Unassociated Document


    


    SECURITIES
      PURCHASE AGREEMENT

     

    This
      Securities Purchase Agreement (this “Agreement”)
      is
      dated as of October 30, 2008, between Octavian Global Technologies, Inc. (f/k/a
      House Fly Rentals Inc. (OTCBB: HSLY), a Nevada corporation (the “Company”)),
      and
      each purchaser identified on the signature pages hereto (each, including its
      successors and assigns, a “Purchaser”
and
      collectively, the “Purchasers”).

     

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

     

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

     

    ARTICLE
      I.

    DEFINITIONS

     

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

     

    “Acquiring
      Person”
shall
      have the meaning ascribed to such term in Section 4.7.

     

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

     

    “Affiliate”
means
      any Person that, directly or indirectly through one or more intermediaries,
      controls or is controlled by or is under common control with a Person, as such
      terms are used in and construed under Rule 405 under the Securities
      Act. 

     

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

     

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

     

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

     

    “Closing
      Date”
means
      the Trading Day when all of the Transaction Documents have been executed and
      delivered by the applicable parties thereto, and all conditions precedent to
      (i)
      the Purchasers’ obligations to pay the Subscription Amount and (ii) the
      Company’s obligations to deliver the Securities have been satisfied or
      waived.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Closing
      Statement”
means
      the closing statement in the form of Annex
      A
      attached
      hereto.

     

    “Commission”
means
      the United States Securities and Exchange Commission.

     

    “Common
      Stock”
means
      the common stock of the Company, par value $0.001 per share, and any other
      class
      of securities into which such securities may hereafter be reclassified or
      changed into.

     

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

     

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

     

    “Debentures”
means
      the Original Issue Discount Convertible Debentures due, subject to the terms
      therein, October 30, 2011, issued by the Company to the Purchasers hereunder,
      in
      the form of Exhibit
      A
      attached
      hereto.

     

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

     

    “Discussion
      Time”
shall
      have the meaning ascribed to such term in Section 3.2(f).

     

    “Effective
      Date”
means
      the earlier of (a) date that a Registration Statement filed by the Company
      pursuant to this Agreement is first declared effective by the Commission and
      (b)
      the date that the Underlying Shares underlying the Debentures may be sold
      pursuant to Rule 144 without volume or manner of sale restrictions.

     

    “Escrow
      Agent”
means
      American Stock Transfer having offices at Sichenzia Ross Friedman Ference
      LLP.

     

    “Escrow
      Agreement”
means
      the escrow agreement entered into prior to the date hereof, by and among the
      Company and the Escrow Agent pursuant to which the Purchasers, shall deposit
      Subscription Amounts with the Escrow Agent to be applied to the transactions
      contemplated hereunder.

     

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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Exempt
      Issuance”
means
      the issuance of (a) up to 1,200,000 shares of Common Stock or options, in the
      aggregate while the Debentures are outstanding and subject to adjustment for
      reverse and forward stock splits and the like), to employees, officers,
      directors, advisors or consultants (as to consultants only, up to 100,000 shares
      (subject to adjustment for reverse and forward stock splits and the like) in
      any
      12 month period) of the Company pursuant to any stock or option plan duly
      adopted for such purpose, by a majority of the non-employee members of the
      Board
      of Directors or a majority of the members of a committee of non-employee
      directors established for such purpose, (b) securities upon the exercise or
      exchange of or conversion of any Securities issued hereunder and/or other
      securities exercisable or exchangeable for or convertible into shares of Common
      Stock issued and outstanding on the date of this Agreement, provided that such
      securities have not been amended since the date of this Agreement to increase
      the number of such securities or to decrease the exercise, exchange or
      conversion price of such securities, and (c) securities issued pursuant to
      acquisitions or strategic transactions approved by a majority of the
      disinterested directors of the Company, provided that any such issuance shall
      only be to a Person which is, itself or through its subsidiaries, an operating
      company in a business synergistic with the business of the Company and in which
      the Company receives benefits in addition to the investment of funds, but shall
      not include a transaction in which the Company is issuing securities primarily
      for the purpose of raising capital or to an entity whose primary business is
      investing in securities, (d) [Intentionally Deleted]; (e) securities issuable
      in
      accordance with existing obligations of the Company to Company or Subsidiary
      employees, officers, directors, consultants or agents, (f) securities issuable
      to any employees or former agents of the Company or any Subsidiary in
      satisfaction of or in settlement of any disputes or controversies concerning
      the
      terms of such Person’s employment or separation from the Company or any such
      Subsidiary, provided that such securities shall not exceed 100,000 shares
      (subject to adjustment for reverse and forward stock splits and the like) of
      Common Stock or Common Stock Equivalents in any 12 month period, (g) shares
      of
      Common Stock issuable in lieu of payments of interest or dividends provided
      that
      such terms of issuance is no less favorable to the Company than the issuance
      of
      Common Stock in lieu of interest under the Debentures and (h) up to an amount
      of
      Debentures and Warrants equal to the difference between $30,000,000 and the
      aggregate Subscription Amounts hereunder, on the same terms and conditions
      and
      prices as hereunder, with investors executing definitive agreements for the
      purchase of such securities provided that the Company has received the prior
      written consent of Vicis.

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    “Lock-Up
      Agreement”
means
      the Lock-Up Agreement, dated as of the date hereof, by and among the Company
      and
      the officers and directors of the Company, in the form of Exhibit
      C
      attached
      hereto.

     

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

     

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

     

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

     

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

     

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

     

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

     

    “Principal
      Amount”
means,
      as to each Purchaser, the amounts set forth below such Purchaser’s signature
      block on the signature pages hereto next to the heading “Principal Amount,” in
      United States Dollars, which shall equal such Purchaser’s Subscription Amount
      multiplied by 1.0989.

     

    “Pro
      Rata Portion”
shall
      have the meaning ascribed to such term in Section 4.12(e).

     

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

     

    “Public
      Information Failure”
shall
      have the meaning ascribed to such term in Section 4.3(b).

     

    “Public
      Information Failure Payments”
shall
      have the meaning ascribed to such term in Section 4.3(b).

     

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

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Registration
      Statement”
means
      a
      registration statement covering the resale of the Underlying Shares by each
      Purchaser pursuant to Section 4.17.

     

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

     

    “Required
      Minimum”
means,
      as of any date, the maximum aggregate number of shares of Common Stock then
      issued or potentially issuable in the future pursuant to the Transaction
      Documents, including any Underlying Shares issuable upon exercise in full of
      all
      Warrants or conversion in full of all Debentures (including Underlying Shares
      issuable as payment of interest on the Debentures), ignoring any conversion
      or
      exercise limits set forth therein.

     

    “Reverse
      Merger”
means
      the execution of those certain Share Exchange Agreements by and among Octavian
      International Limited, a privately-held corporation incorporated under the
      laws
      of the United Kingdom and its shareholder and the shareholders of the
      Company.

     

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

     

    “Securities”
means
      the Debentures, the Warrants, the Warrant Shares, the Shares and the shares
      of
      Common Stock underlying the Debentures.

     

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

     

    “Shares”
means
      the shares of Common Stock issued to the Purchasers at the Closing pursuant
      to
      Section 2 of this Agreement.

     

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

     

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

     

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

     

    “Subsidiary”
means
      any “significant subsidiary” as defined in Rule 1-02(w) of Regulation S-X
      promulgated by the Commission under the Exchange Act, each as set forth in
      the
      Super 8-K and, except for purposes of any representations and warranties of
      the
      Company which speak to a date prior to the date of the acquisition or formation
      of such subsidiary, any such significant subsidiary formed or acquired after
      the
      date of this Agreement.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “Super
      8-K”
means
      the Current Report on Form 8-K delivered to each Purchaser prior to the date
      hereof and to be filed by the Company within four Business Days of the Closing
      Date, along with the exhibits filed in connection therewith.

