MabCure Inc.: Exhibit 10.1 - Filed by newsfilecorp.com






Exhibit 10.1

MABCURE INC. 
INVESTMENT AGREEMENT 


THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE OR OTHER SECURITIES AUTHORITIES.
THEY MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE FEDERAL AND
STATE SECURITIES LAWS. 

THIS INVESTMENT AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO PURCHASE, ANY OF THE SECURITIES DESCRIBED
HEREIN BY OR TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY
ANY FEDERAL OR STATE SECURITIES AUTHORITIES, NOR HAVE SUCH AUTHORITIES CONFIRMED
THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE. 

AN INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF
RISK. THE INVESTOR MUST RELY ON ITS OWN ANALYSIS OF THE INVESTMENT AND
ASSESSMENT OF THE RISKS INVOLVED.

SEE ADDITIONAL LEGENDS AT SECTION 9.10. 

THIS INVESTMENT AGREEMENT (this ”Agreement“ or “Investment
Agreement”) is made as of the 18th day of January, 2011 (the “Agreement
Date”), by and between MabCure Inc., a corporation duly organized and
existing under the laws of the State of Nevada (the "Company"), and Centurion
Private Equity, LLC, a Georgia Limited Liability Company ("Investor"). 

RECITALS: 

WHEREAS, the parties desire that, upon the terms and
subject to the conditions contained herein, the Company shall issue to the
Investor, and the Investor shall purchase from the Company, from time to time as
provided herein, shares of the Company's Common Stock, as part of an offering of
Common Stock by the Company to Investor, for a maximum aggregate offering amount
of up to Ten Million Dollars ($10,000,000) (the "Maximum Offering Amount"); and


WHEREAS, the solicitation of this Investment Agreement
and, if accepted by the Company, the offer and sale of the Common Stock are
being made in reliance upon the provisions of Regulation D ("Regulation D")
promulgated under the Act, Section 4(2) of the Act, and/or upon such other exemption from the registration
requirements of the Act as may be available with respect to any or all of the
purchases of Common Stock to be made hereunder. 

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TERMS: 

NOW, THEREFORE, the parties hereto agree as follows:


1. Certain Definitions. As used in this Agreement
(including the recitals above), the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined): 

“4.9% Limitation” shall have the meaning set forth in Section
2.3.1(f). “Accredited Investor” shall have the meaning set forth in Section
3.1. “Act” shall mean the Securities Act of 1933, as amended. 

“Additional Registration Statement” shall have the meaning set
forth in the Registration Rights Agreement. 

“Advance Put Notice” shall have the meaning set forth in
Section 2.3.1(a), the form of which is attached hereto as Exhibit A. 

“Advance Put Notice Date” shall have the meaning set forth in
Section 2.3.1(a). 

“Affiliate” shall have the meaning as set forth Section 6.5.


“Aggregate Issued Shares” equals the aggregate number of shares
of Common Stock issued to Investor pursuant to the terms of this Agreement or
the Registration Rights Agreement as of a given date, including Put Shares.

“Agreed Upon Procedures Report” shall have the meaning set
forth in Section 2.4.3(b). 

“Agreement” shall mean this Investment Agreement. 

“Approved Primary Market” shall mean any of the following: the
O.T.C. Bulletin Board, the NASDAQ Capital Market, the NASDAQ Global Select
Market, the NYSE Amex, or the New York Stock Exchange. 

“Automatic Termination” shall have the meaning set forth in
Section 2.3.2. 

“Bring Down Cold Comfort Letters” shall have the meaning set
forth in Section 2.3.7(b). 

“Business Day” shall mean shall mean any day other than a
Saturday, Sunday or a day on which commercial banks in the City of New York, New
York are authorized or required by law or executive order to remain closed.

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“Calendar Month” shall mean the period of time beginning on the
numeric day in question in a calendar month and for Calendar Months thereafter,
beginning on the earlier of (i) the same numeric day of the next calendar month
or (ii) the last day of the next calendar month. Each Calendar Month shall end
on the day immediately preceding the beginning of the next succeeding Calendar
Month. 

“Cap Amount” shall have the meaning set forth in Section
2.3.11. 

“Capitalization Schedule” shall have the meaning set forth in
Section 2.4. 

“Change in Control” shall have the meaning set forth within the
definition of Major Transaction, below. 

“Closing” shall mean one of (i) the Investment Commitment
Closing and (ii) each closing of a purchase and sale of Common Stock pursuant to
Section 2. 

"Closing Bid Price" means, for any security as of any date, the
last closing bid price for such security during Normal Trading on the O.T.C.
Bulletin Board, or, if the O.T.C. Bulletin Board is not the principal securities
exchange or trading market for such security, the last closing bid price during
Normal Trading of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by such principal
securities exchange or trading market, or if the foregoing do not apply, the
last closing bid price during Normal Trading of such security in the
over-the-counter market on the electronic bulletin board for such security, or,
if no closing bid price is reported for such security, the average of the bid
prices of any market makers for such security as reported in the "pink sheets"
by the Pink OTC Markets, Inc. If the Closing Bid Price cannot be calculated for
such security on such date on any of the foregoing bases, the Closing Bid Price
of such security on such date shall be the fair market value as mutually
determined by the Company and the Investor in this Offering. If the Company and
the Investor in this Offering are unable to agree upon the fair market value of
the Common Stock, then such dispute shall be resolved by an investment banking
firm mutually acceptable to the Company and the Investor in this offering and
any fees and costs associated therewith shall be paid by the Company. 

“Commission Documents” shall mean (1) all reports, schedules,
registrations, forms, statements, information and other documents filed with or
furnished to the SEC by the Company pursuant to the reporting requirements of
the Exchange Act, including all material filed or furnished pursuant to Section
13(a) or 15(d) of the Exchange Act, which have been filed or furnished by the
Company since December 31, 2009, including, without limitation, the Annual
Report on Form 10-K filed by the Company for the year ended December 31, 2009
(the “2009 Form 10-K”), the Company’s Quarterly Report on Form 10-Q for its
fiscal quarter ended June 30, 2010 and such reports which hereafter shall
be filed with or furnished to the SEC by the Company, including, without
limitation, the Current Report, (2) the Registration Statement, as the same may
be amended from time to time, the Prospectus and each Prospectus Supplement and
(3) all information contained in such filings and all documents and disclosures
that have been and heretofore shall be incorporated by reference therein.

“Commitment Closing Date” means the date of the
Investment Commitment Closing. 

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“Commitment Shares” shall have the meaning set forth in Section
9.10(i).

“Commitment Period” shall have the meaning set forth in Section
2.3.2(g). 

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

“Common Stock” shall mean the common stock of the Company,
$0.001 par value. 

“Company” shall have the meaning set forth in the opening
paragraph hereof. 

“Company Designated Maximum Put Dollar Amount” shall have the
meaning set forth in Section 2.3.1(a). 

“Company Designated Minimum Put Share Price” shall have the
meaning set forth in Section 2.3.1(a). 

“Company Termination” shall have the meaning set forth in
Section 2.3.12. 

“Conditions to Investment Commitment Closing” shall have the
meaning as set forth in Section 2.2.2. 

“Current Report” shall have the meaning ascribed to it in
Section 6.10 hereof. 

“Delisting Event” shall mean any time during the term of this
Investment Agreement, that the Company’s Common Stock is not listed for and
actively trading on an Approved Primary Market or is suspended or delisted with
respect to the trading of the shares of Common Stock on such market or exchange.


“Disclosure Documents” shall have the meaning as set forth in
Section 3.2.4. 

“Due Diligence Review” shall have the meaning as set forth in
Section 2.4. 

“Effective Date” shall have the meaning set forth in Section
2.3.1. 

“Equity Securities” shall have the meaning set forth in Section
6.6.1. 

“Evaluation Day” shall have the meaning set forth in Section
2.3.1(b). 

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

“Excluded Day” shall have the meaning set forth in Section
2.3.1(b). 

“Extended Put Period” shall mean the period of time between the
Advance Put Notice Date until the Pricing Period End Date. 

“Fee Shares” shall have the meaning set forth in Section
9.10(i).

“FINRA” shall mean the Financial Industry Regulatory Authority.


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“Indemnified Liabilities” shall have the meaning set forth in
Section 8. 

“Indemnitees” shall have the meaning set forth in Section 8.


“Indemnitor” shall have the meaning set forth in Section 8.


“Individual Put Limit” shall have the meaning set forth in
Section 2.3.1(b). 

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

“Intended Put Share Amount” shall have the meaning set forth in
Section 2.3.1(a). 

“Investment Commitment Closing” shall have the meaning set
forth in Section 2.2.1. 

“Investment Agreement” shall mean this Investment Agreement.


“Investment Commitment Opinion of Counsel” shall mean an
opinion from Company’s independent counsel, substantially in the form attached
as Exhibit B, or such other form as agreed upon by the parties, as to the
Investment Commitment Closing. 

“Investment Date” shall mean the date of the Investment
Commitment Closing. 

“Investor” shall have the meaning set forth in the preamble
hereto. 

“Knowledge” means the actual Knowledge of the Company’s Chief
Executive Officer or Chief Financial Officer, after reasonable inquiry of all
officers, directors and employees of the Company who could reasonably be
expected to have Knowledge or information with respect to the matter in
question.

“Legend” shall have the meaning set forth in Section 9.10(iii). 

“Legend Removal Condition” shall have the meaning set forth in
Section 9.10(iii). 

“Liquidity Date” shall have the meaning set forth in Section
2.3.5(t). 

“Major Transaction" shall mean and shall be deemed to have
occurred at such time upon any of the following events: 

(i) a consolidation, merger or other business combination or
event or transaction following which the holders of Common Stock of the Company
immediately preceding such consolidation, merger, combination or event either
(i) no longer hold a majority of the shares of Common Stock of the Company or (ii) no longer have the ability
to elect the board of directors of the Company (a “Change of Control”);

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(ii) the sale or transfer of a portion of the Company's assets
not in the ordinary course of business;

(iii) the purchase of assets by the Company not in the ordinary
course of business; or 

(iv) a purchase, tender or exchange offer made to the holders
of outstanding shares of Common Stock. 

“Market Price” shall equal the average of the three lowest
daily VWAPS for the Common Stock on the Principal Market during the Pricing
Period for the applicable Put. 

“Material Adverse Effect” means (i) any condition, occurrence,
state of facts or event having any material adverse effect on the legality,
validity or enforceability of the Transaction Documents or the transactions
contemplated thereby, (ii) any condition, occurrence, state of facts or event
having, any effect on the business, operations, properties or condition
(financial or otherwise) of the Company that is material and adverse to the
Company and its Subsidiaries, taken as a whole, and/or (iii) any condition,
occurrence, state of facts or event prohibiting or otherwise materially
interfering with or delaying the ability of the Company to perform any of its
obligations under any of the Transaction Documents to which it is a party;
provided , however , that none of the following, individually or
in the aggregate, shall be taken into account in determining whether a Material
Adverse Effect has occurred : (a) changes in conditions in the U.S. or global
capital, credit or financial markets generally, including changes in the
availability of capital or currency exchange rates, provided such changes shall
not have affected the Company in a materially disproportionate manner as
compared to other similarly situated companies; (b) changes generally affecting
the industries in which the Company is engaged, provided such changes shall not
have affected the Company in a materially disproportionate manner as compared to
other similarly situated companies; (c) any effect of the announcement of, or
the consummation of the transactions contemplated by, this Agreement and the
other Transaction Documents on the Company’s relationships, contractual or
otherwise, with customers, suppliers, vendors, bank lenders, strategic venture
partners or employees; and (d) the receipt of any notice that the Common Stock
may be ineligible to continue listing or quotation on the Trading Market, other
than a final and non-appealable notice that the listing or quotation of the
Common Stock on the Trading Market shall be terminated on a date certain.

“Material Facts” shall have the meaning set forth in Section
2.3.7(a). 

“Maximum Put Dollar Amount” shall mean the lesser of (i) the
Company Designated Maximum Put Dollar Amount, if any, specified by the Company
in a Put Notice, and (ii) $500,000. 

“Maximum Offering Amount” shall have the meaning set forth in
the recitals hereto. 

“Nasdaq 20% Rule” shall have the meaning set forth in Section
2.3.11. 

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“NASDAQ Market” shall mean NASDAQ Capital Market, the NASDAQ
Global Select Market or the NASDAQ Global Market. 

“Normal Trading” shall mean trading that occurs between 9:30 AM
and 4:00 PM, New York City Time, on any Trading Day, and shall expressly exclude
“after hours” trading. 

“Numeric Day” shall mean the numerical day of the month of the
Investment Date or the last day of the calendar month in question, whichever is
less. 

“Offering” shall mean the Company’s offering of Common Stock
issued under this Investment Agreement. 

“Officer’s Certificate” shall have the meaning set forth in
Section 2.2.2(e). 

“Opinion of Counsel” shall mean, as applicable, the Investment
Commitment Opinion of Counsel, the Put Opinion of Counsel and the Registration
Opinion. 

“Payment Due Date” shall have the meaning set forth in Section
2.3.9. 

“Pricing Period” shall mean, unless otherwise shortened under
the terms of this Agreement, the period beginning on the Trading Day immediately
following the Put Date and ending on and including the date which is 15 Trading
Days after such Put Date. 

“Pricing Period End Date” shall mean the last Trading Day of
any Pricing Period. 

“Principal Market” shall mean the single Approved Primary
Market on which the Common Stock is then listed or traded in the United States,
provided that if the Company’s Common Stock is simultaneously trading on more
than one Approved Primary Market, then the Principal Market shall be deemed to
be the first market or exchange on which the Common Stock is traded to appear,
in order, on the following list: (1) the New York Stock Exchange, (2) the NASDAQ
Global Select Market, (3) the NASDAQ Capital Market, (4) the NYSE Amex or (5)
the O.T.C. Bulletin Board.

“Proceeding” shall have the meaning as set forth Section 5.1.


“Prospectus” shall have the meaning set forth in the
Registration Rights Agreement. 

“Prospectus Supplement” means any prospectus supplement to the
Prospectus filed with the SEC from time to time pursuant to Rule 424(b) under
the Securities Act, including the documents incorporated by reference
therein.

“Purchase” shall have the meaning set forth in Section 2.3.8.


“Put” shall have the meaning set forth in Section 2.3.1(d).


“Put Closing” shall have the meaning set forth in Section
2.3.9. 

“Put Closing Date” shall have the meaning set forth in Section
2.3.9. 

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“Put Conditions” shall have the meaning set forth in Section
2.3.5. 

“Put Date” shall mean the date that is specified by the Company
in any Put Notice for which the Company intends to exercise a Put under Section
2.3.1, unless the Put Date is postponed pursuant to the terms hereof, in which
case the “Put Date” is such postponed date. 

“Put Dollar Amount” shall be determined by multiplying the Put
Share Amount by the respective Put Share Prices with respect to such Put Shares,
subject to the limitations herein. 

“Put Interruption Date” shall have the meaning set forth in
Section 2.3.4. “Put Interruption Event” shall have the meaning set forth in
Section 2.3.4. “Put Interruption Notice” shall have the meaning set forth in
Section 2.3.4. 

“Put Notice” shall have the meaning set forth in Section
2.3.1(d), the form of which is attached hereto as Exhibit C. 

“Put Opinion of Counsel” shall mean an opinion from Company’s
independent counsel, in the form attached as Exhibit D, or such other
form as agreed upon by the parties, as to any Put Closing. 

“Put Share Amount” shall have the meaning as set forth Section
2.3.1(b). 

“Put Share Price” shall have the meaning set forth in Section
2.3.1(c). 

“Put Shares” shall mean shares of Common Stock that are
purchased by the Investor pursuant to a Put. 

“Registrable Securities” shall have the meaning as set forth in
the Registration Rights Agreement.

“Registration Opinion” shall have the meaning set forth in
Section 2.3.7(a), the form of which is attached hereto as Exhibit E. 

“Registration Opinion Deadline” shall have the meaning set
forth in Section 2.3.7(a). 

“Registration Rights Agreement” shall mean that certain
registration rights agreement entered into by the Company and Investor on even
date herewith, in the form attached hereto as Exhibit F, or such other
form as agreed upon by the parties. 

“Registration Statement” shall have the meaning as set forth in
the Registration Rights Agreement.

“Regulation D” shall have the meaning set forth in the recitals
hereto. 

“Reporting Issuer” shall have the meaning set forth in Section
6.2. 

