Unassociated Document


    
      
        
          SECURITIES
            PURCHASE AGREEMENT


           

          SECURITIES
            PURCHASE AGREEMENT (this “Agreement”),
            dated
            as of March 7, 2007, by and among Grant Life Sciences, Inc., a Nevada
            corporation, with headquarters located at 3550 Wilshire Blvd., Suite
            1700, Los
            Angeles, CA 90010 (the “Company”),
            and
            each of the purchasers set forth on the signature pages hereto (the
“Buyers”).

           

          WHEREAS:
            

           

          A.  The
            Company and the Buyers are executing and delivering this Agreement in
            reliance
            upon the exemption from securities registration afforded by the rules
            and
            regulations as promulgated by the United States Securities and Exchange
            Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933
            Act”);

           

          B.  Buyers
            desire to purchase and the Company desires to issue and sell, upon the
            terms and
            conditions set forth in this Agreement (i) 10%
            secured convertible notes of the Company, in the form attached hereto
            as
Exhibit
            “A”,
            in the
            aggregate principal amount of Two Hundred Thousand Dollars ($200,000)
            (together with any note(s) issued in replacement thereof or as a dividend
            thereon or otherwise with respect thereto in accordance with the terms
            thereof,
            the “Notes”),
            convertible into shares of common stock, par value $.001 per share, of
            the
            Company (the “Common
            Stock”),
            upon
            the terms and subject to the limitations and conditions set forth in
            such Notes
            and (ii) warrants,
            in the form attached hereto as Exhibit
            “B”,
            to
            purchase 1,000,000 shares of Common Stock (the “Warrants”).

           

          C.  Each
            Buyer wishes to purchase, upon the terms and conditions stated in this
            Agreement, such principal amount of Notes and number of Warrants as is
            set forth
            immediately below its name on the signature pages hereto; and

           

          D.  Contemporaneous
            with the execution and delivery of this Agreement, the parties hereto
            are
            executing and delivering a Registration Rights Agreement, in the form
            attached
            hereto as Exhibit
            “C”
            (the
“Registration
            Rights Agreement”),
            pursuant to which the Company has agreed to provide certain registration
            rights
            under the 1933 Act and the rules and regulations promulgated thereunder,
            and
            applicable state securities laws.

           

          NOW
            THEREFORE,
            the
            Company and each of the Buyers severally (and not jointly) hereby agree
            as
            follows:

           

          1.  PURCHASE
            AND SALE OF NOTES AND WARRANTS.

           

          a.  Purchase
            of Notes and Warrants.
            On the
            Closing Date (as defined below), the Company shall issue and sell to
            each Buyer
            and each Buyer severally agrees to purchase from the Company such principal
            amount of Notes and number of Warrants as is set forth immediately below
            such
            Buyer’s name on the signature pages hereto.

           

          
            
              
              

            

            
              
              

              
                

              

            

             

          

           

          b.  Form
            of Payment.
            On the
            Closing Date (as defined below), (i) each
            Buyer shall pay the purchase price for the Notes and the Warrants to
            be issued
            and sold to it at the Closing (as defined below) (the “Purchase
            Price”)
            by
            wire transfer of immediately available funds to the Company, in accordance
            with
            the Company’s written wiring instructions, against delivery of the Notes in the
            principal amount equal to the Purchase Price and the number of Warrants
            as is
            set forth immediately below such Buyer’s name on the signature pages hereto, and
(ii) the
            Company shall deliver such Notes and Warrants duly executed on behalf
            of the
            Company, to such Buyer, against delivery of such Purchase Price. 

           

          c.  Closing
            Date.
            Subject
            to the satisfaction (or written waiver) of the conditions thereto set
            forth in
            Section 6 and Section 7 below, the date and time of the issuance and
            sale of the
            Notes and the Warrants pursuant to this Agreement (the “Closing
            Date”)
            shall
            be 12:00 noon, Eastern Standard Time on March 7, 2007, or such other
            mutually agreed upon time. The closing of the transactions contemplated
            by this
            Agreement (the “Closing”)
            shall
            occur on the Closing Date at such location as may be agreed to by the
            parties.

           

          2.  BUYERS’
            REPRESENTATIONS AND WARRANTIES.
            Each
            Buyer severally (and not jointly) represents and warrants to the Company
            solely
            as to such Buyer that:

           

          a.  Investment
            Purpose.
            As of
            the date hereof, the Buyer is purchasing the Notes and the shares of
            Common
            Stock issuable upon conversion of or otherwise pursuant to the Notes
            (including,
            without limitation, such additional shares of Common Stock, if any, as
            are
            issuable (i) on
            account of interest on the Notes, (ii) as
            a result of the events described in Sections 1.3 and 1.4(g) of the Notes
            and
            Section 2(c) of the Registration Rights Agreement or (iii) in
            payment of the Standard Liquidated Damages Amount (as defined in Section
            2(f)
            below) pursuant to this Agreement, such shares of Common Stock being
            collectively referred to herein as the “Conversion
            Shares”)
            and
            the Warrants and the shares of Common Stock issuable upon exercise thereof
            (the
“Warrant
            Shares”
and,
            collectively with the Notes, Warrants and Conversion Shares, the “Securities”)
            for
            its own account and not with a present view towards the public sale or
            distribution thereof, except pursuant to sales registered or exempted
            from
            registration under the 1933 Act; provided,
            however,
            that by
            making the representations herein, the Buyer does not agree to hold any
            of the
            Securities for any minimum or other specific term and reserves the right
            to
            dispose of the Securities at any time in accordance with or pursuant
            to a
            registration statement or an exemption under the 1933 Act.

           

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

           

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

           

          
            
              
              

            

            
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          d.  Information.
            The
            Buyer and its advisors, if any, have been, and for so long as the Notes
            and
            Warrants remain outstanding will continue to be, furnished with all materials
            relating to the business, finances and operations of the Company and
            materials
            relating to the offer and sale of the Securities which have been requested
            by
            the Buyer or its advisors. The Buyer and its advisors, if any, have been,
            and
            for so long as the Notes and Warrants remain outstanding will continue
            to be,
            afforded the opportunity to ask questions of the Company. Notwithstanding
            the
            foregoing, the Company has not disclosed to the Buyer any material nonpublic
            information and will not disclose such information unless such information
            is
            disclosed to the public prior to or promptly following such disclosure
            to the
            Buyer. Neither such inquiries nor any other due diligence investigation
            conducted by Buyer or any of its advisors or representatives shall modify,
            amend
            or affect Buyer’s right to rely on the Company’s representations and warranties
            contained in Section 3 below. The Buyer understands that its investment
            in the
            Securities involves a significant degree of risk.

           

          e.  Governmental
            Review.
            The
            Buyer understands that no United States federal or state agency or any
            other
            government or governmental agency has passed upon or made any recommendation
            or
            endorsement of the Securities.

           

          f.  Transfer
            or Re-sale.
            The
            Buyer understands that (i) except
            as provided in the Registration Rights Agreement, the sale or re-sale
            of the
            Securities has not been and is not being registered under the 1933 Act
            or any
            applicable state securities laws, and the Securities may not be transferred
            unless (a) the
            Securities are sold pursuant to an effective registration statement under
            the
            1933 Act, (b) the
            Buyer shall have delivered to the Company an opinion of counsel reasonably
            acceptable to the Company that shall be in form, substance and scope
            customary
            for opinions of counsel in comparable transactions to the effect that
            the
            Securities to be sold or transferred may be sold or transferred pursuant
            to an
            exemption from such registration, which opinion shall be accepted by
            the
            Company, (c) the
            Securities are sold or transferred to an “affiliate” (as defined in Rule 144
            promulgated under the 1933 Act (or a successor rule) (“Rule
            144”))
            of
            the Buyer who agrees to sell or otherwise transfer the Securities only
            in
            accordance with this Section 2(f) and who is an Accredited Investor,
            (d) the
            Securities are sold pursuant to Rule 144, or (e) the
            Securities are sold pursuant to Regulation S under the 1933 Act (or a
            successor
            rule) (“Regulation
            S”),
            and
            the Buyer shall have delivered to the Company an opinion of counsel that
            shall
            be in form, substance and scope customary for opinions of counsel in
            corporate
            transactions, which opinion shall be accepted by the Company; (ii) any
            sale of
            such Securities made in reliance on Rule 144 may be made only in accordance
            with
            the terms of said Rule and further, if said Rule is not applicable, any
            re-sale
            of such Securities under circumstances in which the seller (or the person
            through whom the sale is made) may be deemed to be an underwriter (as
            that term
            is defined in the 1933 Act) may require compliance with some other exemption
            under the 1933 Act or the rules and regulations of the SEC thereunder;
            and (iii)
            neither the Company nor any other person is under any obligation to register
            such Securities under the 1933 Act or any state securities laws or to
            comply
            with the terms and conditions of any exemption thereunder (in each case,
            other
            than pursuant to the Registration Rights Agreement). Notwithstanding
            the
            foregoing or anything else contained herein to the contrary, the Securities
            may
            be pledged as collateral in connection with a bona fide
            margin
            account or other lending arrangement. In the event that the Company does
            not
            accept the opinion of counsel provided by the Buyer with respect to the
            transfer
            of Securities pursuant to an exemption from registration, such as Rule
            144 or
            Regulation S, within three (3) business days of delivery of the opinion
            to the
            Company, the Company shall pay to the Buyer liquidated damages of three
            percent
            (3%) of the outstanding amount of the Notes per month plus accrued and
            unpaid
            interest on the Notes, prorated for partial months, in cash or shares
            at the
            option of the Company (“Standard
            Liquidated Damages Amount”).
            If
            the Company elects to be pay the Standard Liquidated Damages Amount in
            shares of
            Common Stock, such shares shall be issued at the Conversion Price at
            the time of
            payment.

