Exhibit
      4.1

     

    EXECUTION
      COPY

     

    SECURITIES
      PURCHASE AGREEMENT

     

    This
      Securities Purchase Agreement (this “Agreement”)
      is
      entered into and dated as of June 1, 2006 among Generex Biotechnology
      Corporation, a Delaware corporation (the “Company”),
      and
      each purchaser identified on the signature pages hereto (each, a “Purchaser”
and
      collectively, the “Purchasers”).
      

     

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

     

    NOW,
      THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
      and for other good and valuable consideration the receipt and adequacy of which
      are hereby acknowledged, the Company and Purchaser, severally and not jointly,
      agree as follows:

     

    ARTICLE
      I

    DEFINITIONS

     

    1.1
       Definitions.
      In
      addition to the terms defined elsewhere in this Agreement, the following terms
      have the meanings set forth in this Section 1.1:

     

    “Affiliate”
      means
      any Person that, directly or indirectly through one or more intermediaries,
      controls or is controlled by or is under common control with a Person, as such
      terms are used in and construed under Rule 144 under the Securities Act. With
      respect to a Purchaser, any investment fund or managed account that is managed
      on a discretionary basis by the same investment manager as such Purchaser will
      be deemed to be an Affiliate of such Purchaser.

     

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

     

    “Change
      of Control”
      means
      the occurrence of any of the following in one or a series of related
      transactions: (i) an acquisition after the date hereof by an individual or
      legal
      entity or “group” (as described in Rule 13d-5(b)(1) under the Exchange Act) of
      more than one-third of the voting rights or equity interests in the Company;
      (ii) a replacement of more than one-third of the members of the Company's board
      of directors that is not approved by those individuals who are members of the
      board of directors on the date hereof (or other directors previously approved
      by
      such individuals); (iii) a merger or consolidation of the Company or any
      Subsidiary or a sale of more than one-third of the assets of the Company in
      one
      or a series of related transactions, unless following such transaction or series
      of transactions, the holders of the Company's securities prior to the first
      such
      transaction continue to hold at least two-thirds of the voting rights and equity
      interests in the surviving entity or acquirer of such assets; (iv) a
      recapitalization, reorganization or other transaction involving the Company
      or
      any significant Subsidiary that constitutes or results in a transfer of more
      than one-half of the voting rights or equity interests in the Company; (v)
      consummation of a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the
      Exchange Act with respect to the Company, or (vi) the execution by the Company
      or its controlling shareholders of an agreement providing for or reasonably
      likely to result in any of the foregoing events.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


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

     

    “Closing
      Date”
      means
      the date of the Closing.

     

    “Closing
      Price”
      means,
      for any date, the price determined by the first of the following clauses that
      applies: (a) if the Common Stock is then listed or quoted on an Eligible Market
      or any other national securities exchange, the closing price per share of the
      Common Stock for such date (or the nearest preceding date) on the primary
      Eligible Market or exchange on which the Common Stock is then listed or quoted;
      (b) if prices for the Common Stock are then quoted on the OTC Bulletin
      Board, the closing bid price per share of the Common Stock for such date (or
      the
      nearest preceding date) so quoted; (c) if prices for the Common Stock are
      then reported in the “Pink Sheets” published by the National Quotation Bureau
      Incorporated (or a similar organization or agency succeeding to its functions
      of
      reporting prices), the most recent closing bid price per share of the Common
      Stock so reported; or (d) in all other cases, the fair market value of a
      share of Common Stock as determined by an independent appraiser selected in
      good
      faith by Purchasers holding a majority of the Securities, the cost of which
      shall be paid by the Company.

     

    “Commission”
      means
      the Securities and Exchange Commission.

     

    “Common
      Stock”
      means
      the common stock of the Company, par value $0.001 per share.

     

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

     

    “Company
      Counsel”
      means
      Eckert Seamans Cherin & Mellott, LLC, counsel to the Company.

     

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

     

    “Effective
      Date”
      means
      the date that the Registration Statement is first declared effective by the
      Commission.

     

    “Eligible
      Market”
      means
      any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ
      National Market or the NASDAQ Capital Market.

     


    
      
         

      

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

     

    “Excluded
      Stock” means
      the
      issuance of Common Stock (A) upon exercise or conversion of any options or
      other
      securities described in Schedule
      3.1(f)
      (provided that such exercise or conversion occurs in accordance with the terms
      thereof, without amendment or modification, and that the applicable exercise
      or
      conversion price or ratio is described in such schedule) or otherwise pursuant
      to any employee benefit plan described in Schedule
      3.1(f)
      or
      hereafter adopted by the Company and approved by its shareholders, (B) the
      issuance of Common Stock or grant of options to employees, officers, directors
      or consultants of the Company pursuant to a stock option plan or duly adopted
      by
      the Company’s board of directors or otherwise pursuant to any employee benefit
      plan described in Schedule 3.1(f) or hereafter adopted by the Company and
      approved by its shareholders or in respect of the issuance of Common Stock
      upon
      exercise of any such options, (C) the issuance of Common Stock upon exercise
      of
      the Warrants, or (D) the issuance of Common Stock pursuant to acquisitions
      or
      strategic transactions provided any such issuance shall only be to a Person
      which, is, itself or through its Subsidiaries, an operating company and in
      which
      the Company receives benefits in addition to the investment of funds, but shall
      not include a transaction in which the Company is issuing securities primarily
      for the purpose of raising capital or to an entity whose primary business is
      investing in securities.

     

    “Filing
      Date”
      means
      the 30th day following the Closing Date with respect to the initial Registration
      Statement required to be filed hereunder, and, with respect to any additional
      Registration Statements that may be required pursuant to Section
      6.1(f),
      the
      10th day following the date on which the Company first knows, or reasonably
      should have known, that such additional Registration Statement is required
      under
      such Section.

     

    “Lien”
means
      any lien, charge, claim, security interest, encumbrance, right of first refusal
      or other restriction.

     

    “Losses”
      means
      any and all losses, claims, damages, liabilities, settlement costs and expenses,
      including, without limitation, costs of preparation of legal action and
      reasonable attorneys’ fees.

     

    “Options”
means
      any rights, warrants or options to subscribe for or purchase Common Stock or
      Convertible Securities (including all Warrants that can be issued under the
      Transaction Documents).

     

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

     

    “Per
      Unit Purchase Price”
means
      $2.05.

     

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

     


    
      
         

      

      
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    “Prospectus”
      means
      the prospectus included in the Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated under the Securities Act), as amended or supplemented
      by
      any prospectus supplement, with respect to the terms of the offering of any
      portion of the Registrable Securities covered by the Registration Statement,
      and
      all other amendments and supplements to the Prospectus including post effective
      amendments, and all material incorporated by reference or deemed to be
      incorporated by reference in such Prospectus.

     

    “Purchaser
      Counsel”
      has the
      meaning set forth in Section
      6.2(a).

     

    “Registrable
      Securities”
      means
      any Common Stock (including Underlying Shares) issued or issuable pursuant
      to
      the Transaction Documents, together with any securities issued or issuable
      upon
      any stock split, dividend or other distribution, recapitalization or similar
      event with respect to the foregoing.