     

    “Trading
      Day”
means
      a
      day on which the principal Trading Market is open for trading.

     

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

     

    “Transaction
      Documents”
means
      this Agreement, the Debentures, the Warrants, the Escrow Agreement, the Lock-Up
      Agreement and all exhibits and schedules thereto and hereto and any other
      documents or agreements executed in connection with the transactions
      contemplated hereunder.

     

    “Transfer
      Agent”
means
      the transfer agent to the Company.

     

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

     

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

     

    “Vicis”
shall
      have the meaning ascribed to such term in Section 5.2.

     

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

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    ARTICLE
      II.

    PURCHASE
      AND SALE

     

    2.1 Closing.
      On the
      Closing Date, upon the terms and subject to the conditions set forth herein,
      substantially concurrent with the execution and delivery of this Agreement
      by
      the parties hereto, the Company agrees to sell, and the Purchasers, severally
      and not jointly, agree to purchase, up to an aggregate of $21,978,000 in
      principal amount of the Debentures. Each Purchaser shall deliver to the Company
      via wire transfer or a certified check of immediately available funds equal
      to
      its Subscription Amount and the Company shall deliver to each Purchaser its
      respective Debenture, Shares, as determined pursuant to Section 2.2(a), a
      Warrant, as determined pursuant to Section 2.2(a), and the Company and each
      Purchaser shall deliver the other items set forth in Section 2.2 deliverable
      at
      the Closing. Upon satisfaction of the covenants and conditions set forth in
      Sections 2.2 and 2.3, the Closing shall occur at the offices of FWS or such
      other location as the parties shall mutually agree.

     

    2.2 Deliveries.

     

    (a) On
      or
      prior to the Closing Date, the Company shall deliver or cause to be delivered
      to
      each Purchaser the following:

     

    
      
        (i)
          this
          Agreement duly executed by the Company;

      

    

     

    (ii) an
      officer’s certificate from the Chief Executive Officer of the Company, dated as
      of the Closing Date, certifying and setting forth (i) the names, signatures
      and
      positions of the Persons authorized to execute this Agreement and any other
      Transaction Documents to which the Company is a party and (ii) a copy of the
      resolutions of the Company authorizing the execution, delivery and performance
      of this Agreement;

     

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

     

    (iv) a
      number
      of Shares registered in the name of such Purchaser equal to 20% of the
      Underlying Shares underlying such Purchaser’s Debenture;

     

    (v) an
      opinion of Company Counsel, substantially in the form of Exhibit
      D
      attached
      hereto;

     

    (vi) the
      Lock-Up Agreements;

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (vii) a
      certificate, signed by the Chief Executive Officer of the Company, certifying
      that the conditions specified in this Section 2.2(a) have been fulfilled as
      of
      the Closing, it being understood that such Purchaser may rely on such
      certificate as though it were a representation and warranty of the Company
      made
      herein;

     

    (viii) a
      copy of
      a Good Standing (or equivalent certificate) for the Company;

     

    (ix) Release
      Notice (as defined in the Escrow Agreement) duly executed by the
      Company;

     

    (x) Closing
      statement for the Escrow Account;

     

    (xi) a
      Warrant
      registered in the name of such Purchaser to purchase up to a number of shares
      of
      Common Stock equal to 50% of such Purchaser’s Subscription Amount divided by
      $3.10, with an exercise price equal to $3.10 and a term of exercise equal to
      5
      years,
      subject
      to adjustment therein; and

     

    (xii) a
      Warrant
      registered in the name of such Purchaser to purchase up to a number of shares
      of
      Common Stock equal to 50% of such Purchaser’s Subscription Amount divided by
      $3.10, with an exercise price equal to $4.65 and a term of exercise equal to
      7
      years,
      subject
      to adjustment therein.

     

    (b) On
      or
      prior to the Closing Date, each Purchaser shall deliver or cause to be delivered
      to the Company the following: 

     

    
      
        (i)
          this
          Agreement duly executed by such Purchaser; 

      

    

     

    
      
        (ii)
          Release
          Notice duly executed by such Purchaser; and

      

    

     

    (iii) such
      Purchaser’s Subscription Amount by wire transfer to the account as specified in
      writing by the Company.

     

    2.3 Closing
      Conditions. 

     

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

     

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

     

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

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

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

     

    (iv) the
      delivery by each Purchaser of the items set forth in Section 2.2(b) of this
      Agreement; and

     

    (v) the
      Reverse Merger has been consummated
      contemporaneously with the Closing.

     

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

     

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

     

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

     

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

     

    (iv) the
      Reverse Merger has been consummated contemporaneously with the
      Closing;

     

    (v) on
      or
      prior to the Closing the Company or one of its Subsidiaries shall enter into
      an
      agreement with Austrian Gaming Industries BmbH  (“AGI”);
      pursuant to which AGI shall restructure €8 million of accounts payable to AGI by
      the Company into a four year loan, which will amounts owed to AGI will accrue
      interest at a rate of three month USD LIBOR plus four percent (4%) (capped
      at a
      maximum rate of eight percent (8%)) per year, and will be payable in equal
      monthly installments of €166,666.67 over a period of 48 months;

     

    (vi) AGI
      shall
      have agree to a Subscription Amount of at least $5 million
      hereunder;

     

    (vii) concurrently
      with the Closing, the Company shall repay all amounts owed by it to eBet Limited
      (“eBet”)(other
      than trade payables in the ordinary course), and shall receive a release of
      any
      security interest held by eBet;

     

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

     

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

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (x) The
      Acquisition Agreement by and among Octavian Emperor Holdings Limited, Ziria
      Enterprises Limited and PacificNet, Inc., dated December 7, 2007, shall have
      been terminated by written agreement of the parties.

     

    ARTICLE
      III.

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1 Representations
      and Warranties of the Company.
      Except
      as set forth in the Disclosure Schedules, which Disclosure Schedules shall
      be
      deemed a part hereof and shall qualify any representation made herein, the
      Company hereby makes the following representations and warranties to each
      Purchaser:

     

    (a) Subsidiaries.
      All of
      the Subsidiaries of the Company are set forth on Schedule
      3.1(a).
      The
      Company owns, directly or indirectly, all of the capital stock or other equity
      interests of each Subsidiary free and clear of any Liens, and all of the issued
      and outstanding shares of capital stock of each Subsidiary are validly issued
      and are fully paid, non-assessable and free of preemptive and similar rights
      to
      subscribe for or purchase securities.

     

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

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

    (h) Financial
      Statements.
      The
      financial statements of the Company included in the Super 8-K and provided
      to
      the Purchasers comply in all material respects with applicable accounting
      requirements and the rules and regulations of the Commission. Such financial
      statements have been prepared in accordance with United States generally
      accepted accounting principles applied on a consistent basis during the periods
      involved (“GAAP”),
      except as may be otherwise specified in such financial statements or the notes
      thereto and except that unaudited financial statements may not contain all
      footnotes required by GAAP, and fairly present in all material respects the
      financial position of the Company and its consolidated Subsidiaries as of and
      for the dates thereof and the results of operations and cash flows for the
      periods then ended, subject, in the case of unaudited statements, to normal,
      immaterial, year-end audit adjustments.

