Unassociated Document


    SECURITIES
PURCHASE AGREEMENT

     

    SECURITIES PURCHASE AGREEMENT
(the "Agreement"), dated
as of January 30, 2011, by and among Radient Pharmaceuticals Corporation,
Delaware corporation, with headquarters located at 2492 Walnut Avenue, Suite
100, Tustin, California 92780 (the "Company") and the investors
listed on the Schedule of Buyers attached hereto (individually, a "Buyer" and collectively, the
"Buyers").

     

    WHEREAS:

     

    A.          The
Company and each Buyer is executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(2) of the
Securities Act of 1933, as amended (the "1933 Act"), and Rule 506 of
Regulation D ("Regulation D") as
promulgated by the United States Securities and Exchange Commission (the "SEC") under the 1933
Act.

     

    B.           The
Company has authorized a new series of senior convertible notes of the Company,
in substantially the form attached hereto as Exhibit A (the "Notes"), which Notes shall be
convertible into the Company's common stock, par value $0.001 per share
(the "Common
Stock") (the Notes as converted, collectively, the "Conversion Shares"), in
accordance with the terms of the Notes.

     

    C.           Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement, (i) that aggregate principal amount of
Notes, set forth opposite such Buyer's name in column (3) on the Schedule of
Buyers attached hereto (which aggregate principal amount of Notes for all Buyers
shall be $8,437,500), (ii) Warrants, in substantially the form attached hereto
as Exhibit B
(the "Series A Warrants"), representing the
right to acquire that number of shares of Common Stock set forth opposite such
Buyer's name in column (4) on the Schedule of Buyers (as exercised,
collectively, the "Series A
Warrant Shares"), and (iii) Warrants, in substantially the form attached
hereto as Exhibit
C (the "Series B
Warrants" and, together
with the Series A Warrants, the "Warrants"), representing the
right to acquire that number of shares of Common Stock set forth opposite such
Buyer's name in column (5) on the Schedule of Buyers (as exercised,
collectively, the "Series B
Warrant Shares" and, together with the Series A Warrant Shares, the
"Warrant
Shares").

     

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

     

    E.           The
Notes, the Conversion Shares, the Warrants and the Warrant Shares collectively
are referred to herein as the "Securities".

     

    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    NOW, THEREFORE, the Company
and each Buyer hereby agree as follows:

     

    1.           PURCHASE AND SALE OF NOTES
AND WARRANTS.

     

    (a)         Purchase of Notes and
Warrants.  Subject to the satisfaction (or waiver) of the
conditions set forth in Sections 6 and 7 below, the Company shall issue and sell
to each Buyer, and each Buyer severally, but not jointly, agrees to purchase
from the Company on the Closing Date (as defined below), (w) a principal amount
of Notes as is set forth opposite such Buyer's name in column (3) on the
Schedule of Buyers, (x) Series A Warrants to acquire up to that number of Series
A Warrant Shares as is set forth opposite such Buyer's name in column (4) on the
Schedule of Buyers, and (y) Series B Warrants to acquire up to that number of
Series B Warrant Shares as is set forth opposite such Buyer's name in column (5)
on the Schedule of Buyers (the "Closing").

     

    (b)         Closing.  The
date and time of the Closing (the "Closing Date") shall be 10:00
a.m., New York City time, on the date hereof (or such other date and time as is
mutually agreed to by the Company and each Buyer) after notification of
satisfaction (or waiver) of the conditions to the Closing set forth in Sections
6 and 7 below, at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue,
New York, New York 10022.

     

    (c)          Purchase
Price.  The aggregate purchase price for the Notes and the
Warrants to be purchased by each Buyer at the Closing (the "Purchase Price") shall be the
amount set forth opposite each Buyer's name in column (6) of the Schedule of
Buyers.  Each Buyer shall pay $888.88 for each $1,000 of principal
amount of Notes and related Warrants to be purchased by such Buyer at the
Closing.  The Buyers and the Company agree that the Notes and the
Warrants constitute an "investment unit" for purposes of Section 1273(c)(2) of
the Internal Revenue Code of 1986, as amended (the "Code").  The Buyers
and the Company mutually agree that the allocation of the issue price of such
investment unit between the Notes and the Warrants in accordance with Section
1273(c)(2) of the Code and Treasury Regulation Section 1.1273-2(h) shall be an
aggregate amount of $1,372,500 allocated to the Warrants and the balance of the
Purchase Price allocated to the Notes, and neither the Buyers nor the Company
shall take any position inconsistent with such allocation in any tax return or
in any judicial or administrative proceeding in respect of taxes.

     

    (d)         Form of
Payment.  On the Closing Date, (i) each Buyer shall pay its
Purchase Price to the Company for the Notes and the Warrants to be issued and
sold to such Buyer at the Closing (less, in the case of [Buyer] ("[Buyer]"), the
amounts withheld pursuant to Section 4(g)), by wire transfer of immediately
available funds in accordance with the Company's written wire instructions and
(ii) the Company shall deliver to each Buyer the Notes (allocated in the
principal amounts as such Buyer shall request) which such Buyer is then
purchasing hereunder along with the Warrants (allocated in the amounts as such
Buyer shall request) which such Buyer is purchasing, in each case duly executed
on behalf of the Company and registered in the name of such Buyer or its
designee.

     

    
      
         


      

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

     

    (a)         No Public Sale or
Distribution.  Such Buyer is (i) acquiring the Notes and the
Warrants and (ii) upon conversion of the Notes and exercise of the Warrants
(other than pursuant to a Cashless Exercise (as defined in the Warrants)) will
acquire the Conversion Shares issuable upon conversion of the Notes and the
Warrant Shares issuable upon exercise of the Warrants, for its own account and
not with a view towards, or for resale in connection with, the public sale or
distribution thereof, except pursuant to sales registered or exempted under the
1933 Act; provided, however, that by
making the representations herein, such Buyer does not agree to hold any of the
Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act.  Such Buyer
is acquiring the Securities hereunder in the ordinary course of its
business.  Such Buyer does not presently have any agreement or
understanding, directly or indirectly, with any Person (as defined in Section
3(s)) to distribute any of the Securities.

     

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

     

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

     

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

     

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

     

    
      
         


      

      
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    (f)          Transfer or
Resale.  Such Buyer understands that except as provided in the
Registration Rights Agreement:  (i) the Securities have not been and
are not being registered under the 1933 Act or any state securities laws, and
may not be offered for sale, sold, assigned or transferred unless (A)
subsequently registered thereunder, (B) such Buyer shall have delivered to the
Company an opinion of counsel, in a generally acceptable form, to the effect
that such Securities to be sold, assigned or transferred may be sold, assigned
or transferred pursuant to an exemption from such registration, or (C) such
Buyer provides the Company with reasonable assurance that such Securities can be
sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated
under the 1933 Act, as amended, (or a successor rule thereto) (collectively,
"Rule 144"); (ii) any
sale of the Securities made in reliance on Rule 144 may be made only in
accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of the Securities under circumstances in which the seller
(or the Person (as defined below) through whom the sale is made) may be deemed
to be an underwriter (as that term is defined in the 1933 Act) may require
compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other
Person is under any obligation to register the Securities under the 1933 Act or
any state securities laws or to comply with the terms and conditions of any
exemption thereunder.  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 and such pledge of Securities
shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Buyer effecting a pledge of Securities shall be required to
provide the Company with any notice thereof or otherwise make any delivery to
the Company pursuant to this Agreement or any other Transaction Document (as
defined in Section 3(b)), including, without limitation, this Section
2(f).

     

    (g)         Legends.  Such
Buyer understands that the certificates or other instruments representing the
Notes and the Warrants and, until such time as the resale of the Conversion
Shares and the Warrant Shares have been registered under the 1933 Act as
contemplated by the Registration Rights Agreement, the stock certificates
representing the Conversion Shares and the Warrant Shares, except as set forth
below, shall bear any legend as required by the "blue sky" laws of any state and
a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):

     

    [NEITHER THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH
THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE] HAVE BEEN][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, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A 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.

     

    
      
         


      

      
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    The
legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped or issue to such holder by electronic delivery at the applicable balance
account at The Depository Trust Company ("DTC"), if, unless otherwise
required by state securities laws, (i) such Securities are registered for resale
under the 1933 Act, (ii) in connection with a sale, assignment or other
transfer, such holder provides the Company with an opinion of counsel, in a
generally acceptable form, to the effect that such sale, assignment or transfer
of the Securities may be made without registration under the applicable
requirements of the 1933 Act, or (iii) the Securities can be sold, assigned or
transferred pursuant to Rule 144 or Rule 144A.  The Company shall be
responsible for the fees of its transfer agent and all DTC fees associated with
such issuance.

     

    (h)         Validity;
Enforcement.  This Agreement and the Registration Rights
Agreement have been duly and validly authorized, executed and delivered on
behalf of such Buyer and shall constitute the legal, valid and binding
obligations of such Buyer enforceable against such Buyer in accordance with
their respective terms, except as such enforceability may be limited by general
principles of equity or to applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors' rights and
remedies.

     

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

     

    (j)          Residency.  Such
Buyer is a resident of that jurisdiction specified below its address on the
Schedule of Buyers.

     

    3.           REPRESENTATIONS AND
WARRANTIES OF THE COMPANY.

     

    The
Company represents and warrants to each of the Buyers and the Placement Agent
(as defined below) that:

     

    
      
         


      

      
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    (a)        Organization and
Qualification.  Each of the Company and its "Subsidiaries" (which for
purposes of this Agreement means any entity in which the Company, directly or
indirectly, owns any of the capital stock or holds an equity or similar
interest) are entities duly organized and validly existing in good standing
under the laws of the jurisdiction in which they are formed, and have the
requisite power and authorization to own their properties and to carry on their
business as now being conducted.  The
Company is duly qualified as a foreign entity to do business and is in good
standing in the state of California.  Each of the Company and its
Subsidiaries is duly qualified as a foreign entity to do business and is in good
standing in every jurisdiction in which its ownership of property or the nature
of the business conducted by it makes such qualification necessary, except to
the extent that the failure to be so qualified or be in good standing would not
reasonably be expected to have a Material Adverse Effect.  As used in
this Agreement, "Material
Adverse Effect" means any material adverse effect on the business,
properties, assets, operations, results of operations, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, individually or
taken as a whole, or on the transactions contemplated hereby or on the other
Transaction Documents or by the agreements and instruments to be entered into in
connection herewith or therewith, or on the authority or ability of the Company
to perform its obligations under the Transaction Documents (as defined
below).  The Company has no Subsidiaries except as set forth on Schedule
3(a).

