EX-10.29 SECURITIES PURCHASE AGREEMENT



 





Exhibit 10.29




SECURITIES PURCHASE AGREEMENT




     THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of January 11, 2008, by and
among Solar Enertech Corp., a Nevada corporation (the “Company”) and the investors listed on the
Schedule of Buyers attached hereto (individually, a “Buyer” and collectively, the “Buyers”).



WITNESSTH




     A. WHEREAS, the Company and Buyers are executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of
1933, as amended (the “Securities Act”), and Rule 506 of Regulation D (“Regulation D”) with respect
to Buyers that are U.S. persons (as that term is defined in Rule 903(k) of the Securities Act) and
Rule 903 of Regulation S with respect to Buyers that are non-U.S. persons, each as promulgated by
the United States Securities and Exchange Commission (the “SEC”) under the Securities Act;



     B. WHEREAS, each Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement, (i) the number of shares (the “Shares”)of common stock, par
value $.0001 per share (“Common Stock”) set forth opposite such Buyer’s name in column (3) on the
Schedule of Buyers attached hereto (which aggregate amount for all Buyers shall be up to 24,318,181
Shares in amounts as subscribed by the Buyers), and (ii) warrants, in substantially the form
attached hereto as Exhibit A (the “Series C Warrants” or the “Warrants”) to acquire up to
that number of additional shares of Common Stock (the “Warrant Shares”) set forth opposite such
Buyer’s name in column (4) of the Schedule of Buyers (which aggregate amount for all Buyers shall
be up to 24,318,181 Warrants);



     C. WHEREAS, the Shares, the Warrants and the Warrant Shares collectively are referred to
herein as the “Securities.”



     NOW, THEREFORE, in consideration of the mutual covenants and other agreements contained in
this Agreement, the Company and Buyer hereby agree as follows:



     1. PURCHASE AND SALE OF SHARES AND WARRANTS.



          (a) Purchase of Shares and Warrants.



               (i) Shares and Warrants. Subject to the satisfaction (or waiver) of the conditions
set forth in Sections 6 and 7 below, the Company shall issue and sell to each Buyer, and each Buyer
agrees to purchase from the Company on the Closing Date (as defined below), the Shares and Warrants
(the “Closing”).



               (ii) Closing. The date and time of the Closing shall be no later than 10:00 a.m., New
York City time on January 15, 2008 (or such later date as is mutually agreed to by the Company and
Buyer) (the “Closing Date”) after notification of satisfaction (or waiver) of



 









 





the conditions to the Closing set forth in Sections 6 and 7 below, to occur at the offices of Richardson & Patel LLP, 405
Lexington Avenue, 26th Floor, New York, New York 10174 unless the Company and each Buyer (as
defined below) agree otherwise.



               (iii) Purchase Price. The aggregate purchase price for the Shares and Warrants to be
purchased by the Buyers at the Closing (the “Purchase Price”) shall be up to $21,400,000.



          (b) Form of Payment. On the Closing Date, each Buyer shall: (i) deliver its Purchase
Price to the Escrow Agent (as defined below) pursuant to Section 1.3 of the Escrow Agreement, dated
as of January 10, 2008, by and among the Company, the Buyers and Richardson & Patel LLP (“Escrow
Agent”), attached hereto as Exhibit D (the “Escrow Agreement”), and (ii) the Company shall
deliver to each Buyer the Shares (allocated in such amounts as Buyer shall request) which such
Buyer is then purchasing hereunder along with the Warrants (allocated in the amounts as Buyer shall
request) which such Buyer is purchasing, in each case duly executed on behalf of the Company and
registered in the name of each such Buyer or its designee.



     2. BUYER’S REPRESENTATIONS AND WARRANTIES. Each Buyer, severally and not jointly,
represents and warrants with respect only to itself that:




     (a) Investment Purpose. Buyer is acquiring the Shares and Warrants, and upon
exercise of the Warrants, will acquire the Warrant Shares issuable upon exercise of the
Warrants, as principal for its own account and not with a view towards, or for resale in
connection with, the public sale or distribution thereof, except pursuant to sales registered
or exempted under the Securities Act; provided, however, that by making the representations
herein, Buyer 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 Securities Act and pursuant
to the applicable terms of the Transaction Documents (as defined in Section 3(c)). Buyer is
acquiring the Securities hereunder in the ordinary course of its business. Buyer does not
presently have any agreement or understanding, directly or indirectly, with any Person (as
defined in Section 3(s)) to distribute any of the Securities. As the Shares being purchased
are “restricted” securities, Buyer understands that the following legend will be placed on the
Shares:




	 	 	 	“THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH
EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. NOTWITHSTANDING THE




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	 	 	 	FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”






     (b) Accredited Investor Status. At the time Buyer was offered the Securities, it
was, at the date hereof, and on each date on which it exercises any Warrants, it will be
either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or
(a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule
144A(a) under the Securities Act. Buyer is not required to be registered as a broker-dealer
under Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).




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




     (d) Information. Buyer and its advisors, if any, have been furnished with all
materials relating to the business, finances and operations of the Company and materials
deemed relevant to making an informed investment decision relating to the offer and sale of
the Securities that have been requested by Buyer. Buyer and its advisors, if any, have been
afforded the opportunity to ask questions of the Company. Neither such inquiries nor any
other due diligence investigations conducted by Buyer or its advisors, if any, or its
representatives shall modify, amend or affect Buyer’s right to rely on the Company’s
representations and warranties contained herein. Buyer understands that its investment in the
Securities involves a high degree of risk and is able to afford a complete loss of such
investment. Buyer has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision with respect to its acquisition of the
Securities.




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




     (f) Authorization. Buyer has full power and authority to enter into the
Transaction Documents to which it is a signatory. All action on the part of the Buyer, its
officers, directors and stockholders necessary for authorization, execution and delivery of
the Transaction documents has been taken or will be taken prior to the Closing. Each such
agreement shall constitute the legal, valid and binding obligations of Buyer enforceable
against Buyer in accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, liquidation and other similar laws



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relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.




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




     (h) Residency. Buyer is a resident of that jurisdiction specified below its
address on the Buyer signature page hereto.