           

          
            
              
              

            

            
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          g.  Legends.
            The
            Buyer understands that the Notes and the Warrants and, until such time
            as the
            Conversion Shares and Warrant Shares have been registered under the 1933
            Act as
            contemplated by the Registration Rights Agreement or otherwise may be
            sold
            pursuant to Rule 144 or Regulation S without any restriction as to the
            number of
            securities as of a particular date that can then be immediately sold,
            the
            Conversion Shares and Warrant Shares may bear a restrictive legend in
            substantially the following form (and a stop-transfer order may be placed
            against transfer of the certificates for such Securities):

           

          “The
            securities represented by this certificate have not been registered under
            the
            Securities Act of 1933, as amended. The securities may not be sold, transferred
            or assigned in the absence of an effective registration statement for
            the
            securities under said Act, or an opinion of counsel, in form, substance
            and
            scope customary for opinions of counsel in comparable transactions, that
            registration is not required under said Act or unless sold pursuant to
            Rule 144
            or Regulation S under said Act.”

           

          The
            legend set forth above shall be removed and the Company shall issue a
            certificate without such legend to the holder of any Security upon which
            it is
            stamped, if, unless otherwise required by applicable state securities
            laws, (a)
            such Security is registered for sale under an effective registration
            statement
            filed under the 1933 Act or otherwise may be sold pursuant to Rule 144
            or
            Regulation S without any restriction as to the number of securities as
            of a
            particular date that can then be immediately sold, or (b) such holder
            provides
            the Company with an opinion of counsel, in form, substance and scope
            customary
            for opinions of counsel in comparable transactions which opinion shall
            be
            reasonably acceptable to the Company’s counsel, to the effect that a public sale
            or transfer of such Security may be made without registration under the
            1933
            Act, which opinion shall be accepted by the Company so that the sale
            or transfer
            is effected or (c) such holder provides the Company with reasonable assurances
            that such Security can be sold pursuant to Rule 144 or Regulation S.
            The Buyer
            agrees to sell all Securities, including those represented by a certificate(s)
            from which the legend has been removed, in compliance with applicable
            prospectus
            delivery requirements, if any.

           

          h.  Authorization;
            Enforcement.
            This
            Agreement and the Registration Rights Agreement have been duly and validly
            authorized. This Agreement has been duly executed and delivered on behalf
            of the
            Buyer, and this Agreement constitutes, and upon execution and delivery
            by the
            Buyer of the Registration Rights Agreement, such agreement will constitute,
            valid and binding agreements of the Buyer enforceable in accordance with
            their
            terms.

           

          i.  Residency.
            The
            Buyer is a resident of the jurisdiction set forth immediately below such
            Buyer’s
            name on the signature pages hereto. 

           

          
            
              
              

            

            
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          3.  REPRESENTATIONS
            AND WARRANTIES OF THE COMPANY.
            The
            Company represents and warrants to each Buyer that:

           

          a.  Organization
            and Qualification.
            The
            Company and each of its Subsidiaries (as defined below), if any, is a
            corporation duly organized, validly existing and in good standing under
            the laws
            of the jurisdiction in which it is incorporated, with full power and
            authority
            (corporate and other) to own, lease, use and operate its properties and
            to carry
            on its business as and where now owned, leased, used, operated and conducted.
            Schedule
            3(a)
            sets
            forth a list of all of the Subsidiaries of the Company and the jurisdiction
            in
            which each is incorporated. The Company and each of its Subsidiaries
            is duly
            qualified as a foreign corporation to do business and is in good standing
            in
            every jurisdiction in which its ownership or use of property or the nature
            of
            the business conducted by it makes such qualification necessary except
            where the
            failure to be so qualified or in good standing would not have a Material
            Adverse
            Effect. “Material
            Adverse Effect”
means
            any material adverse effect on the business, operations, assets, financial
            condition or prospects of the Company or its Subsidiaries, if any, taken
            as a
            whole, or on the transactions contemplated hereby or by the agreements
            or
            instruments to be entered into in connection herewith. “Subsidiaries”
means
            any corporation or other organization, whether incorporated or unincorporated,
            in which the Company owns, directly or indirectly, any equity or other
            ownership
            interest.

           

          b.  Authorization;
            Enforcement.
            (i) The
            Company has all requisite corporate power and authority to enter into
            and
            perform this Agreement, the Registration Rights Agreement, the Notes
            and the
            Warrants and to consummate the transactions contemplated hereby and thereby
            and
            to issue the Securities, in accordance with the terms hereof and thereof,
            (ii)
            the execution and delivery of this Agreement, the Registration Rights
            Agreement,
            the Notes and the Warrants by the Company and the consummation by it
            of the
            transactions contemplated hereby and thereby (including without limitation,
            the
            issuance of the Notes and the Warrants and the issuance and reservation
            for
            issuance of the Conversion Shares and Warrant Shares issuable upon conversion
            or
            exercise thereof) have been duly authorized by the Company’s Board of Directors
            and no further consent or authorization of the Company, its Board of
            Directors,
            or its shareholders is required, (iii) this Agreement has been duly executed
            and
            delivered by the Company by its authorized representative, and such authorized
            representative is the true and official representative with authority
            to sign
            this Agreement and the other documents executed in connection herewith
            and bind
            the Company accordingly, and (iv) this Agreement constitutes, and upon
            execution
            and delivery by the Company of the Registration Rights Agreement, the
            Notes and
            the Warrants, each of such instruments will constitute, a legal, valid
            and
            binding obligation of the Company enforceable against the Company in
            accordance
            with its terms.

           

          c.  Capitalization.
            As of
            the date hereof, the authorized capital stock of the Company consists
            of (i)
            750,000,000 shares of Common Stock, of which 148,515,423 shares are issued
            and outstanding, 8,645,867 shares are reserved for issuance pursuant
            to the
            Company’s stock option plans, 25,288,891 shares are reserved for issuance
            pursuant to securities (other than the Notes and the Warrants) exercisable
            for,
            or convertible into or exchangeable for shares of Common Stock
            and 5,901,961 shares are reserved for issuance upon conversion of the Notes
            and exercise of the Warrants (subject to adjustment pursuant to the Company’s
            covenant set forth in Section 4(h) below); and (ii) 20,000,000 shares
            of
            preferred stock, of which 0 shares are issued and outstanding. All of
            such
            outstanding shares of capital stock are, or upon issuance will be, duly
            authorized, validly issued, fully paid and nonassessable. No shares of
            capital
            stock of the Company are subject to preemptive rights or any other similar
            rights of the shareholders of the Company or any liens or encumbrances
            imposed
            through the actions or failure to act of the Company. Except as disclosed
            in
Schedule
            3(c),
            as of
            the effective date of this Agreement, (i) there are no outstanding options,
            warrants, scrip, rights to subscribe for, puts, calls, rights of first
            refusal,
            agreements, understandings, claims or other commitments or rights of
            any
            character whatsoever relating to, or securities or rights convertible
            into or
            exchangeable for any shares of capital stock of the Company or any of
            its
            Subsidiaries, 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, (ii) there are no agreements or arrangements
            under
            which the Company or any of its Subsidiaries is obligated to register
            the sale
            of any of its or their securities under the 1933 Act (except the Registration
            Rights Agreement) and (iii) there are no anti-dilution or price adjustment
            provisions contained in any security issued by the Company (or in any
            agreement
            providing rights to security holders) that will be triggered by the issuance
            of
            the Notes, the Warrants, the Conversion Shares or Warrant Shares. The
            Company
            has furnished to the Buyer true and correct copies of the Company’s Articles of
            Incorporation as in effect on the date hereof (“Articles
            of Incorporation”),
            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 of
            the Company and the material rights of the holders thereof in respect
            thereto.
            The Company shall provide the Buyer with a written update of this representation
            signed by the Company’s Chief Executive or Chief Financial Officer on behalf of
            the Company as of the Closing Date.