     

    (b)         Authorization; Enforcement;
Validity.  The Company has the requisite power and authority to
enter into and perform its obligations under this Agreement, the Notes, the
Warrants, the Registration Rights Agreement, the Lock-Up Agreements (as defined
in Section 7(xii)), the Irrevocable Transfer Agent Instructions (as defined in
Section 5(b)), and each of the other agreements entered into by the parties
hereto in connection with the transactions contemplated by this Agreement
(collectively, the "Transaction
Documents") and to issue the Securities in accordance with the terms
hereof and thereof.  The execution and delivery of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby, including, without limitation, the issuance of
the Notes and the Warrants, the reservation for issuance and the issuance of the
Conversion Shares issuable upon conversion
of the Notes and the reservation for issuance and issuance of Warrant Shares
issuable upon exercise of the Warrants have been duly authorized by the
Company's Board of Directors and (other than the filing with the SEC of one or
more Registration Statements in accordance with the requirements of the
Registration Rights Agreement and other filings as may be required by state
securities agencies) no further filing, consent, or authorization is required by
the Company, its Board of Directors or its stockholders.  This
Agreement and the other Transaction Documents have been duly executed and
delivered by the Company, and constitute the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of applicable creditors' rights and remedies.

     

    (c)         Issuance of
Securities.  The issuance of the Notes and the Warrants are
duly authorized and are, upon issuance, shall be validly issued and free from
all taxes, liens and charges with respect to the issue thereof.  As of
the Closing, a number of shares of Common Stock shall have been duly authorized
and reserved for issuance which equals or exceeds 100% of the aggregate of the
maximum number of shares of Common Stock (the "Required Reserved Amount) (i)
issuable upon conversion of the Notes, and (ii) upon exercise of the Series A
Warrants, without taking into account any limitations on the conversion of the
Notes or exercise of the Warrants set forth in the Notes and Warrants,
respectively).  Upon conversion in accordance with the Notes or
exercise in accordance with the Warrants, as the case may be, the Conversion
Shares and the Warrant Shares, respectively, will be validly issued, fully paid
and nonassessable and free from all preemptive or similar rights, taxes, liens
and charges with respect to the issue thereof, with the holders being entitled
to all rights accorded to a holder of Common Stock.  Assuming the
accuracy of each of the representations and warranties set forth in Section 2 of
this Agreement, the offer and issuance by the Company of the Securities is
exempt from registration under the 1933 Act.

     

    
      
         


      

      
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    (d)         No
Conflicts.  The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance of the Notes and the Warrants and reservation for issuance and issuance
of the Conversion Shares and the Warrant Shares) will not (i) result in a
violation of any memorandum of association, certificate of incorporation,
certificate of formation, any certificate of designations or other constituent
documents of the Company or any of its Subsidiaries, any capital stock of the
Company or any of its Subsidiaries or the articles of association or bylaws of
the Company or any of its Subsidiaries or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) in any respect under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any material agreement, indenture or
instrument to which the Company or any of its Subsidiaries is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including foreign, federal and state securities laws and regulations and the
rules and regulations of the NYSE Amex (the "Principal Market") and
applicable laws of the State of Delaware and of the People's Republic of China
("China")) applicable to
the Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected.

     

    (e)         Consents.  Other
than the approval by the Principal Market of the listing application with
respect to the Conversion Shares and the Warrant Shares, neither the Company nor
any of its Subsidiaries is required to obtain any consent, authorization or
order of, or make any filing or registration with, any court, governmental
agency or any regulatory or self-regulatory agency or any other Person in order
for it to execute, deliver or perform any of its obligations under or
contemplated by the Transaction Documents, in each case in accordance with the
terms hereof or thereof.  All consents, authorizations, orders,
filings and registrations which the Company is required to obtain pursuant to
the preceding sentence have been obtained or effected on or prior to the Closing
Date, and the Company and its Subsidiaries are unaware of any facts or
circumstances that might prevent the Company from obtaining or effecting any of
the registration, application or filings pursuant to the preceding
sentence.  Except as disclosed in Schedule 3(e), the
Company is not in violation of the listing requirements of the Principal Market
and has no knowledge of any facts that would reasonably lead to delisting or
suspension of the Common Stock in the foreseeable future.  The
issuance by the Company of the Securities shall not have the effect of delisting
or suspending the Common Stock from the Principal Market.

     

    
      
         


      

      
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    (f)          Acknowledgment Regarding
Buyer's Purchase of Securities.  The Company acknowledges and
agrees that each Buyer is acting solely in the capacity of an arm's length
purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby and that no Buyer is (i) an officer or director
of the Company or any of its Subsidiaries, (ii) an "affiliate" of the Company or
any of its Subsidiaries (as defined in Rule 144) or (iii) to the knowledge of
the Company, a "beneficial owner" of more than 10% of the shares of Common Stock
(as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934,
as amended (the "1934
Act")).  The Company further acknowledges that no Buyer is
acting as a financial advisor or fiduciary of the Company or any of its
Subsidiaries (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated hereby and thereby, and any advice
given by a Buyer or any of its representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is
merely incidental to such Buyer's purchase of the Securities.  The
Company further represents to each Buyer that the Company's decision to enter
into the Transaction Documents has been based solely on the independent
evaluation by the Company and its representatives.

     

    (g)         No General Solicitation;
Placement Agent's Fees.  Neither the Company, nor any of its
Subsidiaries or affiliates, nor any Person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the
Securities.  The Company shall be responsible for the payment of any
placement agent's fees, financial advisory fees, or brokers' commissions (other
than for persons engaged by any Buyer or its investment advisor) relating to or
arising out of the transactions contemplated hereby, including, without
limitation, placement agent fees payable to Reedland Capital Partners, as
placement agent (the "Placement
Agent") in connection with the sale of the Securities.  The
Company shall pay, and hold each Buyer harmless against, any liability, loss or
expense (including, without limitation, attorney's fees and out-of-pocket
expenses) arising in connection with any such claim.  The Company
acknowledges that it has engaged the Placement Agent in connection with the sale
of the Securities.  Other than the Placement Agent, neither the
Company nor any of its Subsidiaries has engaged any placement agent or other
agent in connection with the sale of the Securities.

     

    (h)         No Integrated
Offering.  None of the Company, its Subsidiaries, any of their
affiliates, and any Person acting on their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any
security, under circumstances that would require registration of any of the
Securities under the 1933 Act, whether through integration with prior offerings
or otherwise, or cause this offering of the Securities to require approval of
stockholders of the Company for purposes of the 1933 Act or any applicable
stockholder approval provisions, including, without limitation, under the rules
and regulations of any exchange or automated quotation system on which any of
the securities of the Company are listed or designated.  None of the
Company, its Subsidiaries, their affiliates and any Person acting on their
behalf will take any action or steps referred to in the preceding sentence that
would require registration of any of the Securities under the 1933 Act or cause
the offering of the Securities to be integrated with other offerings for
purposes of any such applicable stockholder approval provisions.

     

    (i)          Dilutive
Effect.  The Company understands and acknowledges that the
number of Conversion Shares issuable upon conversion of the Notes and the number
of Warrant Shares issuable upon exercise of the Warrants will increase in
certain circumstances.  The Company further acknowledges that its
obligation to issue Conversion Shares upon conversion of the Notes in accordance
with this Agreement and the Notes and its obligation to issue the Warrant Shares
upon exercise of the Warrants in accordance with this Agreement and the
Warrants, in each case, is absolute and unconditional regardless of the dilutive
effect that such issuance may have on the ownership interests of other
stockholders of the Company.

     

    
      
         


      

      
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    (j)          Application of Takeover
Protections; Rights Agreement.  The Company and its board of
directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Certificate of Incorporation or the laws of
the jurisdiction of its formation which is or could become applicable to any
Buyer as a result of the transactions contemplated by this Agreement, including,
without limitation, the Company's issuance of the Securities and any Buyer's
ownership of the Securities.  The Company has not adopted a
stockholder rights plan or similar arrangement relating to accumulations of
beneficial ownership of Common Stock or a change in control of the Company.

     

    (k)         SEC Documents; Financial
Statements.  During the two (2) years prior to the date hereof,
the Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the 1934 Act (all of the foregoing filed prior to the date
hereof, and all exhibits included therein and financial statements, notes and
schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the "SEC
Documents").  The Company has delivered to the Buyers or their
respective representatives true, correct and complete copies of the SEC
Documents not available on the EDGAR system.  As of their respective
filing dates, the SEC Documents complied in all material respects with the
requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.  As of their respective filing dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto.  Such financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).  No other information provided by or on behalf of the
Company to the Buyers which is not included in the SEC Documents, including,
without limitation, information referred to in Section 2(d) of this Agreement or
in the disclosure schedules to this Agreement, contains any untrue statement of
a material fact or omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstance under which they are or
were made, not misleading.

     

    
      
         


      

      
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    (l)          Absence of Certain
Changes.  Except as disclosed in Schedule 3(l), since
December 31, 2009, there has been no material adverse change and no material
adverse development in the business, assets, properties, operations, condition
(financial or otherwise), results of operations or prospects of the Company or
its Subsidiaries.  Except as disclosed in Schedule 3(l), since
December 31, 2009, neither the Company nor any of its Subsidiaries has (i)
declared or paid any dividends, (ii) sold any assets, individually or in the
aggregate, in excess of $100,000 outside of the ordinary course of business or
(iii) had capital expenditures, individually or in the aggregate, in excess of
$100,000.  Neither the Company nor any of its Subsidiaries has taken
any steps to seek protection pursuant to any bankruptcy law nor does the Company
have any knowledge or reason to believe that its creditors intend to initiate
involuntary bankruptcy proceedings or any actual knowledge of any fact that
would reasonably lead a creditor to do so.  The Company and its
Subsidiaries, individually and on a consolidated basis, are not as of the date
hereof, and after giving effect to the transactions contemplated hereby to occur
at the Closing, will not be Insolvent (as defined below).  For
purposes of this Section 3(l), "Insolvent" means, with respect
to any Person, (i) the present fair saleable value of such Person's assets is
less than the amount required to pay such Person's total Indebtedness (as
defined in Section 3(s)), (ii) such Person is unable to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured, (iii) such Person intends to incur or
believes that it will incur debts that would be beyond its ability to pay as
such debts mature or (iv) such Person has unreasonably small capital with which
to conduct the business in which it is engaged as such business is now conducted
and is proposed to be conducted.

     

    (m)        No Undisclosed Events,
Liabilities, Developments or Circumstances.  No event,
liability, development or circumstance has occurred or exists, or is
contemplated to occur with respect to the Company, its Subsidiaries or their
respective business, properties, prospects, operations or financial condition,
that would be required to be disclosed by the Company under applicable
securities laws on a registration statement on Form S-1 filed with the SEC
relating to an issuance and sale by the Company of its Common Stock and which
has not been publicly announced.