     

    “Registration
      Statement”
      means
      each registration statement required to be filed under Article VI, including
      (in
      each case) the Prospectus, amendments and supplements to such registration
      statement or Prospectus, including pre- and post-effective amendments, all
      exhibits thereto, and all material incorporated by reference or deemed to be
      incorporated by reference in such registration statement.

     

    “Required
      Effectiveness Date”
      means
      (i) with respect to the initial Registration Statement required to be filed
      hereunder, the 90th
      day
      following the Closing Date, and (ii) with respect to any additional Registration
      Statements that may be required pursuant to Section
      6.1(f),
      the
      30th day following the date on which the Company first knows, or reasonably
      should have known, that such additional Registration Statement is required
      under
      such Section.

     

    “Rule
      144,” “Rule
      415,”
      and
“Rule
      424”
      means
      Rule 144, Rule 415 and Rule 424, respectively, promulgated by the Commission
      pursuant to the Securities Act, as such Rules may be amended from time to time,
      or any similar rule or regulation hereafter adopted by the Commission having
      substantially the same effect as such Rule.

     

    “Securities”
      means
      the Shares, Warrants and the Underlying Shares.

     

    “Shares”
      means
      the shares of Common Stock, which are being issued and sold to the Purchasers
      at
      the Closing.

     

    “Subsidiary”
      means
      any Person in which the Company, directly or indirectly, owns capital stock
      or
      holds an equity or similar interest.

     

    “Trading
      Day”
      means
      (a) any day on which the Common Stock is listed or quoted and traded on its
      primary Trading Market, or (b) if the Common Stock is not then listed or quoted
      and traded on its primary Trading Market, then a day on which trading occurs
      on
      an Eligible Market (or any successor thereto), or (c) if trading ceases to
      occur
      on an Eligible Market (or any successor thereto), any Business Day.

     


    
      
         

      

      
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    “Trading
      Market”
      means
      the NASDAQ Capital Market or any other Eligible Market, or any national
      securities exchange, market or trading or quotation facility on which the Common
      Stock is then listed or quoted.

     

    “Transaction
      Documents”
      means
      this Agreement, the Warrants, the Transfer Agent Instructions and any other
      documents or agreements executed in connection with the transactions
      contemplated hereunder.

     

    "Transfer
      Agent Instructions"
      means
      the Irrevocable Transfer Agent Instructions, in the form of Exhibit
      C,
      executed by the Company and delivered to and acknowledged in writing by the
      Company's transfer agent.

     

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

     

    “Unit”
means
      one Share and a Warrant to acquire 0.75 shares of Common Stock.

     

    “Warrant”
means
      each Common Stock purchase warrant in the form of Exhibit
      A,
      collectively the “Warrants”.

     

     

    ARTICLE
      II

    PURCHASE
      AND SALE

     

    2.1
       Subject
      to the terms and conditions set forth in this Agreement, at the Closing the
      Company shall issue and sell to each Purchaser, and each Purchaser shall,
      severally and not jointly, purchase from the Company, such number of Units
      indicated below such Purchaser’s name on the signature page of this Agreement at
      the Per Unit Purchase Price. The Closing shall take place at the offices of
      Malhotra & Associates LLP immediately following the execution hereof, or at
      such other location or time as the parties may agree. 

     

    2.2
       Closing
      Deliveries.

     

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

     

    (i)
       one
      or
      more stock certificates, registered in the name of such Purchaser, evidencing
      such number of Shares equal to the number of Units indicated below such
      Purchaser's name on the signature page of this Agreement;

     

    (ii)
       a
      Warrant, registered in the name of such Purchaser, pursuant to which such
      Purchaser shall have the right to acquire such number of Underlying Shares
      indicated below such Purchaser’s name on the signature page of this Agreement
      under the heading “Warrant Shares”;

     

    (iii)
       a
      legal
      opinion of Company Counsel, in the form of Exhibit
      B,
      executed by such counsel and delivered to the Purchasers; 

     


    
      
         

      

      
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    (iv)
       duly
      executed Transfer Agent Instructions, in the form of Exhibit
      C;
      and

     

    (v)
       a
      certificate from a duly authorized officer certifying on behalf of the Company
      that each of the conditions set forth in Section 5.1 has been
      satisfied.

     

    (b)
       At
      the
      Closing, each Purchaser shall deliver or cause to be delivered an amount equal
      to the Per Unit Purchase Price multiplied by the number of Units indicated
      below
      such Purchaser’s name on the signature page of this Agreement under the heading
      "Units Purchased", in United States dollars and in immediately available funds,
      by wire transfer to an account designated in writing to such Purchaser by the
      Company for such purpose. The total purchase price payable by each Purchaser
      shall be set forth under such Purchaser’s name on the signature page of this
      Agreement under the heading “Aggregate Purchase Price.”

     

    


    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1
       Representations
      and Warranties of the Company.
      The
      Company hereby represents and warrants to each Purchaser as
      follows:

     

    (a)
       Subsidiaries.
      The
      Company has no direct or indirect Subsidiaries other than those listed in
      Schedule 3.1(a). Except as disclosed in Schedule 3.1(a), the Company owns,
      directly or indirectly, all of the capital stock or comparable equity interests
      of each Subsidiary free and clear of any Lien and all the issued and outstanding
      shares of capital stock or comparable equity interest of each Subsidiary are
      validly issued and are fully paid, non-assessable and free of preemptive and
      similar rights.

     

    (b)
       Organization
      and Qualification.
      Each of
      the Company and the Subsidiaries is an entity duly incorporated or otherwise
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its incorporation or organization (as applicable), with the
      requisite power and authority to own and use its properties and assets and
      to
      carry on its business as currently conducted. Neither the Company nor any
      Subsidiary is in violation of any of the provisions of its respective
      certificate or articles of incorporation, bylaws or other organizational or
      charter documents. Each of the Company and the Subsidiaries is duly qualified
      to
      conduct business and is in good standing as a foreign corporation or other
      entity in each jurisdiction in which the nature of the business conducted or
      property owned by it makes such qualification necessary, except where the
      failure to be so qualified or in good standing, as the case may be, could not,
      individually or in the aggregate, (i) adversely affect the legality, validity
      or
      enforceability of any Transaction Document, (ii) have or result in a material
      adverse effect on the results of operations, assets, prospects, business or
      condition (financial or otherwise) of the Company and the Subsidiaries, taken
      as
      a whole on a consolidated basis, or (iii) adversely impair the Company's ability
      to perform fully on a timely basis its obligations under any Transaction
      Document (any of (i), (ii) or (iii), a “Material
      Adverse Effect”).

     


    
      
         

      

      
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    (c)
       Authorization;
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and to
      consummate the transactions contemplated by each of the Transaction Documents
      and otherwise to carry out its obligations hereunder and thereunder. The
      execution and delivery of each of the Transaction Documents by the Company
      and
      the consummation by it of the transactions contemplated hereunder and thereunder
      have been duly authorized by all necessary action on the part of the Company
      and
      no further consent or action is required by the Company, its Board of Directors
      or its shareholders. Each Transaction Document has been (or upon delivery will
      have been) duly executed by the Company and, assuming the due authorization,
      execution and delivery by the other parties thereto, is, or when delivered
      in
      accordance with the terms hereof, will constitute, the valid and binding
      obligation of the Company enforceable against the Company in accordance with
      its
      terms.