           

          
            
              
              

            

            
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          d.  Issuance
            of Shares.
            The
            Conversion Shares and Warrant Shares are duly authorized and reserved
            for
            issuance and, upon conversion of the Notes and exercise of the Warrants
            in
            accordance with their respective terms, will be validly issued, fully
            paid and
            non-assessable, and free from all taxes, liens, claims and encumbrances
            with
            respect to the issue thereof and shall not be subject to preemptive rights
            or
            other similar rights of shareholders of the Company and will not impose
            personal
            liability upon the holder thereof.

           

          e.  Acknowledgment
            of Dilution.
            The
            Company understands and acknowledges the potentially dilutive effect
            to the
            Common Stock upon the issuance of the Conversion Shares and Warrant Shares
            upon
            conversion of the Note or exercise of the Warrants. The Company further
            acknowledges that its obligation to issue Conversion Shares and Warrant
            Shares
            upon conversion of the Notes or exercise of the Warrants in accordance
            with this
            Agreement, the Notes and the Warrants is absolute and unconditional regardless
            of the dilutive effect that such issuance may have on the ownership interests
            of
            other shareholders of the Company.

           

          f.  No
            Conflicts.
            The
            execution, delivery and performance of this Agreement, the Registration
            Rights
            Agreement, the Notes and the Warrants by the Company and the consummation
            by the
            Company of the transactions contemplated hereby and thereby (including,
            without
            limitation, the issuance and reservation for issuance of the Conversion
            Shares
            and Warrant Shares) will not (i) conflict with or result in a violation
            of any
            provision of the Articles of Incorporation or By-laws or (ii) violate
            or
            conflict with, or result in a breach of any provision of, or constitute
            a
            default (or an event which with notice or lapse of time or both could
            become a
            default) under, or give to others any rights of termination, amendment,
            acceleration or cancellation of, any agreement, indenture, patent, patent
            license or instrument to which the Company or any of its Subsidiaries
            is a
            party, or (iii) result in a violation of any law, rule, regulation, order,
            judgment or decree (including federal and state securities laws and regulations
            and regulations of any self-regulatory organizations to which the Company
            or its
            securities are subject) 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 for such conflicts, defaults, terminations,
            amendments, accelerations, cancellations and violations as would not,
            individually or in the aggregate, have a Material Adverse Effect). Neither
            the
            Company nor any of its Subsidiaries is in violation of its Articles of
            Incorporation, By-laws or other organizational documents and neither
            the Company
            nor any of its Subsidiaries is in default (and no event has occurred
            which with
            notice or lapse of time or both could put the Company or any of its Subsidiaries
            in default) under, and neither the Company nor any of its Subsidiaries
            has taken
            any action or failed to take any action that would give to others any
            rights of
            termination, amendment, acceleration or cancellation of, any agreement,
            indenture or instrument to which the Company or any of its Subsidiaries
            is a
            party or by which any property or assets of the Company or any of its
            Subsidiaries is bound or affected, except for possible defaults as would
            not,
            individually or in the aggregate, have a Material Adverse Effect. The
            businesses
            of the Company and its Subsidiaries, if any, are not being conducted,
            and shall
            not be conducted so long as a Buyer owns any of the Securities, in violation
            of
            any law, ordinance or regulation of any governmental entity. Except as
            specifically contemplated by this Agreement and as required under the
            1933 Act
            and any applicable state securities laws, the Company is not required
            to obtain
            any consent, authorization or order of, or make any filing or registration
            with,
            any court, governmental agency, regulatory agency, self regulatory organization
            or stock market or any third party in order for it to execute, deliver
            or
            perform any of its obligations under this Agreement, the Registration
            Rights
            Agreement, the Notes or the Warrants in accordance with the terms hereof
            or
            thereof or to issue and sell the Notes and Warrants in accordance with
            the terms
            hereof and to issue the Conversion Shares upon conversion of the Notes
            and the
            Warrant Shares upon exercise of the Warrants. Except as disclosed in
            Schedule
            3(f),
            all
            consents, authorizations, orders, filings and registrations which the
            Company is
            required to obtain pursuant to the preceding sentence have been obtained
            or
            effected on or prior to the date hereof. The Company is not in violation
            of the
            listing requirements of the Over-the-Counter Bulletin Board (the “OTCBB”)
            and
            does not reasonably anticipate that the Common Stock will be delisted
            by the
            OTCBB in the foreseeable future. The Company and its Subsidiaries are
            unaware of
            any facts or circumstances which might give rise to any of the foregoing.
            

           

          
            
              
              

            

            
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          g.  SEC
            Documents; Financial Statements.
            Except
            as disclosed in Schedule
            3(g),
            the
            Company has timely filed all reports, schedules, forms, statements and
            other
            documents required to be filed by it with the SEC pursuant to the reporting
            requirements of the Securities Exchange Act of 1934, as amended (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
            (other than
            exhibits to such documents) incorporated by reference therein, being
            hereinafter
            referred to herein as the “SEC
            Documents”).
            The
            Company has delivered to each Buyer true and complete copies of the SEC
            Documents, except for such exhibits and incorporated 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 in order to make the statements therein,
            in light of
            the circumstances under which they were made, not misleading. None of
            the
            statements made in any such SEC Documents is, or has been, required to
            be
            amended or updated under applicable law (except for such statements as
            have been
            amended or updated in subsequent filings prior the date hereof). 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
            United States generally accepted accounting principles, consistently
            applied,
            during the periods involved (except (i) as may be otherwise indicated
            in such
            financial statements or the notes thereto, or (ii) in the case of unaudited
            interim statements, to the extent they may not include footnotes or may
            be
            condensed or summary statements) and fairly present in all material respects
            the
            consolidated financial position of the Company and its consolidated Subsidiaries
            as of the dates thereof and the consolidated results of their operations
            and
            cash flows for the periods then ended (subject, in the case of unaudited
            statements, to normal year-end audit adjustments). Except as set forth
            in the
            financial statements of the Company included in the SEC Documents, the
            Company
            has no liabilities, contingent or otherwise, other than (i) liabilities
            incurred
            in the ordinary course of business subsequent to March 31, 2006 and (ii)
            obligations under contracts and commitments incurred in the ordinary
            course of
            business and not required under generally accepted accounting principles
            to be
            reflected in such financial statements, which, individually or in the
            aggregate,
            are not material to the financial condition or operating results of the
            Company.


          
            
              
              

            

            
              7

              
                

              

            

             

          

           

          h.  Absence
            of Certain Changes.
            Since
            March 31, 2006, there has been no material adverse change and no material
            adverse development in the assets, liabilities, business, properties,
            operations, financial condition, results of operations or prospects of
            the
            Company or any of its Subsidiaries.

           

          i.  Absence
            of Litigation.
            There
            is no action, suit, claim, 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 Company or any of its Subsidiaries,
            threatened against or affecting the Company or any of its Subsidiaries,
            or their
            officers or directors in their capacity as such, that could have a Material
            Adverse Effect. Schedule
            3(i)
            contains
            a complete list and summary description of any pending or, to the knowledge
            of
            the Company, threatened proceeding against or affecting the Company or
            any of
            its Subsidiaries, without regard to whether it would have a Material
            Adverse
            Effect. The Company and its Subsidiaries are unaware of any facts or
            circumstances which might give rise to any of the foregoing.

           

          j.  Patents,
            Copyrights, etc.
            The
            Company and each of its Subsidiaries owns or possesses the requisite
            licenses or
            rights to use all patents, patent applications, patent rights, inventions,
            know-how, trade secrets, trademarks, trademark applications, service
            marks,
            service names, trade names and copyrights (“Intellectual
            Property”)
            necessary to enable it to conduct its business as now operated (and,
            except as
            set forth in Schedule
            3(j)
            hereof,
            to the best of the Company’s knowledge, as presently contemplated to be operated
            in the future); there is no claim or action by any person pertaining
            to, or
            proceeding pending, or to the Company’s knowledge threatened, which challenges
            the right of the Company or of a Subsidiary with respect to any Intellectual
            Property necessary to enable it to conduct its business as now operated
            (and,
            except as set forth in Schedule
            3(j)
            hereof,
            to the best of the Company’s knowledge, as presently contemplated to be operated
            in the future); to the best of the Company’s knowledge, the Company’s or its
            Subsidiaries’ current and intended products, services and processes do not
            infringe on any Intellectual Property or other rights held by any person;
            and
            the Company is unaware of any facts or circumstances which might give
            rise to
            any of the foregoing. The Company and each of its Subsidiaries have taken
            reasonable security measures to protect the secrecy, confidentiality
            and value
            of their Intellectual Property.