     (i) No Legal Advice From the Company. Buyer acknowledges that it had the
opportunity to review this Agreement and the transactions contemplated by this Agreement with
his or its own legal counsel and investment and tax advisors. Buyer is relying solely on such
counsel and advisors and not on any statements or representations of the Company or any of its
representatives or agents for legal, tax or investment advice with respect to this investment,
the Transaction Documents, the transactions contemplated herein or therein or the securities
laws of any jurisdiction.




     (j) Buyer’s Broker Fees. Buyer shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, or brokers’ commissions for placement agents,
financial advisors and/or brokers engaged by Buyer relating to or arising out of the
transactions contemplated hereby.




     (k) Certain Trading Activities. Other than the transactions contemplated herein,
since the time that Buyer was first contacted by the Company, the Agent or any other Person
regarding this investment in the Company, neither the Buyer nor any Affiliate of Buyer which
(x) had knowledge of the transactions contemplated hereby, (y) has or shares discretion
relating to Buyer’s investments or trading or information concerning Buyer’s investments and
(z) is subject to Buyer’s review or input concerning such Affiliate’s investments or trading
(collectively, “Trading Affiliates”) has directly or indirectly, nor has any Person acting on behalf of
or pursuant to any understanding with Buyer or Trading Affiliate, effected or agreed to effect
any transactions in the securities of the Company. Buyer hereby covenants and agrees not to,
and shall cause its Trading Affiliates not to, engage, directly or indirectly, in any
transactions in the securities of the Company or involving the Company’s securities during the
period from the date hereof until the earlier to occur of (i) such time as the transactions
contemplated by this Agreement are first publicly announced as described in Section 4(h)
hereof or (ii) such time as this Agreement is terminated in full pursuant to Section 8 hereof.
Other than to other Persons party to this Agreement and those expressly acknowledged by the
Company, Buyer has maintained the



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confidentiality of the existence and terms of this transaction “Short Sales” include,
without limitation, all “short sales” as defined in Rule
200 promulgated under Regulation SHO under the Exchange Act and all types of direct and
indirect stock pledges, forward sale contracts, options, puts, calls, short sales, swaps and
similar arrangements (including on a total return basis), and sales and other transactions
through non-U.S. broker-dealers or foreign regulated brokers. Buyer acknowledges the SEC’s
position set forth in Item 65, Section 5 under Section A, of the Manual of Publicly Available
Telephone Interpretations, dated July 1997, compiled by the Office of Chief Counsel, Division
of Corporation Finance, and Buyer will adhere to such position.



     2.A. ADDITIONAL REPRESENTATIONS BY OFFSHORE BUYERS. Each Buyer that is a non-U.S.
person, severally and not jointly, represents and warrants with respect only to itself that (Buyers
that are non-U.S. persons shall indicate such status on such Buyer’s signature page hereto):



          (i) Buyer is not a U.S. person or Buyer was not formed for the purpose of investing in
securities which have not been registered under the 1933 Act for the benefit of a U.S. person;



          (ii) At the time the buy order for the Securities was originated, Buyer was outside the United
States and was not a U.S. person (and was not purchasing for the account or benefit of a U.S.
person) within the meaning of Regulation S under the Securities Act;



          (iii) All subsequent offers and sales of the Securities and/or the underlying shares of stock
shall be made in compliance with Regulation S, specifically Rule 903(b)(3) and/or pursuant to
registration of the underlying shares under the 1933 Act or pursuant to an exemption from
registration under the 1933 Act. Buyer acknowledges that it will offer, sell or otherwise transfer
the Securities, if prior to the date which is two years after the later of the original issue date
hereof and the last date on which the Company or any affiliate of the Company was the owner of the
Securities, only (A) to the Company, (B) pursuant to a registration statement that has been
declared effective under the Securities Act, (C) pursuant to offers and sales that occur outside
the United States within the meaning of Regulation S under the Securities Act in a transaction
meeting the requirements of Rule 904 under the Securities Act, or (D) pursuant to another available
exemption from the registration requirements of the Securities Act, subject to the Company’s right
prior to any offer, sale or transfer to require the delivery of an opinion of
counsel, certificates and/or other information reasonably satisfactory to the Company.



          (iv) Buyer understands that the Company is the seller of the Securities which are the subject
of this Agreement, and that, for purpose of Regulation S, a “distributor” is any underwriter,
dealer or other person who participates, pursuant to a contractual arrangement, in the distribution
offered or sold in reliance on Regulation S and that an “affiliate” is any partner, officer,
director or any person directly or indirectly controlling, controlled by or under common control
with any person in question. The undersigned agrees that it will not, during the Restricted Period
set forth under Rule 903(b)(iii)(A), act as a distributor, either directly or through any
affiliate, nor shall it sell, transfer, hypothecate or otherwise convey the Securities other than
to a non-U.S. Person except in compliance with applicable securities laws.



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          (v) Buyer and any person receiving a selling concession or acting as a distributor or dealer
on behalf of the Buyer prior to the expiration of the restricted period under Regulation S will
send a confirmation or other notice to any other purchaser stating that the purchase is subject to
the same restrictions on offers and sales that apply to the Buyer.



          (vi) If Buyer is a dealer or a person receiving a selling concession fee or other remuneration
within the meaning of Regulation S under the Securities Act, Buyer acknowledges that until the
expiration of the one-year restricted period within the meaning of Rule 903 of the Regulation S
under the Securities Act, any offer or sale of the Securities shall not be made by it to a U.S.
person or for the account or benefit of a U.S. person within the meaning of Rule 902(k) of the
Securities Act.



     3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth in the SEC
Documents (as defined in Section 3(l)) the Disclosure Schedule attached hereto (the “Disclosure
Schedule”), which Disclosure Schedule shall be deemed a part hereof and shall qualify any
representation made herein to the extent of the disclosure contained in the corresponding section
of the Disclosure Schedule, the Company hereby represents and warrants to the Buyer that, as of the
Closing Date:




     (a) Subsidiaries. The Company has no direct or indirect Subsidiaries other than
as specified in the SEC Documents. Except as disclosed in the SEC Documents, the Company owns,
directly or indirectly, all of the capital stock of each Subsidiary free and clear of any and
all Liens other than Liens disclosed in the SEC Documents, and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights.