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“Required Put Documents” shall have the meaning set forth in
Section 2.3.6. 

“Resolutions” shall have the meaning set forth in Section
2.3.5(u). 

“Right of First Refusal” shall have the meaning set forth in
Section 6.6.2. 

“Schedule of Exceptions” shall have the meaning set forth in
Section 5, and is attached hereto as Exhibit G. 

“SEC” shall mean the United States Securities and Exchange
Commission or any successor entity.

“Secretary’s Certificate” shall have the meaning set forth in
Section 2.2.2(a). 

“Section 13(d) Outstanding Share Amount” shall have the meaning
set forth in Section 2.3.1(f). 

“Securities” shall mean the Common Stock of the Company
issuable pursuant to this Investment Agreement, including but not limited to the
Commitment Shares, the Fee Shares and the Put Shares. 

“Securities Act” shall mean the Securities Act of 1933, as
amended. 

“Short Sales” shall mean “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Exchange Act.

“SOX ” shall mean the Sarbanes-Oxley Act of 2002 and the rules
and regulations of the SEC thereunder.

“Stockholder 20% Approval” shall have the meaning set forth in
Section 2.3.11. 

“Subsidiary” shall mean any corporation or other entity of
which at least a majority of the securities or other ownership interest having
ordinary voting power (absolutely or contingently) for the election of directors
or other persons performing similar functions are at the time owned directly or
indirectly by the Company and/or any of its other Subsidiaries. 

“Term” shall mean the term of this Agreement, which shall be a
period of time beginning on the date of this Agreement and ending on the
Termination Date. 

“Termination Date” shall mean the earlier of (i) the date that
is two (2) years after the Effective Date, (ii) the date that is thirty (30)
calendar months after the date of this Agreement, or (iii) the date that is
thirty (30) Business Days after the later of (a) the Put Closing Date on which
the sum of the aggregate Put Share Prices for all Put Shares equal the Maximum
Offering Amount, (b) the date that the Company has delivered a Termination
Notice to the Investor, and (c) the date of an Automatic Termination.

“Termination Notice” shall have the meaning as set forth in
Section 2.3.12. 

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“Third Party Reports” shall have the meaning set forth in
Section 3.2.4. 

“Trading Day” shall mean any day on which the Principal Market
is open for trading including any day on which the Principal Market is open for
trading for a period of time less than the customary time. 

“Transaction Documents” means, collectively, this Agreement and
the exhibits hereto, the Registration Rights Agreement, and each of the other
agreements, documents, certificates and instruments entered into or furnished by
the parties hereto in connection with the transactions contemplated hereby and
thereby, including, without limitation, the Disclosure Documents.

“Trading Market” means whichever Approved Primary Market is at
the time the principal trading exchange or market for the Common Stock.

“Trading Volume” shall mean the volume of shares of the
Company’s Common Stock that trade between 9:30 AM and 4:00 PM, New York City
Time, on any Trading Day, and shall expressly exclude any shares trading during
“after hours” trading. 

“Transfer Agent” shall have the meaning set forth in Section
6.9. 

“Trigger Price” shall have the meaning set forth in Section
2.3.1(b). 

“Unlegended Share Certificates” shall mean a certificate or
certificates (or electronically delivered shares, as appropriate) (in
denominations as instructed by Investor) representing the shares of Common Stock
to which the Investor is then entitled to receive, registered in the name of
Investor or its nominee (as instructed by Investor) and not containing a
restrictive legend or stop transfer order, including but not limited to the Put
Shares for the applicable Put, and the Commitment Shares and the Fee Shares when
a Legend Removal Condition has been met. 

“Volume Limitations” shall have the meaning set forth in
Section 2.3.1(b). 

2.  Purchase and Sale of Common Stock. 

2.1 Commitment to Purchase Put Shares. Subject to
the terms and conditions herein and the satisfaction of the conditions to
closing set forth in Sections 2.2 and 2.3 below and the other terms and
conditions set forth in this Agreement, Investor hereby agrees to purchase such
amounts of Common Stock as the Company may, in its sole and absolute discretion,
from time to time elect to issue and sell to Investor according to one or more
Puts pursuant to Section 2.3 below. 

2.2 Investment Commitment.

2.2.1 Investment Commitment Closing. The closing of this
Agreement (the “Investment Commitment Closing") shall be deemed to occur when
this Agreement has been duly executed and delivered by both the Company and the
Investor, and the other Conditions to Investment Commitment Closing set forth in
Section 2.2.2 below have been met. 

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2.2.2 Conditions to Investment Commitment Closing. As a
prerequisite to the Investment Commitment Closing, all of the following (the
“Conditions to Investment Commitment Closing”) shall have been satisfied within
five (5) Business Days of the Company’s execution and delivery of this
Agreement: 

	 	(a) 	the following documents shall have been delivered to the Investor: (i)
      the Registration Rights Agreement (duly executed by the Company and
      Investor), (ii) the Investment Commitment Opinion of Counsel (signed by
      the Company’s counsel), (iii) a Secretary's Certificate, in the form of
      Exhibit H hereto (“Secretary’s Certificate”), (A) attaching the
      Resolutions of the Company's board of directors authorizing this
      transaction, (B) attaching a certified copy of the Company's Certificate
      of Incorporation evidencing the incorporation and good standing of the
      Company in its state of incorporation, issued by the secretary of state of
      the state of incorporation within the ten (10) Business Days prior to the
      Commitment Closing Date, and (C) attaching a true and complete copy of the
      Bylaws of the Company and certifying that they remain in full force and
      effect; 
	 	 	 
	 	(b) 	this Investment Agreement, duly executed by the Company, shall have
      been received by the Investor; 
	 	 	 
	 	(c) 	the Company’s Common Stock shall be listed for trading and actually
      trading on an Approved Primary Market; 
	 	 	 
	 	(d) 	other than continuing losses described in the Disclosure Documents
      (provided for in Section 3.2.4), up through the Investment Commitment
      Closing there have been no material adverse changes in the Company’s
      financial condition since the date of the last balance sheet included in
      the Disclosure Documents, including but not limited to incurring material
      liabilities; 
	 	 	 
	 	(e) 	the representations and warranties of the Company in this Agreement
      shall be true and correct in all material respects and the Conditions to
      Investment Commitment Closing set forth in this Section 2.2.2 shall have
      been satisfied on the date of such Investment Commitment Closing and all
      of the conditions and limitations set forth in this Agreement for the
      applicable Closing has been satisfied; and the Company shall deliver an
      Officer’s Certificate in the form of Exhibit I hereto (“Officer’s
      Certificate”), signed by an officer of the Company, to such effect to the
      Investor; and 
	 	 	 
	 	(f) 	The Company shall have issued to the Investor, or shall have caused
      its transfer agent to issue to the investor, certificates representing the
      Commitment Shares and the Fee Shares, respectively, in the name of the
      Investor or its designee (in which case such designee name shall have been
      provided to the Company prior to the Commitment Closing Date), in consideration for the Investor’s execution and delivery of this
Agreement. Such certificate shall be delivered to the Investor by overnight
courier at its address set forth in Section 9.12 hereof. For the avoidance of
doubt, all of the Commitment Shares and Fee Shares shall be fully earned upon
receipt regardless of whether or not the Registration Statement is filed or
declared effective and regardless of whether or not any Puts are issued by the
Company or settled hereunder.


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2.3 Puts of Common Shares to the Investor. 

2.3.1 Procedure to Exercise a Put. Subject to the
Individual Put Limit, the Maximum Offering Amount and the Cap Amount (if
applicable), and subject to the satisfaction of the Put Conditions and the other
conditions and limitations set forth in this Agreement, at any time beginning on
the date on which the Registration Statement is declared effective by the SEC
(the “Effective Date”), the Company may, in its sole and absolute discretion,
elect to exercise one or more Puts according to the following procedure,
provided that each subsequent Put Date after the first Put Date shall be no
sooner than five (5) Business Days following the preceding Pricing Period End
Date: 

(a) Delivery of Advance Put Notice. At least
three (3) Business Days but not more than ten (10) Business Days prior to any
intended Put Date, the Company shall deliver advance written notice (the
“Advance Put Notice,” the form of which is attached hereto as Exhibit A,
the date of such Advance Put Notice being the “Advance Put Notice Date”) to
Investor stating the Put Date for which the Company shall, subject to the
limitations and restrictions contained herein, exercise a Put and stating the
number of shares of Common Stock (subject to the Individual Put Limit and the
Maximum Put Dollar Amount) which the Company intends to sell to the Investor for
the Put (the “Intended Put Share Amount”).

The Company shall also designate in any Advance Put Notice (i)
a maximum dollar amount of Common Stock, not to exceed $500,000, which it shall
sell to Investor during the Put (the “Company Designated Maximum Put Dollar
Amount”) and/or (ii) a minimum purchase price per Put Share at which the
Investor may purchase shares of Common Stock pursuant to such Put Notice (a
"Company Designated Minimum Put Share Price"). The Company Designated Minimum
Put Share Price, if applicable, shall be no greater than the lesser of (i) 80%
of the Closing Bid Price of the Company’s common stock on the Trading Day
immediately preceding the Advance Put Notice Date, or (ii) the Closing Bid Price
of the Company’s common stock on the Trading Day immediately preceding the
Advance Put Notice Date minus $0.0125. The Company may decrease (but not
increase) the Company Designated Minimum Put Share Price for a Put at any time
by giving the Investor written notice of such decrease not later than 12:00
Noon, New York City time, on the Trading Day immediately preceding the Trading
Day that such decrease is to take effect. A decrease in the Company Designated
Minimum Put Share Price shall have no retroactive effect on the determination of
Trigger Prices and Excluded Days for days preceding the Trading Day that such
decrease takes effect, provided that the Put Share Price for all shares in a Put
shall be calculated using the lowest Company Designated Minimum Put Share Price,
as decreased. 

(b) Put Share Amount. The “Put Share Amount” is the
number of shares of Common Stock that the Investor shall be obligated to
purchase in a given Put, and shall equal the lesser of (i) the Intended Put Share Amount, and (ii)
the Individual Put Limit. The “Individual Put Limit” shall equal the lesser of
(A) 1,500,000 shares, (B) 15% of the sum of the aggregate daily reported Trading
Volumes in the outstanding Common Stock on the Company’s Principal Market
excluding any block trades that exceed 40,000 shares of Common Stock for all
Evaluation Days (as defined below) in the Pricing Period, (C) the number of Put
Shares which, when multiplied by their respective Put Share Prices, equals the
Maximum Put Dollar Amount, and (D) the 4.9% Limitation (collectively referred to
herein as the “Volume Limitations”). Company agrees not to trade Common Stock or
arrange for Common Stock to be traded for the purpose of artificially increasing
the Volume Limitations.  

12




For purposes of this Agreement: 

"Trigger Price" for any Pricing Period shall mean the greater
of (i) the Company Designated Minimum Put Share Price, plus $0.01, or (ii) the
Company Designated Minimum Put Share Price divided by 0.97, provided that if the
Company does not specify a Company Designated Minimum Put Share Price, the
“Trigger Price” shall equal $.01. 

An “Excluded Day” shall mean each Trading Day during a Pricing
Period where the lowest intra-day trading price of the Common Stock is less than
the Trigger Price and each Trading Day defined in Section 2.3.4 as an “Excluded
Day.”

An “Evaluation Day” shall mean each Trading Day during a
Pricing Period that is not an Excluded Day.

(c) Put Share Price. The purchase price for the Put
Shares (the “Put Share Price”) shall equal the lesser of (i) the Market Price
for such Put, minus $0.01, or (ii) 97% of the Market Price for such Put, but
shall in no event be less than the Company Designated Minimum Put Share Price
for such Put, if applicable. 

(d) Delivery of Put Notice. After delivery of an Advance
Put Notice, on the Put Date specified in the Advance Put Notice the Company
shall deliver written notice (the “Put Notice,” the form of which is attached
hereto as Exhibit C) to Investor stating (i) the Put Date, (ii) the
Intended Put Share Amount as specified in the Advance Put Notice (such exercise
a “Put”), (iii) the Company Designated Maximum Put Dollar Amount (if
applicable), and (iv) the Company Designated Minimum Put Share Price (if
applicable). In order to effect delivery of the Put Notice, the Company shall
(i) send the Put Notice by facsimile on the Put Date so that such notice is
received by the Investor by 6:00 p.m., New York, NY time, and (ii) surrender
such notice on the Put Date to a courier for overnight delivery to the Investor
(or two (2) day delivery in the case of an Investor residing outside of the
U.S.).

(e) Delivery of Required Put Documents. On or before the
Put Date for such Put, the Company shall deliver the Required Put Documents (as
defined in Section 2.3.6 below) to the Investor (or to an agent of Investor, if
Investor so directs). Unless otherwise specified by the Investor, the Put Shares
of Common Stock shall be delivered to the Investor in accordance with Section
2.3 by crediting the Investor’s or its designees’ account at DTC through its
Deposit/Withdrawal at Custodian (DWAC) system. 

13




(f) Limitation on Investor's Obligation to Purchase
Shares. Notwithstanding anything to the contrary in this Agreement, in no
event shall the Investor be required to purchase, and an Intended Put Share
Amount may not include, an amount of Put Shares, which when added to the number
of shares of Common Stock of the Company then beneficially owned by the Investor
as determined in accordance with Section 13(d) of the Exchange Act, would exceed
4.9% of the number of shares of Common Stock outstanding (on a fully diluted
basis, to the extent that inclusion of unissued shares is mandated by Section
13(d) of the Exchange Act) on the Put Date for such Pricing Period (the “Section
13(d) Outstanding Share Amount”). Each Put Notice shall include a representation
of the Company as to the Section 13(d) Outstanding Share Amount on the related
Put Date. In the event that the Section 13(d) Outstanding Share Amount is
different on any date during a Pricing Period than on the Put Date associated
with such Pricing Period, then the number of shares of Common Stock outstanding
on such date during such Pricing Period shall govern for purposes of determining
whether the number of shares beneficially owned by the Investor following the
issuance of the subject Put Shares, would constitute in excess of 4.9% of
the Section 13(d) Outstanding Share Amount. The limitation set forth in this
Section 2.3.1(f) is referred to as the “4.9% Limitation.” 

2.3.2 Termination of Right to Put. The Company’s right
to initiate subsequent Puts to the Investor shall terminate permanently (each,
an “Automatic Termination”) upon the occurrence of any of the following,
provided that, if a specific cure period is specified below, then such Automatic
Termination shall end following such cure: 

(a) an Automatic Termination shall occur if, at any time,
either the Company or any director or executive officer of the Company has
engaged in a transaction or conduct related to the Company that has resulted in
(i) a Securities and Exchange Commission enforcement action that results in a
consent decree or other disposition adverse to the Company, or (ii) a civil
judgment or criminal conviction for fraud or misrepresentation, or for any other
offense that, if prosecuted criminally, would constitute a felony under
applicable law; 

(b) an Automatic Termination shall occur on any date after a
cumulative time period or series of time periods, consisting only of Ineffective
Periods, that continues for a period of twenty (20) consecutive Trading Days or
for more than an aggregate of forty (40) Trading Days in any 365-day period,
provided that the Automatic Termination shall end at such time as the
Registration Statement has thereafter been current and effective for twenty (20)
consecutive Trading Days, provided further that if a cumulative time period or
series of time periods, consisting only of Ineffective Periods, continues for an
aggregate of eighty (80) Trading Days after the date the Registration Statement
is initially declared effective, then the Automatic Termination shall become
permanent an uncurable; 

(c) an Automatic Termination shall occur if at any time the
Company has filed for and/or is subject to any bankruptcy, insolvency,
reorganization or liquidation proceedings or other proceedings for relief under
any bankruptcy law or any law for the relief of debtors instituted by or against
the Company or any subsidiary of the Company and such action is not dismissed
within a period of 90 days of the filing;

(d) an Automatic Termination shall occur if any Person
commences a proceeding against the Company pursuant to or within the meaning of
any Bankruptcy Law and such proceeding is not dismissed within a period of 90
days; 

14




(e) an Automatic Termination shall occur if the Company
pursuant to or within the meaning of any Bankruptcy Law; (A) commences a
voluntary case, (B) consents to the entry of an order for relief against it in
an involuntary case, (C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, (D) makes a general assignment for the
benefit of its creditors or is generally unable to pay its debts as the same
become due;

(f) an Automatic Termination shall occur if a court of
competent jurisdiction enters a final order or decree under any Bankruptcy Law
that (A) is for relief against the Company in an involuntary case, (B) appoints
a Custodian of the Company or for all or substantially all of its property, or
(C) orders the liquidation of the Company or any Subsidiary;

(g) an Automatic Termination shall occur after the sooner of
(i) the date that is two (2) years after the Effective Date, (ii) the date that
is thirty (30) calendar months after the date of this Agreement, or (iii) the
Put Closing Date on which the aggregate of the Put Dollar Amounts for all Puts
equal the Maximum Offering Amount (the period from the date of this Agreement to
the sooner or (i), (ii) or (iii) is referred to as the “Commitment Period”);

(h) an Automatic Termination shall occur if the Company has
breached any covenant in Section 5, Section 6, Section 8 or Section 9 hereof,
and such breach has not been cured within a period of thirty (30) days, provided
that if a specific cure provision is set forth in this sub-section 2.3.2 with
respect to any such covenant, then the applicable cure provision in this
sub-section 2.3.2 shall govern;

(i) an Automatic Termination shall occur if no Registration
Statement has been declared effective by the date that is one (1) year after the
date of this Agreement, the Automatic Termination shall occur on the date that
is one (1) year after the date of this Agreement.