           

          
            
              
              

            

            
              8

              
                

              

            

             

          

           

          k.  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.

           

          l.  Tax
            Status.
            Except
            as set forth on Schedule
            3(l),
            the
            Company and each of its Subsidiaries has made or filed all federal, state
            and
            foreign 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 provisions 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. The Company has not executed a waiver with
            respect to
            the statute of limitations relating to the assessment or collection of
            any
            foreign, federal, state or local tax. Except as set forth on Schedule
            3(l),
            none of
            the Company’s tax returns is presently being audited by any taxing
            authority.

           

          m.  Certain
            Transactions.
            Except
            as set forth on Schedule
            3(m)
            and
            except for arm’s length transactions pursuant to which the Company or any of its
            Subsidiaries makes payments in the ordinary course of business upon terms
            no
            less favorable than the Company or any of its Subsidiaries could obtain
            from
            third parties and other than the grant of stock options disclosed on
            Schedule
            3(c),
            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.

           

          n.  Disclosure.
            All
            information relating to or concerning the Company or any of its Subsidiaries
            set
            forth in this Agreement and provided to the Buyers pursuant to Section
            2(d)
            hereof and otherwise in connection with the transactions contemplated
            hereby is
            true and correct in all material respects and the Company has not omitted
            to
            state any material fact necessary in order to make the statements made
            herein or
            therein, in light of the circumstances under which they were made, not
            misleading. No event or circumstance has occurred or exists with respect
            to the
            Company or any of its Subsidiaries or its or their business, properties,
            prospects, operations or financial conditions, which, under applicable
            law, rule
            or regulation, requires public disclosure or announcement by the Company
            but
            which has not been so publicly announced or disclosed (assuming for this
            purpose
            that the Company’s reports filed under the 1934 Act are being incorporated into
            an effective registration statement filed by the Company under the 1933
            Act).

           

          
            
              
              

            

            
              9

              
                

              

            

             

          

           

          o.  Acknowledgment
            Regarding Buyers’ Purchase of Securities.
            The
            Company acknowledges and agrees that the Buyers are acting solely in
            the
            capacity of arm’s length purchasers with respect to this Agreement and the
            transactions contemplated hereby. The Company further acknowledges that
            no Buyer
            is acting as a financial advisor or fiduciary of the Company (or in any
            similar
            capacity) with respect to this Agreement and the transactions contemplated
            hereby and any statement made by any Buyer or any of their respective
            representatives or agents in connection with this Agreement and the transactions
            contemplated hereby is not advice or a recommendation and is merely incidental
            to the Buyers’ purchase of the Securities. The Company further represents to
            each Buyer that the Company’s decision to enter into this Agreement has been
            based solely on the independent evaluation of the Company and its
            representatives.

           

          p.  No
            Integrated Offering.
            Neither
            the Company, nor any of its affiliates, nor any person acting on its
            or their
            behalf, has directly or indirectly made any offers or sales in any security
            or
            solicited any offers to buy any security under circumstances that would
            require
            registration under the 1933 Act of the issuance of the Securities to
            the Buyers.
            The issuance of the Securities to the Buyers will not be integrated with
            any
            other issuance of the Company’s securities (past, current or future) for
            purposes of any shareholder approval provisions applicable to the Company
            or its
            securities.

           

          q.  No
            Brokers.
            The
            Company has taken no action which would give rise to any claim by any
            person for
            brokerage commissions, transaction fees or similar payments relating
            to this
            Agreement or the transactions contemplated hereby. 

           

          r.  Permits;
            Compliance.
            The
            Company and each of its Subsidiaries is in possession of all franchises,
            grants,
            authorizations, licenses, permits, easements, variances, exemptions,
            consents,
            certificates, approvals and orders necessary to own, lease and operate
            its
            properties and to carry on its business as it is now being conducted
            (collectively, the “Company
            Permits”),
            and
            there is no action pending or, to the knowledge of the Company, threatened
            regarding suspension or cancellation of any of the Company Permits. Neither
            the
            Company nor any of its Subsidiaries is in conflict with, or in default
            or
            violation of, any of the Company Permits, except for any such conflicts,
            defaults or violations which, individually or in the aggregate, would
            not
            reasonably be expected to have a Material Adverse Effect. Since March
            31, 2006,
            neither the Company nor any of its Subsidiaries has received any notification
            with respect to possible conflicts, defaults or violations of applicable
            laws,
            except for notices relating to possible conflicts, defaults or violations,
            which
            conflicts, defaults or violations would not have a Material Adverse
            Effect.

           

          
            
              
              

            

            
              10

              
                

              

            

             

          

           

          s.  Environmental
            Matters.

           

          (i)  Except
            as
            set forth in Schedule
            3(s),
            there
            are, to the Company’s knowledge, with respect to the Company or any of its
            Subsidiaries or any predecessor of the Company, no past or present violations
            of
            Environmental Laws (as defined below), releases of any material into
            the
            environment, actions, activities, circumstances, conditions, events,
            incidents,
            or contractual obligations which may give rise to any common law environmental
            liability or any liability under the Comprehensive Environmental Response,
            Compensation and Liability Act of 1980 or similar federal, state, local
            or
            foreign laws and neither the Company nor any of its Subsidiaries has
            received
            any notice with respect to any of the foregoing, nor is any action pending
            or,
            to the Company’s knowledge, threatened in connection with any of the foregoing.
            The term “Environmental
            Laws”
means
            all federal, state, local or foreign laws relating to pollution or protection
            of
            human health or the environment (including, without limitation, ambient
            air,
            surface water, groundwater, land surface or subsurface strata), including,
            without limitation, laws relating to emissions, discharges, releases
            or
            threatened releases of chemicals, pollutants contaminants, or toxic or
            hazardous
            substances or wastes (collectively, “Hazardous
            Materials”)
            into
            the environment, or otherwise relating to the manufacture, processing,
            distribution, use, treatment, storage, disposal, transport or handling
            of
            Hazardous Materials, as well as all authorizations, codes, decrees, demands
            or
            demand letters, injunctions, judgments, licenses, notices or notice letters,
            orders, permits, plans or regulations issued, entered, promulgated or
            approved
            thereunder.

           

          (ii)  Other
            than those that are or were stored, used or disposed of in compliance
            with
            applicable law, no Hazardous Materials are contained on or about any
            real
            property currently owned, leased or used by the Company or any of its
            Subsidiaries, and no Hazardous Materials were released on or about any
            real
            property previously owned, leased or used by the Company or any of its
            Subsidiaries during the period the property was owned, leased or used
            by the
            Company or any of its Subsidiaries, except in the normal course of the
            Company’s
            or any of its Subsidiaries’ business.

           

          (iii)  Except
            as
            set forth in Schedule
            3(s),
            there
            are no underground storage tanks on or under any real property owned,
            leased or
            used by the Company or any of its Subsidiaries that are not in compliance
            with
            applicable law. 

           

          t.  Title
            to Property.
            The
            Company and its Subsidiaries have good and marketable title in fee simple
            to all
            real property and good and marketable title to all personal property
            owned by
            them which is material to the business of the Company and its Subsidiaries,
            in
            each case free and clear of all liens, encumbrances and defects except
            such as
            are described in Schedule
            3(t)
            or such
            as would not have a Material Adverse Effect. Any real property and facilities
            held under lease by the Company and its Subsidiaries are held by them
            under
            valid, subsisting and enforceable leases with such exceptions as would
            not have
            a Material Adverse Effect.

           

          
            
              
              

            

            
              11

              
                

              

            

             

          

           

          u.  Insurance.
            The
            Company and each of its Subsidiaries are insured by insurers of recognized
            financial responsibility against such losses and risks and in such amounts
            as
            management of the Company believes to be prudent and customary in the
            businesses
            in which the Company and its Subsidiaries are engaged. 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. The
            Company
            has provided to Buyer true and correct copies of all policies relating
            to
            directors’ and officers’ liability coverage, errors and omissions coverage, and
            commercial general liability coverage.

           

          v.  Internal
            Accounting Controls.
            The
            Company and each of its Subsidiaries maintain a system of internal accounting
            controls sufficient, in the judgment of the Company’s board of directors, to
            provide reasonable assurance that (i) transactions are executed in accordance
            with management’s general or specific authorizations, (ii) transactions are
            recorded as necessary to permit preparation of financial statements in
            conformity with generally accepted accounting principles and to maintain
            asset
            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.