     

    (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 do not and will not (i) conflict with or violate any provision of the
      Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws
      or other organizational or charter documents, (ii) conflict with, or constitute
      a default (or an event that with notice or lapse of time or both would become
      a
      default) under, or give to others any rights of termination, amendment,
      acceleration or cancellation (with or without notice, lapse of time or both)
      of,
      any agreement, credit facility, debt or other instrument (evidencing a Company
      or Subsidiary debt or otherwise) or other understanding to which the Company
      or
      any Subsidiary is a party or by which any property or asset of the Company
      or
      any Subsidiary is bound or affected, or (iii) result in a violation of any
      law,
      rule, regulation, order, judgment, injunction, decree or other restriction
      of
      any court or governmental authority to which the Company or a Subsidiary is
      subject (including federal and state securities laws and regulations and the
      rules and regulations of any self-regulatory organization to which the Company
      or its securities are subject), or by which any property or asset of the Company
      or a Subsidiary is bound or affected.

     

    (e)
       Issuance
      of the Securities.
      The
      Securities are duly authorized and, when issued and paid for in accordance
      with
      the Transaction Documents, will be duly and validly issued, fully paid and
      nonassessable, free and clear of all Liens (other than restrictions under
      applicable securities laws), and shall not be subject to preemptive rights
      or
      similar rights of shareholders. The Securities are issued
      in
      compliance with applicable securities laws, rules and regulations. The
      Company has reserved from its duly authorized capital stock the maximum number
      of shares of Common Stock issuable under the Transaction Documents.

     

    (f)
       Capitalization.
      The
      number of shares and type of all authorized, issued and outstanding capital
      stock, options and other securities of the Company (whether or not presently
      convertible into or exercisable or exchangeable for shares of capital stock
      of
      the Company) is set forth in Schedule 3.1(f). All outstanding shares of capital
      stock are duly authorized, validly issued, fully paid and nonassessable and
      have
      been issued in compliance with all applicable securities laws. No securities
      of
      the Company are entitled to preemptive or similar rights, and no Person (other
      than the Purchaser) has any right of first refusal, preemptive right, right
      of
      participation, or any similar right to participate in the transactions
      contemplated by the Transaction Documents. Except as disclosed in Schedule
      3.1(f), there are no outstanding options, warrants, script rights to subscribe
      to, calls or commitments of any character whatsoever relating to, or securities,
      rights or obligations convertible into or exercisable or exchangeable for,
      or
      giving any Person any right to subscribe for or acquire, any shares of Common
      Stock, or contracts, commitments, understandings or arrangements by which the
      Company or any Subsidiary is or may become bound to issue additional shares
      of
      Common Stock, or securities or rights convertible or exchangeable into shares
      of
      Common Stock. There are no anti-dilution or price adjustment provisions
      contained in any security issued by the Company (or in any agreement providing
      rights to security holders) and the issue and sale of the Securities will not
      obligate the Company to issue shares of Common Stock or other securities to
      any
      Person (other than the Purchasers) and will not result in a right of any holder
      of Company securities to adjust the exercise, conversion, exchange or reset
      price under such securities. To the knowledge of the Company, except as
      specifically disclosed in Schedule 3.1(f), no Person or group of related Persons
      beneficially owns (as determined pursuant to Rule 13d-3 under the Exchange
      Act),
      or has the right to acquire, by agreement with or by obligation binding upon
      the
      Company, beneficial ownership of in excess of 5% of the outstanding Common
      Stock, ignoring for such purposes any limitation on the number of shares of
      Common Stock that may be owned at any single time.

     


    
      
         

      

      
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    (g)
       SEC
      Reports; Financial Statements.
      The
      Company has filed all reports required to be filed by it under the Exchange
      Act,
      including pursuant to Section 13(a) or 15(d) thereof, for the two years
      preceding the date hereof (or such shorter period as the Company was required
      by
      law to file such material) (the foregoing materials (together with any materials
      filed by the Company under the Exchange Act, whether or not required) being
      collectively referred to herein as the “SEC
      Reports”
      and,
      together with this Agreement and the Schedules to this Agreement, the
“Disclosure
      Materials”)
      on a
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Reports prior to the expiration of any such extension. As
      of
      their respective dates, the SEC Reports complied in all material respects with
      the requirements of the Securities Act and the Exchange Act and the rules and
      regulations of the Commission promulgated thereunder, and none of the SEC
      Reports, when filed, 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. The financial statements of the Company
      included in the SEC Reports comply in all material respects with applicable
      accounting requirements and the rules and regulations of the Commission with
      respect thereto as in effect at the time of filing. Such financial statements
      have been prepared in accordance with United States generally accepted
      accounting principles applied on a consistent basis during the periods involved
      (“GAAP”),
      except
      as may be otherwise specified in such financial statements or the notes thereto,
      and fairly present in all material respects the financial position of the
      Company and its consolidated subsidiaries as of and for the dates thereof and
      the results of operations and cash flows for the periods then ended, subject,
      in
      the case of unaudited statements, to normal, immaterial, year-end audit
      adjustments. All material agreements to which the Company or any Subsidiary
      is a
      party or to which the property or assets of the Company or any Subsidiary are
      subject are included as part of or specifically identified in the SEC
      Reports.

     

    (h)
       Material
      Changes.
      Since
      the date of the latest audited financial statements included within the SEC
      Reports, except as specifically disclosed in the SEC Reports or in Schedule
      3.1(h), (i) there has been no event, occurrence or development that,
      individually or in the aggregate, has had or that could result in a Material
      Adverse Effect, (ii) the Company has not incurred any liabilities (contingent
      or
      otherwise) other than (A) trade payables and accrued expenses incurred in the
      ordinary course of business consistent with past practice and (B) liabilities
      not required to be reflected in the Company’s financial statements pursuant to
      GAAP or required to be disclosed in filings made with the Commission, (iii)
      the
      Company has not altered its method of accounting or the identity of its
      auditors, except as disclosed in its SEC Reports, (iv) the Company has not
      declared or made any dividend or distribution of cash or other property to
      its
      shareholders or purchased, redeemed or made any agreements to purchase or redeem
      any shares of its capital stock, and (v) the Company has not issued any equity
      securities to any officer, director or Affiliate, except pursuant to existing
      Company stock-based plans.