     (b) Organization and Qualification. The Company and its “Subsidiaries” (which
for purposes of this Agreement means any joint venture or any entity in which the Company,
directly or indirectly, owns any of the capital stock or holds an equity or similar interest)
are entities validly existing and in good standing under the laws of the jurisdiction in which
they are formed, and have the requisite power and authorization to own their properties and to carry on their business as now being
conducted. Each of the Company and its Subsidiaries is duly qualified as a foreign entity to
do business and, is in good standing in every jurisdiction in which its ownership of property
or the nature of the business conducted by it makes such qualification necessary, except to
the extent that the failure to be so qualified or be in good standing would not reasonably be
expected to have a Material Adverse Effect. As used in this Agreement, “Material Adverse
Effect” means any material adverse effect on the business, properties, assets, operations,
results of operations or condition (financial or otherwise) of the Company and its
Subsidiaries, individually or taken as a whole, or on the transactions contemplated hereby or
in the other Transaction Documents or by the agreements and instruments to be entered into in
connection herewith or therewith, or on the authority or ability of the Company to perform in
any material respect its obligations under the Transaction Documents (as defined below).



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     (c) Authorization; Enforcement; Validity. (i) the Company has the requisite
corporate power and authority to enter into and perform its obligations under this Agreement
and the Warrants, and each of the other agreements entered into by the parties hereto in
connection with the transactions contemplated by this Agreement (collectively, the
“Transaction Documents”) and to issue the Securities in accordance with the terms hereof and
thereof; (ii) the execution and delivery of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby, including,
without limitation, the issuance of the Shares and the Warrants, the reservation for issuance
and the issuance of the Warrant Shares issuable upon exercise of the Warrants have been duly
authorized by the Company’s Board of Directors and, except as set forth in Section 3(f), no
further filing, consent, or authorization is required by the Company, its Board of Directors
or its stockholders; and (iii) this Agreement and the other Transaction Documents of even date
herewith have been (or upon delivery will have been) duly executed and delivered by the
Company and constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except as such enforceability
may be limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or affecting generally,
the enforcement of applicable creditors’ rights and remedies.




     (d) Issuance of Securities. The issuance of the Shares and Warrants are duly
authorized and are free from all taxes, liens and charges with respect to the issue thereof.
At Closing, the Company shall have reserved from its duly authorized capital stock not less
than the sum of 100% of the maximum number of shares of Common Stock issuable upon exercise of
the Warrants (without taking into account any limitations on the exercise of the Warrants set
forth in the Warrants). Upon issuance of the Shares and upon exercise of the Warrants, the
Shares and the Warrant Shares, as the case may be, will be validly issued, fully paid and
nonassessable and free from all preemptive or similar rights, taxes, liens and charges with
respect to the issue thereof, with the holders being entitled to all rights accorded
to a holder of Common Stock. Assuming the accuracy of each of the representations and
warranties set forth in Section 2 of this Agreement, the offer and issuance by the Company of
the Securities is exempt from registration under the Securities Act.




     (e) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions contemplated
hereby and thereby (including, without limitation, the issuance of the Shares and Warrants and
reservation for issuance and issuance of the Warrant Shares) will not (i) result in a
violation of any articles of incorporation, articles of formation, any articles of
designations or other constituent documents of the Company or any of its Subsidiaries, any
capital stock of the Company or any of its Subsidiaries or bylaws of the Company or any of its
Subsidiaries or (ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) in any respect under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company or any of its Subsidiaries is a party, or result in the
imposition of any Lien upon any of the material properties or assets of the Company or of any
Subsidiary pursuant to, any agreement, credit facility, debt or other



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instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding
to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is
bound or affected or (iii) result in a violation of any law, rule, regulation, order, judgment
or decree (including foreign, federal and state securities laws and regulations and the rules
and regulations of the NASD’s OTC Bulletin Board (the “Principal Market”)) 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 in the case of each of clauses (ii) and (iii),
such as would not be reasonably likely to have or reasonably be expected to result in a
Material Adverse Effect.




     (f) Consents. Neither the Company nor any of its Subsidiaries is required to
obtain any consent, authorization or order of, or make any filing or registration with, any
court, governmental agency or any regulatory or self-regulatory agency or any other Person in
order for it to execute, deliver or perform any of its obligations under or contemplated by
the Transaction Documents, in each case in accordance with the terms hereof or thereof, except
for the following consents, authorizations, orders, filings and registrations (none of which
is required by any such agency to be filed or obtained before the Closing): the filing of a
listing application for the Shares and the Warrant Shares with the Principal Market, if
applicable, which shall be done pursuant to the rules of the Principal Market, NASD or
applicable securities or “Blue Sky” laws of the states of the United States. The Company and
its Subsidiaries are unaware of any facts or circumstances that might prevent the Company from
obtaining or effecting any of the registration, application or filings pursuant to the
preceding sentence. The Company is not in violation of the listing requirements of the
Principal Market and has no knowledge of any facts that would reasonably lead to delisting or
suspension of the Common Stock on the Principal Market in the foreseeable future.




     (g) Acknowledgement Regarding Buyer’s Trading Activity. Anything in this
Agreement or elsewhere herein to the contrary notwithstanding (except as set forth in Section
2(k)), it is understood and acknowledged by the Company (i) that none of the Buyers have been
asked by the Company to agree, nor has Buyer agreed, to desist from purchasing or selling,
long and/or short, securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the Securities for any specified term; (ii) that past or
future open market or other transactions by Buyer, including Short Sales, and specifically
including, without limitation, Short Sales or “derivative” transactions, before or after the
Closing of this or future private placement transactions, may negatively impact the market
price of the Company’s publicly-traded securities; (iii) that Buyer, and counter-parties in
“derivative” transactions to which Buyer is a party, directly or indirectly, presently may
have a “short” position in the Common Stock, and (iv) that Buyer shall not be deemed to have
any affiliation with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that (a) one or more Buyers may
engage in hedging activities at various times during the period that the Securities are
outstanding, including, without limitation, during the periods that the value of the Warrant
Shares deliverable with respect to Securities are being determined and (b) such hedging
activities (if any) could reduce the value of the existing stockholders’ equity interests in
the Company at and after the time that the hedging



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activities are being conducted. The Company acknowledges that such aforementioned hedging
activities do not constitute a breach of any of the Transaction Documents.