           

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

           

          x.  Solvency.
            The
            Company (after giving effect to the transactions contemplated by this
            Agreement)
            is solvent (i.e.,
            its
            assets have a fair market value in excess of the amount required to pay
            its
            probable liabilities on its existing debts as they become absolute and
            matured)
            and currently the Company has no information that would lead it to reasonably
            conclude that the Company would not, after giving effect to the transaction
            contemplated by this Agreement, have the ability to, nor does it intend
            to take
            any action that would impair its ability to, pay its debts from time
            to time
            incurred in connection therewith as such debts mature. The Company did
            not
            receive a qualified opinion from its auditors with respect to its most
            recent
            fiscal year end and, after giving effect to the transactions contemplated
            by
            this Agreement, does not anticipate or know of any basis upon which its
            auditors
            might issue a qualified opinion in respect of its current fiscal
            year.

           

          y.  No
            Investment Company.
            The
            Company is not, and upon the issuance and sale of the Securities as contemplated
            by this Agreement will not be an “investment company” required to be registered
            under the Investment Company Act of 1940 (an “Investment
            Company”).
            The
            Company is not controlled by an Investment Company.

           

          
            
              
              

            

            
              12

              
                

              

            

             

          

           

          z.  Breach
            of Representations and Warranties by the Company.
            If the
            Company materially breaches any of the representations or warranties
            set forth
            in this Section 3, and in addition to any other remedies available to
            the Buyers
            pursuant to this Agreement, the Company shall pay to the Buyer the Standard
            Liquidated Damages Amount in cash or in shares of Common Stock at the
            option of
            the Company, until such breach is cured. If the Company elects to pay
            the
            Standard Liquidated Damages Amounts in shares of Common Stock, such shares
            shall
            be issued at the Conversion Price at the time of payment.

           

          4.  COVENANTS.

           

          a.  Best
            Efforts.
            The
            parties shall use their best efforts to satisfy timely each of the conditions
            described in Section 6 and 7 of this Agreement. 

           

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

           

          c.  Reporting
            Status; Eligibility to Use Form S-3, SB-2 or Form S-1. The
            Company’s Common Stock is registered under Section 12(g) of the 1934 Act. The
            Company represents and warrants that it meets the requirements for the
            use of
            Form S-3 (or if the Company is not eligible for the use of Form S-3 as
            of the
            Filing Date (as defined in the Registration Rights Agreement), the Company
            may
            use the form of registration for which it is eligible at that time) for
            registration of the sale by the Buyer of the Registrable Securities (as
            defined
            in the Registration Rights Agreement). So long as the Buyer beneficially
            owns
            any of the Securities, the Company shall timely file all reports required
            to be
            filed with the SEC pursuant to the 1934 Act, and the Company shall not
            terminate
            its status as an issuer required to file reports under the 1934 Act even
            if the
            1934 Act or the rules and regulations thereunder would permit such termination.
            The Company further agrees to file all reports required to be filed by
            the
            Company with the SEC in a timely manner so as to become eligible, and
            thereafter
            to maintain its eligibility, for the use of Form S-3. The Company shall
            issue a
            press release describing the materials terms of the transaction contemplated
            hereby as soon as practicable following the Closing Date but in no event
            more
            than two (2) business days of the Closing Date, which press release shall
            be
            subject to prior review by the Buyers. The Company agrees that such press
            release shall not disclose the name of the Buyers unless expressly consented
            to
            in writing by the Buyers or unless required by applicable law or regulation,
            and
            then only to the extent of such requirement.

           

          d.  Use
            of Proceeds.
            The
            Company shall use the proceeds from the sale of the Notes and the Warrants
            in
            the manner set forth in Schedule
            4(d)
            attached
            hereto and made a part hereof and shall not, directly or indirectly,
            use such
            proceeds for any loan to or investment in any other corporation, partnership,
            enterprise or other person (except in connection with its currently existing
            direct or indirect Subsidiaries)

           

          
            
              
              

            

            
              13

              
                

              

            

             

          

           

          e.  Future
            Offerings.
            Subject
            to the exceptions described below, the Company will not, without the
            prior
            written consent of a majority-in-interest of the Buyers, not to be unreasonably
            withheld, negotiate or contract with any party to obtain additional equity
            financing (including debt financing with an equity component) that involves
            (A)
            the issuance of Common Stock at a discount to the market price of the
            Common
            Stock on the date of issuance (taking into account the value of any warrants
            or
            options to acquire Common Stock issued in connection therewith) or (B)
            the
            issuance of convertible securities that are convertible into an indeterminate
            number of shares of Common Stock or (C) the issuance of warrants during
            the
            period (the “Lock-up
            Period”)
            beginning on the Closing Date and ending on the later of (i) two hundred
            seventy
            (270) days from the Closing Date and (ii) one hundred eighty (180) days
            from the
            date the Registration Statement (as defined in the Registration Rights
            Agreement) is declared effective (plus any days in which sales cannot
            be made
            thereunder). In addition, subject to the exceptions described below,
            the Company
            will not conduct any equity financing (including debt with an equity
            component)
            (“Future
            Offerings”)
            during
            the period beginning on the Closing Date and ending two (2) years after
            the end
            of the Lock-up Period unless it shall have first delivered to each Buyer,
            at
            least twenty (20) business days prior to the closing of such Future Offering,
            written notice describing the proposed Future Offering, including the
            terms and
            conditions thereof and proposed definitive documentation to be entered
            into in
            connection therewith, and providing each Buyer an option during the fifteen
            (15)
            day period following delivery of such notice to purchase its pro rata
            share
            (based on the ratio that the aggregate principal amount of Notes purchased
            by it
            hereunder bears to the aggregate principal amount of Notes purchased
            hereunder)
            of the securities being offered in the Future Offering on the same terms
            as
            contemplated by such Future Offering (the limitations referred to in
            this
            sentence and the preceding sentence are collectively referred to as the
            “Capital
            Raising Limitations”). 
            In the
            event the terms and conditions of a proposed Future Offering are amended
            in any
            respect after delivery of the notice to the Buyers concerning the proposed
            Future Offering, the Company shall deliver a new notice to each Buyer
            describing
            the amended terms and conditions of the proposed Future Offering and
            each Buyer
            thereafter shall have an option during the fifteen (15) day period following
            delivery of such new notice to purchase its pro rata share of the securities
            being offered on the same terms as contemplated by such proposed Future
            Offering, as amended. The foregoing sentence shall apply to successive
            amendments to the terms and conditions of any proposed Future Offering.
            The
            Capital Raising Limitations shall not apply to any transaction involving
            (i)
            issuances of securities in a firm commitment underwritten public offering
            (excluding a continuous offering pursuant to Rule 415 under the 1933
            Act) or
            (ii) issuances of securities as consideration for a merger, consolidation
            or
            purchase of assets, or in connection with any strategic partnership or
            joint
            venture (the primary purpose of which is not to raise equity capital),
            or in
            connection with the disposition or acquisition of a business, product
            or license
            by the Company. The Capital Raising Limitations also shall not apply
            to the
            issuance of securities upon exercise or conversion of the Company’s options,
            warrants or other convertible securities outstanding as of the date hereof
            or to
            the grant of additional options or warrants, or the issuance of additional
            securities, under any Company stock option or restricted stock plan approved
            by
            the shareholders of the Company. 

           

          f.  Expenses.
            At the
            Closing, the Company shall reimburse Buyers for expenses incurred by
            them in
            connection with the negotiation, preparation, execution, delivery and
            performance of this Agreement and the other agreements to be executed
            in
            connection herewith (“Documents”), including, without limitation, attorneys’ and
            consultants’ fees and expenses, transfer agent fees, fees for stock quotation
            services, fees relating to any amendments or modifications of the Documents
            or
            any consents or waivers of provisions in the Documents, fees for the
            preparation
            of opinions of counsel, escrow fees, and costs of restructuring the transactions
            contemplated by the Documents. When possible, the Company must pay these
            fees
            directly, otherwise the Company must make immediate payment for reimbursement
            to
            the Buyers for all fees and expenses immediately upon written notice
            by the
            Buyer or the submission of an invoice by the Buyer If the Company fails
            to
            reimburse the Buyer in full within three (3) business days of the written
            notice
            or submission of invoice by the Buyer, the Company shall pay interest
            on the
            total amount of fees to be reimbursed at a rate of 15% per annum.