(j) an Automatic Termination shall occur upon the suspension
from trading or failure of the Common Stock to be listed on an Approved Primary
Market for a period of ten (10) consecutive Business Days, provided that such
Automatic Termination shall end only if the Company’s Common Stock is thereafter
listed and trading on an Approved Primary Market for a period of twenty (20)
consecutive Business Days during the six (6) month period immediately following
the initial suspension from trading;

(k) an Automatic Termination shall occur upon the delisting of
the Company’s Common Stock from the Principal Market, provided, however, that
the Common Stock is not immediately thereafter (within one (1) Business Day)
trading on another Approved Primary Market;

(l) an Automatic Termination shall occur upon the failure,
other than due to a mistake that is cured within three (3) Business Days of
notification by the Investor to the Company, , by the Transfer Agent to issue
Commitment Shares or Fee Shares to the Investor, without restrictive legends,
pursuant to a legend removal request accompanied by the requisite representation
letters, within ten (10) Business Days after the applicable Required Delivery
Date (as defined in Section 9.10(iii) below); or 

15




(m) the Company breaches any representation, warranty, covenant
or other term or condition under any Transaction Document if such breach has a
Material Adverse Effect and except, in the case of a breach of a covenant which
is reasonably curable, only if such breach continues for a period of at least
twenty (20) Business Days after notice thereof is provided to the Company by
Investor, provided that if a specific cure provision is set forth in this
sub-section 2.3.2 with respect to any such covenant, then the applicable cure
provision in this sub-section 2.3.2 shall govern. 

For purposes of clarification, notwithstanding any Automatic
Termination hereunder, the Investor shall retain all of the Commitment Shares
and the Fee Shares in consideration for this Agreement. 

2.3.3 Maximum Offering Amount. The Investor shall not be
obligated to purchase any additional Put Shares once the aggregate Put Dollar
Amount paid by Investor equals the Maximum Offering Amount. 

2.3.4 Put Interruption. Once the Company delivers an
Advance Put Notice to the Investor, the Company may not cancel the Put. In the
event of a Put Interruption Event (as defined below), in each case during any
Pricing Period, then (A) the Company shall notify the Investor in writing (a
“Put Interruption Notice”) as soon as possible by facsimile and overnight
courier, but no later than the end of the Trading Day in which the Company
becomes aware of such facts, (B) the Pricing Period shall be extended or
shortened, as applicable, such that the Pricing Period End Date is the tenth
(10th) Trading Day after the date of such Put Interruption Notice
from the Company, (the “Put Interruption Date”), (C) each Trading Day from and
including the Put Interruption Date through and including the Pricing Period End
Date for the applicable Put (as extended or shortened, if applicable), shall be
considered to be an “Excluded Day,” as that term is used in this Agreement, and
(D) the Company Designated Minimum Put Share Price, if any, shall not apply to
the affected Put. In the event that a Put Interruption Event occurs after an
Advance Put Notice Date, but before the applicable Put Date, that Put shall be
deemed to be terminated, and the Company may deliver an Advance Put Notice for a
new Put anytime beginning on the following Trading Day, if otherwise allowed
under this Agreement. A “Put Interruption Event” shall mean any of the
following: (i) an Automatic Termination, (ii) the failure of one of the items
specified in Section 2.3.5 below to be true and correct on any day during an
Extended Pricing Period, or (iii) the occurrence of one of the following events:


(a) the Company has announced a subdivision or combination,
including a reverse split, of its Common Stock or has subdivided or combined its
Common Stock; 

(b) the Company has paid a dividend of its Common Stock or has
made any other distribution of its Common Stock; 

(c) the Company has made a distribution of all or any portion
of its assets or evidences of indebtedness to the holders of its Common Stock;


(d) a Major Transaction has occurred; or 

16




(e) the Company discovers or is notified of the existence of
Material Facts or any Ineffective Period or Delisting Event occurs.

2.3.5 Conditions Precedent to the Right of the Company to
Deliver an Advance Put Notice or a Put Notice. The right of the Company to
deliver an Advance Put Notice or a Put Notice is subject to the satisfaction, on
the date of delivery of such Advance Put Notice or Put Notice, of each of the
following conditions (the “Put Conditions”): 

	 	(a) 	Investment Commitment Closing. The Conditions to Investment
      Commitment Closing shall have been satisfied as required in this Agreement
      and the Investment Commitment Closing shall have occurred; 
	 	 	 
	 	(b) 	Time Since Prior Put Notice. At least five Trading Days shall
      have passed from the most recent Pricing Period End Date until the Put
      Date for the proposed Put; 
	 	 	 
	 	(c) 	Required Put Documents. The Investor shall have received the
      Required Put Documents on or before the applicable Put Date; 
	 	 	 
	 	(d) 	Listing. The Company’s Common Stock shall be listed for and
      actively trading on an Approved Primary Market and the Commitment Shares,
      the Fee Shares and the Put Shares shall have been and are at such time
      listed on an Approved Primary Market; 
	 	 	 
	 	(e) 	No Suspension of Trading in or Delisting of Common Stock.
      Trading in the Common Stock shall not have been suspended or delisted by
      the SEC, the Trading Market or the FINRA, the Company shall not have
      received any final and non-appealable notice that the listing or quotation
      of the Common Stock on the Trading Market shall be terminated on a date
      certain, and, at any time prior to the applicable Put Date and applicable
      Put Closing Date, trading in securities generally as reported on the
      Trading Market shall not have been suspended or limited, 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 or crisis of such magnitude in its effect on, or any material
      adverse change in, any financial, credit or securities market; 
	 	 	 
	 	(f) 	Registration Effective; No Stop Order. (1) The Company shall
      have satisfied any and all obligations pursuant to the Registration Rights
      Agreement, including, but not limited to, the filing of the Registration
      Statement with the SEC with respect to the resale of all Registrable
      Securities and the requirement that the Registration Statement shall have
      been declared effective under the Securities Act by the SEC and shall
      remain current and effective such that the Investor shall be permitted to
      utilize the Prospectus therein to resell (a) all of the Commitment Shares, (b) all of the Fee Shares, (c) all of the Shares issued pursuant to all
      prior Put Notices, and (d) all of the Shares issuable pursuant to the
      applicable Put Notice, (2) the Company shall have included all Material
      Facts or material non-public information in the Prospectus (as
      supplemented or amended) and (3) the Company shall have satisfied and
      shall be in compliance with any and all obligations pursuant to this
      Agreement and the Registration Rights Agreement. The Registration
      Statement is not subject to an Ineffective Period as defined in the
      Registration Rights Agreement, the Prospectus included therein is current
      and deliverable, and to the Company’s Knowledge there is no notice of any
      investigation or inquiry concerning any stop order with respect to the
      Registration Statement;


17





	 	(g) 	No Knowledge of Events Which Would Suspend
      Registration. The Company shall have no Knowledge of any event that,
      in the Company’s opinion, is more likely than not to have the effect of
      causing any Registration Statement to be suspended or otherwise
      ineffective (which event is more likely than not to occur within the
      thirty Business Days following the date on which such Advance Put Notice
      and Put Notice is deemed delivered); 
	 	 	 	 
	 	(h) 	No Material Notices. None of the following events shall
    have occurred and be continuing: (a) receipt of any request by the SEC or
    any other federal or state governmental authority for any additional
    information relating to the Registration Statement, the Prospectus or any
    Prospectus Supplement, or for any amendment of or supplement to the
    Registration Statement, the Prospectus, or any Prospectus Supplement; (b)
    the issuance by the SEC or any other federal or state governmental authority
    of any stop order suspending the effectiveness of the Registration Statement
    or prohibiting or suspending the use of the Prospectus or any Prospectus
    Supplement, or of the suspension of qualification or exemption from
    qualification of the securities for offering or sale in any jurisdiction, or
    the initiation or contemplated initiation of any proceeding for such
    purpose; or (c) the occurrence of any event or the existence of any
    condition or state of facts, which makes any statement of a material fact
    made in the Registration Statement, the Prospectus or any Prospectus
    Supplement untrue or which requires the making of any additions to or
    changes to the statements then made in the Registration Statement, the
    Prospectus or any Prospectus Supplement in order to state a material fact
    required by the Securities Act to be stated therein or necessary in order to
    make the statements then made therein (in the case of the Prospectus or any
    Prospectus Supplement, in light of the circumstances under which they were
    made) not misleading, or which requires an amendment to the Registration
    Statement or a supplement to the Prospectus or any Prospectus Supplement to
    comply with the Securities Act or any other law (other than the transactions
    contemplated by the applicable Put Notice and the settlement thereof). The
    Company shall have no Knowledge of any event that could reasonably be expected to have the effect of causing
      the suspension of the effectiveness of the Registration Statement or the
      prohibition or suspension of the use of the Prospectus or any Prospectus
      Supplement in connection with the resale of the Registrable Securities by
      the Investor; 


18





	 	(i) 	Representations and Warranties True and Correct. The
      representations and warranties of the Company in Section 5 hereof are true
      and correct as of the Put Date in all material respects as if made on such
      date, the Company has satisfied its obligations under Section 2.3 hereof
      and the conditions to Investor’s obligations set forth in this Section
      2.3.5 are satisfied as of such Closing, and the Company shall deliver a
      certificate, signed by an officer of the Company, to such effect to the
      Investor; 
	 	 	 
	 	(j) 	Authorization and Reservation of Shares. The Company shall have
      authorized by all necessary corporate action and reserved for issuance a
      sufficient number of Common Shares for the purpose of enabling the Company
      to satisfy any obligation to issue Common Shares pursuant to any Put;
  
	 	 	 
	 	(k) 	Cap Amount Not Exceeded. If the Aggregate Issued Shares after
      the Closing of the Put would exceed the Cap Amount, the Company shall have
      obtained the Stockholder 20% Approval as specified in Section 2.3.11, if
      the Company’s Common Stock is listed on a NASDAQ Market, and such approval
      is required by the rules of the NASDAQ; 
	 	 	 
	 	(l) 	4.9% Limitation Not Exceeded. The aggregate number of Put
      Shares to be issued in the Put, when combined with the number of shares of
      Common Stock of the Company then beneficially owned by the Investor, would
      not cause the Investor to exceed the 4.9% Limitation (as defined herein);
    
	 	 	 
	 	(m) 	Maximum Offering Amount Not Exceeded. The aggregate number of
      Put Shares to be issued in the Put, when combined with all Put Share
      issued in prior Puts, would not cause the Maximum Offering Amount to be
      exceeded; 
	 	 	 
	 	(n) 	No Adverse Law, Rule, Regulation, or Pending Proceeding. There
      is not then in effect any law, rule or regulation prohibiting or
      restricting the transactions contemplated hereby, or requiring any consent
      or approval which shall not have been obtained, nor is there any pending
      or threatened proceeding or investigation which may have the effect of
      prohibiting or adversely affecting any of the transactions contemplated by
      this Agreement; 
	 	 	 
	 	(o) 	No Pending or Threatened Injunctions. No statute, rule,
      regulation, executive order, decree, ruling or injunction shall have been
      enacted, entered, promulgated or adopted by any court or governmental
      authority of competent jurisdiction that prohibits the transactions contemplated
      by this Agreement, and no actions, suits or proceedings shall be in
      progress, pending or threatened by any person (other than the Investor or
      any affiliate of the Investor), that seek to enjoin or prohibit the
      transactions contemplated by this Agreement. For purposes of this
      paragraph (i), no proceeding shall be deemed pending or threatened unless
      one of the parties has received written notification thereof prior to the
      applicable Put Closing Date;


19





	 	(p) 	Put Shares DTC Eligible. The Put Shares delivered to the
      Investor are DTC eligible and can be immediately converted into electronic
      form; 
	 	 	 
	 	(q) 	No Allegation of Section 5 Violation. There has been no
      assertion by the SEC that there has been a violation of Section 5 of the
      Securities Act caused by the integration of the private sale of common
      stock to the Investor and the public offering pursuant to the Registration
      Statement, and there have been no claims made by third parties against the
      Investor based on a such an alleged Section 5 violation; 
	 	 	 
	 	(r) 	Compliance with Laws. The Company shall have complied with all
      applicable federal, state and local governmental laws, rules, regulations
      and ordinances in connection with the execution, delivery and performance
      of this Agreement and the other Transaction Documents to which it is a
      party and the consummation of the transactions contemplated hereby and
      thereby, including, without limitation, the Company shall have obtained
      all permits and qualifications required by any applicable state securities
      or “blue sky” laws for the offer and sale of the Securities by the Company
      to the Investor and the subsequent resale of the Registrable Securities by
      the Investor (or shall have the availability of exemptions therefrom);
  
	 	 	 
	 	(s) 	No Material Adverse Effect. No condition, occurrence, state of
      facts or event constituting a Material Adverse Effect shall have occurred
      and be continuing; 
	 	 	 
	 	(t) 	No Restrictive Legends. If requested by the Investor from and
      after the earlier of (x) the Effective Date, or (y) the date that the
      Commitment Shares and Fee Shares can be sold under Rule 144 without volume
      restrictions (the earlier of (x) and (y) is referred to in this Agreement
      as the “Liquidity Date”) and permitted pursuant to applicable law, the
      Company shall have either (i) issued and delivered (or caused to be issued
      and delivered) to the Investor certificates representing the Commitment
      Shares and the Fee Shares, respectively, that are free from all
      restrictive and other legends or (ii) caused the Company’s transfer agent
      to credit the Investor’s or its designee’s account at DTC through its
      Deposit/Withdrawal at Custodian (DWAC) system with a number of shares of
      Common Stock equal to the number of Commitment Shares and Fee Shares represented by the certificate delivered by the Investor to
      the Company in accordance with Section 9.10(iv) of this Agreement. It is
      agreed and understood that, even though the Company was at one time a
      Shell Company under Rule 144(i)(1)(i), the Liquidity Date of the shares
      issued to the Investor shall be six (6) months after the date of such
      issuance, provided that the Company remains current in its public
      reporting under the 1934 Act hereafter.


20





	 	(u) 	Resolutions Adopted. The Board of Directors of the Company
      shall have adopted resolutions (“Resolutions”) in the form attached hereto
      as Exhibit J, which shall be in full force and effect without any
      amendment or supplement thereto as of the Put Date; 
	 	 	 
	 	(v) 	No Material Non-Public Information. The Investor shall not be
      in possession of any material non-public information. If the Company
      discovers or is notified that the Investor is in possession of material
      non- public information or discovers or is notified of the existence of
      Material Facts or material non-public information or any Ineffective
      Period occurs, the Company shall not initiate a Put until the Prospectus
      is amended to include any existing Material Facts or material non-public
      information and the Company’s counsel provides in a Registration Opinion
      that no Material Facts or material non-public information exists that is
      not included in the Prospectus. 
	 	 	 
	 	(w) 	Requested Due Diligence Information Provided. The Company shall
      have provided the Investor with the information requested by the Investor
      in connection with its due diligence requests made prior to, or in
      connection with, the Put in accordance with Section 2.4 hereof. 
	 	 	 
	 	(x) 	Reporting Issuer. The Company shall be a Reporting Issuer,
      shall be current on all periodic public filings required to be made with
      the SEC and shall have a class of securities registered under Section 12
      of the Exchange Act. 
	 	 	 