     (h) Acknowledgment Regarding Buyer’s Purchase of Securities. Except as set forth
in the Disclosure Schedule or the SEC Documents, the Company acknowledges and agrees that
Buyer is acting solely in the capacity of an arm’s length purchaser with respect to the
Transaction Documents and the transactions contemplated hereby and thereby and that no Buyer
is (i) an officer or director of the Company, (ii) an “affiliate” of the Company or any of its
Subsidiaries (as defined in Rule 144 of the 1933 Act) or (iii) to the knowledge of the
Company, a “beneficial owner” of more than 10% of the shares of Common Stock (as defined for
purposes of Rule 13d-3 of the Exchange Act. The Company further acknowledges that no Buyer is
acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in
any similar capacity) with respect to the Transaction Documents and the transactions
contemplated hereby and thereby, and any advice given by Buyer or any of its representatives
or agents in connection with the Transaction Documents and the transactions contemplated
hereby and thereby is merely incidental to Buyer’s purchase of the Securities. The Company
further represents to Buyer that the Company’s decision to enter into the Transaction
Documents has been based solely on the independent evaluation by the Company and its
representatives.




     (i) No General Solicitation; Placement Agent’s Fees. Neither the Company, nor
any of its Subsidiaries or affiliates, nor any Person acting on its or their behalf,
including, without limitation, any Person related to Buyer, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in connection
with the offer or sale of the Securities. The Company shall be responsible for the payment of
any of the Agent’s (as defined below) fees relating to or arising out of the transactions contemplated hereby,
including but not limited toits outside counsel’s legal fees and expenses. The Company acknowledges that it has engaged
Knight Capital Markets, LLC as placement agent (the “Agent”) in connection with the sale of
the Securities. The fees and expenses payable to the Agent are set forth in the Disclosure
Schedule. Other than the Agent, neither the Company nor any of its Subsidiaries has engaged
any placement agent or other agent in connection with the sale of the Securities.




     (j) Dilutive Effect. The Company acknowledges that its obligation to issue the
Warrant Shares upon exercise of the Warrants in accordance with this Agreement and the
Warrants is, in each case, absolute and unconditional, regardless of the dilutive effect that
such issuance may have on the ownership interests of other stockholders of the Company.




     (k) Application of Takeover Protections; Rights Agreement. The Company and its
board of directors have taken all necessary action in order to render inapplicable any control
share acquisition, business combination, poison pill (including any distribution under a
rights agreement) or other similar anti-takeover provision under the Articles of Incorporation
or the laws of the state of its incorporation which is or could become applicable to Buyer as
a result of the transactions contemplated by this Agreement, including, without limitation,
the Company’s issuance of the Securities and Buyer’s ownership of the Securities.




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




     (m) Absence of Certain Changes. Since the date of the latest unaudited financial
statements included in the Company’s Form 10-KSB filed on December 28, 2007 and except as
specifically disclosed in a subsequent SEC Report filed prior to the date hereof or as set
forth the Disclosure Schedule, (i) there has been no event, occurrence or development that has
had or that could reasonably be expected to result in a Material Adverse Effect, or be
required to be disclosed by the Company under applicable securities laws on a registration
statement filed with the SEC relating to an issuance and sale by the Company of its Common
Stock and which has not been publicly announced, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice
and (B) liabilities incurred in the ordinary course of business not required to be
reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made
with the SEC, (iii) the Company has not altered its method of accounting, (iv) the Company has
not declared or made any dividend or distribution of cash or other property to



---10---









 







its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) the Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock option plans or pursuant to
conversion of outstanding debt. The Company does not have pending before the SEC any request
for confidential treatment of information. Except as set forth in the Disclosure Schedule, any
event, liability or development with respect to the Company or its Subsidiaries or their
respective business, properties, operations or financial condition, required to be disclosed
by the Company under applicable securities laws has been disclosed at least five (5) Trading
Days prior to the date hereof. The Company maintains and will continue to maintain a standard
system of accounting established and administered in accordance with generally accepted
accounting principles.




     (n) Conduct of Business; Regulatory Permits. Neither the Company nor any of its
Subsidiaries is in violation of any term of or in default under its respective Certificates or
Articles of Incorporation or its Bylaws or their organizational charter or bylaws,
respectively. Neither the Company nor any of its Subsidiaries is in violation of any
judgment, decree or order or any statute, ordinance, rule or regulation applicable to the
Company or its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct
its business in violation of any of the foregoing, except for possible violations which could
not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect. Without limiting the generality of the foregoing, the Company is not in violation of
any of the rules, regulations or requirements of the Approved Market and has no knowledge of
any facts or circumstances that would reasonably lead to delisting or suspension of the Common
Stock by its Approved Market in the foreseeable future. Since March 10, 2006, (i) the Common
Stock has been designated for quotation on the Principal Market, (ii) trading in the Common
Stock has not been suspended by the SEC or the Principal Market and (iii) the Company has
received no communication, written or oral, from the SEC or the Principal Market regarding the
suspension or delisting of the Common Stock from the Principal Market. The Company and its
Subsidiaries possess all certificates, authorizations and permits issued by the appropriate
regulatory authorities necessary to conduct their respective businesses, except where the
failure to possess such certificates, authorizations or permits would not be reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect, and neither the Company
nor any such Subsidiary has received any written notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit.




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



---11---









 






     (p) Neither the issuance of the Securities to the Buyer, nor the use of the respective
proceeds thereof, shall cause the Buyer to violate the U.S. Bank Secrecy Act, as amended, and
any applicable regulations thereunder or any of the sanctions programs administered by the
U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) of the United
States Department of Treasury, any regulations promulgated thereunder by OFAC or under any
affiliated or successor governmental or quasi-governmental office, bureau or agency and any
enabling legislation or executive order relating thereto. Without limiting the foregoing,
neither the Company nor any Subsidiary (a) is a person whose property or interests in property
are blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September
23, 200l Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (b) engages in any dealings or
transactions prohibited by Section 2 of such executive order, or is otherwise associated with
any such person in any manner violative of Section 2, or (c) is a person on the list of
Specially Designated Nationals and Blocked Persons or subject to the limitations or
prohibitions under any other OFAC regulation or executive order.