     

    
      
        
        

      

      
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    (i) Material
      Changes; Undisclosed Events, Liabilities or Developments.
      Since
      the date of the latest financial statements included within the Super 8-K and
      delivered to the Purchasers: (i) there has been no event, occurrence or
      development that has had or that could reasonably be expected to result in
      a
      Material Adverse Effect, (ii) the Company has not incurred any liabilities
      (contingent or otherwise) other than (A) trade payables and accrued expenses
      incurred in the ordinary course of business consistent with past practice and
      (B) liabilities not required to be reflected in the Company’s financial
      statements pursuant to GAAP or disclosed in filings made with the Commission,
      (iii) the Company has not altered its method of accounting, (iv) the Company
      has
      not declared or made any dividend or distribution of cash or other property
      to
      its stockholders or purchased, redeemed or made any agreements to purchase
      or
      redeem any shares of its capital stock and (v) the Company has not issued any
      equity securities to any officer, director or Affiliate, except pursuant to
      existing Company stock option plans. The Company does not have pending before
      the Commission any request for confidential treatment of information. Except
      for
      the issuance of the Securities contemplated by this Agreement, no event,
      liability or development has occurred or exists with respect to the Company
      or
      its Subsidiaries or their respective business, properties, operations or
      financial condition, that would be required to be disclosed by the Company
      under
      applicable securities laws at the time this representation is made or deemed
      made that has not been publicly disclosed at least 1 Trading Day prior to the
      date that this representation is made.

     

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

     

    
      
        
        

      

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

     

    (l) Compliance.
      Neither
      the Company nor any Subsidiary, after the application the proceeds hereunder
      or
      as set forth on Schedule
      3.1(l):
      (i) is
      in default under or in violation of (and no event has occurred that has not
      been
      waived that, with notice or lapse of time or both, would result in a default
      by
      the Company or any Subsidiary under), nor has the Company or any Subsidiary
      received notice of a claim that it is in default under or that it is in
      violation of, any indenture, loan or credit agreement or any other agreement
      or
      instrument to which it is a party or by which it or any of its properties is
      bound (whether or not such default or violation has been waived), (ii) is in
      violation of any order of any court, arbitrator or governmental body or (iii)
      is
      or has been in violation of any statute, rule or regulation of any governmental
      authority, including without limitation all foreign, federal, state and local
      laws applicable to its business and all such laws that affect the environment,
      except in each case as would not, individually or in the aggregate, have or
      reasonably be expected to result in a Material Adverse Effect.

     

    (m) Regulatory
      Permits.
      The
      Company and the Subsidiaries possess all certificates, authorizations and
      permits issued by the appropriate federal, state, local or foreign regulatory
      authorities necessary to conduct their respective businesses as described in
      the
      Super 8-K, except where the failure to possess such permits would not,
      individually or in the aggregate, reasonably be expected to result in a Material
      Adverse Effect (“Material
      Permits”),
      and
      neither the Company nor any Subsidiary has received any notice of proceedings
      relating to the revocation or modification of any Material Permit.

     

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

     

    
      
        
        

      

      
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    (o) Patents
      and Trademarks.
      The
      Company and the Subsidiaries have, or have rights to use, all patents, patent
      applications, trademarks, trademark applications, service marks, trade names,
      trade secrets, inventions, copyrights, licenses and other intellectual property
      rights and similar rights as described in the Super 8-K as necessary or material
      for use in connection with their respective businesses and which the failure
      to
      so have could have a Material Adverse Effect (collectively, the “Intellectual
      Property Rights”).
      Neither the Company nor any Subsidiary believes that any of the Intellectual
      Property Rights used by the Company or any Subsidiary violates or infringes
      upon
      the rights of any Person. To the knowledge of the Company, all such Intellectual
      Property Rights are enforceable and there is no existing infringement by another
      Person of any of the Intellectual Property Rights. The Company and its
      Subsidiaries have taken reasonable security measures to protect the secrecy,
      confidentiality and value of all of their intellectual properties, except where
      failure to do so would not, individually or in the aggregate, reasonably be
      expected to have a Material Adverse Effect.

     

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

     

    (q) Transactions
      With Affiliates and Employees.
      Except
      as set forth in the Super 8-K, none of the officers or directors of the Company
      and, to the knowledge of the Company, none of the employees of the Company
      is
      presently a party to any transaction with the Company or any Subsidiary (other
      than for services as employees, officers and directors), including any contract,
      agreement or other arrangement providing for the furnishing of services to
      or
      by, providing for rental of real or personal property to or from, or otherwise
      requiring payments to or from any officer, director or such employee or, to
      the
      knowledge of the Company, any entity in which any officer, director, or any
      such
      employee has a substantial interest or is an officer, director, trustee or
      partner, in each case in excess of $120,000 other than for: (i) payment of
      salary or consulting fees for services rendered, (ii) reimbursement for expenses
      incurred on behalf of the Company and (iii) other employee benefits, including
      stock option agreements under any stock option plan of the Company.

     

    
      
        
        

      

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

     

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

     

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

     

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

     

    (v) Application
      of Takeover Protections.
      The
      Company and the Board of Directors have taken all necessary action, if any,
      in
      order to render inapplicable any control share acquisition, business
      combination, poison pill (including any distribution under a rights agreement)
      or other similar anti-takeover provision under the Company’s certificate of
      incorporation (or similar charter documents) or the laws of its state of
      incorporation that is or would become applicable to the Purchasers as a result
      of the Purchasers and the Company fulfilling their obligations or exercising
      their rights under the Transaction Documents, including without limitation
      as a
      result of the Company’s issuance of the Securities and the Purchasers’ ownership
      of the Securities.

     

    (w) Disclosure.
      All
      disclosure furnished by or on behalf of the Company to the Purchasers regarding
      the Company, its business and the transactions contemplated hereby, including
      the Disclosure Schedules to this Agreement, is true and correct and does not
      contain any untrue statement of a material fact or omit to state any material
      fact necessary in order to make the statements made therein, in light of the
      circumstances under which they were made, not misleading.

     

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

     

    
      
        
        

      

      
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    (y) Solvency.
      Other
      than any rendering by the Company’s auditors of a “going concern” or similar
      note in connection with the audited financial statements of the Company as
      set
      forth in the Super 8-K and delivered to the Purchasers, the Company has no
      knowledge of any facts or circumstances which lead it to believe that it will
      file for reorganization or liquidation under the bankruptcy or reorganization
      laws of any jurisdiction within one year from the Closing Date. Schedule
      3.1(y)
      sets
      forth as of the date hereof all outstanding secured and unsecured Indebtedness
      of the Company or any Subsidiary, or for which the Company or any Subsidiary
      has
      commitments. For the purposes of this Agreement, “Indebtedness”
means
      (x) any liabilities for borrowed money or amounts owed in excess of $150,000
      (other than trade accounts payable incurred in the ordinary course of business),
      (y) all guaranties, endorsements and other contingent obligations in respect
      of
      indebtedness of others, whether or not the same are or should be reflected
      in
      the Company’s balance sheet (or the notes thereto), except guaranties by
      endorsement of negotiable instruments for deposit or collection or similar
      transactions in the ordinary course of business; and (z) the present value
      of
      any lease payments
      in excess of $150,000 due under leases required to be capitalized in accordance
      with GAAP. Neither
      the Company nor any Subsidiary is in default with respect to any
      Indebtedness.

     

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

     

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

     

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

     

    
      
        
        

      

      
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    (cc) Accountants.
      The
      Company’s accounting firm is set forth on Schedule
      3.1(cc)
      of the
      Disclosure Schedules. To the knowledge and belief of the Company, such
      accounting firm: (i) is a registered public accounting firm as required by
      the
      Exchange Act and (ii) shall express its opinion with respect to the financial
      statements to be included in the Company’s Annual Report for the year ending
      December 31, 2008.

     

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

     

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

     

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

     

    (gg) Internal
      Accounting Controls.
      The
      Company and the Subsidiaries maintain a system of internal accounting controls
      sufficient to provide reasonable assurance that: (i) transactions are executed
      in accordance with management’s general or specific authorizations, (ii)
      transactions are recorded as necessary to permit preparation of financial
      statements in conformity with GAAP and to maintain asset accountability, (iii)
      access to assets is permitted only in accordance with management’s general or
      specific authorization, and (iv) the recorded accountability for assets is
      compared with the existing assets at reasonable intervals and appropriate action
      is taken with respect to any differences.