	 	(y) 	No Bankruptcy Proceedings. At the time of the Put and at
      anytime during the ninety (90) day period immediately preceding the Put,
      the Company shall not have filed for and/or be subject to any bankruptcy,
      insolvency, reorganization or liquidation proceedings or other proceedings
      for relief under any bankruptcy law or any law for the relief of debtors
      instituted by or against the Company or any subsidiary of the Company, or
      instituted involuntarily against the Company. 
	 	 	 
	 	(z) 	No SEC Enforcement Action Pending. The Company shall not then
      be, and shall not have been in the prior twenty (20) Business Days, the
      subject of an enforcement action by the Securities and Exchange Commission
      that has not been dismissed. 


21




2.3.6 Documents Required to be Delivered on the Put Date as
Conditions to Closing of any Put. The Closing of any Put and Investor’s
obligations hereunder shall additionally be conditioned upon the delivery to the
Investor of each of the following (the “Required Put Documents”) on or within
three (3) Business Days before the applicable Put Date (or such earlier time as
may be specifically required under the terms hereof): 

(a) a number of Unlegended Share Certificates equal to the
Intended Put Share Amount, which shall be delivered by crediting the Investor’s
or its designees’ account at DTC through its Deposit/Withdrawal at Custodian
(DWAC) system (unless the Investor requests physical certificates, in which such
certificates shall be in denominations of not more than 50,000 shares per
certificate); 

(b) the following documents: Put Opinion of Counsel,
Registration Opinion, Officer’s Certificate, Secretary’s Certificate,
Resolutions, Put Notice, and any report or disclosure required under Section
2.3.7 or Section 2.4 hereof, each dated as of the Put Date or a date within
three Business Days prior to the Put Date; 

(c) all documents, instruments and other writings required to
be delivered on or before the Put Date pursuant to any provision of this
Agreement in order to implement and effect the transactions contemplated herein.


2.3.7 Accountant’s Letter and Registration Opinion. 

(a) The Company shall have caused to be delivered to the
Investor, (i) whenever required by Section 2.3.7(b) or by Section 2.5.3, and
(ii) on the date that is three (3) Business Days prior to each Put Date (the
“Registration Opinion Deadline”), an opinion of the Company's independent
counsel, in substantially the form of Exhibit E (the “Registration
Opinion”), addressed to the Investor stating, inter alia, that no facts have
come to such counsel's attention that have caused it to believe that the
Registration Statement is subject to an Ineffective Period or to believe that
the Registration Statement, any Supplemental Registration Statement (as each may
be amended, if applicable), and any related prospectuses, contain an untrue
statement of material fact or omits a material fact required to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading (“Material Facts”). If a Registration Opinion cannot
be delivered by the Company's independent counsel to the Investor on the
Registration Opinion Deadline due to the existence of Material Facts or an
Ineffective Period, the Company shall promptly notify the Investor and as
promptly as possible amend each of the Registration Statement and any
Supplemental Registration Statements, as applicable, and any related prospectus
or cause such Ineffective Period to terminate, as the case may be, and deliver
such Registration Opinion and updated prospectus as soon as possible thereafter.
If at any time after a Put Notice shall have been delivered to Investor but
before the related Pricing Period End Date, the Company acquires Knowledge of
such Material Facts or any Ineffective Period occurs, the Company shall promptly
notify the Investor and shall deliver a Put Interruption Notice to the Investor
pursuant to Section 2.3.4 by facsimile and overnight courier by the end of that
Business Day.

(b) (i) the Company shall engage its independent
auditors, which, at all times after the earlier of (A) the date that is six (6)
months after the date hereof or (B) the Qualification Trigger Date, shall be a
Qualified Auditor (as defined herein) and shall be independent public accountants as required by the Securities
Act and shall be an independent registered public accounting firm within the
meaning of SOXA as required by the rules of the Public Company Accounting
Oversight Board, to perform the procedures in accordance with the provisions of
Statement on Auditing Standards No. 71, as amended, as agreed to by the parties
hereto, and reports thereon (the “Bring Down Cold Comfort Letters”) as shall
have been reasonably requested by the Investor with respect to certain financial
information contained in the Registration Statement and shall have delivered to
the Investor such a report addressed to the Investor, on the date that is three
(3) Business Days prior to each Put Date, except as otherwise limited herein. 

22




(ii) in the event that the Investor shall have requested
delivery of an Agreed Upon Procedures Report pursuant to Section 2.4.3, the
Company shall engage its independent auditors to perform certain agreed upon
procedures and report thereon as shall have been reasonably requested by the
Investor with respect to certain financial information of the Company and the
Company shall deliver to the Investor a copy of such report addressed to the
Investor. In the event that the report required by this Section 2.3.7(b) cannot
be delivered by the Company's independent auditors, the Company shall, if
necessary, promptly revise the Registration Statement and the Company shall not
deliver a Put Notice until such report is delivered. 

2.3.8 Limitation on Company’s Obligation to Deliver Opinions
of Counsel and Accountants’ Letters. Notwithstanding the above, after the
first Put, the Company shall not be required to deliver a Bring Down Cold
Comfort Letter (collectively, the “Professional Opinions”) to the Investor with
respect to each subsequent Puts unless, at the time of the Put Notice for such
subsequent Put, either (A) the sum of (i) the aggregate Purchase Price of the
Put Shares that have been sold by the Company since the last date that such
Professional Opinions were delivered to the Investor plus (ii) the Company
Designated Maximum Put Dollar Amount for the then current Put Notice, exceeds
$500,000 or (B) nine (9) months or more have passed since the last date that
such Professional Opinions were delivered to the Investor. 

2.3.9 Special Requirement for Counsel Providing
Opinions of Counsel And Accounting Reports After $500,000 Has Been Put. Once
the Investor has purchased Put Shares having an aggregate Purchase Price of
$500,000 (when aggregated with the maximum amount of Put Shares that the
Investor would be required to purchase under the then current Put)(the date of
such occurrence, the “Qualification Trigger Date”), then

	 	(A) the Put Opinions and Registration Opinions that are
      issued for the then current Put and any Put Opinions and Registration
      Opinions that are issued anytime thereafter pursuant to this Agreement
      shall be issued by an attorney with an independent law firm representing
      the Company which, as of the date of any such opinion(s), either (a) has
      at least 20 attorneys or (b) has (and has represented to the Investor in
      writing that it has) a liability policy covering the Investor’s liability
      related to the attorney’s issuance of such Put Opinions and Registration
      Opinions, with policy limits of at least $1 million per occurrence and at
      least $10 million in the aggregate (a “Qualified Law Firm”),
      and 


23





		(B) any Bring Down Cold Comfort Letters and Agreed Upon
      Procedures Reports that are issued for the then current Put and any Bring
      Down Cold Comfort Letters and Agreed Upon Procedures Reports that are
      issued anytime thereafter pursuant to this Agreement shall be issued by an
      accounting firm representing the Company which, as of the date of any such
      opinion(s), either (a) has at least 20 independent accountants or (b) has
      (and has represented to the Investor in writing that it has) a liability
      policy covering the Investor’s liability related to the accountant’s or
      the accounting firm’s issuance of such Bring Down Cold Comfort Letters,
      with policy limits of at least $1 million per occurrence and at least $10
      million in the aggregate(a “Qualified Auditor”).



2.3.10 Investor’s Obligation and Right to Purchase
Shares. Subject to the conditions set forth in this Agreement, following the
Investor's receipt of a validly delivered Put Notice, the Investor shall be
required to purchase (each a “Purchase”) from the Company a number of Put Shares
equal to the Put Share Amount, in the manner described below. 

2.3.11 Mechanics of Put Closing. Each of the Company and
the Investor shall deliver all documents, instruments and writings required to
be delivered by either of them pursuant to this Agreement at or prior to each
Put Closing. Subject to such delivery and the satisfaction of the conditions set
forth in this Section 2, the closing of the purchase by the Investor of Put
Shares shall occur by 5:00 PM, New York City Time, on the date which is five (5)
Business Days following the applicable Pricing Period End Date (the “Payment Due
Date”) at the offices of Investor. On each or before each Payment Due Date, the
Investor shall deliver to the Company, in the manner specified in Section 7
below, the Put Dollar Amount to be paid for such Put Shares, determined as
aforesaid. The closing (each a “Put Closing”) for each Put shall occur on the
date that (i) the Company has delivered to the Investor all Required Put
Documents, (ii) each of the Put Conditions have been materially satisfied
and (iii) the Investor has delivered to the Company such Put Dollar Amount (each
a “Put Closing Date”). 

2.3.12 Limitation on Short Sales. The Investor and its
affiliates shall not engage in short sales of the Company's Common Stock;
provided, however, that the Investor may enter into any short exempt sale or any
short sale or other hedging or similar arrangement it deems appropriate with
respect to Put Shares after it receives a Put Notice with respect to such Put
Shares so long as such sales or arrangements do not involve more than the number
of such Put Shares specified in the Put Notice. 

2.3.13 Cap Amount. If the Company becomes listed on a
NASDAQ Market, then, unless the Company has obtained the necessary approval
(“Stockholder 20% Approval”) of its shareholders as required under the Nasdaq
20% Rule or unless otherwise permitted by Nasdaq, in no event shall the
Aggregate Issued Shares exceed the maximum number of shares of Common Stock (the
“Cap Amount”) that the Company can, without stockholder approval, so issue
pursuant to Nasdaq Rule 5635 (or any other applicable Nasdaq Rules or any
successor rule) (the “Nasdaq 20% Rule”). 

2.3.14 Investment Agreement Termination. The Company may
terminate (a “Company Termination”) its right to initiate future Puts by
providing written notice (“Termination Notice”) to the Investor, by facsimile
and overnight courier, at any time other than during an Extended Put Period, provided that such termination
shall have no effect on the parties’ other rights and obligations under this
Agreement and the Registration Rights Agreement. Notwithstanding the above, any
Put Interruption Notice occurring during an Extended Put Period is governed by
Section 2.3.4. 

24




2.3.15 Return of Excess Common Shares. In the event that
the number of Put Shares purchased by the Investor in any Put pursuant to its
obligations hereunder is less than the number of Unlegended Share Certificates
provided by the Company to the Investor representing the Intended Put Share
Amount, the Investor shall promptly return to the Company any such excess shares
of Common Stock in the Investor’s possession that are not being purchased by the
Investor, unless the parties mutually agree for the Investor to retain such
excess Common Shares to apply to the next Put. 

2.4 Due Diligence Review. The Company shall make
available for inspection and review by the Investor (the “Due Diligence
Review”), advisors to and representatives of the Investor (who may or may not be
affiliated with the Investor and who are reasonably acceptable to the Company),
any underwriter participating in any disposition of Common Stock on behalf of
the Investor pursuant to the Registration Statement, any Supplemental
Registration Statement, or amendments or supplements thereto or any blue
sky, FINRA or other filing, all financial and other records, all filings with
the SEC, and all other corporate documents and properties of the Company as may
be reasonably necessary for the purpose of such review, and cause the Company's
officers, directors and employees to supply all such information reasonably
requested by the Investor or any such representative, advisor or underwriter in
connection with such Registration Statement (including, without limitation, in
response to all questions and other inquiries reasonably made or submitted by
any of them), prior to and from time to time after the filing and effectiveness
of the Registration Statement for the sole purpose of enabling the Investor and
such representatives, advisors and underwriters and their respective accountants
and attorneys to conduct initial and ongoing due diligence with respect to the
Company and the accuracy of the Registration Statement. Prior to filing the
initial Registration Statement, the Company shall provide to the Investor (i) a
schedule setting forth all of the Indebtedness of the Company as of the date of
the schedule (“Schedule of Indebtedness”) and (ii) a schedule setting forth the
fully diluted capitalization of the Company as of the date of the schedule (the
“Capitalization Schedule”), along with a signed certification from an authorized
officer of the Company certifying that each such schedule is true and correct as
of the date thereof. 

2.4.1 Treatment of Nonpublic Information. The Company
shall not disclose nonpublic information to the Investor or to its advisors or
representatives unless prior to disclosure of such information the Company
identifies such information as being nonpublic information and provides the
Investor and such advisors and representatives with the opportunity to accept or
refuse to accept such nonpublic information for review. The Company may, as a
condition to disclosing any nonpublic information hereunder, require the
Investor and its advisors and representatives to enter into a confidentiality
agreement (including an agreement with such advisors and representatives
prohibiting them from trading in Common Stock during such period of time as they
are in possession of nonpublic information) in form reasonably satisfactory to
the Company and the Investor. The Company shall ensure that any information
disclosed by the Company to the Investor in connection with the Agreement shall
cease to be material non-public information on or prior to the Liquidity Date
and that if any material non-public information arises in the future, the
Prospectus shall be promptly amended or supplemented to cover such information in accordance with the
terms of the Registration Rights Agreement. 

25




Nothing herein shall require the Company to disclose nonpublic
information to the Investor or its advisors or representatives, and the Company
represents that it does not disseminate nonpublic information to any investors
who purchase stock in the Company in a public offering, to money managers or to
securities analysts, provided, however, that notwithstanding anything herein to
the contrary, the Company will, as hereinabove provided, immediately notify the
advisors and representatives of the Investor and, if any, underwriters, of any
event or the existence of any circumstance (without any obligation to disclose
the specific event or circumstance) of which it becomes aware, constituting
nonpublic information (whether or not requested of the Company specifically or
generally during the course of due diligence by and such persons or entities),
which, if not disclosed in the Prospectus included in the Registration
Statement, would cause such Prospectus to include a material misstatement or to
omit a material fact required to be stated therein in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading. Nothing contained in this Section 2.4 shall be construed to mean
that such persons or entities other than the Investor (without the written
consent of the Investor prior to disclosure of such information) may not obtain
nonpublic information in the course of conducting due diligence in accordance
with the terms of this Agreement; provided, however, that in no event shall the
Investor's advisors or representatives disclose to the Investor the nature of
the specific event or circumstances constituting any nonpublic information
discovered by such advisors or representatives in the course of their due
diligence without the written consent of the Investor prior to disclosure of
such information. 

2.4.2 Disclosure of Misstatements and
Omissions. The Investor's advisors or representatives
shall make complete disclosure to the Investor's counsel of all events or
circumstances constituting nonpublic information discovered by such advisors or
representatives in the course of their due diligence upon which such advisors or
representatives form the opinion that the Registration Statement contains an
untrue statement of a material fact or omits a material fact required to be
stated in the Registration Statement or necessary to make the statements
contained therein, in the light of the circumstances in which they were made,
not misleading. Upon receipt of such disclosure, the Investor's counsel shall
consult with the Company's independent counsel in order to address the concern
raised as to the existence of a material misstatement or omission and to discuss
appropriate disclosure with respect thereto; provided, however, that such
consultation shall not constitute the advice of the Company's independent
counsel to the Investor as to the accuracy of the Registration Statement and
related Prospectus.

2.4.3 Procedure if Material Facts are Reasonably Believed to
be Untrue or are Omitted. In the event after such consultation the Investor
or the Investor's counsel reasonably believes that the Registration Statement
contains an untrue statement of a material fact or omits a material fact
required to be stated in the Registration Statement or necessary to make the
statements contained therein, in light of the circumstances in which they were
made, not misleading, and the Company, after a request from the Investor, has
failed to promptly provide reasonable information indicating that that the
Registration Statement is in fact complete, accurate and current, then

26




(a) the Company shall promptly file with the SEC an amendment
to the Registration Statement responsive to such alleged untrue material
statement or omission and provide the Investor, as promptly as practicable, with
copies of the Registration Statement and related Prospectus, as so amended, or


(b) if the Company disputes the existence of any such material
misstatement or omission, (i) the Company's independent counsel (who is either a
member of the SRK Law Offices, or is a member of a another law firm having at
least 20 attorneys) shall provide the Investor's counsel with a Registration
Opinion, at the Company’s expense, and (ii) in the event the dispute relates to
the adequacy of financial disclosure and the Investor shall reasonably request,
the Company shall promptly cause its independent auditors to provide to the
Company a letter (“Agreed Upon Procedures Report”) outlining the performance of
such "agreed upon procedures" as shall be reasonably requested by the Investor
and the Company shall promptly provide the Investor with a copy of such letter.
If the Company has failed to deliver or cause to be delivered such Registration
Opinion and such Agreement Upon Procedures Report within two (2) Business Days
of such request, then a Put Interruption Event shall be deemed to have occurred
until such items are delivered to the Investor. 