     


    
      
         

      

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

     

    (j)
       Compliance.
      Neither
      the Company nor any Subsidiary (i) is in default under or in violation of (and,
      to the knowledge of the Company, no event has occurred that has not been waived
      that, with notice or lapse of time or both, would result in a default by the
      Company or any Subsidiary under), nor has the Company or any Subsidiary received
      written notice of a claim that it is in default under or that it is in violation
      of, any indenture, loan or credit agreement or any other agreement or instrument
      to which it is a party or by which it or any of its properties is bound (whether
      or not such default or violation has been waived), (ii) is in violation of
      any
      order of any court, arbitrator or governmental body, or (iii) is or has been
      in
      violation of any statute, rule or regulation of any governmental authority,
      including without limitation all foreign, federal, state and local laws relating
      to taxes, environmental protection, occupational health and safety, product
      quality and safety and employment and labor matters, except in each case as
      could not, individually or in the aggregate, have or result in a Material
      Adverse Effect. 

     

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

     


    
      
         

      

      
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    (l)
       Certain
      Fees.
      Except
      for the fees described in Schedule 3.1(l), no brokerage or finder’s fees or
      commissions are or will be payable by the Company to any broker, financial
      advisor or consultant, finder, placement agent, investment banker, bank or
      other
      Person with respect to the transactions contemplated by this Agreement, and
      the
      Company has not taken any action that would cause any Purchaser to be liable
      for
      any such fees or commissions. The Purchasers shall have no obligation with
      respect to any fees or with respect to any claims made by or on behalf of other
      Persons for fees of a type contemplated in this Section that may be due in
      connection with the transactions contemplated by this Agreement. The Company
      shall indemnify and hold harmless the Purchasers, their employees, officers,
      directors, agents, and partners, and their respective Affiliates, from and
      against all claims, losses, damages, costs (including the costs of preparation
      and attorney’s fees) and expenses suffered in respect of any such claimed or
      existing fees, as such fees and expenses are incurred.

     

    (m)
       Private
      Placement.
      Neither
      the Company nor any Person acting on the Company’s behalf has sold or offered to
      sell or solicited any offer to buy the Securities by means of any form of
      general solicitation or advertising. Neither the Company nor any of its
      Affiliates nor any Person acting on the Company's behalf has, directly or
      indirectly, at any time within the past six months, made any offer or sale
      of
      any security or solicitation of any offer to buy any security under
      circumstances that would (i) eliminate the availability of the exemption from
      registration under Regulation D under the Securities Act in connection with
      the
      offer and sale of the Securities as contemplated hereby or (ii) cause the
      offering of the Securities pursuant to the Transaction Documents to be
      integrated with prior offerings by the Company for purposes of any applicable
      law, regulation or stockholder approval provisions, including, without
      limitation, under the rules and regulations of any Trading Market. Assuming
      the
      accuracy of the Purchasers representations and warranties set forth in Section
      3.2, no registration under the Securities Act is required for the offer and
      sale
      of the Securities by the Company to the Purchasers as contemplated hereby.
      The
      issuance and sale of the Securities hereunder does not contravene the rules
      and
      regulations of the Trading Market and no shareholder approval is required for
      the Company to fulfill its obligations under the Transaction Documents. The
      Company is not a United States real property holding corporation within the
      meaning of the Foreign Investment in Real Property Tax Act of 1980.

     

    (n)
       Listing
      and Maintenance Requirements.
      Except
      as set forth in the SEC Reports, the Company has not, in the two years preceding
      the date hereof, received notice (written or oral) from any Eligible Market
      on
      which the Common Stock is or has been listed or quoted to the effect that the
      Company is not in compliance with the listing or maintenance requirements of
      such Trading Market. The Company is, and has no reason to believe that it will
      not in the foreseeable future continue to be, in compliance with all such
      listing and maintenance requirements.

     

    (o)
       Registration
      Rights.
      Except
      as described in Schedule 3.1(o), the Company has not granted or agreed to grant
      to any Person any rights (including “piggy-back” registration rights) to have
      any securities of the Company registered with the Commission or any other
      governmental authority that have not been satisfied.

     

    (p)
       Application
      of Takeover Protections.
      There
      is no control share acquisition, business combination, poison pill (including
      any distribution under a rights agreement) or other similar anti-takeover
      provision under the Company’s Certificate of Incorporation (or similar charter
      documents) or the laws of its state of incorporation that is or could become
      applicable to any of the Purchasers as a result of the Purchasers and the
      Company fulfilling their obligations or exercising their rights under the
      Transaction Documents, including, without limitation, as a result of the
      Company's issuance of the Securities and the Purchasers' ownership of the
      Securities.

     


    
      
         

      

      
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    (q)
       Disclosure.
      The
      Company confirms that neither it nor any other Person acting on its behalf
      has
      provided any of the Purchasers or their agents or counsel with any information
      that constitutes or might constitute material, nonpublic information. The
      Company understands and confirms that each of the Purchasers will rely on the
      foregoing representations in effecting transactions in securities of the
      Company. All disclosure materials provided to the Purchasers regarding the
      Company, its business and the transactions contemplated hereby, including the
      Schedules to this Agreement, furnished by or on behalf of the Company are true
      and correct and do not contain any untrue statement of a material fact or omit
      to state any material fact necessary in order to make the statements made
      therein, in 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 Purchaser makes or has made (i) any
      representations or warranties with respect to the transactions contemplated
      hereby other than those specifically set forth in Section 3.2 or (ii) any
      statement, commitment or promise to the Company or, to its knowledge, any of
      its
      representatives which is or was an inducement to the Company to enter into
      this
      Agreement or otherwise. 

     

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

     

    (s)
       Patents
      and Trademarks.
      The
      Company and the Subsidiaries have, or have rights to use, all patents, patent
      applications, trademarks, trademark applications, service marks, trade names,
      copyrights, licenses and other similar rights that are necessary or material
      for
      use in connection with their respective businesses as described in the SEC
      Reports and which the failure to so have could have a Material Adverse Effect
      (collectively, the "Intellectual
      Property Rights").
      Neither the Company nor any Subsidiary has received a written notice that the
      Intellectual Property Rights used by the Company or any Subsidiary violates
      or
      infringes upon the rights of any Person. To the knowledge of the Company, all
      such Intellectual Property Rights are enforceable and there is no existing
      infringement by another Person of any of the Intellectual Property
      Rights.

     


    
      
         

      

      
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    (t)
       Insurance.
      The
      Company and the Subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are prudent
      and customary in the businesses in which the Company and the Subsidiaries are
      engaged. Neither the Company nor any Subsidiary has any reason to believe that
      it will not be able to renew its existing insurance coverage as and when such
      coverage expires or to obtain similar coverage from similar insurers as may
      be
      necessary to continue its business without a significant increase in
      cost.

     

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

     

    (v)
       Transactions
      With Affiliates and Employees.
      Except
      as set forth in SEC Reports filed at least ten days prior to the date hereof,
      none of the officers or directors of the Company and, to the knowledge of the
      Company, none of the employees of the Company is presently a party to any
      transaction with the Company or any Subsidiary (other than for services as
      employees, officers and directors), including any contract, agreement or other
      arrangement providing for the furnishing of services to or by, providing for
      rental of real or personal property to or from, or otherwise requiring payments
      to or from any officer, director or such employee or, to the knowledge of the
      Company, any entity in which any officer, director, or any such employee has
      a
      substantial interest or is an officer, director, trustee or
      partner.