     (q) Sarbanes-Oxley Act. Except as set forth in the Disclosure Schedule or the
SEC Documents, the Company is in compliance with any and all applicable requirements of the
Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all
applicable rules and regulations promulgated by the SEC thereunder that are effective as of
the date hereof.




     (r) Transactions With Affiliates. Except as set forth in the SEC Documents filed
at least ten (10) days prior to the date hereof and other than the grant of stock options
disclosed on the Disclosure Schedule, none of the employees of the Company or any of its
Subsidiaries 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
entity in which any officer, director, or any such employee has a substantial interest or is
an officer, director, trustee or partner.




     (s) Equity Capitalization. As of the date hereof, the capitalization of the
Company is as set forth in the Disclosure Schedule. Except as disclosed in the Disclosure
Schedule: (i) none of the Company’s capital stock is subject to preemptive rights or any other
similar rights or any liens or encumbrances suffered or permitted by the Company; (ii) there
are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights convertible into, or exercisable
or exchangeable for, any capital stock of the Company or any of its Subsidiaries, or
contracts, commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional capital stock of the Company or any of
its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights



---12---









 







convertible into, or exercisable
or exchangeable for, any capital stock of the Company or any of its Subsidiaries; (iii) there
are no outstanding debt securities, notes, credit agreements, credit facilities or other
agreements, documents or instruments evidencing Indebtedness of the Company or any of its
Subsidiaries or by which the Company or any of its Subsidiaries is or may become bound; (iv)
there are no financing statements securing obligations in any material amounts, either singly
or in the aggregate, filed in connection with the Company or any of its Subsidiaries; (v)
there are no agreements or arrangements under which the Company or any of its Subsidiaries is
obligated to register the sale of any of their securities under the Securities Act; (vi) there
are no outstanding securities or instruments of the Company or any of its Subsidiaries which
contain any redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries is or may
become bound to redeem a security of the Company or any of its Subsidiaries; (vii) there are
no securities or instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the Securities; (viii) the Company does not have any stock
appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement;
and (ix) the Company and its Subsidiaries have no liabilities or obligations required to be
disclosed in the SEC Documents but not so disclosed in the SEC Documents, other than those
incurred in the ordinary course of the Company’s or its Subsidiaries’ respective businesses
and which, individually or in the aggregate, do not or would not have a Material Adverse
Effect. The Company has furnished to the Buyers true, correct and complete copies of the
Company’s Certificate of Incorporation, as amended and as in effect on the date hereof (the
“Certificate of Incorporation”), and the Company’s Bylaws, as amended and as in effect on the
date hereof (the “Bylaws”), and the terms of all securities convertible into, or exercisable
or exchangeable for, shares of Common Stock and the material rights of the holders thereof in
respect thereto.




     (t) Indebtedness and Other Contracts. Since the date of the latest unaudited
financial statements included in the Company’s Form 10-KSB filed on December 28, 2007 and
except as disclosed in the Disclosure Schedule or the SEC Documents, neither the Company nor
any of its Subsidiaries (i) has any additional outstanding Indebtedness (as defined below),
(ii) is a party to any contract, agreement or instrument, the violation of which, or default
under which, by the other
party(ies) to such contract, agreement or instrument could reasonably be expected to
result in a Material Adverse Effect, (iii) is in violation of any term of or in default under
any contract, agreement or instrument, including, without limitation, contracts, agreements or
instruments relating to any Indebtedness, except where such violations and defaults would not
result, individually or in the aggregate, in a Material Adverse Effect, or (iv) is a party to
any contract, agreement or instrument relating to any Indebtedness, the performance of which,
in the judgment of the Company’s officers, has or is expected to have a Material Adverse
Effect. For purposes of this Agreement: (x) “Indebtedness” of any Person means, without
duplication, (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken
or assumed as the deferred purchase price of property or services, including (without
limitation) “capital leases” in accordance with generally accepted accounting principles
(other than trade payables entered into in the ordinary course of business), (C) all
reimbursement or payment obligations with respect to letters of credit, surety bonds and other
similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar
instruments, including



---13---









 







obligations so evidenced incurred in connection with the acquisition of
property, assets or businesses, (E) all indebtedness created or arising under any conditional
sale or other title retention agreement, or incurred as financing, in either case with respect
to any property or assets acquired with the proceeds of such indebtedness (even though the
rights and remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property), (F) all monetary obligations under any
leasing or similar arrangement which, in connection with generally accepted accounting
principles, consistently applied for the periods covered thereby, is classified as a capital
lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any mortgage, lien, pledge, charge, security interest or other encumbrance upon or
in any property or assets (including accounts and contract rights) owned by any Person, even
though the Person which owns such assets or property has not assumed or become liable for the
payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or
obligations of others of the kinds referred to in clauses (A) through (G) above; (y)
“Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent
or otherwise, of that Person with respect to any indebtedness, lease, dividend or other
obligation of another Person if the primary purpose or intent of the Person incurring such
liability, or the primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be protected (in
whole or in part) against loss with respect thereto; and (z) “Person” means an individual or
legal entity, including but not limited to a corporation, a limited liability company, a
partnership, a joint venture, a trust, an unincorporated organization and a government or any
department or agency thereof.




     (u) Absence of Litigation. There is no action, suit or proceeding which (i)
adversely affects or challenges the legality, validity or enforceability of any of the
Transaction Documents or the Securities or (ii) except as specifically disclosed in the SEC
Documents, could, if there were an unfavorable decision,
individually or in the aggregate, have or reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof
(in his capacity as such), is or has been the subject of any action involving a claim of
violation of or liability under federal or state securities laws or a claim of breach of
fiduciary duty, except as specifically disclosed in the SEC Documents. There has not been, and
to the knowledge of the Company, there is not pending any investigation by the Principal
Market, any court, public board, government agency, self-regulatory organization or body,
involving the Company or any current or former director or officer of the Company (in his or
her capacity as such).