     

    (n)         Conduct of Business;
Regulatory Permits.  Except as set forth in Schedule 3(n)(i),
neither the Company nor any of its Subsidiaries is in violation of any term of
or in default under any certificate of designations of any outstanding series of
preferred stock of the Company (if any), its Certificate of Incorporation or
Bylaws (as such terms are defined below) or their organizational charter or
memorandum of association or certificate of incorporation or articles of
association or bylaws, respectively.  Neither the Company nor any of
its Subsidiaries is in violation of any judgment, decree or order or any
statute, ordinance, rule or regulation applicable to the Company or any of its
Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct
its business in violation of any of the foregoing, except for possible
violations which could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.  Without limiting the
generality of the foregoing, except as disclosed in Schedule 3(n)(ii),
the Company is not in violation of any of the rules, regulations or
requirements of the Principal Market and has no knowledge of any facts or
circumstances that would reasonably lead to delisting or suspension of the
Common Stock by the Principal Market in the foreseeable
future.  During the two (2) years prior to the date hereof, the Common
Stock has been designated for quotation on the Principal
Market.  Except as set forth in Schedule 3(n)(ii),
during the two (2) years prior to the date hereof, (i) trading in the Common
Stock has not been suspended by the SEC or the Principal Market and (ii) the
Company has received no communication, written or oral, from the SEC or the
Principal Market regarding the suspension or delisting of the Common Stock from
the Principal Market.  The Company and its Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses, except where the failure to possess such certificates,
authorizations or permits would not have, individually or in the aggregate, a
Material Adverse Effect, and neither the Company nor any such Subsidiary has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.

     

    
      
         


      

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

     

    (p)         Sarbanes-Oxley
Act.  The Company is in compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date
hereof, and any and all applicable rules and regulations promulgated by the SEC
thereunder that are effective as of the date hereof.

     

    (q)         Transactions With
Affiliates.  Except as set forth on Schedule 3(q), none
of the officers, directors or employees of the Company or any of its
Subsidiaries is presently a party to any transaction with the Company or any of
its Subsidiaries (other than for ordinary course services as employees, officers
or 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
such officer, director or employee or, to the knowledge of the Company or any of
its Subsidiaries, any corporation, partnership, trust or other entity in which
any such officer, director, or employee has a substantial interest or is an
officer, director, trustee or partner.

     

    
      
         


      

      
        - 11
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    (r)          Equity
Capitalization.  As of the date hereof, the authorized capital
stock of the Company consists of (i) 200,000,000 shares of Common Stock, of
which as of the date hereof, 91,259,425 shares are issued and outstanding,
7,488,001 shares are reserved for issuance pursuant to the Company's stock
option and purchase plans and 28,125,000 shares are reserved for issuance
pursuant to securities (other than the aforementioned options, the Notes and the
Warrants) exercisable or exchangeable for, or convertible into, Common Stock,
(ii) 23,000,000 shares of the Company's blank check preferred stock, par value
$0.001 per share, of which as of the date hereof, no shares are issued and
outstanding, and (iii) 2,000,000 shares of the Company’s Series A Convertible
Preferred Stock, par value $0.001 per share, of which as of the date hereof, no
shares are issued and outstanding.  All of such outstanding shares
have been, or upon issuance will be, validly issued and are fully paid and
nonassessable.  Except as disclosed in Schedule
3(r):  (i) none of the Company's capital stock is subject to
preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company; (ii) there are no outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable
or exchangeable for, any shares of capital stock of the Company or any of its
Subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its Subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its Subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or
exercisable or exchangeable for, any shares of capital stock of the Company or
any of its Subsidiaries; (iii) there are no outstanding debt securities, notes,
credit agreements, credit facilities or other agreements, documents or
instruments evidencing Indebtedness of the Company or any of its Subsidiaries or
by which the Company or any of its Subsidiaries is or may become bound; (iv)
there are no financing statements securing obligations in any material amounts,
either singly or in the aggregate, filed in connection with the Company or any
of its Subsidiaries; (v) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
their securities under the 1933 Act (except pursuant to the Registration Rights
Agreement); (vi) there are no outstanding securities or instruments of the
Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries; (vii)
there are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Securities; (viii) the
Company does not have any stock appreciation rights or "phantom stock" plans or
agreements or any similar plan or agreement; and (ix) the Company and its
Subsidiaries have no liabilities or obligations required to be disclosed in the
SEC Documents but not so disclosed in the SEC Documents, other than those
incurred in the ordinary course of the Company's or any of its Subsidiary's'
respective businesses and which, individually or in the aggregate, do not or
would not have a Material Adverse Effect.  The Company has furnished
or made available to the Buyers true, correct and complete copies of the
Company's Certificate of Incorporation, as amended and as in effect on the date
hereof (the "Certificate of
Incorporation"), and the Company's Bylaws, as amended and as in effect on
the date hereof (the "Bylaws"), and the terms of all
securities convertible into, or exercisable or exchangeable for, shares of
Common Stock and the material rights of the holders thereof in respect
thereto.

     

    
      
         


      

      
        - 12
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    (s)         Indebtedness and Other
Contracts.  Except as disclosed in Schedule 3(s),
neither the Company nor any of its Subsidiaries (i) has any outstanding
Indebtedness (as defined below), (ii) is a party to any contract, agreement or
instrument, the violation of which, or default under which, by the other
party(ies) to such contract, agreement or instrument could reasonably be
expected to result in a Material Adverse Effect, (iii) is in violation of any
term of or in default under any contract, agreement or instrument relating to
any Indebtedness, except where such violations and defaults would not result,
individually or in the aggregate, in a Material Adverse Effect, or (iv) is a
party to any contract, agreement or instrument relating to any Indebtedness, the
performance of which, in the judgment of the Company's officers, has or is
expected to have a Material Adverse Effect.  Schedule 3(s)
provides a detailed description of the material terms of any such outstanding
Indebtedness.  For purposes of this Agreement:  (x) "Indebtedness" of any Person
means, without duplication (A) all indebtedness for borrowed money, (B) all
obligations issued, undertaken or assumed as the deferred purchase price of
property or services, including, without limitation, "capital leases" in
accordance with United States generally accepted accounting principles (other
than trade payables entered into in the ordinary course of business consistent
with past practice), (C) all reimbursement or payment obligations with respect
to letters of credit, surety bonds and other similar instruments, (D) all
obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (E) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with
the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (F) all monetary obligations under any
leasing or similar arrangement which, in connection with generally accepted
accounting principles, consistently applied for the periods covered thereby, is
classified as a capital lease, (G) all indebtedness referred to in clauses (A)
through (F) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any mortgage,
lien, pledge, charge, security interest or other encumbrance upon or in any
property or assets (including accounts and contract rights) owned by any Person,
even though the Person which owns such assets or property has not assumed or
become liable for the payment of such indebtedness, and (H) all Contingent
Obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (A) through (G) above; (y) "Contingent Obligation" means,
as to any Person, any direct or indirect liability, contingent or otherwise, of
that Person with respect to any indebtedness, lease, dividend or other
obligation of another Person if the primary purpose or intent of the Person
incurring such liability, or the primary effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the
holders of such liability will be protected (in whole or in part) against loss
with respect thereto; and (z) "Person" means an individual, a
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or
agency thereof.

     

    (t)          Absence of
Litigation.  There is no action, suit, proceeding, inquiry or
investigation before or by the Principal Market, any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its Subsidiaries, the Common Stock or any of the Company's Subsidiaries or any
of the Company's or its Subsidiaries' officers or directors, whether of a civil
or criminal nature or otherwise, in their capacities as such, except as set
forth in Schedule
3(t).  The matters set forth in Schedule 3(t) would
not reasonably be expected to have a Material Adverse Effect.

     

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

     

    
      
         


      

      
        - 13
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    (v)         Employee
Relations.

     

    (i)           Neither
the Company nor any of its Subsidiaries is a party to any collective bargaining
agreement or employs any member of a union.  The Company and its
Subsidiaries believe that their relations with their employees are
good.  No executive officer of the Company or any of its Subsidiaries
(as defined in Rule 501(f) of the 1933 Act) has notified the Company or any such
Subsidiary that such officer intends to leave the Company or any such Subsidiary
or otherwise terminate such officer's employment with the Company or any such
Subsidiary.  No executive officer of the Company or any of its
Subsidiaries, to the knowledge of the Company or any of its Subsidiaries, is, or
is now expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any restrictive
covenant, and the continued employment of each such executive officer does not
subject the Company or any of its Subsidiaries to any liability with respect to
any of the foregoing matters.

     

    (ii)          The
Company and its Subsidiaries are in compliance with all federal, state, local
and foreign laws and regulations respecting labor, employment and employment
practices and benefits, terms and conditions of employment and wages and hours,
except where failure to be in compliance would not, either individually or in
the aggregate, reasonably be expected to result in a Material Adverse
Effect.

     

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

     

    (x)          Intellectual Property
Rights.  The Company and its Subsidiaries own or possess
adequate rights or licenses to use all trademarks, trade names, service marks,
service mark registrations, service names, original works of authorship,
patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and other intellectual property
rights and all applications and registrations therefor ("Intellectual Property Rights")
necessary to conduct their respective businesses as now
conducted.  Except as set forth in Schedule 3(x), none
of the Company's Intellectual Property Rights have expired or terminated or have
been abandoned or are expected to expire or terminate or are expected to be
abandoned, within three years from the date of this Agreement.  The
Company does not have any knowledge of any infringement by the Company or its
Subsidiaries of Intellectual Property Rights of others.  There is no
claim, action or proceeding being made or brought, or to the knowledge of the
Company or any of its Subsidiaries, being threatened, against the Company or any
of its Subsidiaries regarding its Intellectual Property
Rights.  Neither the Company nor any of its Subsidiaries is aware of
any facts or circumstances which might give rise to any of the foregoing
infringements or claims, actions or proceedings.  The Company and its
Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their Intellectual Property
Rights.

     

    
      
         


      

      
        - 14
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    (y)         Environmental
Laws.  The Company and its Subsidiaries (i) are in compliance
with any and all Environmental Laws (as hereinafter defined), (ii) have received
all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or approval
where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so
comply could be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect.  The term "Environmental Laws" means all
federal, state, local or foreign laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, "Hazardous Materials") into the environment, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations issued, entered, promulgated or approved thereunder.

     

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

     

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

     

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

     

    
      
         


      

      
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    (cc)       Internal Accounting and
Disclosure Controls.  Except as set forth in Schedule 3(cc), the
Company and each of its Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management's
general or specific authorization and (iv) the recorded accountability for
assets and liabilities is compared with the existing assets and liabilities at
reasonable intervals and appropriate action is taken with respect to any
difference.  Except as set forth in Schedule 3(cc), the
Company maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15 under the 1934 Act) that are effective in ensuring that information
required to be disclosed by the Company in the reports that it files or submits
under the 1934 Act is recorded, processed, summarized and reported, within the
time periods specified in the rules and forms of the SEC, including, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the
1934 Act is accumulated and communicated to the Company's management, including
its principal executive officer or officers and its principal financial officer
or officers, as appropriate, to allow timely decisions regarding required
disclosure.  Except as set forth in Schedule 3(cc),
during the twelve months prior to the date hereof neither the Company nor any of
its Subsidiaries has received any notice or correspondence from any accountant
relating to any material weakness in any part of the system of internal
accounting controls of the Company or any of its Subsidiaries.

     

    (dd)       Off Balance Sheet
Arrangements.  There is no transaction, arrangement, or other
relationship between the Company and an unconsolidated or other off balance
sheet entity that is required to be disclosed by the Company in its 1934 Act
filings and is not so disclosed or that otherwise would be reasonably likely to
have a Material Adverse Effect.