3. Representations, Warranties and Covenants of
Investor. Investor hereby represents and warrants to and agrees with the
Company as follows: 

3.1 Accredited Investor. Investor is an accredited
investor (“Accredited Investor”), as defined in Rule 501 of Regulation D. 

3.2 Investment Experience; Access to Information;
Independent Investigation. 3.2.1 Access to Information. Investor or
Investor’s professional advisor has been granted the opportunity to ask
questions of and receive answers from representatives of the Company, its
officers, directors, employees and agents concerning the terms and conditions of
this Offering, the Company and its business and prospects, and to obtain any
additional information which Investor or Investor’s professional advisor deems
necessary to verify the accuracy and completeness of the information received.


3.2.2 Reliance on Own Advisors. Investor has relied
completely on the advice of, or has consulted with, Investor’s own personal tax,
investment, legal or other advisors and has not relied on the Company or any of
its affiliates, officers, directors, attorneys, accountants or any affiliates of
any thereof and each other person, if any, who controls any of the foregoing,
within the meaning of Section 15 of the Act for any tax or legal advice (other
than reliance on information in the Disclosure Documents as defined in Section
3.2.4 below and on the Opinion of Counsel). The foregoing, however, does not
limit or modify Investor’s right to rely upon covenants, representations and
warranties of the Company in this Agreement. 

3.2.3 Capability to Evaluate. Investor has such
Knowledge and experience in financial and business matters so as to enable such
Investor to utilize the information made available to it in connection with the
Offering in order to evaluate the merits and risks of the prospective
investment, which are substantial, including without limitation those set forth
in the Disclosure Documents (as defined in Section 3.2.4 below). 

27




3.2.4 Disclosure Documents. Investor, in making
Investor’s investment decision to subscribe for the Investment Agreement
hereunder, represents that (a) Investor has received and had an opportunity to
review (i) the Company’s Annual Report on Form 10-K for the year ended December
31, 2009, and (ii) the Company’s quarterly report on Form 10-Q for the quarters
ended March 31, 2010, June 30, 2010 and September 30, 2010; (b) Investor has
read, reviewed, and relied solely on the documents described in (a) above, the
Company’s representations and warranties and other information in this
Agreement, including the exhibits, documents prepared by the Company which have
been specifically provided to Investor in connection with this Offering (the
documents described in this Section 3.2.4 (a) and (b) are collectively referred
to as the “Disclosure Documents”), and an independent investigation made by
Investor and Investor’s representatives, if any; (c) Investor has, prior to the
date of this Agreement, been given an opportunity to review material contracts
and documents of the Company which have been filed as exhibits to the Company’s
filings under the Act and the Exchange Act and has had an opportunity to ask
questions of and receive answers from the Company’s officers and directors; and
(d) is not relying on any oral representation of the Company or any other
person, nor any written representation or assurance from the Company other than
those contained in the Disclosure Documents or incorporated herein or therein.
The foregoing, however, does not limit or modify Investor’s right to rely upon
covenants, representations and warranties of the Company in Sections 5 and 6 of
this Agreement. Investor acknowledges and agrees that the Company has no
responsibility for, does not ratify, and is under no responsibility whatsoever
to comment upon or correct any reports, analyses or other comments made about
the Company by any third parties, including, but not limited to, analysts’
research reports or comments (collectively, “Third Party Reports”), and Investor
has not relied upon any Third Party Reports in making the decision to invest.


3.2.5 Investment Experience; Fend for Self. Investor has
substantial experience in investing in securities and it has made investments in
securities other than those of the Company. Investor acknowledges that Investor
is able to fend for Investor’s self in the transaction contemplated by this
Agreement, that Investor has the ability to bear the economic risk of Investor’s
investment pursuant to this Agreement and that Investor is an "Accredited
Investor" by virtue of the fact that Investor meets the investor qualification
standards set forth in Section 3.1 above. Investor has not been organized for
the purpose of investing in securities of the Company, although such investment
is consistent with Investor’s purposes. 

28




3.3 Exempt Offering Under Regulation D. 

3.3.1 No General Solicitation. The Investment Agreement
was not offered to Investor through, and Investor is not aware of, any form of
general solicitation or general advertising, including, without limitation, (i)
any advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, and
(ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. 

3.3.2 Restricted Securities. Investor understands that
the Investment Agreement is, the Common Stock issued at each Put Closing will be
characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction exempt
from the registration requirements of the federal securities laws and that under
such laws and applicable regulations such securities may not be transferred or
resold without registration under the Act or pursuant to an exemption therefrom.
In this connection, Investor represents that Investor is familiar with Rule 144
under the Act, as presently in effect, and understands the resale limitations
imposed thereby and by the Act. 

3.3.3 Disposition. Investor further agrees not to sell,
transfer, assign, or pledge the Securities (except for any bona fide pledge
arrangement to the extent that such pledge does not require registration under
the Act or unless an exemption from such registration is available and provided
further that if such pledge is realized upon, any transfer to the pledgee shall
comply with the requirements set forth herein), or to otherwise dispose of all
or any portion of the Securities unless and until: 

(a) There is then in effect a registration statement under the
Act and any applicable state securities laws covering such proposed disposition
and such disposition is made in accordance with such registration statement and
in compliance with applicable prospectus delivery requirements; or 

(b) (i) Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a statement of
the circumstances surrounding the proposed disposition to the extent relevant
for determination of the availability of an exemption from registration, and
(ii) if reasonably requested by the Company, Investor shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of the Securities under the Act
or state securities laws. It is agreed that the Company will not require the
Investor to provide opinions of counsel for transactions made pursuant to Rule
144 provided that Investor and Investor’s broker, if necessary, provide the
Company with the necessary representations and documents for counsel to the
Company to issue an opinion with respect to such transaction. 

The Investor is entering into this Agreement for its own
account and the Investor has no present arrangement or intention to sell the
security represented by this Agreement to or through any person or entity, has
no present arrangement (whether or not legally binding) to sell the Common Stock
to or through any person or entity and has no present intention to sell such
Common Stock to or through any person or entity; provided, however, that by
making the representations herein, the Investor does not agree to hold the
Common Stock for any minimum or other specific term and reserves the right to dispose of the
Common Stock at any time in accordance with federal and state securities laws
applicable to such disposition.

29




3.4 Due Authorization. 

3.4.1 Authority. The person executing this Investment
Agreement, if executing this Agreement in a representative or fiduciary
capacity, has full power and authority to execute and deliver this Agreement and
each other document included herein for which a signature is required in such
capacity and on behalf of the subscribing individual, partnership, trust,
estate, corporation or other entity for whom or which Investor is executing this
Agreement. Investor has reached the age of majority (if an individual) according
to the laws of the state in which he or she resides. 

3.4.2 Due Organization; Due Authorization. Investor is
duly and validly organized, validly existing and in good standing as a limited
liability company under the laws of Georgia with full power and authority to
purchase the Securities to be purchased by Investor and to execute and deliver
this Agreement. 

3.4.3 Partnerships. If Investor is a partnership, the
representations, warranties, agreements and understandings set forth above are
true with respect to all partners of Investor (and if any such partner is itself
a partnership, all persons holding an interest in such partnership, directly or
indirectly, including through one or more partnerships), and the person
executing this Agreement has made due inquiry to determine the truthfulness of
the representations and warranties made hereby. 

3.5 No Registration As A Dealer. The Investor is not and
will not be required to be registered as a "dealer" under the 1934 Act, either
as a result of its execution and performance of its obligations under this
Agreement or otherwise. 

4. Acknowledgments Investor is aware that: 

4.1 Risks of Investment. Investor recognizes that an
investment in the Company involves substantial risks, including the potential
loss of Investor's entire investment herein. Investor recognizes that the
Disclosure Documents, this Agreement and the exhibits hereto do not purport to
contain all the information, which would be contained in a registration
statement under the Act;

4.2 No Government Approval. No federal or state agency
has passed upon the Securities, recommended or endorsed the Offering, or made
any finding or determination as to the fairness of this transaction; 

4.3 No Registration, Restrictions on Transfer. As of the
date of this Agreement, the Securities and any component thereof have not been
registered under the Act or any applicable state securities laws by reason of
exemptions from the registration requirements of the Act and such laws, and may
not be sold, pledged (except for any limited pledge in connection with a margin
account of Investor to the extent that such pledge does not require registration
under the Act or unless an exemption from such registration is available and
provided further that if such pledge is realized upon, any transfer to the
pledgee shall comply with the requirements set forth herein), assigned or otherwise
disposed of in the absence of an effective registration of the Securities and
any component thereof under the Act or unless an exemption from such
registration is available; 

30




4.4 Restrictions on Transfer. Investor may not attempt
to sell, transfer, assign, pledge or otherwise dispose of all or any portion of
the Securities or any component thereof in the absence of either an effective
registration statement or an exemption from the registration requirements of the
Act and applicable state securities laws;

4.5 No Assurances of Registration. There can be no
assurance that any registration statement will become effective at the scheduled
time, or ever, or remain effective when required, and Investor acknowledges that
it may be required to bear the economic risk of Investor's investment for an
indefinite period of time; 

4.6 Exempt Transaction. Investor understands that the
Securities are being offered and sold in reliance on specific exemptions from
the registration requirements of federal and state law and that the
representations, warranties, agreements, acknowledgments and understandings set
forth herein are being relied upon by the Company in determining the
applicability of such exemptions and the suitability of Investor to acquire such
Securities. 

4.7 Legends. The certificates representing the Put
Shares shall not bear a legend restricting the sale or transfer thereof. 

5. Representations, Warranties and Covenants of the
Company. The Company hereby makes the following representations and
warranties to Investor (which shall be true at the signing of this Agreement,
and as of any such later date as specified hereunder) and agrees with Investor
that, except as set forth in the “Schedule of Exceptions” attached hereto as
Exhibit G: 

5.1 Organization, Good Standing, and Qualification. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada, USA and has all requisite corporate power
and authority to carry on its business as now conducted and as proposed to be
conducted. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure to so qualify would, in the
Company’s opinion, have a material adverse effect on the business or properties
of the Company and its subsidiaries taken as a whole. The Company is not the
subject of any pending, threatened or, to its Knowledge, contemplated
investigation or administrative or legal proceeding (a “Proceeding”) by the
Internal Revenue Service, the taxing authorities of any state or local
jurisdiction, or the Securities and Exchange Commission, the FINRA, the Nasdaq
Stock Market, Inc. or any state securities commission, or any other governmental
entity, which have not been disclosed in the Disclosure Documents. None of the
disclosed Proceedings, if any, will, in the Company’s opinion, have a material
adverse effect upon the Company. Each of the Company’s subsidiaries, if any, the
jurisdiction of incorporation or organization of each, and the percentage of the
Company’s ownership of each is as set forth in Schedule 5.1 attached hereto.


5.2 Corporate Condition. The Company's condition is, in
all material respects, as described in the Disclosure Documents (as further set
forth in any subsequently filed Disclosure Documents, if applicable), except for
changes in the ordinary course of business and normal year-end adjustments that
are not, in the aggregate, materially adverse to the Company. 

31




Except for continuing losses, there have been no material
adverse changes to the Company’s business, financial condition, or prospects
from the dates of such Disclosure Documents through the date of the Investment
Commitment Closing. The financial statements as contained in the 10-K and 10-Q
have been prepared in accordance with generally accepted accounting principles,
consistently applied (except as otherwise permitted by Regulation S-X of the
Exchange Act, or Generally Accepted Accounting Principles, as applicable),
subject, in the case of unaudited interim financial statements, to customary
year end adjustments and the absence of certain footnotes, and fairly present
the financial condition of the Company as of the dates of the balance sheets
included therein and the consolidated results of its operations and cash flows
for the periods then ended. Without limiting the foregoing, there are no
material liabilities, contingent or actual, that are not disclosed in the
Disclosure Documents (other than liabilities incurred by the Company in the
ordinary course of its business, consistent with its past practice, after the
period covered by the Disclosure Documents). The Company has paid all material
taxes that are due, except for taxes that it reasonably disputes. There is no
material claim, litigation, or administrative proceeding pending or, to the best
of the Company’s Knowledge, threatened against the Company, except as disclosed
in the Disclosure Documents. This Agreement and the Disclosure Documents do not
contain any untrue statement of a material fact and do not omit to state any
material fact required to be stated therein or herein necessary to make the
statements contained therein or herein not misleading in the light of the
circumstances under which they were made. No event or circumstance exists
relating to the Company which, under applicable law, requires public disclosure
but which has not been so publicly announced or disclosed. 

5.3 Commission Documents, Financial Statements.

(a) The Company has timely filed (giving effect to permissible
extensions in accordance with Rule 12b-25 under the Exchange Act) all Commission
Documents. The Company has delivered or made available to the Investor
via EDGAR or otherwise true and complete copies of the Commission Documents
filed with or furnished to the SEC prior to the Commitment Closing Date
(including, without limitation, the 2009 Form 10-K). No Subsidiary of the
Company is required to file or furnish any report, schedule, registration, form,
statement, information or other document with the SEC. As of its filing date,
each Commission Document filed with or furnished to the SEC prior to the
Commitment Closing Date (including, without limitation, the 2009 Form
10-K) complied in all material respects with the requirements of the Securities
Act or the Exchange Act, as applicable, and other federal, state and local laws,
rules and regulations applicable to it, and, as of its filing date (or, if
amended or superseded by a filing prior to the Commitment Closing Date,
on the date of such amended or superseded filing), such Commission Document did
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Registration Statement, on the date it is filed with the SEC, on
the date it is declared effective by the SEC, on each Put Date and on each Put
Closing Date, shall comply in all material respects with the requirements of the
Securities Act (including, without limitation, Rule 415 under the Securities
Act) and shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, except that this representation and
warranty shall not apply to statements in or omissions from the Registration
Statement made in reliance upon and in conformity with information relating to
the Investor furnished to the Company in writing by or on behalf of the Investor expressly for use therein (which to the Company’s
Knowledge are not false or misleading). The Prospectus and each Prospectus
Supplement required to be filed pursuant to this Agreement or the Registration
Rights Agreement, when taken together, on its date, on each Put Date and on each
Put Closing Date, shall comply in all material respects with the requirements of
the Securities Act (including, without limitation, Rule 424(b) under the
Securities Act) and shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, except that this representation and warranty
shall not apply to statements in or omissions from the Prospectus or any
Prospectus Supplement made in reliance upon and in conformity with information
relating to the Investor furnished to the Company in writing by or on behalf of
the Investor expressly for use therein (which to the Company’s Knowledge are not
false or misleading). Each Commission Document (other than the Registration
Statement, the Prospectus or any Prospectus Supplement) to be filed with or
furnished to the SEC after the Commitment Closing Date and incorporated by
reference in the Registration Statement, the Prospectus or any Prospectus
Supplement required to be filed pursuant to this Agreement or the Registration
Rights Agreement (including, without limitation, the Current Report), when such
document is filed with or furnished to the SEC and, if applicable, when such
document becomes effective, as the case may be, shall comply in all material
respects with the requirements of the Securities Act or the Exchange Act, as
applicable, and other federal, state and local laws, rules and regulations
applicable to it, and shall not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The Company has delivered or made available to
the Investor via EDGAR or otherwise true and complete copies of all comment
letters and substantive correspondence received by the Company from the SEC
relating to the Commission Documents filed with or furnished to the SEC as of
the Commitment Closing Date, together with all written responses of the Company
thereto. There are no outstanding or unresolved comments or undertakings in such
comment letters received by the Company from the SEC. The SEC has not issued any
stop order or other order suspending the effectiveness of any registration
statement filed by the Company under the Securities Act or the Exchange Act.

32




(b) The financial statements, together with the related notes
and schedules, of the Company included in the Commission Documents comply as to
form in all material respects with all applicable accounting requirements and
the published rules and regulations of the SEC and all other applicable rules
and regulations with respect thereto as may be subject to any applicable out of
period adjustments disclosed in the Commission Documents. Such financial
statements, together with the related notes and schedules, have been prepared in
accordance with GAAP applied on a consistent basis during the periods involved
(except (i) as may be otherwise indicated in such financial statements or the
notes thereto or (ii) in the case of unaudited interim statements, to the extent
they may not include footnotes or may be condensed or summary statements and are
subject to customary year-end audit adjustments), and fairly present in all
material respects the financial condition of the Company and its consolidated
Subsidiaries as of 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 year-end audit adjustments).