           

          
            
              
              

            

            
              14

              
                

              

            

             

          

           

          g.  Financial
            Information.
            The
            Company agrees to send the following reports to each Buyer until such
            Buyer
            transfers, assigns, or sells all of the Securities: (i) within
            ten (10) days after the filing with the SEC, a copy of its Annual Report
            on Form
            10-KSB its Quarterly Reports on Form 10-QSB and any Current Reports on
            Form 8-K;
(ii) within
            one (1) day after release, copies of all press releases issued by the
            Company or
            any of its Subsidiaries; and (iii) contemporaneously
            with the making available or giving to the shareholders of the Company,
            copies
            of any notices or other information the Company makes available or gives
            to such
            shareholders.

           

          h.  Authorization
            and Reservation of Shares.
            The
            Company shall at all times have authorized, and reserved for the purpose
            of
            issuance, a sufficient number of shares of Common Stock to provide for
            the full
            conversion or exercise of the outstanding Notes and Warrants and issuance
            of the
            Conversion Shares and Warrant Shares in connection therewith (based on
            the
            Conversion Price of the Notes or Exercise Price (as defined in the Warrants)
            of
            the Warrants in effect from time to time) and as otherwise required by
            the
            Notes. The Company shall not reduce the number of shares of Common Stock
            reserved for issuance upon conversion of Notes and exercise of the Warrants
            without the consent of each Buyer. The Company shall at all times maintain
            the
            number of shares of Common Stock so reserved for issuance at an amount
            (“Reserved
            Amount”)
            equal
            to no less than two (2) times the number that is then actually issuable
            upon
            full conversion of the Notes and Additional Notes and upon exercise of
            the
            Warrants and the Additional Warrants (based on the Conversion Price of
            the Notes
            or the Exercise Price of the Warrants in effect from time to time). If
            at any
            time the number of shares of Common Stock authorized and reserved for
            issuance
            (“Authorized
            and Reserved Shares”)
            is
            below the Reserved Amount, the Company will promptly take all corporate
            action
            necessary to authorize and reserve a sufficient number of shares, including,
            without limitation, calling a special meeting of shareholders to authorize
            additional shares to meet the Company’s obligations under this Section 4(h), in
            the case of an insufficient number of authorized shares, obtain shareholder
            approval of an increase in such authorized number of shares, and voting
            the
            management shares of the Company in favor of an increase in the authorized
            shares of the Company to ensure that the number of authorized shares
            is
            sufficient to meet the Reserved Amount. If the Company fails to obtain
            such
            shareholder approval within thirty (30) days following the date on which
            the
            number of Reserved Amount exceeds the Authorized and Reserved Shares,
            the
            Company shall pay to the Borrower the Standard Liquidated Damages Amount,
            in
            cash or in shares of Common Stock at the option of the Buyer. If the
            Buyer
            elects to be paid the Standard Liquidated Damages Amount in shares of
            Common
            Stock, such shares shall be issued at the Conversion Price at the time
            of
            payment. In order to ensure that the Company has authorized a sufficient
            amount
            of shares to meet the Reserved Amount at all times, the Company must
            deliver to
            the Buyer at the end of every month a list detailing (1) the current
            amount of
            shares authorized by the Company and reserved for the Buyer; and (2)
            amount of
            shares issuable upon conversion of the Notes and upon exercise of the
            Warrants
            and as payment of interest accrued on the Notes for one year. If the
            Company
            fails to provide such list within five (5) business days of the end of
            each
            month, the Company shall pay the Standard Liquidated Damages Amount,
            in cash or
            in shares of Common Stock at the option of the Buyer, until the list
            is
            delivered. If the Buyer elects to be paid the Standard Liquidated Damages
            Amount
            in shares of Common Stock, such shares shall be issued at the Conversion
            Price
            at the time of payment.

           

          
            
              
              

            

            
              15

              
                

              

            

             

          

           

          i.  Listing.
            The
            Company shall promptly secure the listing of the Conversion Shares and
            Warrant
            Shares upon each national securities exchange or automated quotation
            system, if
            any, upon which shares of Common Stock are then listed (subject to official
            notice of issuance) and, so long as any Buyer owns any of the Securities,
            shall
            maintain, so long as any other shares of Common Stock shall be so listed,
            such
            listing of all Conversion Shares and Warrant Shares from time to time
            issuable
            upon conversion of the Notes or exercise of the Warrants. The Company
            will
            obtain and, so long as any Buyer owns any of the Securities, maintain
            the
            listing and trading of its Common Stock on the OTCBB or any equivalent
            replacement exchange, the Nasdaq National Market (“Nasdaq”),
            the
            Nasdaq SmallCap Market (“Nasdaq
            SmallCap”),
            the
            New York Stock Exchange (“NYSE”),
            or
            the American Stock Exchange (“AMEX”)
            and
            will comply in all respects with the Company’s reporting, filing and other
            obligations under the bylaws or rules of the National Association of
            Securities
            Dealers (“NASD”)
            and
            such exchanges, as applicable. The Company shall promptly provide to
            each Buyer
            copies of any notices it receives from the OTCBB and any other exchanges
            or
            quotation systems on which the Common Stock is then listed regarding
            the
            continued eligibility of the Common Stock for listing on such exchanges
            and
            quotation systems.

           

          j.  Corporate
            Existence.
            So long
            as a Buyer beneficially owns any Notes or Warrants, the Company shall
            maintain
            its corporate existence and shall not sell all or substantially all of
            the
            Company’s assets, except in the event of a merger or consolidation or sale of
            all or substantially all of the Company’s assets, where the surviving or
            successor entity in such transaction (i) assumes the Company’s obligations
            hereunder and under the agreements and instruments entered into in connection
            herewith and (ii) is a publicly traded corporation whose Common Stock
            is listed
            for trading on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

           

          k.  No
            Integration.
            The
            Company shall not make any offers or sales of any security (other than
            the
            Securities) under circumstances that would require registration of the
            Securities being offered or sold hereunder under the 1933 Act or cause
            the
            offering of the Securities to be integrated with any other offering of
            securities by the Company for the purpose of any stockholder approval
            provision
            applicable to the Company or its securities.

           

          l.  Restriction
            on Short Sales.
            Neither
            the Buyers nor their affiliates has an open short position in the common
            stock
            of the Company and the Buyers agree that, so long as any of the Notes
            remain
            outstanding, but in no event less than two (2) years from the date hereof,
            the
            Buyers will not enter into or effect any “short sales” (as such term is defined
            in Rule 3b-3 of the 1934 Act) of the Common Stock or hedging transaction
            which
            establishes a net short position with respect to the Common Stock.

           

          
            
              
              

            

            
              16

              
                

              

            

             

          

           

          m.  Breach
            of Covenants.
            If the
            Company breaches any of the covenants set forth in this Section 4, and
            in
            addition to any other remedies available to the Buyers pursuant to this
            Agreement, the Company shall pay to the Buyers the Standard Liquidated
            Damages
            Amount, in cash or in shares of Common Stock at the option of the Company,
            until
            such breach is cured. If the Company elects to pay the Standard Liquidated
            Damages Amount in shares, such shares shall be issued at the Conversion
            Price at
            the time of payment.

           

          5.  TRANSFER
            AGENT INSTRUCTIONS.
            The
            Company shall issue irrevocable instructions to its transfer agent to
            issue
            certificates, registered in the name of each Buyer or its nominee, for
            the
            Conversion Shares and Warrant Shares in such amounts as specified from
            time to
            time by each Buyer to the Company upon conversion of the Notes or exercise
            of
            the Warrants in accordance with the terms thereof (the “Irrevocable
            Transfer Agent Instructions”).
            Prior
            to registration of the Conversion Shares and Warrant Shares under the
            1933 Act
            or the date on which the Conversion Shares and Warrant Shares may be
            sold
            pursuant to Rule 144 without any restriction as to the number of Securities
            as
            of a particular date that can then be immediately sold, all such certificates
            shall bear the restrictive legend specified in Section 2(g) of this Agreement.
            The Company warrants that no instruction other than the Irrevocable Transfer
            Agent Instructions referred to in this Section 5, and stop transfer instructions
            to give effect to Section 2(f) hereof (in the case of the Conversion
            Shares and
            Warrant Shares, prior to registration of the Conversion Shares and Warrant
            Shares under the 1933 Act or the date on which the Conversion Shares
            and Warrant
            Shares may be sold pursuant to Rule 144 without any restriction as to
            the number
            of Securities as of a particular date that can then be immediately sold),
            will
            be given by the Company to its transfer agent and that the Securities
            shall
            otherwise be freely transferable on the books and records of the Company
            as and
            to the extent provided in this Agreement and the Registration Rights
            Agreement.
            Nothing in this Section shall affect in any way the Buyer’s obligations and
            agreement set forth in Section 2(g) hereof to comply with all applicable
            prospectus delivery requirements, if any, upon re-sale of the Securities.
            If a
            Buyer provides the Company with (i) an opinion of counsel in form, substance
            and
            scope customary for opinions in comparable transactions, to the effect
            that a
            public sale or transfer of such Securities may be made without registration
            under the 1933 Act and such sale or transfer is effected or (ii) the
            Buyer
            provides reasonable assurances that the Securities can be sold pursuant
            to Rule
            144, the Company shall permit the transfer, and, in the case of the Conversion
            Shares and Warrant Shares, promptly instruct its transfer agent to issue
            one or
            more certificates, free from restrictive legend, in such name and in
            such
            denominations as specified by such Buyer. The Company acknowledges that
            a breach
            by it of its obligations hereunder will cause irreparable harm to the
            Buyers, by
            vitiating the intent and purpose of the transactions contemplated hereby.
            Accordingly, the Company acknowledges that the remedy at law for a breach
            of its
            obligations under this Section 5 may be inadequate and agrees, in the
            event of a
            breach or threatened breach by the Company of the provisions of this
            Section,
            that the Buyers shall be entitled, in addition to all other available
            remedies,
            to an injunction restraining any breach and requiring immediate transfer,
            without the necessity of showing economic loss and without any bond or
            other
            security being required.