     

    (ee)       Ranking of
Notes.  Except as set forth in Schedule 3(ee), no
Indebtedness of the Company is senior to or ranks pari passu with the Notes in
right of payment, whether with respect of payment of redemptions, interest,
damages or upon liquidation or dissolution or otherwise.

     

    (ff)         Eligibility for
Registration.  The Company is eligible to register the
Conversion Shares and the Warrant Shares for resale by the Buyers using Form S-3
promulgated under the 1933 Act.

     

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

     

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

     

    
      
         


      

      
        - 16
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    (ii)         Acknowledgement Regarding
Buyers' Trading Activity.  The Company acknowledges and agrees
that (i) none of the Buyers has been asked to agree, nor has any Buyer agreed,
to desist from purchasing or selling, long and/or short, securities of the
Company, or "derivative" securities based on securities issued by the Company or
to hold the Securities for any specified term; (ii) any Buyer, and
counter-parties in "derivative" transactions to which any such Buyer is a party,
directly or indirectly, presently may have a "short" position in the Common
Stock, and (iii) each Buyer shall not be deemed to have any affiliation with or
control over any arm's length counter-party in any "derivative"
transaction.  The Company further understands and acknowledges that
one or more Buyers may engage in hedging and/or trading activities at various
times during the period that the Securities are outstanding, including, without
limitation, during the periods that the value of the Conversion Shares and/or
the Warrant Shares are being determined and (b) such hedging and/or trading
activities, if any, can reduce the value of the existing stockholders' equity
interest in the Company both at and after the time the hedging and/or trading
activities are being conducted.  The Company acknowledges that such
aforementioned hedging and/or trading activities do not constitute a breach of
this Agreement, the Notes, the Warrants or any of the documents executed in
connection herewith.

     

    (jj)         U.S. Real Property Holding
Corporation.  The Company is not, has never been, and so long
as any Securities remain outstanding, shall not become, a U.S. real property
holding corporation within the meaning of Section 897 of the Internal Revenue
Code of 1986, as amended, and the Company shall so certify upon any Buyer's
request.

     

    (kk)       Bank Holding Company
Act.  Neither the Company nor any of its Subsidiaries or
affiliates is subject to the Bank Holding Company Act of 1956, as amended (the
"BHCA") and to
regulation by the Board of Governors of the Federal Reserve System (the "Federal
Reserve").  Neither the Company nor any of its Subsidiaries or
affiliates owns or controls, directly or indirectly, five percent (5%) or more
of the outstanding shares of any class of voting securities or twenty-five
percent (25%) or more of the total equity of a bank or any  entity
that is subject to the BHCA and to regulation by the Federal
Reserve.  Neither the Company nor any of its Subsidiaries or
affiliates exercises a controlling influence over the management or policies of
a bank or any entity that is subject to the BHCA and to regulation by the
Federal Reserve.

     

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

     

    (mm)     
Disclosure.  The
Company confirms that neither it nor any other Person acting on its behalf has
provided any of the Buyers or their agents or counsel with any information that
constitutes or could reasonably be expected to constitute material, nonpublic
information.  The Company understands and confirms that each of the
Buyers will rely on the foregoing representations in effecting transactions in
securities of the Company.  All disclosure provided to the Buyers
regarding the Company, or any of its Subsidiaries, their business and the
transactions contemplated hereby, including the disclosure schedules to this
Agreement, furnished by or on behalf of the Company is true and correct and does
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading.  Each press release issued by the Company or any of its
Subsidiaries during the twelve (12) months preceding the date of this Agreement
did not at the time of release 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 the light of the circumstances under
which they were made, not misleading.  No event or circumstance has
occurred or information exists with respect to the Company or any of its
Subsidiaries or its or their business, properties, prospects, operations or
financial conditions, which, under applicable law, rule or regulation, requires
public disclosure or announcement by the Company but which has not been so
publicly announced or disclosed.  The Company acknowledges and agrees
that no Buyer makes or has made any representations or warranties with respect
to the transactions contemplated hereby other than those specifically set forth
in Section 2.

     

    
      
         


      

      
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    (nn)       Shell Company
Status.  The Company is not, and has not been at any time
during the twelve-month period preceding the date hereof, an issuer identified
in Rule 144(i)(1).

     

    (oo)       China
Subsidiaries.

     

    (i)          Schedule 3(oo) sets
forth, for each Subsidiary that is incorporated in China, (i) the legal
classification of such entity under the applicable company laws and foreign
investment laws of China, including true and correct copies of the relevant
currently effective business license, registration documents and capital
verification report issued by the relevant China governmental approval authority
for the location in which the Subsidiary maintains an office or premises for
business operations; (ii) the total investment capital (i.e., debt and equity)
and equity (i.e., registered capital); (iii) the holders of record of the equity
(i.e., the registered capital); (iv) the authorized legal representative,
directors, officers, legal address and each business address, as well as the
original China approval authority and China governmental authority with current
jurisdiction over the entity; and (v) any agreements with respect to the
registered capital, including outstanding securities, contracts, commitments or
arrangements granting any party the right to obtain any equity ownership of the
Subsidiary.

     

    (ii)         For
each Subsidiary, the holders of record of its registered capital have
contributed in full its subscribed share of the entity's registered capital
pursuant to the relevant joint venture contract and articles of association, and
all such contributions have been verified and certified by a Chinese registered
public accountant according to applicable China law, approved by all relevant
China governmental authorities and fully paid, and verification certificates
have been issued to each such holder of record or previous investor
accordingly.  All previous transfers or assignments of registered
capital have been approved by the relevant China governmental authorities and
all necessary corporate action.

     

    (iii)        Each
Subsidiary incorporated in China is a limited liability company duly organized,
validly existing and in good standing under the applicable company laws and
foreign investment laws of China, has the status of a foreign investment
enterprise (where applicable), and is a legal person with all requisite
corporate power to own, lease and operate its properties and to carry on its
business as now being conducted in each place where its business is
conducted.  Each Subsidiary and its business operations are in
compliance with the terms and conditions of its business license, joint venture
contract (where applicable) and articles of association.  The
construction of the Subsidiary's operating facilities and operation of its
business is and has been in full compliance with its relevant feasibility study
and business license.  Each Subsidiary has received all
authorizations, approvals, license, permits and other rights (including but not
limited to those pertaining to the manufacture, distribution and sale of
telephone equipment and all other products of the Company's business) from China
governmental authorities necessary and appropriate for the continued operation
of the Company's business.

     

    
      
         


      

      
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    (iv)        All
necessary approvals from China governmental authorities have been received to
ensure that each Subsidiary will continue to enjoy, to the extent permitted by
applicable China law, all of the tax clearances, concessions and other benefits
available to such Subsidiary prior to the Closing Date, or otherwise available
under applicable China law to foreign investment enterprises similarly
situated.

     

    (v)         Each
Subsidiary is and has been in compliance with applicable China laws relating to
its relationship to its employees or suppliers or to any governmental taxing or
customs authority, and relating to any other aspect of its
business.  Each Subsidiary is in compliance with applicable China law
relating to anti-competitive practices, price fixing, and environmental matters,
respectively, and, to its knowledge, there are no proceedings pending or
threatened regarding any violation by it of applicable China law, including work
safety, environmental and employment laws.

     

    (vi)        Each
Subsidiary has obtained all required China product registrations for the
products related to its business.

     

    (pp)       Stock Option Plans.
Each stock option granted by the Company was granted (i) in accordance with the
terms of the applicable Company stock option plan and (ii) with an exercise
price at least equal to the fair market value of the Common Stock on the date
such stock option would be considered granted under GAAP and applicable law. No
stock option granted under the Company's stock option plan has been
backdated.  The Company has not knowingly granted, and there is no and
has been no Company policy or practice to knowingly grant, stock options prior
to, or otherwise knowingly coordinate the grant of stock options with, the
release or other public announcement of material information regarding the
Company or its Subsidiaries or their financial results or
prospects.

     

    (qq)       No Disagreements with
Accountants and Lawyers.  There are no material disagreements
of any kind presently existing, or reasonably anticipated by the Company to
arise, between the Company and the accountants and lawyers formerly or presently
employed by the Company and the Company is current with respect to any fees owed
to its accountants and lawyers which could affect the Company’s ability to
perform any of its obligations under any of the Transaction
Documents.  In addition, on or prior to the date hereof, the Company
had discussions with their accountants about their financial statements
previously filed with the SEC.  Based on those discussions, the
Company has no reason to believe that they will need to restate any such
financial statements or any part thereof.

     

    
      
         


      

      
        - 19
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    4.      COVENANTS.

     

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

     

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

     

    (c)          Reporting
Status.  Until the date on which the Investors (as defined in
the Registration Rights Agreement) shall have sold all the Conversion Shares and
Warrant Shares and
none of the Notes or Warrants are outstanding
(the "Reporting
Period"), the Company shall timely file all reports required to be filed
with the SEC pursuant to the 1934 Act, and the Company shall not terminate its
status as an issuer required to file reports under the 1934 Act even if the 1934
Act or the rules and regulations thereunder would no longer require or otherwise
permit such termination, and the Company shall take all actions necessary to
maintain its eligibility to register the Conversion Shares and Warrant Shares
for resale by the Investors on Form S-3.

     

    (d)         Use of
Proceeds.  The Company will use the proceeds from the sale of
the Securities for general corporate purposes and for working capital purposes
but not for (i) the repayment of any outstanding Indebtedness of the Company or
any of its Subsidiaries or (ii) the redemption or repurchase of any of its or
its Subsidiaries' equity securities.

     

    (e)          Financial
Information.  The Company agrees to send the following to each
Investor during the Reporting Period (i) within one (1) Business Day after the
filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, any
Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K (or any
analogous reports under the 1934 Act) and any registration statements (other
than on Form S-8) or amendments filed pursuant to the 1933 Act, unless same are
filed with the SEC through EDGAR and are available to the public through the
EDGAR system, and (ii) copies of any notices and other information made
available or given to the stockholders of the Company generally,
contemporaneously with the making available or giving thereof to the
stockholders.  As used herein, "Business Day" means any day
other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed.

     

    
      
         


      

      
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    (f)          Listing.

     

    (i)          The
Company shall promptly secure the listing of all of the Registrable Securities
(as defined in the Registration Rights Agreement) upon each national securities
exchange and automated quotation system, if any, upon which the Common Stock is
then listed (subject to official notice of issuance) and shall maintain such
listing of all Registrable Securities from time to time issuable under the terms
of the Transaction Documents.  The Company shall maintain the
authorization for quotation of the Common Stock on the Principal Market or any
other Eligible Market (as defined in the Warrants).  Neither the
Company nor any of its Subsidiaries shall take any action which would be
reasonably expected to result in the delisting or suspension of the Common Stock
on the Principal Market.  The Company shall pay all fees and expenses
in connection with satisfying its obligations under this Section
4(f).