(c) The Company has timely filed with the SEC and made
available to the Investor via EDGAR or otherwise all certifications and
statements required by (x) Rule 13a-14 or Rule 15d-14 under the Exchange Act or
(y) 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002 (“ SOXA ”)) with respect to
all relevant Commission Documents. The Company is in compliance in all material
respects with the provisions of SOXA applicable to it as of the date hereof. The
Company maintains disclosure controls and procedures required by Rule 13a-15 or
Rule 15d-15 under the Exchange Act; such controls and procedures are effective
to ensure that all material information concerning the Company and its
Subsidiaries is made known on a timely basis to the individuals responsible for
the timely and accurate preparation of the Company’s Commission filings and
other public disclosure documents. As used in this Section 5.3(c), the term
“file” shall be broadly construed to include any manner in which a document or
information is furnished, supplied or otherwise made available to the SEC.

33




(d) Davis Accounting Group P.C., (the “Accounting Firm”), who
shall express their opinion on the audited financial statements and related
schedules to be included or incorporated by reference in the Registration
Statement and the Prospectus are, with respect to the Company, independent
public accountants as required by the Securities Act and is an independent
registered public accounting firm within the meaning of SOXA as required by the
rules of the Public Company Accounting Oversight Board. By not later than the
Qualification Date, the Company shall replace the Davis Accounting Group P.C. as
the Accounting Firm with a new an accounting firm that is a Qualified Auditor.


5.4 Authorization. All corporate action on the part of
the Company by its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement and all of the
Transaction Documents, the performance of all obligations of the Company
hereunder and the authorization, issuance and delivery of the Common Stock being
sold hereunder have been taken, and this Agreement and the Registration Rights
Agreement constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, except insofar as the enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, or other
similar laws affecting creditors’ rights generally or by principles governing
the availability of equitable remedies. The Company has obtained all consents
and approvals required for it to execute, deliver and perform each agreement
referenced in the previous sentence. The Board of Directors of the Company shall
have adopted resolutions granting the above authorizations (the "Resolutions")
and, as a condition to each Put, such Resolutions shall not have been amended or
rescinded prior to such Put Date. 

5.5 Valid Issuance of Common Stock. The Commitment
Shares, Fee Shares and Put Shares, when issued, sold and delivered in accordance
with the terms hereof, for the consideration expressed herein, will be validly
issued, fully paid and nonassessable, will be issued free of any preemptive
rights and, based in part upon the representations of Investor in this
Agreement, will be issued in compliance with all applicable U.S. federal and
state securities laws.

5.6. Securities Act. The Company has complied and shall
comply with all applicable federal and state securities laws in connection with
the offer, issuance and sale of the Securities hereunder, including, without
limitation, the applicable requirements of the Securities Act. Without limiting
the generality of the foregoing, the Company satisfies, and the Registration
Statement upon filing with the SEC and at the time it is declared effective by
the SEC shall satisfy, all of the requirements of the Securities Act to register
the resale of the Registrable Securities by the Investor in accordance with the
Registration Rights Agreement on a delayed or continuous basis under Rule 415 under the Securities Act at
then-prevailing market prices, and not fixed prices. The Company is not an
issuer identified in, or subject to, Rule 144(i)(1)(i). 

34




5.7 Compliance with Other Instruments. The Company is
not in violation or default of any provisions of its Certificate of
Incorporation or Bylaws, each as amended and in effect on and as of the date of
the Agreement, or of any material provision of any material instrument or
material contract to which it is a party or by which it is bound or of any
provision of any federal or state judgment, writ, decree, order, statute, rule
or governmental regulation applicable to the Company, which would, in the
Company’s opinion, have a material adverse effect on the Company's business or
prospects, or on the performance of its obligations under this Agreement or the
Registration Rights Agreement. The execution, delivery and performance of this
Agreement and the other agreements entered into in conjunction with the Offering
and the consummation of the transactions contemplated hereby and thereby will
not (a) result in any such violation or be in conflict with or constitute, with
or without the passage of time and giving of notice, either a default under any
such provision, instrument or contract or an event which results in the creation
of any lien, charge or encumbrance upon any assets of the Company, which would,
in the Company’s opinion, have a material adverse effect on the Company’s
business or prospects, or on the performance of its obligations under this
Agreement, the Registration Rights Agreement, or (b) violate the Company’s
Certificate of Incorporation or ByLaws or (c) violate any statute, rule or
governmental regulation applicable to the Company which violation would, in the
Company’s opinion, have a material adverse effect on the Company's business or
prospects. 

5.8 Reporting Company. The Company is subject to the
reporting requirements of the Exchange Act, has a class of securities registered
under Section 12 of the Exchange Act, and has filed all reports required by the
Exchange Act since the date the Company first became subject to such reporting
obligations. The Company undertakes to furnish Investor with copies of such
reports as may be reasonably requested by Investor prior to consummation of this
Offering and thereafter, to make such reports available, for the full term of
this Agreement, including any extensions thereof, and for as long as Investor
holds the Securities. The Common Stock is duly listed or approved for quotation
on the O.T.C. Bulletin Board. The Company is not in violation of the listing
requirements of the O.T.C. Bulletin Board and does not reasonably anticipate
that the Common Stock will be delisted by the O.T.C. Bulletin Board for the
foreseeable future.

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

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5.10. Indebtedness; Solvency. The Company’s Quarterly
Report on Form 10-Q for its fiscal quarter ended September 30, 2010 sets forth,
as of September 30, 2010, all outstanding secured and unsecured Indebtedness of the Company
or any Subsidiary, or for which the Company or any Subsidiary has commitments
through such date. All outstanding Indebtedness of the Company is set forth on
Schedule 5.10. For the purposes of this Agreement, “Indebtedness ” shall mean
(a) any liabilities for borrowed money (other than trade accounts payable
incurred in the ordinary course of business), (b) all guaranties, endorsements,
indemnities and other contingent obligations in respect of Indebtedness of
others, whether or not the same are or should be reflected in the Company’s
balance sheet (or the notes thereto), except guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business; and (c) the present value of any lease payments due
under leases required to be capitalized in accordance with GAAP. There is no
existing or continuing default or event of default in respect of any
Indebtedness of the Company or any of its Subsidiaries. The Company has not
taken any steps, and does not currently expect to take any steps, to seek
protection pursuant to Title 11 of the United States Code or any similar federal
or state bankruptcy law or law for the relief of debtors, nor does the Company
have any Knowledge that its creditors intend to initiate involuntary bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings for
relief under Title 11 of the United States Code or any other federal or state
bankruptcy law or any law for the relief of debtors. The Company is financially
solvent and is generally able to pay its debts as they become due.

5.11 No Antidilution Triggered. There are no securities
or instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the Securities.

5.12 Intellectual Property. The Company has valid,
unrestricted and exclusive ownership of or rights to use the patents,
trademarks, trademark registrations, trade names, copyrights, know-how,
technology and other intellectual property necessary to the conduct of its
business. The Commission Documents list all patents, trademarks,
trademark registrations, trade names and copyrights of the Company. The Company
has granted such licenses or has assigned or otherwise transferred a portion of
(or all of) such valid, unrestricted and exclusive patents, trademarks,
trademark registrations, trade names, copyrights, know-how, technology and other
intellectual property necessary to the conduct of its business. The Company has
been granted licenses, know-how, technology and/or other intellectual property
necessary to the conduct of its business. To the best of the Company’s Knowledge
after due inquiry, the Company is not infringing on the intellectual property
rights of any third party, nor is any third party infringing on the Company’s
intellectual property rights. There are no restrictions in any agreements,
licenses, franchises, or other instruments that preclude the Company from
engaging in its business as presently conducted. 

5.13 Not a “Shell” Company. The Company is not a “Shell
Company” within the meaning of Rule 144(i) of the Act. 

5.14 No Rights of Participation. No person or entity,
including, but not limited to, current or former stockholders of the Company,
underwriters, brokers, agents or other third parties, has any right of first
refusal, preemptive right, right of participation, or any similar right to
participate in the financing contemplated by this Agreement which has not been
waived. 

36




5.15 No Advance Regulatory Approval. The Company
acknowledges that this Investment Agreement, the transaction contemplated hereby
and the Registration Statement contemplated hereby have not been approved by the
SEC, or any other regulatory body and there is no guarantee that this Investment
Agreement, the transaction contemplated hereby and the Registration Statement
contemplated hereby will ever be approved by the SEC or any other regulatory
body. The Company is relying on its own analysis and is not relying on any
representation by Investor that either this Investment Agreement, the
transaction contemplated hereby or the Registration Statement contemplated
hereby has been or will be approved by the SEC or other appropriate regulatory
body. 

5.16 Underwriter’s Fees and Rights of First Refusal. The
Company is not obligated to pay any compensation or other fees, costs or related
expenditures in cash or securities to any underwriter, broker, agent or other
representative in connection with this Offering. 

5.17 Availability of Suitable Form for Registration. The
Company is currently eligible and agrees to maintain its eligibility to register
the resale of its Common Stock on a registration statement on a suitable form
under the Act. 

5.18 No Integrated Offering. Neither the Company, nor
any of its affiliates, nor any person acting on its or their behalf, has
directly or indirectly made any offers or sales of any of the Company’s
securities or solicited any offers to buy any security under circumstances that
would prevent the parties hereto from consummating the transactions contemplated
hereby pursuant to an exemption from registration under Regulation D of the Act
or would require the issuance of any other securities to be integrated with this
Offering under the Rules of the SEC. The Company has not engaged in any form of
general solicitation or advertising in connection with the offering of the
Common Stock. 

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

5.20 Absence of Certain Company Control Person Actions Or
Events. For purposes hereof, “Company Control Person” means each director,
executive officer, promoter, and such other Persons as may be deemed in control
of the Company pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934
Act. To the Company’s Knowledge, during the past ten (10) years: 

(i) No petition under the federal bankruptcy laws or any state
insolvency law was filed by or against, and no receiver, fiscal agent or similar
officer was appointed by a court for the business or property of such Company
Control Person, or any partnership in which he was a general partner at or within two years before the time of
such filing, or any corporation or business association of which he was an
executive officer at or within two years before the time of such filing; 

37




(ii) No Company Control Person was convicted in a criminal
proceeding or is a named subject of a pending criminal proceeding (excluding
traffic violations and other minor offenses), or has not been convicted of,
found guilty of, or have pled guilty nolo contendere of a crime or felony,
entered into a pre trial diversion for or otherwise been charged for any action,
misdemeanor or felony, involving fraud, dishonesty, breach of trust, contract or
money laundering, or which may be considered to be a crime concerning moral
turpitude, including but not limited to any disciplinary action by any branch of
the United State military, regulatory bodies, including but not limited to any
professional licensing authority [or has been the Defendant in a civil action
for fraud or material breach of a financing agreement]; 

(iii) No Company Control Person has been the subject of any
order, judgment or decree, that was not subsequently reversed, suspended or
vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining him from, or otherwise limiting, the following activities: 

		(A) acting, as an investment advisor, underwriter, broker
      or dealer in securities, or as an affiliated person, director or employee
      of any investment company, bank, savings and loan association or insurance
      company, as a futures commission merchant, introducing broker, commodity
      trading advisor, commodity pool operator, floor broker, any other Person
      regulated by the Commodity Futures Trading Commission (“CFTC”) or engaging
      in or continuing any conduct or practice in connection with such activity;
    
	 	  
	 	(B) engaging in any type of business practice; or 
	 	  
		(C) engaging in any activity in connection with the
      purchase or sale of any security or commodity or in connection with any
      violation of federal or state securities laws or federal commodities laws;
    


(iv) No Company Control Person has been the subject of any
order, judgment or decree, not subsequently reversed, suspended or vacated, of
any federal or state authority barring, suspending or otherwise limiting for
more than 60 days the right of such Company Control Person to engage in any
activity described in paragraph (iii) of this item, or to be associated with
Persons engaged in any such activity; or 

(v) No Company Control Person was found by a court of competent
jurisdiction in a civil action or by the CFTC or SEC to have violated any
federal or state securities law, and the judgment in such civil action or
finding by the CFTC or SEC has not been subsequently reversed, suspended, or
vacated. 

38




5.21 Representations Correct. The foregoing
representations, warranties and agreements are true, correct and complete in all
material respects, and shall survive any Put Closing and the issuance of the
shares of Common Stock thereby. 

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

5.23 Material Agreements. Except as set forth in the
Commission Documents, neither the Company nor any Subsidiary of the Company is a
party to any written or oral contract, instrument, agreement commitment,
obligation, plan or arrangement, a copy of which would be required to be filed
with the SEC as an exhibit to an annual report on Form 10-K (collectively, “
Material Agreements ”). Except as set forth in the Commission
Documents, the Company and each of its Subsidiaries have performed in all
material respects all the obligations required to be performed by them under the
Material Agreements, have received no notice of default or an event of default
by the Company or any of its Subsidiaries thereunder and are not aware of any
basis for the assertion thereof, and neither the Company or any of its
Subsidiaries nor, to the Knowledge of the Company, any other contracting party
thereto are in default under any Material Agreement now in effect, the result of
which would have a Material Adverse Effect. Except as set forth in the
Commission Documents, each of the Material Agreements is in full force and
effect, and constitutes a legal, valid and binding obligation enforceable in
accordance with its terms against the Company and/or any of its Subsidiaries
and, to the Knowledge of the Company, each other contracting party thereto,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of, creditor’s rights and remedies or by other equitable principles of general
application.

5.24 Transactions With Affiliates. Except as set forth
in the Disclosure Documents, none of the officers, directors, or employees of
the Company is presently a party to any transaction with the Company (other than
for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
Knowledge of the Company, any corporation, partnership, trust or other entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner. 

5.25 Application of Takeover Protections. The Company
has not adopted and will not adopt any “poison pill” provision that will be
applicable to Investor as a result of transactions contemplated by this
Agreement. 

39




5.26 Investment Company Act Status. The Company is not,
and as a result of the consummation of the transactions contemplated by the
Transaction Documents and the application of the proceeds from the sale of the
Shares as set forth in the Prospectus and any Prospectus Supplement shall not
be, an “investment company” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of
1940, as amended.

5.27 Taxes. The Company and each of its Subsidiaries (i)
has filed all necessary federal, state and foreign income and franchise tax
returns or has duly requested extensions thereof, except for those the failure
of which to file would not have a Material Adverse Effect, (ii) has paid all
federal, state, local and foreign taxes due and payable for which it is liable,
except to the extent that any such taxes are being contested in good faith and
by appropriate proceedings, except for such taxes the failure of which to pay
would not have a Material Adverse Effect, and (iii) does not have any tax
deficiency or claims outstanding or assessed or, to the Company’s Knowledge,
proposed against it which would have a Material Adverse Effect. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company and its Subsidiaries know of
no basis for any such claim. The Company is not operated in such a manner as to
qualify as a passive foreign investment company, as defined in Section 1297 of
the U.S. Internal Revenue Code of 1986, as amended.

5.28 Insurance. The Company and each of its Subsidiaries
are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its
Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been
refused any insurance coverage sought or applied for, and neither the Company
nor any such Subsidiary has any reason to believe that it will be unable to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.

5.29 U.S. Real Property Holding Corporation. Neither the
Company nor any of its Subsidiaries is, or has ever been, and so long as any of
the Securities are held by the Investor, shall become a U.S. real property
holding corporation within the meaning of Section 897 of the Code.

5.30 Acknowledgment Regarding Investor's Purchase of
Shares. The Company acknowledges and agrees that the Investor is acting
solely in the capacity of an arm's length purchaser with respect to the Equity
Line Transaction Documents and the transactions contemplated hereby and thereby.
The Company further acknowledges that the Investor is not acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect to
the Equity Line Transaction Documents and the transactions contemplated hereby
and thereby and any advice given by the Investor or any of its respective
representatives or agents in connection with the Equity Line Transaction
Documents and the transactions contemplated hereby and thereby is merely
incidental to the Investor's purchase of the Securities, and is not being relied
on by the Company. The Company further represents to the Investor that the Company's decision to enter into the Equity Line Transaction
Documents has been based solely on the independent evaluation by the Company and
its representatives. 