     (v) Insurance. The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which the Company and the Subsidiaries are engaged.
Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or
applied for and neither the Company nor any such Subsidiary has any reason to believe that it
will not be able to renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to continue its business
on terms consistent with the market for the Company’s



---14---









 







and such Subsidiaries’ respective lines of business at a cost that would not have a Material
Adverse Effect.




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




     (x) Title. 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 for encumbrances that do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the Company and any of
its Subsidiaries. Any real property and facilities held under lease by the Company and any of
its Subsidiaries are held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its Subsidiaries.




     (y) Intellectual Property Rights. The Company and its Subsidiaries own or
possess adequate rights or licenses to use all trademarks, service marks and all applications
and registrations therefor, trade names, patents, patent rights, copyrights, original works of
authorship, inventions, trade secrets and other intellectual property rights (“Intellectual
Property Rights”) necessary to conduct their respective businesses as now conducted. None of
the Company’s registered, or applied for, Intellectual Property Rights, to the extent the
Company has such Intellectual Property Rights, have expired or terminated or have been
abandoned, or are expected to expire or terminate or expected to be abandoned, within three
years from the date of this Agreement. The Company does not, after reasonable investigation,
have any knowledge of any infringement by the Company or its Subsidiaries of Intellectual
Property Rights of others. There is no claim, action or proceeding being made or brought, or
to the knowledge of the Company, being threatened, against the Company or its Subsidiaries
regarding its Intellectual Property Rights. Neither the



---15---









 







Company nor any of its Subsidiaries
is aware of any facts or circumstances which might give rise to any of the foregoing
infringements or claims, actions or proceedings. The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value of all of their
Intellectual Property Rights, except where failure to do so would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.




     (z) Environmental Laws. The Company and its Subsidiaries, to their knowledge,
after commercially reasonable investigation: (i) are in compliance with any and all
Environmental Laws (as hereinafter defined), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their respective
businesses, (iii) are in compliance with all terms and conditions of any such permit, license
or approval, (iv) do not own or operate, and have not owned or operated, any real property
(including soils, groundwater, surface water, buildings or other structures) contaminated with
any substance that is in violation of Environmental Laws, (v) are not subject to liability for
any Hazardous Substance disposal or contamination on any third party property; (vi) have not
been associated with any release or threat of release of any Hazardous Materials; and (vii)
are not liable for any off-site disposal or contamination pursuant to any Environmental Laws.
There is no civil, criminal or administrative action, suit, investigation, inquiry or
proceeding pending or, to the knowledge of the Company, threatened by or before any court or
governmental authority against the Company or any of its Subsidiaries relating to or arising
from the Company’s nor
any Subsidiary’s non-compliance with any Environmental Laws, nor has the Company received
written notice of any alleged violations of Environmental Laws. 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.




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




     (bb) Tax Status. The Company and each of its Subsidiaries (i) has made or filed
all foreign, federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject, (ii) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or determined to be
due on such returns, reports and declarations, except those being contested in good faith and
(iii) has set aside on its books provision reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or



---16---









 







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.




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




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




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




     (ff) Transfer Taxes. On each of the Initial Closing Date and the Final Closing
Date, all stock transfer or other taxes (other than income or similar taxes) which are
required to be paid in connection with the sale and transfer of the Securities to be sold to
Buyer hereunder will be, or will have been, fully paid or provided for by the Company, and all
laws imposing such taxes will be or will have been complied with.



---17---









 






     (gg) Manipulation of Price. The Company has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or
to result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities, (ii) other than the Agent, sold, bid
for, purchased, or paid any compensation for soliciting purchases of, any of the Securities,
or (iii) other than the Agent, paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.




     (hh) Disclosure. All disclosures provided to the Buyer regarding the Company,
its Subsidiaries and their respective businesses and the transactions contemplated hereby,
furnished by or on behalf of the Company (including the Company’s representations and
warranties set forth in this Agreement) are true and correct in all material respects and do
not contain any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.




     (ii) No Additional Agreements. The Company does not have any agreement or
understanding with the Buyer with respect to the transactions
contemplated by the Transaction Documents other than as specified in the Transaction
Documents.




     (jj) ERISA. Neither the Company nor any ERISA Affiliate maintains, contributes
to, or has ever maintained or contributed to, any liability or contingent liability with
respect to any employee benefit plan subject to ERISA.



     4. COVENANTS.




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




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




     (c) Reporting Status. Until the date on which the Buyers shall have sold all the
Shares and Warrant Shares and none of the Warrants are outstanding, (the “Reporting Period”),
the Company shall file, in a timely manner, all reports required to be filed with the SEC
pursuant to the Exchange Act, and the Company shall not terminate its status as an



---18---









 







issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and
regulations thereunder would permit such termination.




     (d) Use of Proceeds. The Company will use the proceeds from the sale of the
Securities for general corporate and working capital purposes and not for (i) the repayment of
any outstanding Indebtedness of the Company or any of its Subsidiaries, except for the
repayment of outstanding indebtedness as set forth on the Disclosure Schedule, or (ii)
redemption or repurchase of any of its or its Subsidiaries’ equity securities.




     (e) Financial Information. The Company agrees to send the following to Buyer
during the Reporting Period (i) unless the following are filed with the SEC through EDGAR and
are available to the public through the EDGAR system, within one (1) Business Day after the
filing thereof with the SEC, a copy of its Annual Reports and Quarterly Reports on Form 10-K,
10-KSB, 10-Q or 10-QSB, any interim reports or any consolidated balance sheets, income
statements, stockholders’ equity statements and/or cash flow statements for any period other than
annual, any Current Reports on Form 8-K and any registration statements (other than on Form
S-8) or amendments filed pursuant to the Securities Act, (ii) on the same day as the release
thereof, facsimile or e-mailed copies of all press releases issued by the Company or any of
its Subsidiaries, and (iii) copies of any notices and other information made available or
given to the stockholders of the Company generally, contemporaneously with the making
available or giving thereof to the stockholders. As used herein, “Business Day” means any day
other than Saturday, Sunday or other day on which commercial banks in the City of New York are
authorized or required by law to remain closed.