     

    
      
        
        

      

      
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    (hh) Acknowledgment
      Regarding Purchasers’ Trading Activity.
      Notwithstanding anything in this Agreement or elsewhere herein to the contrary,
      it is understood and acknowledged by the Company that: (i) none of the
      Purchasers has been asked to agree by the Company, nor has any Purchaser agreed,
      to desist from purchasing or selling, long and/or short, securities of the
      Company, or “derivative” securities based on securities issued by the Company or
      to hold the Securities for any specified term, (ii) past or future open market
      or other transactions by any Purchaser, specifically including, without
      limitation, Short Sales or “derivative” transactions, before or after the
      closing of this or future private placement transactions, may negatively impact
      the market price of the Company’s publicly-traded securities, (iii) any
      Purchaser, and counter-parties in “derivative” transactions to which any such
      Purchaser is a party, directly or indirectly, may presently have a “short”
position in the Common Stock and (iv) each Purchaser shall not be deemed to
      have
      any affiliation with or control over any arm’s length counter-party in any
“derivative” transaction. The
      Company further understands and acknowledges that (y) one or more Purchasers
      may
      engage in hedging activities at various times during the period that the
      Securities are outstanding, including, without limitation, during the periods
      that the value of the Underlying Shares deliverable with respect to Securities
      are being determined, and (z) such hedging activities (if any) could reduce
      the
      value of the existing stockholders' equity interests in the Company at and
      after
      the time that the hedging activities are being conducted.  The Company
      acknowledges that such aforementioned hedging activities do not constitute
      a
      breach of any of the Transaction Documents.

     

    (ii) Stock
      Option Plan.
      The
      Company currently does not have an employee stock option plan.

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

    (e) General
      Solicitation.
      Such
      Purchaser is not purchasing the Securities as a result of any advertisement,
      article, notice or other communication regarding the Securities published in
      any
      newspaper, magazine or similar media or broadcast over television or radio
      or
      presented at any seminar or any other general solicitation or general
      advertisement.

     

    (f) Access
      to Information.
      Such
      Purchaser acknowledges that it has reviewed the Super 8-K and has been afforded
      (i) the opportunity to ask such questions as it has deemed necessary of, and
      to
      receive answers from, representatives of the Company concerning the terms and
      conditions of the offering of the Securities and the merits and risks of
      investing in the Securities and regarding the information in clauses (ii) and
      (iii) of this Section 3.2(f); (ii) access to information about the Company
      and
      the Subsidiaries and their respective financial condition, results of
      operations, business, properties, management and prospects which such Purchaser
      has deemed sufficient to enable it to evaluate its investment; and (iii) the
      opportunity to obtain such additional information that the Company possesses
      or
      can acquire without unreasonable effort or expense that which such Purchaser
      has
      deemed is necessary to make an informed investment decision with respect to
      the
      investment. Neither such inquiries nor any other investigation conducted by
      or
      on behalf of such Purchaser or its representatives or counsel shall modify,
      amend or affect such Purchaser’s right to rely on the truth, accuracy and
      completeness of the Super 8-K and the Company’s representations and warranties
      contained in the Transaction Documents.

     

    
      
        
        

      

      
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    (g) Independent
      Investment Decision.
      Such
      Purchaser has independently evaluated the merits and risks of its decision
      to
      purchase the Securities based on the Purchaser’s own financial circumstances,
      and such Purchaser confirms that it has not relied on the advice of any other
      Purchaser’s business and/or legal counsel in making such decision.

     

    ARTICLE
      IV.

    OTHER
      AGREEMENTS OF THE PARTIES

     

    4.1 Transfer
      Restrictions.

     

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

     

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

     

    [NEITHER]
      THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE]
      [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
      COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
      EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
      “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
      TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
      TO
      AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
      APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
      TO
      THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
      ACCEPTABLE TO THE COMPANY. THIS SECURITY [AND THE SECURITIES ISSUABLE UPON
      [EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH
      A
      BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH
      A
      FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
      UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

     

    
      
        
        

      

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

     

    (c) Certificates
      evidencing the Underlying Shares shall not contain any legend (including the
      legend set forth in Section 4.1(b) hereof): (i) while a registration statement
      (including the Registration Statement) covering the resale of such security
      is
      effective under the Securities Act, (ii) following any sale of such Underlying
      Shares pursuant to Rule 144, (iii) if such Underlying Shares are eligible for
      sale under Rule 144, without the requirement for the Company to be in compliance
      with the current public information required under Rule 144 as to such
      Underlying Shares and without volume or manner-of-sale restrictions or (iv)
      if
      such legend is not required under applicable requirements of the Securities
      Act
      (including judicial interpretations and pronouncements issued by the staff
      of
      the Commission). The Company shall cause its counsel to issue a legal opinion
      to
      the Transfer Agent promptly after the Effective Date if required by the Transfer
      Agent to effect the removal of the legend hereunder. If all or any portion
      of a
      Debenture is converted or Warrant is exercised at a time when there is an
      effective registration statement to cover the resale of the Underlying Shares,
      or if such Underlying Shares may be sold under Rule 144, without the requirement
      for the Company to be in compliance with the current public information required
      under Rule 144 as to such Underlying Shares and without volume or manner-of-sale
      restrictions or if such legend is not otherwise required under applicable
      requirements of the Securities Act (including judicial interpretations and
      pronouncements issued by the staff of the Commission) then such Underlying
      Shares shall be issued free of all legends. The Company agrees that following
      the Effective Date or at such time as such legend is no longer required under
      this Section 4.1(c), it will, no later than five Trading Days following the
      delivery by a Purchaser to the Company or the Transfer Agent of a certificate
      representing Underlying Shares, as applicable, issued with a restrictive legend
      (such fifth Trading Day, the “Legend
      Removal Date”),
      deliver or cause to be delivered to such Purchaser a certificate representing
      such shares that is free from all restrictive and other legends. The Company
      may
      not make any notation on its records or give instructions to the Transfer Agent
      that enlarge the restrictions on transfer set forth in this Section 4. If the
      Company is then eligible, certificates for Underlying Shares subject to legend
      removal hereunder shall be transmitted by the Transfer Agent to the Purchaser
      by
      crediting the account of the Purchaser’s prime broker with the Depository Trust
      Company System as directed by such Purchaser.

     

    
      
        
        

      

      
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    (d) In
      addition to such Purchaser’s other available remedies, the Company shall pay to
      a Purchaser, in cash, as partial liquidated damages and not as a penalty, for
      each $2,000 of Underlying Shares (based on the VWAP of the Common Stock on
      the
      date such Securities are submitted to the Transfer Agent) delivered for removal
      of the restrictive legend and subject to Section 4.1(c), $10 per Trading Day
      (increasing to $20 per Trading Day five (5) Trading Days after such damages
      have
      begun to accrue) for each Trading Day after the 2nd
      Trading
      Day following the Legend Removal Date until such certificate is delivered
      without a legend. Nothing herein shall limit such Purchaser’s right to pursue
      actual damages for the Company’s failure to deliver certificates representing
      any Securities as required by the Transaction Documents, and such Purchaser
      shall have the right to pursue all remedies available to it at law or in equity
      including, without limitation, a decree of specific performance and/or
      injunctive relief.