     

    (w)
       Form
      S-3 Eligibility.
      The
      Company is eligible to register the resale of its Common Stock for resale by
      the
      Purchasers under Form S-3 promulgated under the Securities Act.

     

    (x)
       Solvency.
      Based
      on the financial condition of the Company as of the Closing Date, (i) the
      Company’s fair saleable value of its assets exceeds the amount that will be
      required to be paid on or in respect of the Company’s existing debts and other
      liabilities (including known contingent liabilities) as they mature; (ii) the
      Company’s assets do not constitute unreasonably small capital to carry on its
      business for the current fiscal year as now conducted and as proposed to be
      conducted including its capital needs taking into account the particular capital
      requirements of the business conducted by the Company, and projected capital
      requirements and capital availability thereof; and (iii) the current cash flow
      of the Company, together with the proceeds the Company would receive, were
      it to
      liquidate all of its assets, after taking into account all anticipated uses
      of
      the cash, would be sufficient to pay all amounts on or in respect of its debt
      when such amounts are required to be paid. The Company does not intend to incur
      debts beyond its ability to pay such debts as they mature (taking into account
      the timing and amounts of cash to be payable on or in respect of its
      debt).

     


    
      
         

      

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

     

    (z)
       Filings,
      Consents and Approvals.
      The
      Company is not required to obtain any consent, waiver, authorization or order
      of, give any notice to, or make any filing or registration with, any court
      or
      other federal, state, local or other governmental authority or other Person
      in
      connection with the execution, delivery and performance by the Company of the
      Transaction Documents, other than the filing with the Commission of the
      Registration Statement, and other filings required pursuant to the Securities
      Act and or the Exchange Act, the application(s) to each Trading Market for
      the
      listing of the Underlying Shares for trading thereon in the time and manner
      required thereby, and applicable Blue Sky filings (collectively, the
“Required
      Approvals”).

     

    (aa)
       Labor
      Relations.
      No
      material labor dispute exists or, to the knowledge of the Company, is imminent
      with respect to any of the employees of the Company.

     

    (bb)
       No
      Violation.
      The
      issuance and sale of the Securities contemplated hereby does not conflict with
      or violate any rules or regulations of the Trading Market.

     

    (cc)
       Sarbanes-Oxley
      Act.
      The
      Company is in compliance with applicable requirements of the Sarbanes-Oxley
      Act
      of 2002 and applicable rules and regulations promulgated by the Commission
      thereunder in effect as of the date of this Agreement, except where such
      noncompliance could not be reasonably expected to have, individually or in
      the aggregate, a Material Adverse Effect.

     

    


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

     

    (a)
       Organization;
      Authority.
      Such
      Purchaser is an entity duly organized, validly existing and in good standing
      under the laws of the jurisdiction of its organization with the requisite
      corporate, limited liability company or partnership power and authority to
      enter
      into and to consummate the transactions contemplated by the Transaction
      Documents and otherwise to carry out its obligations hereunder and thereunder.
      The execution, delivery and performance by such Purchaser of this Agreement
      have
      been duly authorized by all necessary corporate or limited liability company
      action on the part of such Purchaser. This Agreement has been duly executed
      by
      such Purchaser and, when delivered by such Purchaser in accordance with terms
      hereof, will constitutes the valid and legally binding obligation of such
      Purchaser, enforceable against it in accordance with its terms.

     


    
      
         

      

      
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    (b)
       Purchaser
      Status.
      At the
      time such Purchaser was offered the Shares and the Warrants, it was, and at
      the
      date hereof it is, an “accredited investor” as defined in Rule 501(a) under the
      Securities Act.

     

    (c)
       Investment
      Intent. Such
      Purchaser is acquiring the Securities for investment purposes only and not
      with
      a view to or for distributing or reselling such Securities or any part thereof,
      without prejudice, however, to such Purchaser’s right, subject to the provisions
      of this Agreement and the Registration Rights Agreement, at all times to sell
      or
      otherwise dispose of all or any part of such Securities pursuant to an effective
      registration statement under the Securities Act or under an exemption from
      such
      registration and in compliance with applicable federal and state securities
      laws. Nothing contained herein shall be deemed a representation or warranty
      by
      such Purchaser to hold Securities for any period of time. Such Purchaser is
      acquiring the Securities hereunder in the ordinary course of its
      business.

     

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

     

    


    ARTICLE
      IV

    OTHER
      AGREEMENTS OF THE PARTIES

     

    4.1
       Transfer
      Restrictions.

     

    (a)
       The
      Securities may only be disposed of pursuant to an effective registration
      statement under the Securities Act or pursuant to an available exemption from
      the registration requirements of the Securities Act, and in compliance with
      any
      applicable state securities laws. In connection with any transfer of Securities
      other than pursuant to an effective registration statement or to the Company
      or
      pursuant to Rule 144(k), except as otherwise set forth herein, the Company
      may
      require the transferor to provide to the Company an opinion of counsel selected
      by the transferor, the form and substance of which opinion shall be reasonably
      satisfactory to the Company, to the effect that such transfer does not require
      registration under the Securities Act. Notwithstanding the foregoing, the
      Company hereby consents to and agrees to register on the books of the Company
      and with its transfer agent, without any such legal opinion, any transfer of
      Securities by a Purchaser to an Affiliate of such Purchaser, provided that
      the
      transferee certifies to the Company that it is an “accredited investor” as
      defined in Rule 501(a) under the Securities Act.

     

    (b)
       The
      Purchasers agree to the imprinting, except as otherwise permitted by
Section
      4.1(c),
      of the
      following legend on any certificate evidencing Securities: 

     

    [NEITHER]
      THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
      EXERCISABLE] HAVE [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
      COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
      EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
      “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
      TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
      TO
      AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH
      APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS. NOTWITHSTANDING THE
      FOREGOING, THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
      SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
      OTHER
      LOAN OR FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.

     


    
      
         

      

      
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    (c)
       Certificates
      evidencing Securities shall not be required to contain the legend set forth
      in
      Section 4.1(b) or any other legend (i) while a Registration Statement covering
      the resale of such Securities is effective under the Securities Act, or (ii)
      following any sale of such Securities pursuant to Rule 144, or (iii) if such
      Securities are eligible for sale under Rule 144(k), or (iv) if such legend
      is
      not required under applicable requirements of the Securities Act (including
      judicial interpretations and pronouncements issued by the Staff of the
      Commission). The Company shall cause its counsel to issue the legal opinion
      included in the Transfer Agent Instructions to the Company's transfer agent
      on
      the Effective Date.
      Following the Effective Date or at such earlier time as a legend is no longer
      required for certain Securities, the Company will use reasonable best efforts
      to
      cause its transfer agent, no later than three Trading Days following the
      delivery by a Purchaser to the Company or the Company’s transfer agent of a
      legended certificate representing such Securities, deliver or cause to be
      delivered to such Purchaser a certificate representing such Securities that
      is
      free from all restrictive and other legends. The Company may not make any
      notation on its records or give instructions to any transfer agent of the
      Company that enlarge the restrictions on transfer set forth in this Section.
      For
      so long as any Purchaser owns Securities, the Company will not effect or
      publicly announce its intention to effect any exchange, recapitalization or
      other transaction that effectively requires or rewards physical delivery of
      certificates evidencing the Common Stock.