     

    (g)         Fees.  The
Company shall reimburse [Buyer] (a Buyer) or its designee(s) (in addition to any
other expense amounts paid to any Buyer or its counsel prior to the date of this
Agreement) for all costs and expenses incurred in connection with the
transactions contemplated by the Transaction Documents (including all legal fees
and disbursements in connection therewith, documentation and implementation of
the transactions contemplated by the Transaction Documents and due diligence in
connection therewith) in an amount not to exceed $95,000, which amount may be
withheld by such Buyer from its Purchase Price at the Closing.  The
Company shall be responsible for the payment of any placement agent's fees,
financial advisory fees, or broker's commissions (other than for Persons engaged
by any Buyer) relating to or arising out of the transactions contemplated
hereby, including, without limitation, any fees or commissions payable to the
Placement Agent.  The Company shall pay, and hold each Buyer harmless
against, any liability, loss or expense (including, without limitation,
reasonable attorney's fees and out-of-pocket expenses) arising in connection
with any claim relating to any such payment.  Except as otherwise set
forth in the Transaction Documents, each party to this Agreement shall bear its
own expenses in connection with the sale of the Securities to the
Buyers.

     

    (h)         Pledge of
Securities.  The Company acknowledges and agrees that the
Securities may be pledged by an Investor (as defined in the Registration Rights
Agreement) in connection with a bona fide margin agreement or other loan or
financing arrangement that is secured by the Securities.  The pledge
of Securities shall not be deemed to be a transfer, sale or assignment of the
Securities hereunder, and no Investor effecting a pledge of Securities shall be
required to provide the Company with any notice thereof or otherwise make any
delivery to the Company pursuant to this Agreement or any other Transaction
Document, including, without limitation, Section 2(f) hereof; provided that an
Investor and its pledgee shall be required to comply with the provisions of
Section 2(f) hereof in order to effect a sale, transfer or assignment of
Securities to such pledgee.  The Company hereby agrees to execute and
deliver such documentation as a pledgee of the Securities may reasonably request
in connection with a pledge of the Securities to such pledgee by an
Investor.

     

    
      
         


      

      
        - 21
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    (i)           Disclosure of Transactions
and Other Material Information.  On or before 8:30 a.m., New
York City time, on the first Business Day after this Agreement has been
executed, the Company shall issue a press release and file a Current Report on
Form 8-K describing the terms of the transactions contemplated by the
Transaction Documents in the form required by the 1934 Act and attaching the
material Transaction Documents (including, without limitation, this Agreement
(and all schedules and exhibits to this Agreement), the form of the Notes, the
form of the Registration Rights Agreement and the form of Lock-Up Agreement as
exhibits to such filing (including all attachments, the "8-K Filing").  From
and after the filing of the 8-K Filing with the SEC, no Buyer shall be in
possession of any material, nonpublic information received from the Company, any
of its Subsidiaries or any of their respective officers, directors, employees or
agents, that is not disclosed in the 8-K Filing.  The Company shall
not, and shall cause each of its Subsidiaries and its and each of their
respective officers, directors, employees and agents, not to, provide any Buyer
with any material, nonpublic information regarding the Company or any of its
Subsidiaries from and after the filing of the 8-K Filing with the SEC without
the express prior written consent of such Buyer.  If a Buyer has, or
believes it has, received any such material, nonpublic information regarding the
Company or any of its Subsidiaries from the Company, any of its Subsidiaries or
any of their respective officers, directors, affiliates or agents, it may
provide the Company with written notice thereof.  The Company shall,
within two (2) Trading Days (as defined in the Notes) of receipt of such notice,
make public disclosure of such material, nonpublic information.  In
the event of a breach of the foregoing covenant by the Company, any of its
Subsidiaries, or any of its or their respective officers, directors, employees
and agents, in addition to any other remedy provided herein or in the
Transaction Documents, a Buyer shall have the right to make a public disclosure,
in the form of a press release, public advertisement or otherwise, of such
material, nonpublic information without the prior approval by the Company, its
Subsidiaries, or any of its or their respective officers, directors, employees
or agents.  No Buyer shall have any liability to the Company, its
Subsidiaries, or any of its or their respective officers, directors, employees,
stockholders or agents for any such disclosure.  To the extent that
the Company delivers any material, non-public information to a Buyer without
such Buyer’s consent, the Company hereby covenants and agrees that such Buyer
shall not have any duty of confidentiality with respect to, or a duty not to
trade on the basis of, such material, non-public information.  Subject
to the foregoing, neither the Company, its Subsidiaries nor any Buyer shall
issue any press releases or any other public statements with respect to the
transactions contemplated hereby; provided, however, that the Company shall be
entitled, without the prior approval of any Buyer, to make any press release or
other public disclosure with respect to such transactions (i) in substantial
conformity with the 8-K Filing and contemporaneously therewith and (ii) as is
required by applicable law and regulations (provided that in the case of clause
(i) each Buyer shall be consulted by the Company in connection with any such
press release or other public disclosure prior to its
release).  Except for the Registration Statement required to be filed
pursuant to the Registration Rights Agreement, without the prior written consent
of any applicable Buyer, neither the Company nor any of its Subsidiaries or
affiliates shall disclose the name of such Buyer in any filing, announcement,
release or otherwise.

     

    
      
         


      

      
        - 22
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    (j)          Additional Notes; Variable
Securities; Dilutive Issuances.  So long as any Buyer
beneficially owns any Securities, the Company will not issue any Notes other
than to the Buyers as contemplated hereby and the Company shall not issue any
other securities that would cause a breach or default under the
Notes.  For so long as any Notes or Warrants remain outstanding, the
Company shall not, in any manner, issue or sell any rights, warrants or options
to subscribe for or purchase Common Stock or directly or indirectly convertible
into or exchangeable or exercisable for Common Stock at a price which varies or
may vary with the market price of the Common Stock, including by way of one or
more reset(s) to any fixed price unless the conversion, exchange or exercise
price of any such security cannot be less than the then applicable Conversion
Price (as defined in the Notes) with respect to the Common Stock into which any
Note is convertible or the then applicable Exercise Price (as defined in the
Warrants) with respect to the Common Stock into which any Warrant is
exercisable.  For so long as any Notes or Warrants are outstanding,
unless or until each of the Principal Market Stockholder Approval (as defined
below) and the Authorized Share Stockholder Approval (as defined below) has been
obtained, the Company shall not take any action if the effect of such action
would be to cause the Exercise Price or Conversion Price to be reduced or to
cause the number of Conversion Shares or Warrant Shares to be increased, in each
case without giving effect to any (w) limitations on exercise contained in
the Warrants, (y) limitations upon conversion contained in the Notes,
(y) floor on the Exercise Price contained in the Warrants and
(z) Market Price Floor (as defined in the Notes).  For so long as
any Notes are outstanding, neither the Company nor any of it Subsidiaries shall
incur any Indebtedness, other than trade payables incurred in the ordinary
course of business consistent with past practice, the Jade Indebtedness or the
NuVax Indebtedness (each as defined in the Notes), in each case only as
permitted pursuant to the Notes.

     

    (k)         Corporate
Existence.  So long as any Buyer beneficially owns any
Securities, the Company shall maintain its corporate existence and shall not be
party to any Fundamental Transaction (as defined in the Notes) unless the
Company is in compliance with the applicable provisions governing Fundamental
Transactions set forth in the Notes and the Warrants.

     

    (l)          Reservation of
Shares.  So long as any Buyer owns any Securities, the Company
shall take all action necessary to at all times (I) prior to the time that the
Company obtains the Authorized Share Stockholder Approval, have authorized, and
reserved for the purpose of issuance, no less than 100% of the sum of the number
of shares of Common Stock issuable (i) upon conversion or amortization of the
Notes then outstanding at the then existing Conversion Price, and (ii) upon
exercise of the Warrants then outstanding at the then existing Exercise Price
(without taking into account any limitations on the conversion or amortization
of the Notes or exercise of the Warrants set forth in the Notes and Warrants,
respectively) and (II) from and after the time that the Company obtains the
Authorized Share Stockholder Approval, have authorized, and reserved for the
purpose of issuance, no less than 130% of the sum of the number of shares of
Common Stock issuable (i) upon conversion or amortization of the Notes (assuming
a Conversion Price equal to the Market Price Floor (as defined in the Notes)),
and (ii) upon exercise of the Warrants then outstanding (without taking into
account any limitations on the conversion of the Notes or exercise of the
Warrants set forth in the Notes and Warrants, respectively).  If at
any time the number of shares of Common Stock authorized and reserved for
issuance is not sufficient to meet the Required Reserved Amount, the Company
will promptly take all corporate action necessary to authorize and reserve a
sufficient number of shares, including, without limitation, calling a special
meeting of stockholders to authorize additional shares to meet the Company's
obligations under Section 3(c), in the case of an insufficient number of
authorized shares, obtain stockholder approval of an increase in such authorized
number of shares, and voting the management shares of the Company in favor of an
increase in the authorized shares of the Company to ensure that the number of
authorized shares is sufficient to meet the Required Reserved
Amount.

     

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

     

    
      
         


      

      
        - 23
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    (n)         Additional Issuances of
Securities.

     

    (i)                   
      For purposes of this Section 4(n), the
following definitions shall apply.

     

    (1)          "Approved Stock Plan" means any
stock option plan which has been approved by the Board of Directors of the
Company, pursuant to which the Company's securities may be issued to any
employee, officer or director for services provided to the Company; provided,
that the issuance price, exercise price or deemed issuance or exercise price, is
equal to or exceeds the then existing exercise price for the Series A
Warrants.

     

    (2)          "Convertible Securities" means
any stock or securities (other than Options) convertible into or exercisable or
exchangeable for shares of Common Stock.

     

    (3)          "Options" means any rights,
warrants or options to subscribe for or purchase Common Stock or Convertible
Securities.

     

    (4)          "Common Stock Equivalents" means,
collectively, Options and Convertible Securities.