     

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

     

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

     

    4.3 Furnishing
      of Information; Public Information.
      

     

    (a) As
      soon
      as practicable hereafter, but in no event later than 30 days from the date
      hereof, until the earliest of the time that (i) no Purchaser owns Securities
      or
      (ii) the Warrants have expired, the Company covenants to maintain the
      registration of the Common Stock under Section 12(b) or 12(g) of the Exchange
      Act and to timely file (or obtain extensions in respect thereof and file within
      the applicable grace period) all reports required to be filed by the Company
      after the date hereof pursuant to the Exchange Act. As long as any Purchaser
      owns Securities, if the Company is not required to file reports pursuant to
      the
      Exchange Act, it will prepare and furnish to the Purchasers and make publicly
      available in accordance with Rule 144(c) such information as is required for
      the
      Purchasers to sell the Securities under Rule 144. The Company further covenants
      that it will take such further action as any holder of Securities may reasonably
      request, to the extent required from time to time to enable such Person to
      sell
      such Securities without registration under the Securities Act within the
      requirements of the exemption provided by Rule 144. 

     

    
      
        
        

      

      
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    (b)
       At
      any
      time during the period commencing from the one year anniversary of the date
      hereof and ending on the earlier of (i) at such time that all of the Securities
      may be sold without the requirement for the Company to be in compliance with
      Rule 144(c)(1) and otherwise without restriction or limitation pursuant to
      Rule
      144 and (ii) two years from the date hereof, if the Company shall fail for
      any
      reason to satisfy the current public information requirement under Rule 144(c)
      (a “Public
      Information Failure”)
      then,
      in addition to such Purchaser’s other available remedies, the Company shall pay
      to a Purchaser, in cash, as partial liquidated damages and not as a penalty,
      by
      reason of any such delay in or reduction of its ability to sell the Securities,
      an amount in cash equal to one percent (1%) of the aggregate Subscription Amount
      of such Purchaser’s Securities on the day of a Public Information Failure and on
      every thirtieth (30th)
      day
      (pro rated for periods totaling less than thirty days) thereafter until the
      earlier of (a) the date such Public Information Failure is cured and (b) such
      time that such public information is no longer required  for the Purchasers
      to transfer the Underlying Shares pursuant to Rule 144.  The payments to
      which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred
      to herein as “Public
      Information Failure Payments.” 
      Public Information Failure Payments
      shall be paid on the earlier of (i) the last day of the calendar month during
      which such Public Information Failure Payments
      are incurred and (ii) the fifth (5th)
      Business Day after the event or failure giving rise to the Public Information
      Failure Payments
      is cured.  In the event the Company fails to make Public Information
      Failure Payments
      in a timely manner, such Public Information Failure Payments
      shall bear interest at the rate of 1.0% per month (prorated for partial months)
      until paid in full. Nothing herein shall limit such Purchaser’s right to pursue
      actual damages for the Public Information Failure, and such Purchaser shall
      have
      the right to pursue all remedies available to it at law or in equity including,
      without limitation, a decree of specific performance and/or injunctive
      relief.

     

    4.4 Integration.
      The
      Company shall not sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the Securities
      Act) that would be integrated with the offer or sale of the Securities to the
      Purchasers in a manner that would require the registration under the Securities
      Act of the sale of the Securities to the Purchasers or that would be integrated
      with the offer or sale of the Securities for purposes of the rules and
      regulations of any Trading Market such that it would require shareholder
      approval prior to the closing of such other transaction unless shareholder
      approval is obtained before the closing of such subsequent
      transaction. 

     

    
      
        
        

      

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

     

    4.6 Securities
      Laws Disclosure; Publicity.
      The
      Company shall, within 4 Business Days of the Closing Date, file the Super 8-K
      with the Commission. The Company and each Purchaser shall consult with each
      other in issuing any other press releases with respect to the transactions
      contemplated hereby, and neither the Company nor any Purchaser shall issue
      any
      such press release nor otherwise make any such public statement without the
      prior consent of the Company, with respect to any press release of any
      Purchaser, or without the prior consent of each Purchaser, with respect to
      any
      press release of the Company, which consent shall not unreasonably be withheld
      or delayed, except if such disclosure is required by law, in which case the
      disclosing party shall promptly provide the other party with prior notice of
      such public statement or communication. Notwithstanding the foregoing, the
      Company shall not publicly disclose the name of any Purchaser, or include the
      name of any Purchaser in any filing with the Commission or any regulatory agency
      or Trading Market, without the prior written consent of such Purchaser, except:
      (a) as required by federal securities law in connection with (i) any
      registration statement and (ii) the filing of final Transaction Documents
      (including signature pages thereto) with the Commission and (b) to the extent
      such disclosure is required by law or Trading Market regulations, in which
      case
      the Company shall provide the Purchasers with prior notice of such disclosure
      permitted under this clause (b).

     

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

     

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

     

    
      
        
        

      

      
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    4.9 Use
      of
      Proceeds.
      The
      Company shall use the net proceeds from the sale of the Securities as set forth
      in Schedule
      4.9.

     

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

     

    4.11 Reservation
      and Listing of Securities.

     

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

     

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

     

    
      
        
        

      

      
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    (c) The
      Company shall take all steps necessary to cause such shares of Common Stock
      to
      be approved for listing or quotation on a Trading Market as soon as possible
      thereafter and maintain the listing or quotation of such Common Stock on any
      date at least equal to the Required Minimum.

     

    4.12 Participation
      in Future Financing.
      

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
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    (e) If
      by
      5:30 p.m. (New York City time) on the third Trading Day after all of the
      Purchasers have received the Pre-Notice, the Company receives responses to
      a
      Subsequent Financing Notice from Purchasers seeking to purchase more than the
      aggregate amount of the Participation Maximum, each such Purchaser shall have
      the right to purchase its Pro Rata Portion (as defined below) of the
      Participation Maximum.  “Pro
      Rata Portion”
means
      the ratio of (x) the Subscription Amount of Securities purchased on the Closing
      Date by a Purchaser participating under this Section 4.12 and (y) the sum of
      the
      aggregate Subscription Amounts of Securities purchased on the Closing Date
      by
      all Purchasers participating under this Section 4.12 plus the aggregate
      subscription amounts of investors party to securities purchase agreement(s)
      contemplated by clause (d) in the definition of Exempt Issuance that are
      participating in such Subsequent Financing pursuant to participation rights
      granted to such investors under such agreements that are substantially similar
      to this Section 4.12.

     

    (f) The
      Company must provide the Purchasers with a second Subsequent Financing Notice,
      and the Purchasers will again have the right of participation set forth above
      in
      this Section 4.12, if the Subsequent Financing subject to the initial Subsequent
      Financing Notice is not consummated for any reason on the terms set forth in
      such Subsequent Financing Notice within 30 Trading Days after the date of the
      initial Subsequent Financing Notice. 

     

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

     

    4.13 Subsequent
      Equity Sales.
      

     

    (a) From
      the
      date hereof until after the Effective Date, neither the Company nor any
      Subsidiary shall issue shares of Common Stock or Common Stock
      Equivalents.

     

    (b) From
      the
      date hereof until such time as no Purchaser holds more than $500,000 principal
      amount of the Debentures, the Company shall be prohibited from effecting or
      entering into an agreement to effect any Subsequent Financing involving a
      Variable Rate Transaction. “Variable
      Rate Transaction”
means
      a
      transaction in which the Company (i) issues or sells any debt or equity
      securities that are convertible into, exchangeable or exercisable for, or
      include the right to receive, additional shares of Common Stock either (A)
      at a
      conversion price, exercise price or exchange rate or other price that is based
      upon, and/or varies with, the trading prices of or quotations for the shares
      of
      Common Stock at any time after the initial issuance of such debt or equity
      securities (other than interest or dividend payments in kind on debt or equity
      securities of the Company) or (B) with a conversion, exercise or exchange price
      that is subject to being reset at some future date after the initial issuance
      of
      such debt or equity security or upon the occurrence of specified or contingent
      events directly or indirectly related to the business of the Company or the
      market for the Common Stock or (ii) enters into any agreement, including, but
      not limited to, an equity line of credit, whereby the Company may sell
      securities at a future determined price. Any Purchaser shall be entitled to
      obtain injunctive relief against the Company to preclude any such issuance,
      which remedy shall be in addition to any right to collect damages. 