     

    (d)
       The
      Company acknowledges and agrees that a Purchaser may from time to time pledge
      or
      grant a security interest in some or all of the Securities in connection with
      a
      bona fide margin agreement or other loan or financing arrangement secured by
      the
      Securities and, if required under the terms of such agreement, loan or
      arrangement, such Purchaser may transfer pledged or secured Securities to the
      pledgees or secured parties. Such a pledge or transfer would not be subject
      to
      approval of the Company and no legal opinion of the pledgee, secured party
      or
      pledgor shall be required in connection therewith, except an opinion that is
      required for sale under Rule 144 of the Securities Act with respect to a
      foreclosure upon such pledge. Further, no notice shall be required of such
      pledge. At the appropriate Purchaser’s expense, the Company will execute and
      deliver such reasonable documentation as a pledgee or secured party of
      Securities may reasonably request in connection with a pledge or transfer of
      the
      Securities, including the preparation and filing of any required prospectus
      supplement under Rule 424(b)(3) of the Securities Act or other applicable
      provision of the Securities Act to appropriately amend the list of selling
      stockholders thereunder.

     


    
      
         

      

      
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    4.2
       Furnishing
      of Information.
      As long
      as any Purchaser owns Securities, the Company covenants to timely file (or
      obtain extensions in respect thereof and file within the applicable grace
      period) all reports required to be filed by the Company after the date hereof
      pursuant to the Exchange Act. Upon the request of any Purchaser, the Company
      shall deliver to such Purchaser a written certification of a duly authorized
      officer as to whether it has complied with the preceding sentence. As long
      as
      any Purchaser owns Securities, if the Company is not required to file reports
      pursuant to such laws, it will prepare and furnish to the Purchasers and make
      publicly available in accordance with paragraph (c) of Rule 144 such information
      as is required for the Purchasers to sell the Securities under Rule 144. The
      Company further covenants that it will take such further action as any holder
      of
      Securities may reasonably request to satisfy the provisions of Rule 144
      applicable to the issuer of securities relating to transactions for the sale
      of
      securities pursuant to Rule 144.

     

    4.3
       Acknowledgment
      of Dilution.
      The
      Company acknowledges that the issuance of the Securities will result in dilution
      of the outstanding shares of Common Stock, which dilution may be substantial
      under certain market conditions. The Company further acknowledges that its
      obligations under the Transaction Documents, including without limitation its
      obligation to issue the Securities pursuant to the Transaction Documents, are
      unconditional and absolute and not subject to any right of set off,
      counterclaim, delay or reduction, regardless of the effect of any such dilution
      or any claim that the Company may have against any Purchaser. 

     

    4.4
       Integration.
      The
      Company shall not, and shall use its reasonable best efforts to ensure that
      no
      Affiliate of the Company shall, sell, offer for sale or solicit offers to buy
      or
      otherwise negotiate in respect of any security (as defined in Section 2 of
      the
      Securities Act) that would be integrated with the offer or sale of the
      Securities in a manner that would require the registration under the Securities
      Act of the sale of the Securities to the Purchasers or that would be integrated
      with the offer or sale of the Securities for purposes of the rules and
      regulations of any Trading Market.

     

    4.5
       Reservation
      and Listing of Securities.
      The
      Company shall maintain a reserve from its duly authorized shares of Common
      Stock
      for issuance pursuant to the Transaction Documents in such amount as may be
      required to fulfill its obligations in full under the Transaction Documents.
      In
      the event that at any time the then authorized shares of Common Stock are
      insufficient for the Company to satisfy its obligations in full under the
      Transaction Documents, the Company shall promptly take such actions as may
      be
      required to increase the number of authorized shares. The Company shall in
      the
      time and manner required by its Trading Market, prepare and file with such
      Trading Market an additional shares listing application covering the number
      of
      shares of Common Stock issuable under the Transaction Documents and shall take
      all steps necessary to cause such shares of Common Stock to be approved for
      listing on its Trading Market as soon as possible.

     


    
      
         

      

      
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      4.6
         Subsequent
        Placements.

       

      (a)
         From
        the
        date hereof until the Effective Date, the Company will not, 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 the 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”).

       

    

    (b)
       From
      the
      Effective Date until the one year anniversary thereof, the Company will not,
      directly or indirectly, effect any Subsequent Placement unless the Company
      shall
      have first complied with this Section 4.6(b).

     

    (i)
       The
      Company shall deliver to each Purchaser a written notice (the "Offer")
      of any
      proposed or intended issuance or sale or exchange of the securities being
      offered (the “Offered
      Securities”)
      in a
      Subsequent Placement, which Offer 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 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 each Purchaser (A) a pro
      rata portion of the Offered Securities based on such Purchaser’s pro rata
      portion of the aggregate purchase price paid by the Purchasers for all of the
      Shares purchased hereunder (the "Basic
      Amount"),
      and
      (B) with respect to each Purchaser that elects to purchase its Basic Amount,
      any
      additional portion of the Offered Securities attributable to the Basic Amounts
      of other Purchasers as such Purchaser shall indicate it will purchase or acquire
      should the other Purchasers subscribe for less than their Basic Amounts (the
      “Undersubscription
      Amount”).

     

    (ii)
       To
      accept
      an Offer, in whole or in part, a Purchaser must deliver a written notice to
      the
      Company prior to the end of the ten (10) Trading Day period of the Offer,
      setting forth the portion of the Purchaser's Basic Amount that such Purchaser
      elects to purchase and, if such Purchaser shall elect to purchase all of its
      Basic Amount, the Undersubscription Amount, if any, that such Purchaser elects
      to purchase (in either case, the "Notice
      of Acceptance").
      If
      the Basic Amounts subscribed for by all Purchasers are less than the total
      of
      all of the Basic Amounts, then each Purchaser who has set forth an
      Undersubcription 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
      Purchaser who has subscribed for any Undersubscription Amount shall be entitled
      to purchase on that portion of the Available Undersubscription Amount as the
      Basic Amount of such Purchaser bears to the total Basic Amounts of all
      Purchasers that have subscribed for Undersubscription Amounts, subject to
      rounding by the Board of Directors to the extent its deems reasonably
      necessary.

    

    


    
      
         

      

      
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    (iii)
       The
      Company shall have five (5) Trading Days from the expiration of the period
      set
      forth in Section 4.6(b)(ii) above to 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 Purchasers (the "Refused
      Securities"),
      but
      only to the offerees described in the Offer 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.


    (iv)
       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
      4.6(b)(iii) above), then each Purchaser 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 the Purchaser elected to purchase pursuant
      to Section 4.6(b)(ii) 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 Purchasers pursuant to Section 4.5(c)(ii) 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 Purchaser 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 Purchasers in accordance with Section 4.6(b)(i)
      above.