     

    (5)          "Excluded Securities" means any
Common Stock issued or issuable: (i) in connection with any Approved Stock Plan;
provided that the option term, exercise price or similar provisions of any
issuances pursuant to such Approved Stock Plan are not amended, modified or
changed on or after the date hereof, (ii) upon conversion of the Notes or
exercise of the Warrants; provided that neither
the terms of the Notes nor the terms of the Warrants are amended, modified or
changed on or after the date hereof to lower the conversion price, amortization
price or exercise price of any such securities, to extend the term of any such
securities or otherwise in any manner that adversely affects, or could
reasonably be expected to adversely affect, any Investor, (iii) in connection
with up to 1,163,793 warrants issued to the Placement Agent on the terms set
forth in Schedule
4(n)(i)(5); provided that the
terms of such warrants are not amended, modified or changed on or after the date
hereof to lower the exercise price, extend the term thereof or otherwise in any
other manner that adversely affects, or could reasonably be expected to
adversely affect, any Investor; provided, further, that the
shares of Common Stock underlying such warrants are not reserved by the Company out of the authorized and
unissued shares of Common Stock and are not issuable or issued until the
Company obtains the Principal Market Stockholder Approval and the Authorized
Share Stockholder Approval; and provided, further,
that the shares of Common Stock underlying such warrants are not registered
until all of the Registrable Securities are registered, (iv) upon
exercise of any Options or Convertible Securities which are outstanding on the
day immediately preceding the date hereof; provided that the
terms of such Options or Convertible Securities are not amended, modified or
changed on or after the date hereof to lower the conversion price, amortization
price or exercise price of such securities, to extend the term of any such
securities or otherwise in any manner that adversely affects, or could
reasonably be expected to adversely affect, any Investor, (v) in connection with
the Jade Indebtedness or the NuVax Indebtedness (each as defined in the Notes)
issued in conformity with the provisions set forth in the Notes and (vi) in
connection with mergers, acquisitions, strategic licensing arrangements,
strategic business partnerships or joint ventures, in each case with
non-affiliated third parties and otherwise on an arm's-length basis, the purpose
of which is not to raise additional capital; provided, that such
third parties are not granted any registration rights and provided, further, that the
Company shall not enter into any of the transactions contemplated in clause (vi)
until after the Trigger Date.  Notwithstanding the foregoing, any
Common Stock issued or issuable to raise capital for the Company or its
Subsidiaries, directly or indirectly, in connection with any transaction
contemplated by clause (vi) of the preceding sentence, including, without
limitation, securities issued in one or more related transactions or that result
in similar economic consequences, shall not be deemed to be Excluded
Securities.


     

     

    
      
         


      

      
        - 24
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    (ii)    
             
      From the date hereof until 30 days after the
Initial Effective Date (as defined in the Registration Rights Agreement) (the
"Trigger Date"), the
Company will not, directly or indirectly, file any registration statement with
the SEC other than the Registration Statements (as defined in the Registration
Rights Agreement).  From the date hereof until the Trigger Date, the
Company will not, (i) directly or indirectly, offer, sell, grant any option
to purchase, or otherwise dispose of (or announce any offer, sale, grant or any
option to purchase or other disposition of) any of its or its Subsidiaries'
equity or equity equivalent securities, including without limitation any debt,
preferred stock or other instrument or security that is, at any time during its
life and under any circumstances, convertible into or exchangeable or
exercisable for Common Stock or Common Stock Equivalents (any such offer, sale,
grant, disposition or announcement being referred to as a "Subsequent Placement") or (ii)
be party to any solicitations, negotiations or discussions with regard to the
foregoing.

     

    (iii)    
           
      From the Trigger Date until the second
anniversary of the Initial Effective Date, the Company will not, directly or
indirectly, effect any Subsequent Placement unless the Company shall have first
complied with this Section 4(n)(iii).

     

    (1)           The
Company shall deliver to each Buyer an irrevocable written notice
(the "Offer
Notice") of any proposed or intended issuance or sale or exchange
(the "Offer") of
the securities being offered (the "Offered Securities") in a
Subsequent Placement, which Offer Notice shall (w) identify and describe the
Offered Securities, (x) describe the price and other terms upon which they
are to be issued, sold or exchanged, and the number or amount of the Offered
Securities to be issued, sold or exchanged, (y) identify the persons or
entities (if known) to which or with which the Offered Securities are to be
offered, issued, sold or exchanged and (z) offer to issue and sell to or
exchange with such Buyers 100% of the Offered Securities, allocated among such
Buyers (a) based on such Buyer's pro rata portion of the aggregate principal
amount of Notes purchased hereunder (the "Basic Amount"), and (b) with
respect to each Buyer that elects to purchase its Basic Amount, any additional
portion of the Offered Securities attributable to the Basic Amounts of other
Buyers as such Buyer shall indicate it will purchase or acquire should the other
Buyers subscribe for less than their Basic Amounts (the "Undersubscription Amount"),
which process shall be repeated until the Buyers shall have an opportunity to
subscribe for any remaining Undersubscription Amount.

     

    
      
         


      

      
        - 25
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    (2)           To
accept an Offer, in whole or in part, such Buyer must deliver a written notice
to the Company prior to the end of the tenth (10th)
Business Day after such Buyer's receipt of the Offer Notice (the "Offer Period"), setting forth
the portion of such Buyer's Basic Amount that such Buyer elects to purchase and,
if such Buyer shall elect to purchase all of its Basic Amount, the
Undersubscription Amount, if any, that such Buyer elects to purchase (in either
case, the "Notice of
Acceptance").  If the Basic Amounts subscribed for by all
Buyers are less than the total of all of the Basic Amounts, then each Buyer who
has set forth an Undersubscription Amount in its Notice of Acceptance shall be
entitled to purchase, in addition to the Basic Amounts subscribed for, the
Undersubscription Amount it has subscribed for; provided, however, that if the
Undersubscription Amounts subscribed for exceed the difference between the total
of all the Basic Amounts and the Basic Amounts subscribed for (the "Available Undersubscription
Amount"), each Buyer who has subscribed for any Undersubscription Amount
shall be entitled to purchase only that portion of the Available
Undersubscription Amount as the Basic Amount of such Buyer bears to the total
Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts,
subject to rounding by the Company to the extent its deems reasonably
necessary.  Notwithstanding anything to
the contrary contained herein, if the Company desires to modify or amend the
terms and conditions of the Offer prior to the expiration of the Offer Period,
the Company may deliver to the Buyers a new Offer Notice and the Offer Period
shall expire on the tenth (10th) Business Day after such Buyer's receipt of such
new Offer Notice.

     

    (3)           The
Company shall have five (5) Business Days from the expiration of the Offer
Period above to offer, issue, sell or exchange all or any part of such Offered
Securities as to which a Notice of Acceptance has not been given by the Buyers
(the "Refused
Securities") pursuant to a definitive agreement (the "Subsequent Placement
Agreement") but only to the offerees described in the Offer Notice (if so
described therein) and only upon terms and conditions (including, without
limitation, unit prices and interest rates) that are not more favorable to the
acquiring Person or Persons or less favorable to the Company than those set
forth in the Offer Notice and (ii) to publicly announce (a) the execution of
such Subsequent Placement Agreement, and (b) either (x) the consummation of the
transactions contemplated by such Subsequent Placement Agreement or (y) the
termination of such Subsequent Placement Agreement, which shall be filed with
the SEC on a Current Report on Form 8-K with such Subsequent Placement Agreement
and any documents contemplated therein filed as exhibits thereto.

     

    
      
         


      

      
        - 26
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    (4)           In
the event the Company shall propose to sell less than all the Refused Securities
(any such sale to be in the manner and on the terms specified in Section
4(n)(iii)(3) above), then each Buyer may, at its sole option and in its sole
discretion, reduce the number or amount of the Offered Securities specified in
its Notice of Acceptance to an amount that shall be not less than the number or
amount of the Offered Securities that such Buyer elected to purchase pursuant to
Section 4(n)(iii)(2) above multiplied by a fraction, (i) the numerator of which
shall be the number or amount of Offered Securities the Company actually
proposes to issue, sell or exchange (including Offered Securities to be issued
or sold to Buyers pursuant to Section 4(n)(iii)(3) above prior to such
reduction) and (ii) the denominator of which shall be the original amount of the
Offered Securities.  In the event that any Buyer so elects to reduce
the number or amount of Offered Securities specified in its Notice of
Acceptance, the Company may not issue, sell or exchange more than the reduced
number or amount of the Offered Securities unless and until such securities have
again been offered to the Buyers in accordance with Section 4(n)(iii)(1)
above.

     

    (5)           Upon
the closing of the issuance, sale or exchange of all or less than all of the
Refused Securities, the Buyers shall acquire from the Company, and the Company
shall issue to the Buyers, the number or amount of Offered Securities specified
in the Notices of Acceptance, as reduced pursuant to Section 4(n)(iii)(3) above
if the Buyers have so elected, upon the terms and conditions specified in the
Offer.  The purchase by the Buyers of any Offered Securities is
subject in all cases to the preparation, execution and delivery by the Company
and the Buyers of a purchase agreement relating to such Offered Securities
reasonably satisfactory in form and substance to the Buyers and their respective
counsel.

     

    (6)           Any
Offered Securities not acquired by the Buyers or other persons in accordance
with Section 4(n)(iii)(3) above may not be issued, sold or exchanged until they
are again offered to the Buyers under the procedures specified in this
Agreement.

     

    (7)           The
Company and the Buyers agree that if any Buyer elects to participate in the
Offer, (x) neither the Subsequent Placement Agreement with respect to such Offer
nor any other transaction documents related thereto (collectively, the "Subsequent Placement
Documents") shall include any term or provisions whereby any Buyer shall
be required to agree to any restrictions in trading as to any securities of the
Company owned by such Buyer prior to such Subsequent Placement, and (y) any
registration rights set forth in such Subsequent Placement Documents shall be
similar in all material respects to the registration rights contained in the
Registration Rights Agreement.

     

    (8)           Notwithstanding
anything to the contrary in this Section 4(n) and unless otherwise agreed to by
the Buyers, the Company shall either confirm in writing to the Buyers that the
transaction with respect to the Subsequent Placement has been abandoned or shall
publicly disclose its intention to issue the Offered Securities, in either case
in such a manner such that the Buyers will not be in possession of material
non-public information, by the fifteenth (15th)
Business Day following delivery of the Offer Notice.  If by the
fifteenth (15th)
Business Day following delivery of the Offer Notice no public disclosure
regarding a transaction with respect to the Offered Securities has been made,
and no notice regarding the abandonment of such transaction has been received by
the Buyers, such transaction shall be deemed to have been abandoned and the
Buyers shall not be deemed to be in possession of any material, non-public
information with respect to the Company.  Should the Company decide to
pursue such transaction with respect to the Offered Securities, the Company
shall provide each Buyer with another Offer Notice and each Buyer will again
have the right of participation set forth in this Section
4(n)(iii).  The Company shall not be permitted to deliver more than
one such Offer Notice to the Buyers in any 60 day period.

     

    
      
         


      

      
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    (iv)      
         
     The restrictions contained in subsections (ii) and
(iii) of this Section 4(n) shall not apply in connection with the issuance of
any Excluded Securities.

     

    (o)         Public
Information.  At any time during the period commencing from the
six (6) month anniversary of the Closing Date and ending at such time that all
of the Securities, if a registration statement is not available for the resale
of all of the Securities may be sold without restriction or limitation pursuant
to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1),
if the Company shall fail for any reason to satisfy the current public
information requirement under Rule 144(c) (a "Public Information Failure")
then, as partial relief for the damages to any holder of Securities by reason of
any such delay in or reduction of its ability to sell the Securities (which
remedy shall not be exclusive of any other remedies available at law or in
equity), the Company shall pay to each such holder an amount in cash equal to
one and one-half percent (1.5%) of the aggregate Purchase Price of such holder's
Securities on the day of a Public Information Failure and on every thirtieth day
(pro rated for periods totaling less than thirty days) thereafter until the
earlier of (i) the date such Public Information Failure is cured and (ii) such
time that such public information is no longer required pursuant to Rule
144.  The payments to which a holder shall be entitled pursuant to
this Section 4(o) are referred to herein as "Public Information Failure
Payments."  Public Information Failure Payments shall be paid
on the earlier of (I) the last day of the calendar month during which such
Public Information Failure Payments are incurred
and (II) the third Business Day after the event or failure giving rise to the
Public Information Failure Payments is
cured.  In the event the Company fails to make Public Information
Failure Payments in
a timely manner, such Public Information Failure Payments shall bear
interest at the rate of 1.5% per month (prorated for partial months) until paid
in full.