     

    
      
        
        

      

      
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    (c) Notwithstanding
      the foregoing, this Section 4.13 shall not apply in respect of (i) an Exempt
      Issuance, except that no Variable Rate Transaction shall be an Exempt Issuance
      or (ii) a registered public offering of Common Stock.

     

    4.14 Equal
      Treatment of Purchasers.
      No
      consideration (including any modification of any Transaction Document) shall
      be
      offered or paid to any Person to amend or consent to a waiver or modification
      of
      any provision of any of the Transaction Documents unless the same consideration
      is also offered to all of the parties to the Transaction Documents. Further,
      the
      Company shall not make any payment of principal or interest on the Debentures
      in
      amounts which are disproportionate to the respective principal amounts
      outstanding on the Debentures at any applicable time. For clarification
      purposes, this provision constitutes a separate right granted to each Purchaser
      by the Company and negotiated separately by each Purchaser, and is intended
      for
      the Company to treat the Purchasers as a class and shall not in any way be
      construed as the Purchasers acting in concert or as a group with respect to
      the
      purchase, disposition or voting of Securities or otherwise.

     

    4.15 Form
      D; Blue Sky Filings.
      The
      Company agrees to timely file a Form D with respect to the Securities as
      required under Regulation D and to provide a copy thereof, promptly upon request
      of any Purchaser. The Company shall take such action as the Company shall
      reasonably determine is necessary in order to obtain an exemption for, or to
      qualify the Securities for, sale to the Purchasers at the Closing under
      applicable securities or “Blue Sky” laws of the states of the United States, and
      shall provide evidence of such actions promptly upon request of any
      Purchaser.

     

    4.16 Capital
      Changes.
      Promptly following the Closing, the Company shall complete a 5.0174 for 1
      reverse stock split. Until the one year anniversary of the Effective Date,
      the
      Company shall not undertake another reverse or forward stock split or
      reclassification of the Common Stock without the prior written consent of the
      Purchasers holding a majority in principal amount outstanding of the
      Debentures.

     

    
      
        
        

      

      
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    4.17 Piggy-Back
      Registration Rights.
      If at
      any time after the date hereof until such the date that the Underlying Shares
      underlying the Debentures may be sold pursuant to Rule 144 without volume or
      manner of sale restrictions, the Company shall determine to prepare and file
      with the Commission a registration statement relating to an offering for its
      own
      account or the account of others of any of its equity securities, other than
      on
      Form S-4 or Form S-8 (each as promulgated under the Securities Act), or their
      then equivalents (a “Registration
      Statement”),
      relating to equity securities to be issued solely in connection with any
      acquisition of any entity or business or equity securities issuable in
      connection with stock option or other employee benefit plans, then the Company
      shall send a written notice of such determination to each Purchaser and, if
      within ten calendar days after the date of delivery of such notice, any such
      Purchaser shall so request in writing, the Company shall include in such
      Registration Statement all or any part of the Underlying Shares as the Purchaser
      requests to be registered so long as such Underlying Shares are proposed to
      be
      disposed in the same manner as those securities set forth in the Registration
      Statement; provided,
      however,
      if the
      inclusion of Underlying Shares requested to be included in the Registration
      Statement would cause an adverse effect on the success of any such offering,
      based on market conditions or otherwise (an “Adverse
      Effect”),
      then
      the Company shall be required to include in such Registration Statement only
      that number of Underlying Shares to the extent that such inclusion shall not
      cause and Adverse Effect; provided,
      further,
      if such
      number of Underlying Shares is limited hereunder, any cutbacks of a Purchaser’s
      Underlying Shares shall be done on a pro rata basis among all Purchasers based
      on their Subscription Amounts hereunder. To the extent that all of the
      Underlying Shares are not included in the initial Registration Statement, the
      Purchasers shall have the right to request the inclusion of its Underlying
      Shares in subsequent Registration Statements until all such Underlying Shares
      have been registered in accordance with the terms hereof. If the offering in
      which the Underlying Shares is being included in a Registration Statement is
      a
      firm commitment underwritten offering, unless otherwise agreed by the Company,
      the Purchaser shall sell its Underlying Shares in such offering using the same
      underwriters and, subject to the provisions hereof, on the same terms and
      conditions as the other shares of Common Stock that are included in such
      underwritten offering. The Company shall use its best efforts to cause any
      Registration Statement to be declared effective by the Commission as promptly
      as
      is possible following it being filed with the Commission and to remain effective
      until all Underlying Shares subject thereto have been sold or may be sold
      without volume or manner of sale restrictions. All fees and expenses incident
      to
      the performance of or compliance with this Section 4.17 by the Company shall
      be
      borne by the Company whether or not any Underlying Shares are sold pursuant
      to
      the Registration Statement. The Company shall indemnify and hold harmless the
      Purchaser, the officers, directors, members, partners, agents, brokers,
      investment advisors and employees of each of them, each person who controls
      the
      Purchaser (within the meaning of Section 15 of the Securities Act or Section
      20
      of the Exchange Act), and the officers, directors, members, shareholders,
      partners, agents and employees of each such controlling person, to the fullest
      extent permitted by applicable law, from and against any and all losses, claims,
      damages, liabilities, costs (including, without limitation, reasonable
      attorneys’ fees) and expenses (collectively, the “Losses”),
      as
      incurred, arising out of or relating to (i) any untrue or alleged untrue
      statement of a material fact contained in the Registration Statement, any
      prospectus included therein or any form of prospectus or in any amendment or
      supplement thereto or in any preliminary prospectus, or arising out of or
      relating to any omission or alleged omission of a material fact required to
      be
      stated therein or necessary to make the statements therein (in the case of
      any
      prospectus or form of prospectus or supplement thereto, in light of the
      circumstances under which they were made) not misleading or (ii) any violation
      or alleged violation by the Company of the Securities Act, the Exchange Act
      or
      any state securities law, or any rule or regulation thereunder, in connection
      with the performance of its obligations under this Section 4.18, except to
      the
      extent, but only to the extent, that such untrue statements or omissions
      referred to in (i) above are based solely upon information regarding the
      Purchaser furnished in writing to the Company by the Purchaser expressly for
      use
      therein, or (ii) to the extent that such information relates to such Purchaser’s
      proposed method of distribution of Underlying Shares and was reviewed and
      expressly approved in writing by such Purchaser expressly for use in a
      Registration Statement, the prospectus included therein or in any amendment
      or
      supplement thereto. The rights of the Purchaser under this Section 4.17 shall
      survive until all Underlying Shares have been either registered under a
      Registration Statement or been sold pursuant to an exemption to the registration
      requirements of the Securities Act. Each Purchaser shall, severally and not
      jointly, indemnify and hold harmless the Company, its directors, officers,
      agents and employees, each Person who controls the Company (within the meaning
      of Section 15 of the Securities Act and Section 20 of the Exchange Act), and
      the
      directors, officers, agents or employees of such controlling Persons, to the
      fullest extent permitted by applicable law, from and against all Losses, as
      incurred, to the extent arising out of or based solely upon: (x) such
      Purchaser’s failure to comply with the prospectus delivery requirements of the
      Securities Act or (y) any untrue or alleged untrue statement of a material
      fact
      contained in any Registration Statement, any prospectus included therein, or
      in
      any amendment or supplement thereto or in any preliminary prospectus, or arising
      out of or relating to any omission or alleged omission of a material fact
      required to be stated therein or necessary to make the statements therein not
      misleading (i) to the extent, but only to the extent, that such untrue statement
      or omission is contained in any information so furnished in writing by such
      Purchaser to the Company specifically for inclusion in such Registration
      Statement or (ii) to the extent that such information relates to such
      Purchaser’s proposed method of distribution of Underlying Shares and was
      reviewed and expressly approved in writing by such Purchaser expressly for
      use
      in a Registration Statement, the prospectus included therein or in any amendment
      or supplement thereto. In no event shall the liability of any selling Purchaser
      hereunder be greater in amount than the dollar amount of the net proceeds
      received by such Purchaser upon the sale of the Underlying Shares giving rise
      to
      such indemnification obligation.