40




5.31 Lock-Up. The Company shall
cause its officers, directors, and any related parties under control of the
Company, to refrain from selling Common Stock during each Pricing Period, and
the Company shall use best efforts to cause other insiders or Affiliates to
refrain from selling any Stock during each Pricing Period. 

5.32 Other Agreements. The
Company has not, directly or indirectly, made any agreements with the Investor
under a subscription in the form of this Agreement for the purchase of Common
Stock, relating to the terms or conditions of the transactions contemplated
hereby or thereby except as expressly set forth herein, respectively, or in
exhibits hereto or thereto. 

5.33 Major Transactions. As of
the date of this Agreement, there are no other Major Transactions currently
pending or contemplated by the Company. 

5.34 Financings. As of the date
of this Agreement, there are no other financings currently pending or
contemplated by the Company. 

5.35 Acknowledgment of Limitations
on Put Amounts. The Company understands and acknowledges that the amounts
available under this Investment Agreement are limited, among other things, based
upon the liquidity of the Company’s Common Stock traded on its Principal Market. 

5.36 Dilution. The number of
shares of Common Stock issuable as Put Shares may increase substantially in
certain circumstances, including, but not necessarily limited to, the
circumstance wherein the trading price of the Common Stock declines during the
period between the Effective Date and the end of the Commitment Period. The
Company’s executive officers and directors fully understand the nature of the
transactions contemplated by this Agreement and recognize that they have a
potential dilutive effect. The board of directors of the Company has concluded,
in its good faith business judgment, that such issuance is in the best interests
of the Company. The Company specifically acknowledges that, whenever the Company
elects to initiate a Put, its obligation to issue the Put Shares is binding upon
the Company and enforceable regardless of the dilution such issuance may have on
the ownership interests of other shareholders of the Company. The Company
acknowledges that the Investor may sell shares of Common Stock during any
Pricing Period, and may enter into a short exempt sale or any short sale or
other hedging or similar arrangement in accordance with Section 2.3.10 during
any Pricing Period, and that such sales, short sales or hedging arrangements may
serve to lower the Purchase Price thereby having a potential dilutive effect on
the Company’s Common Stock. 

5.37. No Brokers. No brokers,
finders or financial advisory fees or commissions shall be payable by the
Company or any Subsidiary (or any of their respective Affiliates) with respect
to the transactions contemplated by the Transaction Documents.

5.38 All material representations in
the Company’s public filings from the date that is one (1) year prior to the
date of this Investment Agreement up through the date of the Investment Agreement and up through the date of each Put
Notice, if such representation is made in conjunction with a Put were true and
correct when made. 

41




5.39 No Material Non-Public Information. The Company has
not furnished to the Investor any information concerning the Company that will
constitute material nonpublic information on or after the Liquidity Date. 

6. Additional Covenants of the Company. 

6.1 Independent Auditors. The Company shall, until at
least the Termination Date, maintain as its independent auditors an accounting
firm authorized to practice before the SEC. 

6.2 Corporate Existence and Taxes; Change in Corporate
Entity. The Company shall, until at least the Termination Date, maintain its
corporate existence in good standing and, once it becomes a “Reporting Issuer”
(defined as a Company which files periodic reports under the Exchange Act),
remain a Reporting Issuer and shall pay all its taxes when due except for taxes
which the Company disputes. Notwithstanding the terms of Section 9.2 below, the
Company may, at any time after the date hereof, enter into any merger,
consolidation or corporate reorganization of the Company with or into, or
transfer all or substantially all of the assets of the Company to, another
entity only if the resulting successor or acquiring entity in such transaction,
if not the Company (the “Surviving Entity”), (i) has Common Stock listed for
trading on an Approved Primary Market and is a Reporting Issuer, (ii)
assumes by written instrument the Company's obligations with respect to this
Investment Agreement, the Registration Rights Agreement, the Transfer Agent
Instructions and the other agreements referred to herein, including but not
limited to the obligations to deliver to the Investor shares of Common Stock
and/or securities that Investor is entitled to receive pursuant to this
Investment Agreement.

6.3 Registration Rights. The Company will enter into a
registration rights agreement covering the resale of the Common Shares
substantially in the form of the Registration Rights Agreement attached as
Exhibit F. During the period from the Effective Date through the
Termination Date, the Company shall use its best efforts to maintain the
continuous effectiveness of the Registration Statement under the Securities
Act.

6.4. Blue Sky. The Company shall take such action, if
any, as is necessary in order to obtain an exemption for or to qualify the
Securities for sale to the Investor pursuant to the Transaction Documents and
for the subsequent resale of Securities by the Investor into the Principal
Market and such other jurisdictions within the United States as Investor
reasonably requests in writing, in each case, under applicable state securities
or “blue sky” laws and shall provide evidence of any such action so taken to the
Investor from time to time following the Commitment Closing Date.

6.5 Asset Transfers. The Company shall not (i) transfer,
sell, convey or otherwise dispose of any of its material assets to any
subsidiary except for a cash or cash equivalent consideration and for a proper
business purpose or (ii) transfer, sell, convey or otherwise dispose of any of
its material assets to any Affiliate, as defined below, during the Term of this
Agreement. For purposes hereof, “Affiliate” shall mean any officer of the
Company, director of the Company or owner of twenty percent (20%) or
more of the Common Stock or other securities of the Company. 

42




6.6 Capital Raising Limitations.

6.6.1 Capital Raising Limitations. Notwithstanding
anything to the contrary herein, if the Company issues any Variable Equity
Securities (as defined below) anytime after the date hereof, the Company shall
not be entitled to deliver a Put Notice to the Investor and the Investor shall
not be required to purchase any Put Shares so long as any portion of such
Variable Equity Securities (as defined below) remain outstanding. For
purposes hereof, the following shall be collectively referred to herein as, the
“Equity Securities”: (i) Common Stock or any other equity securities, (ii) any
debt or equity securities which are convertible into, exercisable or
exchangeable for, or carry the right to receive additional shares of Common
Stock or other equity securities, or (iii) any securities of the Company
pursuant to an equity line structure or format similar in nature to this
Offering. For purposes hereof, the following shall be collectively referred to
herein as, the “Variable Equity Securities”: any debt or Equity Securities which
are convertible into, exercisable or exchangeable for, or carry the right to
receive additional shares of Common Stock either (i) at any conversion, exercise
or exchange rate or other price that is based upon and/or varies with the
trading prices of or quotations for Common Stock at any time after the initial
issuance of such debt or equity security, or (ii) with a fixed conversion,
exercise or exchange price that is subject to being reset at some future date at
any time after the initial issuance of such debt or equity security or upon the
occurrence of specified contingent events directly or indirectly related to the
business of the Company or the market for the Common Stock. 

6.6.2 Investor’s Right of First Refusal. For any private
capital raising transactions of Equity Securities which close after the date
hereof and on or prior to the date that is sixty (60) days after the Termination
Date of this Agreement, the Company agrees to deliver to Investor, at least ten
(10) days prior to the closing of such transaction, written notice describing
the proposed transaction, including the terms and conditions thereof, and
providing the Investor and its affiliates an option (the “Right of First
Refusal”) during the ten (10) day period following delivery of such notice to
purchase the securities being offered in such transaction on the same terms as
contemplated by such transaction.

6.6.3 Exceptions to Rights of First
Refusal. Notwithstanding the above, the Rights of First Refusal shall not
apply to any transaction involving issuances of securities by the Company to a
company being acquired by the Company, as payment to such company for such
acquisition, in connection with a merger, consolidation, acquisition or sale of
assets, or in connection with any strategic partnership or joint venture (the
primary purpose of which is not to raise equity capital), or in connection with
the disposition or acquisition of a business, product or license by the Company
or exercise of options by employees, or directors, of the Company, or a primary
underwritten offering of the Company’s Common Stock, but each shall apply to the
issuance of securities or options to consultants of the Company. The Rights of
First Refusal also shall not apply to (a) the issuance of securities upon
exercise or conversion of the Company's options, warrants or other convertible
securities outstanding as of the date hereof, (b) the grant of additional
options or warrants, or the issuance of additional securities, under any Company
stock option or restricted stock plan for the benefit of the Company's employees
or directors, (c) the issuance of debt securities, with no equity feature,
incurred solely for working capital purposes or (d) the issuance of securities to a bona fide Strategic
Investor. For purposes of this Section 6.6.3, a "Strategic Investor" shall mean
an investor whose contacts, experience, and/or knowledge of the Company’s market
adds value to the Company and improves the Company’s prospects for additional
investment and/or business success.  

43




6.7 Opinion of Counsel. Investor shall, concurrent with
the Investment Commitment Closing, receive an opinion letter from the Company’s
legal counsel, in the form of the Investment Commitment Opinion of Counsel
attached as Exhibit B, or in such form as agreed upon by the parties, and
shall, concurrent with each Put Date, receive an opinion letter from the
Company’s legal counsel, in the form of the Put Opinion of Counsel attached as
Exhibit D or in such form as agreed upon by the parties. 

6.8 Listing. Subject to the remainder of this Section
6.8, the Company shall ensure that its shares of Common Stock (including all
Commitment Shares, Fee Shares and Put Shares) are listed and available for
trading on the O.T.C. Bulletin Board. Thereafter, the Company shall (i) use its
best efforts to continue the listing and trading of its Common Stock on an
Approved Primary Market; and (ii) comply in all material respects with the
Company’s reporting, filing and other obligations under the By-Laws or rules of
FINRA and such exchanges, as applicable. 

6.9 The Company’s Instructions to Transfer Agent. The
Company will instruct the Transfer Agent of the Common Stock (the “Transfer
Agent”), by delivering irrevocable instructions to issue certificates,
registered in the name of each Investor or its nominee, for the Commitment
Shares, for the Fee Shares and for the Put Shares in such amounts as specified
from time to time by the Company upon any exercise by the Company of a Put by
the holder thereof. The certificates for the Commitment Shares and for the Fee
Shares shall bear a legend until such time as a Legend Removal Condition has
been met and the Investor has requested removal of such legend. The certificates
for the Put Shares shall not bear a Legend upon issuance. The Investor shall
return any unlegended Put Shares, Commitment Shares or Fees Shares to the
Company or its Transfer Agent to have a Legend placed upon them if the Company
so requests the Investor in writing, and the Company certifies to the Investor
in writing that no Legend Removal Condition then exists, after which the Company
shall return such shares to the Investor with the required Legend. Anytime the
Investor sends legended Commitment Shares, Fee Shares or Put Shares to the
Company requesting legend removal, and a Legend Removal Condition exists or
Legend removal is otherwise permitted by Section 9.10(iii) hereof, the Company,
in accordance with applicable law, shall cause the Transfer Agent to promptly,
but in any event by the Required Delivery Date as defined herein, re-issue such
certificates in the name of the Investor without a Legend and deliver them to
the Investor, and the Irrevocable Instructions to Transfer Agent shall so
indicate. Nothing in this Section shall affect in any way Investor’s obligations
and agreement set forth in Sections 3.3.2 or 3.3.3 hereof to resell the
Securities pursuant to an effective registration statement and to deliver a
prospectus in connection with such sale or in compliance with an exemption from
the registration requirements of applicable securities laws. If (a) an Investor
provides the Company with an opinion of counsel, which opinion of counsel shall
be in form, substance and scope reasonably acceptable to counsel for the
Company, to the effect that the Securities to be sold or transferred may be sold
or transferred pursuant to an exemption from registration or (b) an Investor
transfers Securities, pursuant to Rule 144, to a transferee which is an
accredited investor, the Company shall permit the transfer.

44




The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to an Investor by vitiating the intent and
purpose of the transaction contemplated hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this
Section 6.9 will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Section 6.9, that an
Investor shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other
security being required.

6.10 Initial Public Announcements and Required Filings.
The Company shall, at or before 8:30 a.m., New York City time, on the first
Trading Day after the Commitment Closing Date, issue a press release (the “Press
Release”) reasonably acceptable to the Investor disclosing the execution of this
Agreement and the Registration Rights Agreement by the Company and the Investor
and the issuance of the Commitment Shares and the Fee Shares to the Investor,
and briefly describing the transactions contemplated thereby. Any Press Release
or other public announcement relating to this financing shall be submitted to
the Investor for review at least two (2) Business Days prior to the planned
release. The Company shall not disclose the Investor’s name in any press release
or other public announcement without the Investor’s prior written approval. The
Company shall obtain the Investor’s written approval of the Press Release prior
to issuance by the Company.

At or before 8:30 a.m., New York City time, on the second
Trading Day following the Commitment Closing Date, the Company shall file a
Current Report on Form 8-K describing all the material terms of the transactions
contemplated by the Transaction Documents in the form required by the Exchange
Act and attaching copies of each of this Agreement, the Registration Rights
Agreement and the Press Release as exhibits thereto (including all exhibits
thereto, the “Current Report”). The Company shall provide the Investor a
reasonable opportunity to comment on a draft of such Current Report and has
given due consideration to such comments. From and after the Liquidity Date, the
Company shall have disclosed all material, nonpublic information delivered to
the Investor (or the Investor’s representatives or agents) by the Company or any
of its Subsidiaries, or any of their respective officers, directors, employees,
agents or representatives (if any) in connection with the transactions
contemplated by the Transaction Documents. The Investor covenants that until
such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company as described in this Section 6.10, the Investor will
maintain the confidentiality of all disclosures made to it in connection with
the transactions contemplated by the Transaction Documents (including the
existence and terms of the transactions), except that the Investor may disclose
the terms of such transactions to its financial, accounting, legal and other
advisors. Not later than 15 calendar days following the Commitment Closing Date,
the Company shall file a Form D with respect to the Securities in accordance
with Regulation D and shall provide a copy thereof to the Investor promptly
after such filing. The Company shall prepare and file with the SEC the
Registration Statement (including the prospectus therein) covering the resale by
the Investor of the Registrable Securities in accordance with the Securities Act
and the Registration Rights Agreement.

6.11 Change in Law or Policy. In the event of a change
in law, or policy of the SEC, as evidenced by a No-Action letter or other
written statements of the SEC or FINRA which causes the Investor or the Company
to be unable to perform its obligations hereunder, this Agreement shall be automatically terminated, provided that
notwithstanding any termination under this Section 6.11, the Investor shall
retain full ownership of the Commitment Shares and the Fee Shares as partial
consideration for its commitment hereunder. 

45




6.12 Notice of Certain Litigation. Promptly following
the commencement thereof, the Company shall provide the Investor written notice
and a description in reasonable detail of any litigation or proceeding to which
the Company or any subsidiary of the Company is a party; in which the amount
involved is $250,000 or more and which is not covered by insurance or in which
injunctive or similar relief is sought. 

6.13 Broker/Dealer. The Investor shall use one or more
broker-dealers to effectuate all sales, if any, of Securities that it may
purchase or otherwise acquire from the Company pursuant to the Transaction
Documents, as applicable, which (or whom) shall be unaffiliated with the
Investor and not then currently engaged or used by the Company (collectively,
the “Broker-Dealer”). The Investor shall be solely responsible for all fees and
commissions of the Broker-Dealer, which shall not exceed customary brokerage
fees and commissions.

7. Subscription and Wiring Instructions; Irrevocability.


	 	(a) 	Wire transfer of Subscription Funds. Investor shall deliver Put
      Dollar Amounts (as payment towards any Put Share Price) by wire transfer,
      to the Company pursuant to a wire instruction letter to be provided by the
      Company, and signed by the Company. 
	 	 	 
	 	(b) 	Irrevocable Subscription. Investor hereby acknowledges
      and agrees, subject to the provisions of any applicable laws providing for
      the refund of subscription amounts submitted by Investor, that this
      Agreement is irrevocable and that Investor is not entitled to cancel,
      terminate or revoke this Agreement or any other agreements executed by
      such Investor and delivered pursuant hereto, and that this Agreement and
      such other agreements shall survive the death or disability of such
      Investor and shall be binding upon and inure to the benefit of the parties
      and their heirs, executors, administrators, successors, legal
      representatives and assigns. If the Securities subscribed for are to be
      owned by more than one person, the obligations of all such owners under
      this Agreement shall be joint and several, and the agreements,
      representations, warranties and acknowledgments herein contained shall be
      deemed to be made by and be binding upon each such person and his heirs,
      executors, administrators, successors, legal representatives and assigns.
    