     

    (v)
       Upon
      the
      closing of the issuance, sale or exchange of all or less than all of the Refused
      Securities, the Purchasers shall acquire from the Company, and the Company
      shall
      issue to the Purchasers, the number or amount of Offered Securities specified
      in
      the Notices of Acceptance, as reduced pursuant to Section 4.6(b)(iv) above
      if
      the Purchasers have so elected, upon the terms and conditions specified in
      the
      Offer. The purchase by the Purchasers of any Offered Securities is subject
      in
      all cases to the preparation, execution and delivery by the Company and the
      Purchasers of a purchase agreement relating to such Offered Securities
      reasonably satisfactory in form and substance to the Purchasers and their
      respective counsel.

     

    (vi)
       Any
      Offered Securities not acquired by the Purchasers or other persons in accordance
      with Section 4.6(b)(iii) above may not be issued, sold or exchanged until they
      are again offered to the Purchasers under the procedures specified in this
      Agreement.

     

    (c)
       The
      restrictions contained in paragraph (b) of this Section 4.5 shall not apply
      to
      Excluded Stock.

     


    
      
         

      

      
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    4.7
       Securities
      Laws Disclosure; Publicity.
      The
      Company shall, on or before 8:30 a.m., New York City time on June 2, 2006,
      issue
      a press release acceptable to the Purchasers disclosing all material terms
      of
      the transactions contemplated hereby. Prior to the second business day after
      the
      Closing Date, the Company shall file a Current Report on Form 8-K with the
      Commission (the “8-K
      Filing”) describing
      the terms of the transactions contemplated by the Transaction Documents and
      including as exhibits to such Current Report on Form 8-K this Agreement and
      the
      form of Warrant, in the form required by the Exchange Act. Thereafter, the
      Company shall timely file any filings and notices required by the Commission
      or
      applicable law with respect to the transactions contemplated hereby and provide
      copies thereof to the Purchasers promptly after filing. Except
      with respect to the 8-K Filing and the press release referenced above (a copy
      of
      which will be provided to the Purchasers for their review as early as
      practicable prior to its filing), the
      Company
      shall, at least two Trading Days prior to the filing or dissemination of any
      disclosure required by this paragraph that does not contain any material
      non-public information, provide a copy thereof to the Purchasers for their
      review. The Company and the Purchasers shall consult with each other in issuing
      any press releases or otherwise making public statements or filings and other
      communications with the Commission or any regulatory agency or Trading Market
      with respect to the transactions contemplated hereby, and neither party shall
      issue any such press release or otherwise make any such public statement, filing
      or other communication without the prior consent of the other, except if such
      disclosure is required by law, in which case the disclosing party shall promptly
      provide the other party with prior notice of such public statement, filing
      or
      other communication. Notwithstanding the foregoing, the Company shall not
      publicly disclose the name of any Purchaser, or include the name of any
      Purchaser in any filing with the Commission or any regulatory agency or Trading
      Market, without the prior written consent of such Purchaser, except to the
      extent such disclosure (but not any disclosure as to the controlling Persons
      thereof) is required by law or Trading Market regulations, in which case the
      Company shall provide the Purchasers with prior notice of such disclosure.
      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
      Purchaser with any material nonpublic information regarding the Company or
      any
      of its Subsidiaries from and after the filing of the 8-K Filing without the
      express written consent of such Purchaser. 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 Purchaser 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 Purchaser shall
      have any liability to the Company, its Subsidiaries, or any of its or their
      respective officers, directors, employees, shareholders or agents for any such
      disclosure. Subject to the foregoing, neither the Company nor any Purchaser
      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 Purchaser, 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 Purchaser shall be consulted by the Company in connection
      with any such press release or other public disclosure prior to its release).
      Each press release disseminated during the 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 light of the circumstances
      under which they are made, not misleading. 

     

    4.8
       Exercise
      Procedures.
      The
      form of Exercise Notice included in the Warrants set forth the totality of
      the
      procedures required by the Purchasers in order to exercise the Warrants. No
      additional legal opinion or other information or instructions shall be necessary
      to enable the Purchasers to exercise their Warrants. The Company shall honor
      exercises of the Warrants and shall deliver Underlying Shares in accordance
      with
      the terms, conditions and time periods set forth in the Transaction
      Documents.

     


    
      
         

      

      
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    4.9
       Use
      of
      Proceeds.
      Except
      as set forth on Schedule
      4.7,
      the
      Company shall use the net proceeds from the sale of the Securities hereunder
      for
      working capital purposes and not (i) for the satisfaction of any portion of
      the
      Company’s debt (other than payment of trade payables and accrued expenses in the
      ordinary course of the Company’s business and consistent with past practice),
      (ii) to redeem any Company equity or equity-equivalent securities, or (iii)
      to
      settle any outstanding litigation. 

     

    4.10
       Reimbursement.
      If any
      Purchaser or any of its Affiliates or any officer, director, partner,
      controlling Person, employee or agent of a Purchaser or any of its Affiliates
      (a
“Related
      Person”)
      becomes involved in any capacity in any Proceeding brought by or against any
      Person in connection with or as a result of the transactions contemplated by
      the
      Transaction Documents, the Company will indemnify and hold harmless such
      Purchaser or Related Person for its reasonable legal and other expenses
      (including the costs of any investigation, preparation and travel) and for
      any
      Losses incurred in connection therewith, as such expenses or Losses are
      incurred, excluding only Losses that result directly from such Purchaser’s or
      Related Person’s gross negligence or willful misconduct. In addition, the
      Company shall indemnify and hold harmless each Purchaser and Related Person
      from
      and against any and all Losses, as incurred, arising out of or relating to
      any
      breach by the Company of any of the representations, warranties or covenants
      made by the Company in this Agreement or any other Transaction Document, or
      any
      allegation by a third party that, if true, would constitute such a breach.
      The
      conduct of any Proceedings for which indemnification is available under this
      paragraph shall be governed by Section 6.4(c) below. The indemnification
      obligations of the Company under this paragraph shall be in addition to any
      liability that the Company may otherwise have and shall be binding upon and
      inure to the benefit of any successors, assigns, heirs and personal
      representatives of the Purchasers and any such Related Persons. The Company
      also
      agrees that neither the Purchasers nor any Related Persons shall have any
      liability to the Company or any Person asserting claims on behalf of or in
      right
      of the Company in connection with or as a result of the transactions
      contemplated by the Transaction Documents, except to the extent that any Losses
      incurred by the Company result from the gross negligence or willful misconduct
      of the applicable Purchaser or Related Person in connection with such
      transactions.
      If
      the
      Company breaches its obligations under any Transaction Document, then, in
      addition to any other liabilities the Company may have under any Transaction
      Document or applicable law, the Company shall pay or reimburse the Purchasers
      on
      demand for all costs of collection and enforcement (including reasonable
      attorneys fees and expenses). Without limiting the generality of the foregoing,
      the Company specifically agrees to reimburse the Purchasers on demand for all
      costs of enforcing the indemnification obligations in this
      paragraph.

     

    4.11
       February
      Warrants. Notwithstanding
      anything to the contrary, the issuance of the Securities hereunder shall not
      constitute a “Dilutive Issuance” under the warrants issued by the Company to the
      Purchasers dated February 27, 2006 (the “February
      Warrants”).
      No
      adjustment will be made to the exercise price of the February
      Warrants.