     

    
      
        
        

      

      
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    4.18 Post
      Effective Amendment.
      Within
      30 days following the Closing Date, the Company shall file a post-effective
      amendment to the Registration Statement, Commission File No. 333-146705 in
      order
      to make such Registration Statement available for use by the selling
      shareholders therein and use commercially reasonable efforts to cause such
      Registration Statement to be effective within 90 days from such filing date
      (such dates, the “Registration
      Deadlines”).
      Additionally, in the event that the Company fails to meet the Registration
      Deadlines, the Company shall pay Vicus $2,500 per 30 day period (pro-rated
      on a
      daily basis for lesser periods) in the event that the Company fails to meet
      either Registration Deadline until the earlier of the date that such failure
      is
      cured or the date that Vicus can sell the shares subject to such Registration
      Statement pursuant to Rule 144; provided,
      however,
      such
      damages shall be reduced and tolled ratably for any such shares that the Company
      is unable to register because of any publicly-available written or oral
      guidance, comments, requirements or requests of the Commission
      staff.

     

    4.19 Directors
      and Officers Insurance.
      The
      Company shall have obtained directors and officers insurance with a recognized
      financial responsibility within 120 days of the date hereof.

     

    ARTICLE
      V.

    MISCELLANEOUS

     

    5.1 Termination. 
      This Agreement may be terminated by any Purchaser, as to such Purchaser’s
      obligations hereunder only and without any effect whatsoever on the obligations
      between the Company and the other Purchasers, by written notice to the other
      parties, if the Closing has not been consummated on or before November 14,
      2008;
provided,
      however,
      that
      such termination will not affect the right of any party to sue for any breach
      by
      the other party (or parties).

     

    
      
        
        

      

      
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    5.2 Fees
      and Expenses.
      At the
      Closing, the Company has agreed to reimburse Vicis Capital Master Fund
      (“Vicis”)
      the
      non-accountable sum of $30,000 for its legal fees and expenses and $75,000
      as an
      origination fee on its Subscription Amount and $80,000, along with 4% Warrant
      coverage on the same terms and conditions as the Warrants, to NorthEast Finance
      as an origination fee on $2,000,000 of Subscription Amounts paid hereunder
      and
      AGI $30,000 for its legal fees and expenses. Except as expressly set forth
      in
      the Transaction Documents to the contrary, each party shall pay the fees and
      expenses of its advisers, counsel, accountants and other experts, if any, and
      all other expenses incurred by such party incident to the negotiation,
      preparation, execution, delivery and performance of this Agreement. The Company
      shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied
      in connection with the delivery of any Securities to the
      Purchasers.

     

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

     

    5.4 Notices.
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be in writing and shall be deemed given and effective
      on the earliest of: (a) the date of transmission, if such notice or
      communication is delivered via facsimile or email at the facsimile number or
      email address 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
      or email at the facsimile number or email address set forth on the signature
      pages attached hereto on a day that is not a Trading Day or later than 5:30
      p.m.
      (New York City time) on any Trading Day, (c) the second (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.

     

    5.5 Amendments;
      Waivers.
      No
      provision of this Agreement may be waived, modified, supplemented or amended
      except in a written instrument signed, in the case of an amendment, by the
      Company and the Purchasers holding at least 51% in interest of the Securities
      then outstanding or, in the case of a waiver, by the party against whom
      enforcement of any such waived provision is sought. No waiver of any default
      with respect to any provision, condition or requirement of this Agreement shall
      be deemed to be a continuing waiver in the future or a waiver of any subsequent
      default or a waiver of any other provision, condition or requirement hereof,
      nor
      shall any delay or omission of any party to exercise any right hereunder in
      any
      manner impair the exercise of any such right.

     

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

     

    
      
        
        

      

      
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    5.7 Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and permitted assigns. The Company may not assign this
      Agreement or any rights or obligations hereunder without the prior written
      consent of each Purchaser (other than by merger). Any Purchaser may assign
      any
      or all of its rights under this Agreement to any Person to whom such Purchaser
      assigns or transfers any Securities, provided that such transferee agrees in
      writing to be bound, with respect to the transferred Securities, by the
      provisions of the Transaction Documents that apply to the “Purchasers. And such
      assignment or transfer is in compliance with Section 4.1.

     

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

     

    5.9 Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of the Transaction Documents shall be governed by and construed and enforced
      in
      accordance with the internal laws of the State of New York, without regard
      to
      the principles of conflicts of law thereof. Each party agrees that all legal
      proceedings concerning the interpretations, enforcement and defense of the
      transactions contemplated by this Agreement and any other Transaction Documents
      (whether brought against a party hereto or its respective affiliates, directors,
      officers, shareholders, employees or agents) shall be commenced exclusively
      in
      the state and federal courts sitting in the City of New York. Each party hereby
      irrevocably submits to the exclusive jurisdiction of the state and federal
      courts sitting in the City of New York, borough of Manhattan for the
      adjudication of any dispute hereunder or in connection herewith or with any
      transaction contemplated hereby or discussed herein (including with respect
      to
      the enforcement of any of the Transaction Documents), and hereby irrevocably
      waives, and agrees not to assert in any suit, action or proceeding, any claim
      that it is not personally subject to the jurisdiction of any such court, that
      such suit, action or proceeding is improper or is an inconvenient venue for
      such
      proceeding. Each party hereby irrevocably waives personal service of process
      and
      consents to process being served in any such suit, action or proceeding by
      mailing a copy thereof via registered or certified mail or overnight delivery
      (with evidence of delivery) to such party at the address in effect for notices
      to it under this Agreement and agrees that such service shall constitute good
      and sufficient service of process and notice thereof. Nothing contained herein
      shall be deemed to limit in any way any right to serve process in any other
      manner permitted by law. If either party shall commence an action or proceeding
      to enforce any provisions of the Transaction Documents, then the prevailing
      party in such action or proceeding shall be reimbursed by the other party for
      its reasonable attorneys’ fees and other costs and expenses incurred with the
      investigation, preparation and prosecution of such action or
      proceeding.

     

    5.10 Survival.
      The
      representations and warranties contained herein shall survive the Closing and
      the delivery of the Securities for the applicable statute of
      limitations.

     

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

     

    
      
        
        

      

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

     

    5.13 Rescission
      and Withdrawal Right.
      Notwithstanding anything to the contrary contained in (and without limiting
      any
      similar provisions of) any of the other Transaction Documents, whenever any
      Purchaser exercises a right, election, demand or option under a Transaction
      Document and the Company does not timely perform its related obligations within
      the periods therein provided, then such Purchaser may rescind or withdraw,
      in
      its sole discretion from time to time upon written notice to the Company, any
      relevant notice, demand or election in whole or in part without prejudice to
      its
      future actions and rights; provided,
      however,
      that in
      the case of a rescission of a conversion of a Debenture or exercise of a
      Warrant, the Purchaser shall be required to return any shares of Common Stock
      subject to any such rescinded conversion or exercise notice.