46



8.  Indemnification. 

In consideration of the Investor’s execution and delivery of
the Investment Agreement, the Registration Rights Agreement and acquiring the
Securities thereunder and in addition to all of the Company’s other obligations
under the Transaction Documents, the Company shall defend, protect, indemnify
and hold harmless Investor and all of its stockholders, officers, directors,
employees and direct or indirect investors and any of the foregoing person’s
agents, members, partners or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the “Indemnitees”) from and against any and all
third party actions, causes of action, suits, and claims, and all losses, costs,
penalties, fees, liabilities and damages, and expenses in connection therewith ,
and including reasonable attorney’s fees and disbursements (the “Indemnified
Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or
relating to (a) any material misrepresentation or breach of any representation
or warranty made by the Company in the Prospectus, Transaction Documents or any
other certificate, instrument or documents contemplated hereby or thereby, or
(b) any material breach of any covenant, agreement or obligation of the Company
contained in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby,. 

To the extent that the foregoing undertaking by the Company may
be unenforceable for any reason, the Company shall make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities which it
would be required to make if such foregoing undertaking was enforceable which is
permissible under applicable law. 

Promptly after receipt by an Indemnified Party of notice of the
commencement of any action pursuant to which indemnification may be sought, such
Indemnified Party will, if a claim in respect thereof is to be made against the
other party (hereinafter “Indemnitor”) under this Section 8, deliver to the
Indemnitor a written notice of the commencement thereof and the Indemnitor shall
have the right to participate in and to assume the defense thereof with counsel
reasonably selected by the Indemnitor. The failure to deliver written notice to
the Indemnitor within a reasonable time of the commencement of any such action,
if prejudicial to the Indemnitor’s ability to defend such action, shall relieve
the Indemnitor of any liability to the Indemnified Party under this Section 8,
but the omission to so deliver written notice to the Indemnitor will not relieve
it of any liability that it may have to any Indemnified Party other than under
this Section 8 to the extent it is prejudicial. 

9. Miscellaneous. 

9.1 Representations and Warranties Survive the Closing;
Severability. Investor’s and the Company’s representations and
warranties shall survive the Investment Date and any Put Closing contemplated by
this Agreement for a period of twenty-four (24) months from the Agreement Date
notwithstanding any due diligence investigation made by or on behalf of the
party seeking to rely thereon. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, or is altered by a term required by the Securities
Exchange Commission to be included in the Registration Statement, this Agreement
shall continue in full force and effect without said provision; provided that if
the removal of such provision materially changes the economic benefit of this
Agreement to the Investor, this Agreement shall terminate. 

47




9.2 Successors and Assigns. The Transaction Documents,
including this Investment Agreement, shall not be assignable by the Investor.
The Transaction Documents, including this Investment Agreement, shall not be
assignable by the Company except in conjunction with a transaction permitted
under the terms of Section 6.2 above. 

9.3 Execution in Counterparts Permitted. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, all of which together shall constitute one (1) and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other parties. This Agreement, once executed by a
party, may be delivered to the other parties hereto by facsimile transmission or
an e-mailed “PDF” of a copy of this Agreement bearing the signature of the party
so delivering this Agreement. 

9.4 Titles and Subtitles; Gender. The titles and
subtitles used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement. The use in this
Agreement of a masculine, feminine or neuter pronoun shall be deemed to include
a reference to the others. 

9.5 Written Notices, Etc. Any notice, demand or request
required or permitted to be given by the Company or Investor pursuant to the
terms of this Agreement shall be in writing and shall be deemed given when
delivered personally, or by facsimile or upon receipt if by overnight or two (2)
day courier, addressed to the parties at the addresses and/or facsimile
telephone number of the parties set forth at the end of this Agreement or such
other address as a party may request by notifying the other in writing;
provided, however, that in order for any notice to be effective as to the
Investor such notice shall be delivered and sent, as specified herein, to all
the addresses and facsimile telephone numbers of the Investor set forth
at the end of this Agreement or such other address and/or facsimile telephone
number as Investor may request in writing. 

9.6 Expenses. Except as set forth in the Registration
Rights Agreement, each of the Company and Investor shall pay all costs and
expenses that it respectively incurs, with respect to the negotiation,
execution, delivery and performance of this Agreement. 

9.7 Entire Agreement; Written Amendments Required.
This Agreement, including the Exhibits attached hereto, the Common Stock
certificates, the Registration Rights Agreement, and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof,
and no party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants, whether oral, written, or otherwise
except as specifically set forth herein or therein. Except as expressly provided
herein, neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the party
against whom enforcement of any such amendment, waiver, discharge or termination
is sought. The Disclosure Documents and all exhibits to this Agreement are
hereby incorporated by reference in, and made a part of, this Agreement as if
set forth in full herein.

9.8 Headings. The article, section and subsection
headings in this Agreement are for convenience only and shall not constitute a
part of this Agreement for any other purpose and shall not be deemed to limit or affect any of the
provisions hereof. Unless the context clearly indicates otherwise, each pronoun
herein shall be deemed to include the masculine, feminine, neuter, singular and
plural forms thereof. The terms “including,” “includes,” “include” and words of
like import shall be construed broadly as if followed by the words “without
limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import
refer to this entire Agreement instead of just the provision in which they are
found.

48




9.9 Reporting Entity for the Common Stock. The reporting
entity relied upon for the determination of the trading price or trading volume
of the Common Stock on the Principal Market on any given Trading Day for the
purposes of this Agreement shall be the Bloomberg L.P. The written mutual
consent of the Investor and the Company shall be required to employ any other
reporting entity.

9.10 Fees and Expenses. 

(i) Fee Shares; Commitment Shares. Not later than five
(5) Business Days after the date of the execution and delivery of this
Agreement, in consideration for the Investor’s execution and delivery of this
Agreement, the Company shall issue to the Investor a number of shares of
restricted Common Stock having a value equal to $200,000 (which represents 2% of
the Maximum Offering Amount) (the “Commitment Shares”) and a number of shares of
restricted Common Stock (the “Fee Shares”) having a value equal to $15,000, in
each case based upon a deemed valuation per share equal to 97% of the VWAP of
the Company’s Common Stock for the 5 trading days immediately preceding the
issuance date of such shares. The certificate(s) representing the Commitment
Shares and the Fee Shares shall be delivered to the Investor by overnight
courier at its address set forth in Section 9.12 hereof. For the avoidance of
doubt, all of the Commitment Shares and Fee Shares shall be fully earned as of
the Commitment Closing Date regardless of whether any Puts are issued by the
Company or settled hereunder. Upon issuance, the Commitment Shares and the Fee
Shares shall constitute “restricted securities” as such term is defined in Rule
144(a)(3) under the Securities Act and, subject to the provisions of subsection
(iii) of this Section 9.10, the certificate(s) representing the Commitment
Shares and the Fee Shares shall bear the restrictive legend set forth below in
subsection (ii) of this Section 9.10. The Commitment Shares and the Fee Shares
shall constitute Registrable Securities and shall be included in the
Registration Statement in accordance with the terms of the Registration Rights
Agreement.

(ii) Legends. The certificate representing the
Commitment Shares and the certificated representing the Fees shares, except as
set forth below, shall each bear a restrictive legend (“Legend”) in
substantially the following form (and a stop-transfer order may be placed
against transfer of such stock certificate):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD
OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

49




Notwithstanding the foregoing and for the avoidance of doubt,
all Shares to be issued in respect of any Put Notice delivered to the Investor
pursuant to this Agreement shall be issued to the Investor in accordance with
Section 2.3 by crediting the Investor’s or its designees’ account at DTC through
its Deposit/Withdrawal at Custodian (DWAC) system, and all such Shares shall be
freely tradable and transferable and without restriction on resale (and no
stop-transfer order shall be placed against transfer thereof), and the Company
shall not take any action or give instructions to any transfer agent of the
Company otherwise.

(iii) Removal of Legend. If either (a) the
Registration Statement is Effective, or (b) such holder provides the Company
with an opinion of counsel, in form, substance and scope reasonably acceptable
to counsel for the Company (the reasonable cost of which shall be borne by the
Investor), to the effect that a public sale or transfer of such Security may be
made without registration under the Act, or (c) such holder provides the Company
with reasonable assurances (“Reasonable Assurances”)(which assurances shall be
adequate to the Company or the Company’s counsel) that such Security can be sold
pursuant to Rule 144 (each, a “Legend Removal Condition”), provided that the
Reasonable Assurances shall be deemed to have been met and shall be deemed
adequate to the Company and its counsel if (i) such Security has been held by
the Investor for at least six (6) months, (ii) the Company is then current in
its public reporting requirements, (iii) the Investor is not then, and has not
within the prior 60 days been, an affiliate of the Company, and (iv) the
Investor has provided the Company with the requisite seller’s representation
letter, then the Company shall, subject to applicable law, no later than two
Trading Days following the delivery by the Investor to the Company or the
Company’s transfer agent (with notice to the Company) of a legended certificate
representing the Commitment Shares and a legended certificate representing the
Fee Shares (each endorsed or with stock powers attached, signatures guaranteed,
and otherwise in form necessary to affect the reissuance and/or transfer, if
applicable), as directed by the Investor, either: (A) issue and deliver (or
cause to be issued and delivered) to the Investor a certificate(s) representing
such Commitment Shares and Fee Shares that is free from all restrictive and
other legends or (B) cause the Company’s transfer agent to credit the investor’s
or its designee’s account at DTC through its Deposit/Withdrawal at Custodian
(DWAC) system with a number of shares of Common Stock equal to the number of
Commitment Shares and Fee Shares represented by the certificate(s) so delivered
by the Investor (the date by which such certificate is required to be delivered
to the investor or such credit is so required to be made to the account of the
Investor or its designee at DTC pursuant to the foregoing is referred to herein
as the “Required Delivery Date”).

9.11 Specific Enforcement, Governing Law, Consent to
Jurisdiction, Waiver of Jury Trial.

(i) The Company and the Investor acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that either party shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement by the other party and to enforce specifically the terms and
provisions hereof (without the necessity of showing economic loss and without
any bond or other security being required), this being in addition to any other
remedy to which either party may be entitled by law or equity.

50




(ii) Governing Law and Jurisdiction. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement and the other Transaction Documents shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Georgia 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
Atlanta, Georgia. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of Atlanta,
Georgia 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. 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. THE PARTIES HEREBY WAIVE ALL RIGHTS TO, AND AGREES NOT TO
REQUEST, A TRIAL BY JURY FOR ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY OR BY ANY OF THE TRANSACTION DOCUMENTS.

9.12 Notices. Any notice, demand, request, waiver or
other communication required or permitted to be given hereunder shall be in
writing and shall be effective (a) upon email to the address designated below
(if delivered on a Business Day during normal business hours where such notice
is to be received), or the first Business Day following such delivery (if
delivered other than on a Business Day during normal business hours where such
notice is to be received). The address for such communications shall be:

51




If to the Company:

amnon.gonenne@mabcure.com
and/or
ron.kalfus@mabcure.com


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

Attn: Steve Kronengold, Esq. 
SRK
Law Offices 
Oppenheimer 7 
Rehovot ISRAEL 76701 
steve@kronengold.com 
Tel: + 972-8-936-0998

cell: + 972-528-399-717 
US tel: (718)360-5351
Fax: +972-8-936-6000



If to the Investor:

Attn: Eric S. Swartz 
1120
Sanctuary Parkway, Suite 325 
Alpharetta, GA 30009 
Telephone Number:
(770) 640-8130
Fax: (770) 777-5844


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

Attn: P. Bradford Hathorn, Esq.

1120 Sanctuary Parkway, Suite 325 
Alpharetta, GA 30009 
Telephone
Number: (770) 640-8130
Fax: (770) 777-5844
Email: BradHathorn@RoswellCapitalPartners.com 


Either party hereto may from time to time change its address
for notices by giving at least 10 days advance written notice of such changed
address to the other party hereto.

9.13 Construction. The parties agree that each of them
and 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. In addition,
each and every reference to share prices and shares of Common Stock in any
Transaction Document shall be subject to adjustment for any stock splits, stock
combinations, stock dividends, recapitalizations and other similar transactions
that occur on or after the date of this Agreement

52




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

The undersigned hereby subscribes for the Maximum Offering
Amount and acknowledges that this Agreement and the subscription represented
hereby shall not be effective unless accepted by the Company as indicated below.


IN WITNESS WHEREOF, the undersigned Investor does represent and
certify under penalty of perjury that the foregoing statements are true and
correct and that Investor by the following signature(s) executed this Agreement.


Dated this 18th day of January, 2011. 

CENTURION PRIVATE EQUITY, LLC 

	By: 		 
	 	Eric S. Swartz, Manager 	 


SECURITY DELIVERY INSTRUCTIONS: 
Centurion Private
Equity, LLC 
c/o Eric S. Swartz 
1120 Sanctuary Parkway, Suite 325

Alpharetta, GA 30009 
Telephone: (770) 640-8130 
Fax: 770-777-5844



THIS AGREEMENT IS ACCEPTED BY THE COMPANY IN THE AMOUNT OF THE
MAXIMUM OFFERING AMOUNT ON THE 18TH DAY OF
JANUARY, 2011. 

MABCURE INC. 

By:
________________________________
          Amnon
Gonenne, President & CEO

Address: 

Attn: Amnon Gonenne, President &
CEO 
          MabCure, Inc. 
          De Schiervellaan 3/B1 
          Hasselt, 3500

          Belgium
          Phone: 32 4 874 25 303 
          Fax: 32 2 792 4634 


53




Exhibit List to the 
INVESTMENT AGREEMENT 

	 	Exhibit 	A 	Advance Put Notice 
	 	Exhibit 	B 	Investment Commitment Opinion of Counsel 
	 	Exhibit 	C 	Put Notice 
	 	Exhibit 	D 	Put Opinion of Counsel 
	 	Exhibit 	E 	Registration Opinion of Counsel
    
	 	Exhibit 	F 	Registration Rights Agreement 
	 	Exhibit 	G 	Schedule of Exceptions 
	 	Exhibit 	H 	Secretary’s Certificate 
	 	Exhibit 	I 	Officer’s Certificate 
	 	Exhibit 	J 	Resolutions 
	 	Schedule 	5.1 	List of Subsidiaries and
      ownership. 
	 	Schedule 	5.10 	Schedule of Indebtedness. 


54




ADVANCE PUT NOTICE 

MABCURE INC. (the "Company") hereby intends, subject to the
Individual Put Limit (as defined in the Investment Agreement), to elect to
exercise a Put to sell the number of shares of Common Stock of the Company
specified below, to Centurion Private Equity, LLC, as of the Intended Put Date
written below, all pursuant to that certain Investment Agreement (the
“Investment Agreement”) by and between the Company and Centurion Private Equity,
LLC dated on or about January 18, 2011. 

Date of Advance Put Notice: 
___________________

Intended Put Date: 
___________________________

Intended Put Share Amount: 
__________________

Company Designation Maximum Put Dollar Amount
(Optional):  ________________________________________. 

Company
Designation Minimum Put Share Price (Optional):
________________________________________. 


MABCURE, INC. 

By:
_____________________________
      Amnon Gonenne,
President & CEO 


Address:

Attn: Amnon Gonenne, President &
CEO 
          MabCure,
Inc. 
          De
Schiervellaan
3/B1 
          Hasselt,
3500 
          Belgium
          Phone:
32 4 874 25
303 
          Fax: 32
2 792 4634 

EXHIBIT A


55 




PUT NOTICE 

MABCURE, INC., (the "Company") hereby elects to exercise a Put
to sell shares of common stock ("Common Stock") of the Company to Centurion
Private Equity, LLC (the “Investor”), as of the Put Date, at the Put Share Price
and for the number of Put Shares written below, all pursuant to that certain
Investment Agreement (the “Investment Agreement”) by and between the Company and
Centurion Private Equity, LLC dated on or about January 18, 2011. 

Put Date:
_________________

Intended Put Share Amount (from Advance Put Notice):
_________________ Common Shares 

Company Designation Maximum Put Dollar
Amount (Optional): ________________________________________. 

Company
Designation Minimum Put Share Price (Optional):
________________________________________. 


Note: Capitalized terms shall have the meanings ascribed to
them in this Investment Agreement. 

MABCURE, INC. 

By:
______________________________
       Amnon
Gonenne, President & CEO 


Address:

Attn: Amnon Gonenne, President &
CEO 
          MabCure,
Inc. 
          De
Schiervellaan
3/B1 
          Hasselt,
3500 
          Belgium
          Phone:
32 4 874 25
303 
          Fax: 32
2 792 4634


EXHIBIT C 

56