall be considered one and the same agreement and
      shall become effective when counterparts have been signed by each party and
      delivered to the other party; provided that a facsimile signature shall be
      considered due execution and shall be binding upon the signatory thereto with
      the same force and effect as if the signature were an original, not a facsimile
      signature. 

     

    (D)
      HEADINGS; SINGULAR/PLURAL. The headings of this Agreement are for convenience
      of
      reference and shall not form part of, or affect the interpretation of, this
      Agreement. Whenever required by the context of this Agreement, the singular
      shall include the plural and masculine shall include the feminine. 

     

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

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (F)
      ENTIRE AGREEMENT; AMENDMENTS. This Agreement supersedes all other prior oral
      or
      written agreements between the Investor, the Company, their affiliates and
      persons acting on their behalf with respect to the matters discussed herein,
      and
      this Agreement and the instruments referenced herein (including the other
      Transaction Documents) contain the entire understanding of the parties with
      respect to the matters covered herein and therein and, except as specifically
      set forth herein or therein, neither the Company nor the Investor makes any
      representation, warranty, covenant or undertaking with respect to such matters.
      No provision of this Agreement may be amended other than by an instrument in
      writing signed by the Company and the Investor, and no provision hereof may
      be
      waived other than by an instrument in writing signed by the party against whom
      enforcement is sought. 

     

    (G)
      NOTICES. Any notices or other communications required or permitted to be given
      under the terms of this Agreement must be in writing and will be deemed to
      have
      been delivered (I) upon receipt, when delivered personally; (II) upon receipt,
      when sent by facsimile (provided confirmation of transmission is mechanically
      or
      electronically generated and kept on file by the sending party); or (III) one
      (1) day after deposit with a nationally recognized overnight delivery service,
      in each case properly addressed to the party to receive the same. The addresses
      and facsimile numbers for such communications shall be: 

     

    


    If
      to the Company:

    


    Nexia
      Holdings, Inc.

    59
      West
      100 South

    Salt
      Lake
      City, UT 84101

    Telephone:
      801-575-8073

    


    


    If
      to the Investor:

    


    Dutchess
      Private Equities Fund, LP, 

    312
      Stuart Street

    Boston,
      MA 02116 

    Telephone:
      617-960-3582 

    Facsimile:
      617-249-0947


    


     

    Each
      party shall provide five (5) days' prior written notice to the other party
      of
      any change in address or facsimile number. 

     

    (H)
      NO
      ASSIGNMENT. This Agreement may not be assigned. 

     

    (I)
      NO
      THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the
      parties hereto and is not for the benefit of, nor may any provision hereof
      be
      enforced by, any other person. 

     

    (J)
      SURVIVAL. The representations and warranties of the Company and the Investor
      contained in Sections 2 and 3, the agreements and covenants set forth in
      Sections 4 and 5, and the indemnification provisions set forth in Section 10,
      shall survive each of the Closings and the termination of this Agreement.


     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (K)
      PUBLICITY. The Company and Investor shall consult with each other in issuing
      any
      press releases or otherwise making public statements with respect to the
      transactions contemplated hereby and no party shall issue any such press release
      or otherwise make any such public statement without the prior consent of the
      other parties, which consent shall not be unreasonably withheld or delayed,
      except that no prior consent shall be required if such disclosure is required
      by
      law, in which such case the disclosing party shall provide the other parties
      with prior notice of such public statement. Notwithstanding the foregoing,
      the
      Company shall not publicly disclose the name of Investor without the prior
      consent of such Investor, except to the extent required by law. Investor
      acknowledges that this Agreement and all or part of the Transaction Documents
      may be deemed to be "material contracts" as that term is defined by Item
      601(b)(10) of Regulation S-B, and that the Company may therefore be required
      to
      file such documents as exhibits to reports or registration statements filed
      under the 1933 Act or the 1934 Act. Investor further agrees that the status
      of
      such documents and materials as material contracts shall be determined solely
      by
      the Company, in consultation with its counsel. 

     

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

     

    (M)
      PLACEMENT AGENT. The Company agrees to pay ______________, a registered broker
      dealer ____ percent (__%) of the Put Amount on each draw toward the fee. The
      Investor shall have no obligation with respect to any fees or with respect
      to
      any claims made by or on behalf of other persons or entities for fees of a
      type
      contemplated in this Section that may be due in connection with the transactions
      contemplated by the Transaction Documents. The Company shall indemnify and
      hold
      harmless the Investor, their employees, officers, directors, agents, and
      partners, and their respective affiliates, from and against all claims, losses,
      damages, costs (including the costs of preparation and attorney's fees) and
      expenses incurred in respect of any such claimed or existing fees, as such
      fees
      and expenses are incurred. 