     (f) Listing. The Company shall promptly secure the listing of all of the Shares
and the Warrant Shares upon each national securities exchange and automated quotation system,
if any, upon which the Common Stock is then listed (subject to official notice of issuance)
and shall maintain the listing of the Shares and Warrant Shares from time to time issuable
under the terms of the Transaction Documents. The Company shall maintain the Common Stocks’
authorization for quotation on the Principal Market or an Approved Market (as defined below).
Neither the Company nor any of its Subsidiaries shall take any action which would be
reasonably expected to result in the delisting or suspension of the Common Stock on the
Principal Market or an Approved Market. As used herein, “Approved Market” shall mean any of
the following: The New York Stock Exchange, The NASDAQ Global Select Market, The NASDAQ Global
Market, The NASDAQ Capital Market, the American Stock Exchange or the NASD’s OTC Bulletin
Board. The Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section 4(f).




     (g) Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged by Buyer in connection with a bona fide margin agreement or other
loan or financing arrangement that is secured by the Securities. The pledge of Securities
shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and if
Buyer effects a pledge of Securities Buyer shall not be required to provide the Company with
any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or
any other Transaction Document, including, without



---19---









 







limitation, Section 2(f) hereof; provided
that Buyer and its pledgee shall be required to comply with the provisions of Section 2(f)
hereof in order to effect a sale, transfer or assignment of Securities to such pledgee. The
Company hereby agrees to execute and deliver such documentation as a pledgee of the Securities
may reasonably request in connection with a pledge of the Securities to such pledgee by an
Investor




     (h) Disclosure of Transactions and Other Material Information. The Company shall
on or before the fourth Business Day immediately following the date of this Agreement, file a
press release describing the material terms of the transactions contemplated by the
Transaction Documents and a Current Report on Form 8-K describing the terms of the
transactions contemplated by the Transaction Documents in the form required by the Exchange
Act and attaching the material
Transaction Documents (including, without limitation, this Agreement and the form of the
Warrants) as exhibits to such filing (including all attachments, the “8-K Filing”). The
Company shall not, and shall cause each of its Subsidiaries and its and each of their
respective officers, directors, employees and agents, not to, provide Buyer with any material,
nonpublic information regarding the Company or any of its Subsidiaries from and after the
filing of the 8-K Filing with the SEC without the express written consent of Buyer.




     (i) Reservation of Shares. The Company shall take all action necessary to at all
times have authorized and reserved for the purpose of issuance no less than 100% of the the
number of shares of Common Stock issuable upon exercise of the Warrants issued at the Closing.




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




     (k) Delivery of Certificates. Upon any request for removal of restrictive
legends on the Shares or shares of Common Stock issuable in connection with the exercise of
the Warrants, certificates for shares of Common Stock will be delivered to the Buyer within
three (3) Trading Days.




     (l) Limitation On Sale Or Disposition Of Intellectual Property to Related
Parties. So long as any of the Warrants remain outstanding, the Company shall not sell,
convey, dispose of, spin off or assign any or all of its Intellectual Property Rights (as
defined in Section 3(x) above), or the rights to receive proceeds from patent licensing
agreements, patent infringement litigation or other litigation related to such Intellectual
Property Rights, in each case without Buyer’s written consent, to any Related Party (as
defined below). For purposes hereof, “Related Party” shall mean any of the Company’s or any
Subsidiary’s officers, directors, persons who were officers or directors at any time during
the previous two (2) years, stockholders who beneficially own five percent (5%) or more of the
Common Stock, Strategic Investment Partners or Affiliates (as defined below) or (ii) with any
individual related by blood, marriage, or adoption to any such individual or with any entity
in which any such entity or individual owns a five percent (5%) or more beneficial interest.
“Affiliate” for purposes hereof means, with respect to any person or



---20---









 







entity, another person or
entity that, directly or indirectly, (i) has a ten percent (10%) or more equity interest in
that person or entity, (ii) has ten percent (10%) or more common ownership with that person or
entity, (iii) controls that person or entity, or (iv) shares common control with that person
or entity. “Control” or “Controls” for purposes hereof means that a person or entity has the
power, direct or indirect, to conduct or govern the policies of another person or entity.




     (m) Integration. The Company has not and shall not, and shall use its best
efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale of the
Securities in a manner that would require the registration under the Securities Act of the
sale of the Securities to the Buyer, or that would be integrated with the offer or sale of the
Securities for purposes of the rules and regulations of the Principal Market in a manner that
would require stockholder approval of the sale of the securities to the Investor.



     5. REGISTER.



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



     6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.



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



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



               (ii) Such Buyer shall have delivered to the Escrow Agent the Purchase Price for the Shares and
the related Warrants being purchased by Buyer at the Closing by wire transfer of immediately
available funds pursuant to the wire instructions provided by the Company.



               (iii) The representations and warranties of such Buyer shall be true and correct in all
material respects (except for those representations and warranties that are qualified by
materiality or Material Adverse Effect, which shall be true and correct in all 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, which shall be true and correct as of such
specified date), and such Buyer shall have performed, satisfied and complied in all



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material respects with the covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by such Buyer at or prior to the Closing Date.



     7. CONDITIONS TO BUYER’S OBLIGATION TO PURCHASE.



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



               (i) The Company shall have duly executed and delivered (physically or by electronic copy) to
such Buyer (i) each of the Transaction Documents, (ii) the Shares as set forth on such Buyer’s
signature page hereto, and (iii) the related Warrants (allocated in such amounts as Buyer shall
request) being issued to such Buyer at the Closing pursuant to this Agreement in an amount equal to
100% of the Shares purchased by such Buyer at an exercise price per Series C Warrant Share of
$1.00, subject to adjustment, as set forth on such Buyer’s signature page hereto.



               (ii) Such Buyer shall have received the opinion of Richardson & Patel LLP, the Company’s
outside counsel (“Opinion of Counsel”), dated as of the Closing Date, in substantially the form of
Exhibit B attached hereto.



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



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



               (v) The representations and warranties of the Company shall be true and correct in all
material respects (except for those representations and warranties that are qualified by
materiality or Material Adverse Effect, which shall be true and correct in all 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, which shall be true and correct as of such
specified date) and the Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the Closing Date. Such Buyer
shall have received a certificate, executed by the Chief Executive Officer of the Company, dated as
of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably
requested by such Buyer in the form attached hereto as Exhibit C.