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

    
      
        
        

      

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

     

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

     

    5.21 Construction.
      The
      parties agree that each of them and/or their respective counsel has reviewed
      and
      had an opportunity to revise the Transaction Documents and, therefore, the
      normal rule of construction to the effect that any ambiguities are to be
      resolved against the drafting party shall not be employed in the interpretation
      of the Transaction Documents or any amendments hereto. In addition, each and
      every reference to share prices in any Transaction Document shall be subject
      to
      adjustment for reverse and forward stock splits, stock dividends, stock
      combinations and other similar transactions of the Common Stock that occur
      after
      the date of this Agreement.

     

    5.22 WAIVER
      OF JURY TRIAL.
      IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY
      AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE
      GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
      IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY. 

     

    (Signature
      Pages Follow)

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    

      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.

       

      
        	
                OCTAVIAN
                  GLOBAL TECHNOLOGIES, INC.

                 

              	
                Address
                  for Notice:

                1-3
                  Bury Street

                Guildford
                  Surrey GU2 4AW

                United
                  Kingdom

              
	
                By:
                  /s/
                  Harmen
                  Brenninkmeijer                                      
                  

                Name:
                  Harmen Brenninkmeijer

                Title:
                  Chief Executive Officer

                 

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

              	
                Fax:

              
	
                Feldman
                  Weinstein & Smith LLP

                The
                  Graybar Building

                420
                  Lexington Avenue

                New
                  York, New York 10170-0002

                Tel:
                  (212) 869-7000

                Facsimile:
                  (212) 401 4741

                e-mail: 
                  rcharron@feldmanweinstein.com

                Attn:
                  David N. Feldman

              	 


      

      


      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK

      SIGNATURE
        PAGE FOR PURCHASER FOLLOWS]

    

    


    
      
        
          
          

        

        
          37

          
            

          

        

        
          
          

        

      

    

    


    [PURCHASER
      SIGNATURE PAGES TO OCTAVIAN SECURITIES PURCHASE AGREEMENT]

    


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

     

    Name
      of
      Purchaser: Austrian Gaming Industries GmBH

     

    Signature
      of Authorized Signatory of Purchaser:
      /s/
      Jens Helle

     

    Name
      of
      Authorized Signatory: Jens Helle

     

    Title
      of
      Authorized Signatory: Managing Director

     

    Email
      Address of Authorized Signatory:
      _____________________________________________

     

    Facsimile
      Number of Authorized Signatory:
      __________________________________________

     

    Address
      for Notice of Purchaser:

    


    


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

    


    


    Subscription
      Amount: $5,000,000

    


    Principal
      Amount (1.0989
      x Subscription Amount):
      $5,494,500

    


    Warrant
      Shares: 1,612,903 post split

    


    Shares:
      1,778,587 pre-split

    


    


    [SIGNATURE
      PAGES CONTINUE]

     

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

    

      [PURCHASER
        SIGNATURE PAGES TO OCTAVIAN SECURITIES PURCHASE AGREEMENT]

      


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

       

      Name
        of
        Purchaser: Dynamic
        Decisions Strategic
        Opportunities                                     


       

      Signature
        of Authorized Signatory of Purchaser:
        /s/
        Alberto
        Micalizzi                         


       

      Name
        of
        Authorized Signatory: Alberto
        Micalizzi                                                               


       

      Title
        of
        Authorized Signatory: Chairman                                                                              
        

       

      Email
        Address of Authorized Signatory: alberto.micalizzi@ddecisions.com                  

       

      Facsimile
        Number of Authorized Signatory: +
        44
        2075842157                                           


       

      Address
        for Notice of Purchaser:

      28
        Ives
        Street

      Attn:
        Pelin Sozeri

      London,
        SW3 2ND, UK

      


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

      


      


      Subscription
        Amount: $2,000,000

      


      Principal
        Amount (_______
        x Subscription Amount):
        $2,197,800

      


      Warrant
        Shares: 645,162
        post
        split

      


      Shares:
        711,435
        pre-split

      


      


      EIN
        Number: [PROVIDE
        THIS UNDER SEPARATE COVER]

      


      [SIGNATURE
        PAGES CONTINUE]

    

     

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

    


    [PURCHASER
      SIGNATURE PAGES TO OCTAVIAN SECURITIES PURCHASE AGREEMENT]

    


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

     

    Name
      of
      Purchaser: Rockmore Investment Master Fund Ltd.

     

    Signature
      of Authorized Signatory of Purchaser:
      /s/
      Michael Clateman

     

    Name
      of
      Authorized Signatory: Michael Clateman

     

    Title
      of
      Authorized Signatory: General Counsel

     

    Email
      Address of Authorized Signatory:
      _____________________________________________

     

    Facsimile
      Number of Authorized Signatory:
      ___________________________________________

     

    Address
      for Notice of Purchaser:

    


    


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

    


    


    Subscription
      Amount: $1,000,000

    


    Principal
      Amount (1.0989
      x Subscription Amount):
      $1,098,900

    


    Warrant
      Shares: 322,581 post split

    


    Shares:
      355,717 pre split

    


    [SIGNATURE
      PAGES CONTINUE]

    


    
      
         

      

      
        40

        
          

        

      

      
         

      

    

    

      [PURCHASER
        SIGNATURE PAGES TO OCTAVIAN SECURITIES PURCHASE AGREEMENT]

      


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

       

      Name
        of
        Purchaser: Vicis
        Capital Master
        Fund                                                                                  


       

      Signature
        of Authorized Signatory of Purchaser:
        /s/
        Chris
        Phillips                                              


       

      Name
        of
        Authorized Signatory: Chris
        Phillips                                                                                    


       

      Title
        of
        Authorized Signatory: Managing
        Director, Vicis Capital,
        LLC                                          


       

      Email
        Address of Authorized Signatory: Chrisdp@aol.com                                                            
        

       

      Facsimile
        Number of Authorized Signatory: 212-909-4601                                                               
        

       

      Address
        for Notice of Purchaser: 445
        Park
        Avenue. 16th
        Floor

      New
        York,
        NY 10022

      


      


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

      


      


      Subscription
        Amount: $5,000,000

      


      Principal
        Amount (_______
        x Subscription Amount):
        $5,494,500

      


      Warrant
        Shares: 1,612,904
        post
        split

      


      Shares:
        1,778,587
        pre-split

      


      


      EIN
        Number: [PROVIDE
        THIS UNDER SEPARATE COVER]

      


      [SIGNATURE
        PAGES CONTINUE]

    

     

    
      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      

    

    


    Annex
      A

    


    CLOSING
      STATEMENT

    


    Pursuant
      to the attached Securities Purchase Agreement, dated as of the date hereto,
      the
      purchasers shall purchase up to $21,978,000 of Common Stock and Warrants from
      Octavian Global Technologies, Inc., a Nevada corporation (the “Company”).
      All
      funds will be wired into an account maintained by the Company. All funds will
      be
      disbursed in accordance with this Closing Statement. 

    


    Disbursement
      Date: October
      30, 2008

     

      
        

      

    

    


    
      	
              I.
                PURCHASE
                PRICE

            	 
	
              Gross
                Proceeds to be Received 

            	
              $

            
	 	 
	
              II. DISBURSEMENTS

            	 
	 	
              $

            
	 	
              $

            
	 	
              $

            
	 	
              $

            
	 	
              $

            
	 	
              $

            
	 	
              $

            
	 	 
	
              Total
                Amount Disbursed:

            	
              $

            
	 	 
	
              WIRE
                INSTRUCTIONS:

            	 
	 	
              $

            
	
              To:_____________________

            	 


    

     

    DULY
      EXECUTED THIS _________ DAY OF OCTOBER, 2008:

    


    OCTAVIAN
      GLOBAL TECHNOLOGIES, INC. 

    

      
        	
                By:
                  

              	 


      

    

    Name:
      Harmen Breninkmeijer 

    Title:
      Chief Executive Officer

     

    
      
        
        

      

      
        39