     

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

     

    (O)
      REMEDIES. The Investor and each holder of the Shares shall have all rights
      and
      remedies set forth in this Agreement and the Registration Rights Agreement
      and
      all rights and remedies which such holders have been granted at any time under
      any other agreement or contract and all of the rights which such holders have
      under any law. Any person having any rights under any provision of this
      Agreement shall be entitled to enforce such rights specifically (without posting
      a bond or other security), to recover damages by reason of any default or breach
      of any provision of this Agreement, including the recovery of reasonable
      attorneys fees and costs, and to exercise all other rights granted by law.
      

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    (P)
      PAYMENT SET ASIDE. To the extent that the Company makes a payment or payments
      to
      the Investor hereunder or under the Registration Rights Agreement or the
      Investor enforces or exercises its rights hereunder or thereunder, and such
      payment or payments or the proceeds of such enforcement or exercise or any
      part
      thereof are subsequently invalidated, declared to be fraudulent or preferential,
      set aside, recovered from, disgorged by or are required to be refunded, repaid
      or otherwise restored to the Company, a trustee, receiver or any other person
      under any law (including, without limitation, any bankruptcy law, 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.


     

    (Q)
      PRICING OF COMMON STOCK. For purposes of this Agreement, the bid price of the
      Common Stock in this Agreement shall be as reported on Bloomberg. 

     

    SECTION
      13. Non-Disclosure of Non-Public Information. 

     

    (a)
      The
      Company shall not disclose non-public information to the Investor, its advisors,
      or its representatives, unless prior to disclosure of such information the
      Company identifies such information, in writing, as being non-public information
      and provides the Investor, such advisors and representatives with the
      opportunity to accept or refuse to accept such non-public information for
      review. The Company may, as a condition to disclosing any non-public information
      hereunder, require the Investor's advisors and representatives to enter into
      a
      confidentiality agreement in form reasonably satisfactory to the Company and
      the
      Investor. 

     

    (b)
      Nothing herein shall require the Company to disclose non-public information
      to
      the Investor or its advisors or representatives, and the Company represents
      that
      it does not disseminate non-public information to any investors who purchase
      stock in the Company in a public offering, to money managers or to securities
      analysts, provided, however, that notwithstanding anything herein to the
      contrary, the Company will, as hereinabove provided, immediately notify the
      advisors and representatives of the Investor and, if any, underwriters, of
      any
      event or the existence of any circumstance (without any obligation to disclose
      the specific event or circumstance) of which it becomes aware, constituting
      non-public information (whether or not requested of the Company specifically
      or
      generally during the course of due diligence by such persons or entities),
      which, if not disclosed in the prospectus included in the Registration Statement
      would cause such prospectus to include a material misstatement or to omit a
      material fact required to be stated therein in order to make the statements,
      therein, in light of the circumstances in which they were made, not misleading.
      Nothing contained in this Section 13 shall be construed to mean that such
      persons or entities other than the Investor (without the written consent of
      the
      Investor prior to disclosure of such information) may not obtain non-public
      information in the course of conducting due diligence in accordance with the
      terms of this Agreement and nothing herein shall prevent any such persons or
      entities from notifying the Company of their opinion that based on such due
      diligence by such persons or entities, that the Registration Statement contains
      an untrue statement of material fact or omits a material fact required to be
      stated in the Registration Statement or necessary to make the statements
      contained therein, in light of the circumstances in which they were made, not
      misleading. 

     

    *
      * *


    


    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    SIGNATURE
      PAGE OF INVESTMENT AGREEMENT 

     

    Your
      signature on this Signature Page evidences your agreement to be bound by the
      terms and conditions of the Investment Agreement and the Registration Rights
      Agreement as of the date first written above. 

     

     

    The
      undersigned signatory hereby certifies that he has read and understands the
      Investment Agreement, and the representations made by the undersigned in this
      Investment Agreement are true and accurate, and agrees to be bound by its terms.
      

     

    DUTCHESS
      PRIVATE EQUITIES FUND, L.P. 

    BY
      ITS GENERAL PARTNER, 

    DUTCHESS
      CAPITAL MANAGEMENT, LLC 

     

    By:
      /s/ Douglas H. Leighton

     

    Douglas
      H. Leighton, Managing Member 

     

     

    NEXHIA
      HOLDINGS, INC.

     

    By
/s/
      Richard Surber

     

    Richard
      Surber, President and Director 

     

     

     

    
      
        
        

      

      
        26