           


          
            
              
              

            

            
              17

              
                

              

            

             

          

           

          6.  CONDITIONS
            TO THE COMPANY’S OBLIGATION TO SELL.
            The
            obligation of the Company hereunder to issue and sell the Notes and Warrants
            to
            a Buyer at the Closing is subject to the satisfaction, at or before the
            Closing
            Date of each of the following conditions thereto, provided that these
            conditions
            are for the Company’s sole benefit and may be waived by the Company at any time
            in its sole discretion:

           

          a.  The
            applicable Buyer shall have executed this Agreement and the Registration
            Rights
            Agreement, and delivered the same to the Company.

           

          b.  The
            applicable Buyer shall have delivered the Purchase Price in accordance
            with
            Section 1(b) above.

           

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

           

          d.  No
            litigation, statute, rule, regulation, executive order, decree, ruling
            or
            injunction shall have been enacted, entered, promulgated or endorsed
            by or in
            any court or governmental authority of competent jurisdiction or any
            self-regulatory organization having authority over the matters contemplated
            hereby which prohibits the consummation of any of the transactions contemplated
            by this Agreement.

           

          7.  CONDITIONS
            TO EACH BUYER’S OBLIGATION TO PURCHASE.
            The
            obligation of each Buyer hereunder to purchase the Notes and Warrants
            at the
            Closing is subject to the satisfaction, at or before the Closing Date
            of each of
            the following conditions, provided that these conditions are for such
            Buyer’s
            sole benefit and may be waived by such Buyer at any time in its sole
            discretion:

           

          a.  The
            Company shall have executed this Agreement and the Registration Rights
            Agreement, and delivered the same to the Buyer.

           

          b.  The
            Company shall have delivered to such Buyer duly executed Notes (in such
            denominations as the Buyer shall request) and Warrants in accordance
            with
            Section 1(b) above.

           

          c.  The
            Irrevocable Transfer Agent Instructions, in form and substance satisfactory
            to a
            majority-in-interest of the Buyers, shall have been delivered to and
            acknowledged in writing by the Company’s Transfer Agent.

           

          d.  The
            representations and warranties of the Company shall be true and correct
            in all
            material respects as of the date when made and as of the Closing Date
            as though
            made at such time (except for representations and warranties that speak
            as of a
            specific date) and the Company shall have performed, satisfied and complied
            in
            all material respects with the covenants, agreements and conditions required
            by
            this Agreement to be performed, satisfied or complied with by the Company
            at or
            prior to the Closing Date. The Buyer shall have received a certificate
            or
            certificates, executed by the chief executive officer of the Company,
            dated as
            of the Closing Date, to the foregoing effect and as to such other matters
            as may
            be reasonably requested by such Buyer including, but not limited to certificates
            with respect to the Company’s Articles of Incorporation, By-laws and Board of
            Directors’ resolutions relating to the transactions contemplated
            hereby.

           

          
            
              
              

            

            
              18

              
                

              

            

             

          

           

          e.  No
            litigation, statute, rule, regulation, executive order, decree, ruling
            or
            injunction shall have been enacted, entered, promulgated or endorsed
            by or in
            any court or governmental authority of competent jurisdiction or any
            self-regulatory organization having authority over the matters contemplated
            hereby which prohibits the consummation of any of the transactions contemplated
            by this Agreement.

           

          f.  No
            event
            shall have occurred which could reasonably be expected to have a Material
            Adverse Effect on the Company.

           

          g.  The
            Conversion Shares and Warrant Shares shall have been authorized for quotation
            on
            the OTCBB and trading in the Common Stock on the OTCBB shall not have
            been
            suspended by the SEC or the OTCBB.

           

          h.  The
            Buyer
            shall have received an opinion of the Company’s counsel, dated as of the Closing
            Date, in form, scope and substance reasonably satisfactory to the Buyer
            and in
            substantially the same form as Exhibit
            “D”
            attached
            hereto.

           

          i.  The
            Buyer
            shall have received an officer’s certificate described in Section 3(c) above,
            dated as of the Closing Date.

           

          8.  GOVERNING
            LAW; MISCELLANEOUS.
            

           

          a.  Governing
            Law.
            THIS
            AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE
            WITH THE
            LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
            PERFORMED
            ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT
            OF
            LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION
            OF THE
            UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT
            TO ANY
            DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN
            CONNECTION
            HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES
            IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
            OF
            SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS
            UPON
            A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
            SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING
            HEREIN
            SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
            BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY
            SUCH SUIT
            OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS
            BY
            SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH
            DOES NOT
            PREVAIL IN ANY DISPUTE ARISING UNDER THIS AGREEMENT SHALL BE RESPONSIBLE
            FOR ALL
            FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY
            IN CONNECTION WITH SUCH DISPUTE.

           

          
            
              
              

            

            
              19

              
                

              

            

             

          

           

          b.  Counterparts;
            Signatures by Facsimile.
            This
            Agreement may be executed in one or more counterparts, each of which
            shall be
            deemed an original but all of which shall constitute one and the same
            agreement
            and shall become effective when counterparts have been signed by each
            party and
            delivered to the other party. This Agreement, once executed by a party,
            may be
            delivered to the other party hereto by facsimile transmission of a copy
            of this
            Agreement bearing the signature of the party so delivering this
            Agreement.

           

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

           

          d.  Severability.
            In the
            event that any provision of this Agreement is invalid or unenforceable
            under any
            applicable statute or rule of law, then such provision shall be deemed
            inoperative to the extent that it may conflict therewith and shall be
            deemed
            modified to conform with such statute or rule of law. Any provision hereof
            which
            may prove invalid or unenforceable under any law shall not affect the
            validity
            or enforceability of any other provision hereof.

           

          e.  Entire
            Agreement; Amendments.
            This
            Agreement and the instruments referenced herein 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
            Buyer makes any representation, warranty, covenant or undertaking with
            respect
            to such matters. No provision of this Agreement may be waived or amended
            other
            than by an instrument in writing signed by the party to be charged with
            enforcement. 

           

          f.  Notices.
            Any
            notices required or permitted to be given under the terms of this Agreement
            shall be sent by certified or registered mail (return receipt requested)
            or
            delivered personally or by courier (including a recognized overnight
            delivery
            service) or by facsimile and shall be effective five days after being
            placed in
            the mail, if mailed by regular United States mail, or upon receipt, if
            delivered
            personally or by courier (including a recognized overnight delivery service)
            or
            by facsimile, in each case addressed to a party. The addresses for such
            communications shall be:

           

          
            
              
              

            

            
              20

              
                

              

            

             

          

           

          If
            to the
            Company:

          


          Grant
            Life Sciences, Inc.

          3550
            Wilshire Blvd.

          Suite
            1700

          Los
            Angeles, CA 90010

          Attention:
            President

          Telephone: (213)
            637-5692

          Facsimile: ___________

           

          With
            a
            copy to:

           

          Sichenzia
            Ross Friedman & Ference LLP

          1065
            Avenue of the Americas

          New
            York,
            NY 10018

          Attention:
            Gregory Sichenzia, Esq.

          Telephone:
            (212) 930-9700

          Facsimile:
            (212) 930-9725

           

          If
            to a
            Buyer: To the address set forth immediately below such Buyer’s name on the
            signature pages hereto.

           

          With
            copy
            to:

          


          Ballard
            Spahr Andrews & Ingersoll, LLP

          1735
            Market Street

          51st
            Floor

          Philadelphia,
            Pennsylvania 19103

          Attention:
            Gerald J. Guarcini, Esq.