     

    
      
         


      

      
        - 28
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    (p)         Stockholder
Approval.  (i) The Company shall prepare and file with the SEC,
as promptly as practicable after the date hereof, but in no event later than
twenty (20) calendar days after the Closing Date, the Proxy Statement (as
defined below).  The Company shall provide each stockholder entitled
to vote at a special or annual meeting of stockholders of the Company (the
"Stockholder Meeting"),
which shall be called as promptly as practicable after the date hereof, but in
no event later than the earlier of (i) 30 days after the SEC informs the Company
that there will be no review of the Proxy Statement or that they have no further
comments to the Proxy Statement and (ii) 90 days after the Closing Date (the
"Stockholder Meeting
Deadline"), a proxy statement (the "Proxy Statement"), in a form
reasonably acceptable to the Buyers after review by Schulte Roth & Zabel LLP
at the expense of the Company, soliciting each such stockholder's affirmative
vote at the Stockholder Meeting for approval of resolutions (the "Resolutions") providing for
(x) the issuance of all of the Securities as described in the Transaction
Documents in accordance with applicable law, the provisions of the Bylaws and
the rules and regulations of the Principal Market (such affirmative approval
being referred to herein as the "Principal Market Stockholder
Approval") and (y) an increase in the authorized shares of Common Stock
of the Company to 400,000,000 and any actions required to cause such increase to
occur (such affirmative approval being referred to herein as the "Authorized Share Stockholder
Approval"), and the Company shall use its reasonable best efforts to
solicit its stockholders' approval of such Resolutions and to cause the Board of
Directors of the Company to recommend to the stockholders that they approve the
Resolutions.  In connection therewith, the Company shall, at its
expense, hire a proxy solicitation firm acceptable to [Buyer] to solicit the
Authorized Share Stockholder Approval and the Principal Market Stockholder
Approval.  The Company shall be obligated to seek to obtain the
Principal Market Stockholder Approval and the Authorized Share Stockholder
Approval by the Stockholder Meeting Deadline.  If, despite the
Company's reasonable best efforts, (i) the Principal Market Stockholder Approval
is not obtained at the Stockholder Meeting, the Company shall cause an
additional Stockholder Meeting to be held each calendar quarter thereafter with
respect to the Resolutions relating to the Principal Market Stockholder Approval
until Principal Market Stockholder Approval is obtained and (ii) the Authorized
Share Stockholder Approval is not obtained at the Stockholder Meeting, the
Company shall cause an additional Stockholder Meeting to be held each calendar
quarter thereafter with respect to the Resolutions relating to the Authorized
Share Stockholder Approval until the Authorized Share Stockholder Approval is
obtained.

     

    (q)         Lock-Up.  The
Company shall not amend or waive any provision of any of the Lock-Up Agreements
except to extend the term of the lock-up period and shall enforce the provisions
of each Lock-Up Agreement in accordance with its terms.  If any
officer or director that is a party to a Lock-Up Agreement breaches any
provision of a Lock-Up Agreement, the Company shall promptly use its best
efforts to seek specific performance of the terms of such Lock-Up
Agreement.

     

    (r)          Closing
Documents.  On or prior to fourteen (14) calendar days after
the Closing Date, the Company agrees to deliver, or cause to be delivered, to
each Buyer and Schulte Roth & Zabel LLP a complete closing set of the
executed Transaction Documents, Securities and any other document required to be
delivered to any party pursuant to Section 7 hereof or otherwise.

     

    5.           REGISTER; TRANSFER AGENT
INSTRUCTIONS.

     

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

     

    
      
         


      

      
        - 29
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    (b)         Transfer Agent
Instructions.  The Company shall issue irrevocable instructions
to its transfer agent, and any subsequent transfer agent, to issue certificates
or credit shares to the applicable balance accounts at the DTC, registered in
the name of each Buyer or its respective nominee(s), for the Conversion Shares
and the Warrant Shares issued at the Closing or upon conversion of the Notes or
exercise of the Warrants in such amounts as specified from time to time by each
Buyer to the Company upon conversion of the Notes or exercise of the Warrants in
the form of Exhibit
E attached hereto (the "Irrevocable Transfer Agent
Instructions").  The Company warrants that no instruction other
than the Irrevocable Transfer Agent Instructions referred to in this Section
5(b), and stop transfer instructions to give effect to Section 2(f) hereof, will
be given by the Company to its transfer agent, and that the Securities shall
otherwise be freely transferable on the books and records of the Company as and
to the extent provided in this Agreement and the other Transaction
Documents.  If a Buyer effects a sale, assignment or transfer of the
Securities in accordance with Section 2(f), the Company shall permit the
transfer and shall promptly instruct its transfer agent to issue one or more
certificates or credit shares to the applicable balance accounts at DTC in such
name and in such denominations as specified by such Buyer to effect such sale,
transfer or assignment.  In the event that such sale, assignment or
transfer involves the Conversion Shares or the Warrant Shares sold, assigned or
transferred pursuant to an effective registration statement or pursuant to Rule
144, the transfer agent shall issue such Securities to the Buyer, assignee or
transferee, as the case may be, without any restrictive legend.  The
Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to a Buyer.  Accordingly, the Company acknowledges
that the remedy at law for a breach of its obligations under this Section 5(b)
will be inadequate and agrees, in the event of a breach or threatened breach by
the Company of the provisions of this Section 5(b), that a Buyer shall be
entitled, in addition to all other available remedies, to an order and/or
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.           CONDITIONS TO THE COMPANY'S
OBLIGATION TO SELL.

     

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

     

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

     

    (ii)          Such
Buyer shall have delivered to the Company the Purchase Price (less, in the case
of [Buyer], the amounts withheld pursuant to Section 4(g)) for the Notes and the
related Warrants being purchased by such Buyer at the Closing by wire transfer
of immediately available funds pursuant to the wire instructions provided by the
Company.

     

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

     

    
      
         


      

      
        - 30
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    7.           CONDITIONS TO EACH BUYER'S
OBLIGATION TO PURCHASE.

     

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

     

    (i)           The
Company shall have duly executed and delivered to such Buyer (A) each of the
Transaction Documents, (B) the Notes (allocated in such principal amounts as
such Buyer shall request), being purchased by such Buyer at the Closing pursuant
to this Agreement and (C) the related Warrants (allocated in such amounts as
such Buyer shall request) being purchased by such Buyer at the Closing pursuant
to this Agreement.

     

    (ii)          Such
Buyer and the Placement Agent shall have received the opinion of Leser, Hunter,
Taubman & Taubman, the Company's outside counsel, dated as of the Closing
Date, in substantially the form of Exhibit F
attached hereto.

     

    (iii)         The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer
Agent Instructions, in the form of Exhibit E
attached hereto, which instructions shall have been delivered to and
acknowledged in writing by the Company's transfer agent.

     

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

     

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

     

    (vi)        The
Company shall have delivered to such Buyer a copy of the Certificate of
Incorporation, as currently amended.

     

    (vii)       The
Company shall have delivered to such Buyer a certificate, executed by the
Secretary of the Company and dated as of the Closing Date, as to (i) the
resolutions consistent with Section 3(b) as adopted by the Company's Board of
Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate of
Incorporation and (iii) the Bylaws, each as in effect at the Closing, in the
form attached hereto as Exhibit G.

     

    
      
         


      

      
        - 31
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    (viii)      The
representations and warranties of the Company shall be true and correct as of
the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific date
which shall be true and correct as of such specified date) and the Company shall
have performed, satisfied and complied in all respects with the covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Closing
Date.  Such Buyer shall have received a certificate, executed by the
Chief Executive Officer of the Company, dated as of the Closing Date, to the
foregoing effect and as to such other matters as may be reasonably requested by
such Buyer in the form attached hereto as Exhibit
H.

     

    (ix)         The
Company shall have delivered to such Buyer a letter from the Company's transfer
agent certifying the number of shares of Common Stock outstanding as of a date
within five days of the Closing Date.

     

    (x)          The
Common Stock (I) shall be designated for quotation or listed on the Principal
Market and (II) shall not have been suspended, as of the Closing Date, by the
SEC or the Principal Market from trading on the Principal Market.

     

    (xi)         The
Company shall have obtained all governmental, regulatory or third party consents
and approvals, if any, necessary for the sale of the Securities.

     

    (xii)        The
Company shall have delivered to each Buyer a lock-up agreement in the form
attached hereto as Exhibit I executed
and delivered by each of the Persons listed on Schedule 7(xii)
(collectively, the "Lock Up
Agreements").

     

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

     

    8.           TERMINATION.  In
the event that the Closing shall not have occurred with respect to a Buyer on or
before five (5) Business Days from the date hereof due to the Company's or such
Buyer's failure to satisfy the conditions set forth in Sections 6 and 7 above
(and the nonbreaching party's failure to waive such unsatisfied condition(s)),
the nonbreaching party shall have the option to terminate this Agreement with
respect to such breaching party at the close of business on such date without
liability of any party to any other party; provided, however, that if this
Agreement is terminated pursuant to this Section 8, the Company shall remain
obligated to reimburse [Buyer] or its designee(s), as applicable, for the
expenses described in Section 4(g) above.

     

    9.           MISCELLANEOUS.

     

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

     

    
      
         


      

      
        - 32
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    (b)         Counterparts.  This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile signature.

     

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

     

    (d)         Severability.  If
any provision of this Agreement is prohibited by law or otherwise determined to
be invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Agreement so long as this Agreement
as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties.  The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s).

     

    
      
         


      

      
        - 33
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    (e)         Entire Agreement;
Amendments.  This Agreement and the other Transaction Documents
supersede all other prior oral or written agreements between the Buyers, the
Company, their affiliates and Persons acting on their behalf with respect to the
matters discussed herein, and this Agreement, the other Transaction Documents
and the instruments referenced herein and therein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor any Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters.  No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the holders of at least sixty percent (60%) of the aggregate amount
of Registrable Securities issued and issuable hereunder and under the Notes and
Warrants, and any amendment to this Agreement made in conformity with the
provisions of this Section 9(e) shall be binding on all Buyers and holders of
Securities; provided that any such amendment that complies with the foregoing
but that disproportionately, materially and adversely affects the rights and
obligations of any Buyer relative to the comparable rights and obligations of
the other Buyers shall require the prior written consent of such adversely
affected Buyer.  No provision hereof may be waived other than by an
instrument in writing signed by the party against whom enforcement is
sought.  No such amendment shall be effective to the extent that it
applies to less than all of the holders of the applicable Securities then
outstanding.  No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of any of the
Transaction Documents unless the same consideration (other than the
reimbursement of legal fees) also is offered to all of the parties to the
Transaction Documents, holders of Notes or holders of the Warrants, as the case
may be.  The Company has not, directly or indirectly, made any
agreements with any Buyers relating to the terms or conditions of the
transactions contemplated by the Transaction Documents except as set forth in
the Transaction Documents.  Without limiting the foregoing, the
Company confirms that, except as set forth in this Agreement, no Buyer has made
any commitment or promise or has any other obligation to provide any financing
to the Company or otherwise.