               (vi) The Common Stock (A) shall be designated for quotation or listed on the Principal Market
and (B) shall not have been suspended, as of the Closing Date, by the



---22---









 







SEC or the Principal Market from trading on the Principal Market nor shall suspension by the SEC
or the Principal Market have been threatened, as of the Closing Date, either (I) in writing by the
SEC or the Principal Market or (II) by falling below the minimum listing maintenance requirements
of the Principal Market.



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



     8. TERMINATION. This Agreement may be terminated by Buyer by written notice to the
Company, if the Closing has not been consummated on or before January ___, 2008; provided, however,
that no such termination will affect the right of any party to sue for any breach by the other
party (or parties).



     9. MISCELLANEOUS.




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




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



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




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




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




     (f) Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number set forth on the signature pages attached
hereto prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day
after the date of transmission, if such notice or communication is delivered via facsimile at
the facsimile number set forth on the signature pages attached hereto on a day that is not a
Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the
2nd Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and communications shall be as
set forth on the signature pages attached hereto.




     (g) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns, including any
purchasers of the Shares or the Warrants. The Company shall not assign this Agreement or any
rights or obligations hereunder without the prior written consent of the holders of a majority
of the Shares then held by the Buyers. A Buyer may assign some or all of its rights hereunder
without the consent of the Company, in which event such assignee shall be deemed to be a Buyer
hereunder with respect to such assigned rights




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




     (i) Survival. Unless this Agreement is terminated under Section 8, the
representations and warranties of the Company and the Buyers contained in Sections 2, 2A



---24---









 







and 3, and the agreements and covenants set forth in Sections 4, 5 and 9 shall survive the
Closing. Each Buyer shall be responsible only for its own representations, warranties,
agreements and covenants hereunder.




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




     (k) Indemnification by the Company. In consideration of each Buyer’s execution
and delivery of the Transaction Documents and acquiring the Securities thereunder and in
addition to all of the Company’s other obligations under the Transaction Documents, the
Company shall defend, protect, indemnify and hold harmless each Buyer and each other holder of
the Securities and all of their stockholders, partners, members, officers, directors,
employees and direct or indirect investors and any of the foregoing Persons’ agents or other
representatives (including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the “Buyer Indemnitees”) from and
against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses in connection therewith (irrespective of whether any
Buyer Indemnitee is a party to the action for which indemnification hereunder is sought), and
including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Buyer Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the Company in the
Transaction Documents or any other certificate, instrument or document contemplated hereby or
thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in
the Transaction Documents or any other certificate, instrument or document contemplated hereby
or thereby or (c) any cause of action, suit or claim brought or made against Buyer Indemnitee
by a third party (including for these purposes a derivative action brought on behalf of the
Company) and arising out of or resulting from (i) the execution, delivery, performance or
enforcement of the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of the issuance of the Securities, or (iii)
the status of Buyer or holder of the Securities as an investor in the Company pursuant to the
transactions contemplated by the Transaction Documents. The Company shall not be obligated to
indemnify a Buyer Indemnitee pursuant to this Section 9(k) for Indemnified Liabilities to the
extent such Indemnified Liabilities are caused by acts of gross negligence or willful
misconduct on the part of Buyer Indemnitee. To the extent that the foregoing undertaking by
the Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified Liabilities
that is permissible under applicable law.




     (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.



---25---









 






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




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




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




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



---26---









 






     (q) Independent Nature of Buyers’ Obligations and Rights. The obligations of
each Buyer under any Transaction Document are several and not joint with the obligations of
any other Buyer, and no Buyer shall be responsible in any way for the performance of the
obligations of any other Buyer under any Transaction Document. Nothing contained herein or in
any other Transaction Document, and no action taken by any Buyer pursuant hereto or thereto,
shall be deemed to constitute the Buyers as, and the Company acknowledges that the Buyers do
not so constitute, a partnership, an association, a joint venture or any other kind of entity,
or create a presumption that the Buyers are in any way acting in concert or as a group, and
the Company will not assert any such claim with respect to such obligations or the
transactions contemplated by the Transaction Documents and the Company acknowledges that the
Buyers are not acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. The Company acknowledges and each
Buyer confirms that it has independently participated in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be
entitled to independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of any other Transaction Documents, and it shall
not be necessary for any other Buyer to be joined as an additional party in any proceeding for
such purpose.



[Signature Pages Follow]





---27---









 





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



	 	 	 	 	 	 
	Solar Enertech Corp.
	 	Address for Notice:

	 	 
	 	1600 Adams Drive

	 	 
	 	Menlo Park, CA 94025

	 	 
	 	 	 	 
	By: 	 
	 	Facsimile: (815) 336-8068

	 	 
	 	 	 	 
	 	Name: Leo Shi Young
	 	Attention: Leo Shi Young,

	 	Title: Chief Executive Officer
	 	Chief Executive Officer

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

	 
	 	405 Lexington Avenue, 26th Floor

	Richardson & Patel LLP
	 	New York, NY 10174

	Attention: Jody R. Samuels, Esq.
	 	 	 	 






[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR BUYERS FOLLOWS]




 









 








[BUYER SIGNATURE PAGES TO SOLAR ENERTECH CORP. SECURITIES PURCHASE AGREEMENT]



IN WITNESS WHEREOF, the undersigned has caused this Securities Purchase Agreement to be
duly executed by its authorized signatory as of the date first indicated above.




Name of Buyer:




Signature of Authorized Signatory of Buyer: __________________________





Name of Authorized Signatory:




Title of Authorized Signatory:




Email Address of Buyer:




Fax Number of Buyer:




Address for Notice of Buyer:




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




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




Purchase Price per Share: $0.88

Number of Shares being Purchased:

Total Purchase Price: $




Series C Warrant Shares: ________




EIN Number: [PROVIDE THIS UNDER SEPARATE COVER]



If Buyer is not a “U.S. person”, as such term is defined in Rule 902(k) of the Securities Act of
1933, as amended, please check the following box o.

By checking this box and executing this signature page Buyer understands and agrees that it has
made additional representations to the Company pursuant to Section 2A of this Agreement that U.S.
persons have not been asked to make.




[ADDITIONAL BUYER SIGNATURE PAGES FOLLOW]