          Telephone:
            215-864-8625

          Facsimile:
            215-864-8999


           

          Each
            party shall provide notice to the other party of any change in
            address.

           

          g.  Successors
            and Assigns.
            This
            Agreement shall be binding upon and inure to the benefit of the parties
            and
            their successors and assigns. Neither the Company nor any Buyer shall
            assign
            this Agreement or any rights or obligations hereunder without the prior
            written
            consent of the other. Notwithstanding the foregoing, subject to
            Section 2(f), any Buyer may assign its rights hereunder to any person that
            purchases Securities in a private transaction from a Buyer or to any
            of its
“affiliates,” as that term is defined under the 1934 Act, without the consent of
            the Company.

           

          h.  Third
            Party Beneficiaries.
            This
            Agreement is intended for the benefit of the parties hereto and their
            respective
            permitted successors and assigns, and is not for the benefit of, nor
            may any
            provision hereof be enforced by, any other person.

           


          
            
              
              

            

            
              21

              
                

              

            

             

          

           

          i.  Survival.
            The
            representations and warranties of the Company and the agreements and
            covenants
            set forth in Sections 3, 4, 5 and 8 shall survive the closing hereunder
            notwithstanding any due diligence investigation conducted by or on behalf
            of the
            Buyers. The Company agrees to indemnify and hold harmless each of the
            Buyers and
            all their officers, directors, employees and agents for loss or damage
            arising
            as a result of or related to any breach or alleged breach by the Company
            of any
            of its representations, warranties and covenants set forth in Sections
            3 and 4
            hereof or any of its covenants and obligations under this Agreement or
            the
            Registration Rights Agreement, including advancement of expenses as they
            are
            incurred.

           

          j.  Publicity.
            The
            Company and each of the Buyers shall have the right to review a reasonable
            period of time before issuance of any press releases, SEC, OTCBB or NASD
            filings, or any other public statements with respect to the transactions
            contemplated hereby; provided,
            however,
            that
            the Company shall be entitled, without the prior approval of each of
            the Buyers,
            to make any press release or SEC, OTCBB (or other applicable trading
            market) or
            NASD filings with respect to such transactions as is required by applicable
            law
            and regulations (although each of the Buyers shall be consulted by the
            Company
            in connection with any such press release prior to its release and shall
            be
            provided with a copy thereof and be given an opportunity to comment
            thereon).

           

          k.  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.

           

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

           

          m.  Remedies.
            The
            Company acknowledges that a breach by it of its obligations hereunder
            will cause
            irreparable harm to the Buyers by vitiating the intent and purpose of
            the
            transaction contemplated hereby. Accordingly, the Company acknowledges
            that the
            remedy at law for a breach of its obligations under this Agreement will
            be
            inadequate and agrees, in the event of a breach or threatened breach
            by the
            Company of the provisions of this Agreement, that the Buyers shall be
            entitled,
            in addition to all other available remedies at law or in equity, and
            in addition
            to the penalties assessable herein, to an injunction or injunctions restraining,
            preventing or curing any breach of this Agreement and to enforce specifically
            the terms and provisions hereof, without the necessity of showing economic
            loss
            and without any bond or other security being required.

           

          
            
              
              

            

            
              22

              
                

              

            

             

          


          IN
            WITNESS WHEREOF,
            the
            undersigned Buyers and the Company have caused this Agreement to be duly
            executed as of the date first above written.

          
            	 	 	 	 
	
                    GRANT
                      LIFE SCIENCES, INC.

                  	 	 	 
	 	 	 	 
	 	 	 	 
	/s/
                    Hun-Chi
                    Lin	 	 	
                  
	
                    

                    Hun-Chi
                      Lin

                  	 	 	
                  


          

          
            	
                    President

                  	 	 	 
	 	 	 	 
	
                    
                      AJW
                        PARTNERS, LLC

                      
                        By:
                          SMS Group, LLC

                      

                    

                  	 	 	 
	 	 	 	 
	 	 	 	 
	/s/
                    Corey S.
                    Ribotsky	 	 	
                  
	
                    

                    
                      Corey
                        S. Ribotsky

                      
                        Manager

                      

                    

                  	 	 	
                  


          

           

           

          
            	RESIDENCE: 	Delaware
	 	 
	ADDRESS: 	1044 Northern Boulevard
	 	
                    Suite
                      302

                  
	 	
                    Roslyn,
                      New York 11576

                  
	 	
                    Facsimile:
                      (516) 739-7115

                  
	 	
                    Telephone:
                      (516) 739-7110

                  


          

           

          AGGREGATE
            SUBSCRIPTION AMOUNT:

          


          
            	
                    Aggregate
                      Principal Amount of Notes:

                  	 	
                    $

                  	
                    10,000

                  	 
	
                    Number
                      of Warrants:

                  	 	 	
                    50,000

                  	 
	
                    Aggregate
                      Purchase Price:

                  	 	
                    $

                  	
                    10,00

                  	 


          

          



          
            
              
              

            

            
              23

              
                

              

            

             

          

           

          
            	
                    
                      
                        AJW
                          OFFSHORE, LTD.

                        By:
                          First Street Manager II, LLC

                      

                    

                  	 	 	 
	 	 	 	 
	 	 	 	 
	/s/
                    Corey S.
                    Ribotsky	 	 	
                  
	
                    

                    
                      Corey
                        S. Ribotsky

                      
                        Manager

                      

                    

                  	 	 	
                  


          

           

           

          
            
              	
                      RESIDENCE:

                    	Cayman Islands
	 	 
	ADDRESS: 	AJW
                      Offshore, Ltd.
	 	P.O. Box 32021 SMB
	 	Grand Cayman, Cayman Island,
                      B.W.I.
                      


            
   

          AGGREGATE
            SUBSCRIPTION AMOUNT:

          


          
            	
                    Aggregate
                      Principal Amount of Notes:

                  	 	
                    $

                  	
                    160,000

                  	 
	
                    Number
                      of Warrants:

                  	 	 	
                    800,000

                  	 
	
                    Aggregate
                      Purchase Price:

                  	 	
                    $

                  	
                    160,000

                  	 


          

          



          
            
              
              

            

            
              24

              
                

              

            

             

          

           

          
            	
                    
                      
                        AJW
                          QUALIFIED PARTNERS, LLC

                        By:
                          AJW Manager, LLC

                      

                    

                  	 	 	 
	 	 	 	 
	 	 	 	 
	/s/
                    Corey S.
                    Ribotsky	 	 	
                  
	
                    

                    
                      Corey
                        S. Ribotsky

                      
                        Manager

                      

                    

                  	 	 	
                  


          

           

          
            
              	RESIDENCE: 	New York
	 	 
	ADDRESS:	1044 Northern Boulevard
	 	Suite 302
	 	Roslyn, New York 11576
	 	
                      Facsimile: (516)
                        739-7115

                    
	 	
                      Telephone: (516)
                        739-7110

                    


            
 

          AGGREGATE
            SUBSCRIPTION AMOUNT:

          


          
            	
                    Aggregate
                      Principal Amount of Notes:

                  	 	
                    $

                  	
                    24,000

                  	 
	
                    Number
                      of Warrants:

                  	 	 	
                    120,000

                  	 
	
                    Aggregate
                      Purchase Price:

                  	 	
                    $

                  	
                    24,000

                  	 


          

           


          
            
              
              

            

            
              25

              
                

              

            

             

          

           

          
            	
                    
                      
                        
                          NEW
                            MILLENNIUM CAPITAL PARTNERS II, LLC 

                          By:
                            First Street Manager II, LLP

                        

                      

                    

                  	 	 	 
	 	 	 	 
	 	 	 	 
	/s/
                    Corey S.
                    Ribotsky	 	 	
                  
	
                    

                    
                      Corey
                        S. Ribotsky

                      
                        Manager

                      

                    

                  	 	 	
                  


          

           

          
            	RESIDENCE:	New York
	 	 
	ADDRESS: 	1044 Northern Boulevard
	 	
                    Suite
                      302

                  
	 	
                    Roslyn,
                      New York 11576

                  
	 	
                    Facsimile: (516)
                      739-7115

                  
	 	
                    Telephone: (516)
                      739-7110

                  


          

             

          AGGREGATE
            SUBSCRIPTION AMOUNT:

          


          
            	
                    Aggregate
                      Principal Amount of Notes:

                  	 	
                    $

                  	
                    6,000

                  	 
	
                    Number
                      of Warrants:

                  	 	 	
                    30,000

                  	 
	
                    Aggregate
                      Purchase Price:

                  	 	
                    $

                  	
                    6,000

                  	 


          

          



          
            
              
              

            

            
              26