     

    (f)          Notices.  Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered:  (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one Business Day after deposit with an overnight courier
service, in each case properly addressed to the party to receive the
same.  The addresses and facsimile numbers for such communications
shall be:

     

    If to the
Company:

     

    Radient
Pharmaceuticals Corporation

    2492
Walnut Avenue, Suite 100,

    Tustin,
California 92780-7039

    Telephone:      714-505-4460

    Facsimile:        714-505-4464

    Attention:        Akio
Ariura

    


    With a
copy to:

     

    Leser,
Hunter, Taubman & Taubman

    17 State
Street, Floor 20

    New York,
NY 10004

    Attn:
Rachael Schmierer

    Telephone:
(212) 732-7184

    Facsimile:         (212)
202-6380


    
      
         


      

      
        - 34
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    If to the
Transfer Agent:

     

    Corporate
Stock Transfer, Inc.

    3200
Cherry Creek South Drive, Suite 430

    Denver,
Colorado  80209

    Telephone:
(303) 282-4800

    Facsimile:
(303) 282-5800

    Attention:
Carylyn Bell

    


    If to a
Buyer, to its address and facsimile number set forth on the Schedule of Buyers,
with copies to such Buyer's representatives as set forth on the Schedule of
Buyers,

     

    with a
copy (for informational purposes only) to:

     

    Schulte
Roth & Zabel LLP

    919 Third
Avenue

    New York,
New York  10022

    Telephone:       (212)
756-2000

    Facsimile:         (212)
593-5955

    Attention:         Eleazer
N. Klein, Esq.

    E-mail:              eleazer.klein@srz.com

    


    or to
such other address and/or facsimile number and/or to the attention of such other
Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively

     

    (g)         Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, including
any purchasers of the Notes or the Warrants.  The Company shall not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the holders of at least sixty percent (60%) of the aggregate
number of Registrable Securities issued and issuable hereunder and under the
Notes and Warrants, including by way of a Fundamental Transaction (unless the
Company is in compliance with the applicable provisions governing Fundamental
Transactions set forth in the Notes and the Warrants).  A Buyer may
assign some or all of its rights hereunder without the consent of the Company,
in which event such assignee shall be deemed to be a Buyer hereunder with
respect to such assigned rights.

     

    (h)         No Third Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except that each Indemnitee shall have the right to enforce the
obligations of the Company with respect to Section 9(k).

     

    
      
         


      

      
        - 35
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    (i)          Survival.  Unless
this Agreement is terminated under Section 8, the representations and warranties
of the Company and the Buyers contained in Sections 2 and 3, and the agreements
and covenants set forth in Sections 4, 5 and 9 shall survive the
Closing.  Each Buyer shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.

     

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

     

    (k)         Indemnification.  In
consideration of each Buyer's execution and delivery of the Transaction
Documents and acquiring the Securities thereunder and in addition to all of the
Company's other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless each Buyer and each other holder of
the Securities and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing
Persons' agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the "Indemnitees") from and against
any and all actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys' fees
and disbursements (the "Indemnified Liabilities"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby or
(c) any cause of action, suit or claim brought or made against such Indemnitee
by a third party (including for these purposes a derivative action brought on
behalf of the Company) and arising out of or resulting from (i) the execution,
delivery, performance or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (ii) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Securities, (iii) any
disclosure made by such Buyer pursuant to Section 4(i), or (iv) the status of
such Buyer or holder of the Securities as an investor in the Company pursuant to
the transactions contemplated by the Transaction Documents.  To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities that is permissible under
applicable law.  Except as otherwise set forth herein, the mechanics
and procedures with respect to the rights and obligations under this Section
9(k) shall be the same as those set forth in Section 6 of the Registration
Rights Agreement.

     

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

     

    
      
         


      

      
        - 36
-

        
          

        

      

      
         


      

    


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

     

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

     

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

     

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

     

    
      
         


      

      
        - 37
-

        
          

        

      

      
         


      

    


    (q)         Currency.  Unless
otherwise indicated, all dollar amounts referred to in this Agreement are in
United States Dollars.  All amounts owing under this Agreement or any
Transaction Document shall be paid in US dollars.  All amounts
denominated in other currencies shall be converted in the US dollar equivalent
amount in accordance with the Exchange Rate on the date of
calculation.  "Exchange Rate" means, in
relation to any amount of currency to be converted into US dollars pursuant to
this Agreement, the US dollar exchange rate as published in The Wall Street
Journal on the relevant date of calculation.

     

    (r)          Judgment
Currency.

     

    (i)                  
    If for the purpose of obtaining or enforcing judgment
against the Company in any court in any jurisdiction it becomes necessary to
convert into any other currency (such other currency being hereinafter in this
Section 9(r) referred to as the "Judgment Currency") an amount
due in US Dollars under this Agreement, the conversion shall be made at the
Exchange Rate prevailing on the Business Day immediately preceding:

     

    (1)         the
date of actual payment of the amount due, in the case of any proceeding in the
courts of New York or in the courts of any other jurisdiction that will give
effect to such conversion being made on such date; or

     

    (2)         the
date on which the foreign court determines, in the case of any proceeding in the
courts of any other jurisdiction (the date as of which such conversion is made
pursuant to this Section being hereinafter referred to as the "Judgment Conversion
Date").

     

    (ii)            
         If in the case of any
proceeding in the court of any jurisdiction referred to in Section 9(r)(i)(2)
above, there is a change in the Exchange Rate prevailing between the Judgment
Conversion Date and the date of actual payment of the amount due, the applicable
party shall pay such adjusted amount as may be necessary to ensure that the
amount paid in the Judgment Currency, when converted at the Exchange Rate
prevailing on the date of payment, will produce the amount of US Dollars which
could have been purchased with the amount of Judgment Currency stipulated in the
judgment or judicial order at the Exchange Rate prevailing on the Judgment
Conversion Date.

     

    (iii)                     Any
amount due from the Company under this provision shall be due as a separate debt
and shall not be affected by judgment being obtained for any other amounts due
under or in respect of this Agreement.

     

    [Signature
Page Follows]


    
      
         


      

      
        - 38
-

        
          

        

      

      
         


      

    


    IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Securities
Purchase Agreement to be duly executed as of the date first written
above.

    


    
      
        	
                COMPANY:

              
	 
      
	
                RADIENT
      PHARMACEUTICALS
CORPORATION

              
	 
      
	
                By:  

              	
                    

              
	 
      	
                Name:

              
	 
      	
                Title:

              


      

    

    


    [Signature
Page to Securities Purchase Agreement]



    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Securities
Purchase Agreement to be duly executed as of the date first written
above.

     

    
      
        	
                BUYERS:

              
	 
      
	
                [Buyer]

              
	 
      
	
                By:  

              	
                     

              
	 
      	
                Name:

              
	 
      	
                Title:

              


      

    

    


    [Signature
Page to Securities Purchase Agreement]


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    SCHEDULE
OF BUYERS

    


    
      
        
          
            
              
                
                  
                    
                      	
                              (1)

                            	 
      	
                              (2)

                            	 
      	
                              (3)

                            	 
      	
                              (4)

                            	 
      	
                              (5)

                            	 
      	
                              (6)

                            	 
      	
                              (7)

                            	 
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
	
                              
                                Buyer

                              

                            	 
      	
                              
                                Address,

                                Facsimile Number and Tax ID Number

                              

                            	 
      	
                              
                                Aggregate

                                Principal

                                Amount of

                                Notes

                              

                            	 
      	
                              
                                Number of Series

                                A

                                Warrant Shares

                              

                            	 
      	
                              
                                Number of Series

                                B

                                Warrant Shares

                              

                            	 
      	
                              
                                Purchase Price

                              

                            	 
      	
                              
                                Legal Representative's Address

                                and Facsimile Number

                              

                            	 
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
	 
      	
                                

                            	 
      	
                                

                            	 
      	
                                

                            	 
      	
                                

                            	 
      	
                                

                            	 
      	
                                

                            	 
      	 


                    

                  

                

              

            

          

        

      

    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    EXHIBITS

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	
                                                  Exhibit
      A

                                                	 
      	
                                                  Form
      of Notes

                                                
	
                                                  Exhibit
      B

                                                	 
      	
                                                  Form
      of Series A Warrants

                                                
	
                                                  Exhibit
      C

                                                	 
      	
                                                  Form
      of Series B Warrants

                                                
	
                                                  Exhibit
      D

                                                	 
      	
                                                  Form
      of Registration Rights Agreement

                                                
	
                                                  Exhibit
      E

                                                	 
      	
                                                  Form
      of Irrevocable Transfer Agent Instructions

                                                
	
                                                  Exhibit
      F

                                                	 
      	
                                                  Form
      of Opinion of Company Counsel

                                                
	
                                                  Exhibit
      G

                                                	 
      	
                                                  Form
      of Secretary's Certificate

                                                
	
                                                  Exhibit
      H

                                                	 
      	
                                                  Form
      of Officer's Certificate

                                                
	
                                                  Exhibit
      I

                                                	 
      	
                                                  Form
      of Lock-Up
Agreement

                                                


                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  SCHEDULES

                                
	 
      	 
      	 
      
	
                                  Schedule
      3(a)

                                	 
      	
                                  Subsidiaries

                                
	
                                  Schedule
      3(k)

                                	 
      	
                                  SEC
      Documents

                                
	
                                  Schedule
      3(l)

                                	 
      	
                                  Absence
      of Certain Changes

                                
	
                                  Schedule
      3(n)(i)

                                	 
      	
                                  Conduct
      of Business

                                
	
                                  Schedule
      3(n)(ii)

                                	 
      	
                                  Regulatory
      Permits

                                
	
                                  Schedule
      3(q)

                                	 
      	
                                  Transactions
      with Affiliates

                                
	
                                  Schedule
      3(r)

                                	 
      	
                                  Equity
      Capitalization

                                
	
                                  Schedule
      3(s)

                                	 
      	
                                  Indebtedness
      and Other Contracts

                                
	
                                  Schedule
      3(t)

                                	 
      	
                                  Absence
      of Litigation

                                
	
                                  Schedule
      3(x)

                                	 
      	
                                  Intellectual
      Property Rights

                                
	
                                  Schedule
      3(ee)

                                	 
      	
                                  Ranking
      of Notes

                                
	
                                  Schedule
      3(oo)

                                	 
      	
                                  China
      Subsidiaries

                                
	
                                  Schedule
      7(xii)

                                	
                                    

                                	
                                  Parties
      to Lock Up
Agreements