     


    
      
         

      

      
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    ARTICLE
      V

    CONDITIONS

    


    5.1
       Conditions
      Precedent to the Obligations of the Purchasers.
      The
      obligation of each Purchaser to acquire Securities at the Closing is subject
      to
      the satisfaction or waiver by such Purchaser, at or before the Closing, of
      each
      of the following conditions:

     

    (a)
       Representations
      and Warranties.
      The
      representations and warranties of the Company contained herein shall be true
      and
      correct in all material respects as of the date when made and as of the Closing
      as though made on and as of such date; and

     

    (b)
       Performance.
      The
      Company and each other Purchaser shall have performed, satisfied and complied
      in
      all material respects with all covenants, agreements and conditions required
      by
      the Transaction Documents to be performed, satisfied or complied with by it
      at
      or prior to the Closing.

     

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

     

    (d)
       Acceleration
      Letter / Reload Warrant.
      The
      Company shall deliver to each Purchaser a duly executed copy of the acceleration
      letter and the additional warrant, each in the form of Exhibit
      E-1 and E-2.

     

    (e)
       Adverse
      Changes.
      Since
      the date of execution of this Agreement, no event or series of events shall
      have
      occurred that reasonably would be expected to have or result in a Material
      Adverse Effect; and

     

    (f)
       No
      Suspensions of Trading in Common Stock; Listing.
      Trading
      in the Common Stock shall not have been suspended by the Commission or any
      Trading Market (except for any suspensions of trading of not more than three
      Trading Days (whether or not consecutive) solely to permit dissemination of
      material information regarding the Company) at any time since the date of
      execution of this Agreement, and the Common Stock shall have been at all times
      since such date listed for trading on an Eligible Market;

     

    


    5.2
       Conditions
      Precedent to the Obligations of the Company.
      The
      obligation of the Company to sell Securities at the Closing is subject to the
      satisfaction or waiver by the Company, at or before the Closing, of each of
      the
      following conditions:

     

    (a)
       Representations
      and Warranties.
      The
      representations and warranties of the Purchasers contained herein shall be
      true
      and correct in all material respects as of the date when made and as of the
      Closing Date as though made on and as of such date; and

     

    (b)
       Performance.
      The
      Purchasers shall have performed, satisfied and complied in all material respects
      with all covenants, agreements and conditions required by the Transaction
      Documents to be performed, satisfied or complied with by the Purchasers at
      or
      prior to the Closing.

     


    
      
         

      

      
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    ARTICLE
      VI

    REGISTRATION
      RIGHTS

     

    6.1
       Shelf
      Registration

     

    (a)
       As
      promptly as possible, and in any event on or prior to the Filing Date, the
      Company shall prepare and file with the Commission a “Shelf” Registration
      Statement covering the resale of all Registrable Securities for an offering
      to
      be made on a continuous basis pursuant to Rule 415. The Registration Statement
      shall be on Form S-3 (except if the Company is not then eligible to register
      for
      resale the Registrable Securities on Form S-3, in which case such registration
      shall be on another appropriate form in accordance herewith as the Purchasers
      may consent) and shall contain (except if otherwise directed by the Purchasers)
      the “Plan of Distribution” attached hereto as Exhibit
      D.

     

    (b)
       The
      Company shall use its best efforts to cause the Registration Statement to be
      declared effective by the Commission as promptly as possible after the filing
      thereof, but in any event prior to the Required Effectiveness Date, and shall
      use its best efforts to keep the Registration Statement continuously effective
      under the Securities Act until all Registrable Securities covered by such
      Registration Statement may be sold pursuant to paragraph (k) of Rule 144 or
      such
      earlier date when all Registrable Securities covered by such Registration
      Statement have been sold publicly (the “Effectiveness
      Period”).

     

    (c)
       The
      Company shall notify each Purchaser in writing promptly (and in any event within
      one Trading Day) after receiving notification from the Commission that the
      Registration Statement has been declared effective. 

     

    (d)
       If:
      (i)
      any Registration Statement is not filed on or prior to the Filing Date (if
      the
      Company files such Registration Statement without affording the Purchasers
      the
      opportunity to review and comment on the same as required by Section 6.2(a)
      hereof, the Company shall not be deemed to have satisfied this clause (i)),
      or
      (ii) the Company fails to file with the Commission a request for acceleration
      in
      accordance with Rule 461 promulgated under the Securities Act, within five
      Trading Days after the date that the Company is notified (orally or in writing,
      whichever is earlier) by the Commission that a Registration Statement will
      not
      be “reviewed,” or will not be subject to further review, or (iii) the Company
      fails to respond to any comments made by the Commission within 10 Trading Days
      after the receipt of such comments, or (iv) a Registration Statement filed
      hereunder is not declared effective by the Commission by the Required
      Effectiveness Date, or (v) after a Registration Statement is filed with and
      declared effective by the Commission, such Registration Statement ceases to
      be
      effective as to all Registrable Securities to which it is required to relate
      at
      any time prior to the expiration of the Effectiveness Period without being
      succeeded within 10 Trading Days by an amendment to such Registration Statement
      or by a subsequent Registration Statement filed with and declared effective
      by
      the Commission, or (vi) an amendment to a Registration Statement is not filed
      by
      the Company with the Commission within ten Trading Days after the Commission’s
      having notified the Company that such amendment is required in order for such
      Registration Statement to be declared effective, or (vii) the Common Stock
      is
      not listed or quoted, or is suspended from trading on an Eligible Market for
      a
      period of three Trading Days (which need not be consecutive Trading Days) (any
      such failure or breach being referred to as an “Event,” and for purposes of
      clause (i) or (iv) the date on which such Event occurs, or for purposes of
      clause (ii) the date on which such five Trading Day period is exceeded, or
      for
      purposes of clauses (iii), (v) or (vi) the date which such ten Trading
      Day-period is exceeded, or for purposes of clause (vii) the date on which such
      three Trading Day period is exceeded, being referred to as “‘Event Date”), then:
      (x) on each such Event Date the Company shall pay to each Purchaser an amount
      in
      cash, as partial liquidated damages and not as a penalty, equal to 2% of the
      aggregate purchase price paid by such Purchaser pursuant to the Purchase
      Agreement; and (y) on each monthly anniversary of each such Event Date thereof
      (if the applicable Event shall not have been cured by such date) until the
      applicable Event is cured, the Company shall pay to each Purchaser an amount
      in
      cash, as partial liquidated damages and not as a penalty, equal to 2% of the
      aggregate purchase price paid by such Purchaser pursuant to the Purchase
      Agreement. Such payments shall be in partial compensation to the Purchasers
      and
      shall not constitute the Purchaser’s exclusive remedy for such events. If the
      Company fails to pay any liquidated damages pursuant to this Section in full
      within seven days after the date payable, the Company will pay interest thereon
      at a rate of 18% per annum (or such lesser maximum amount that is permitted
      to
      be paid by applicable law) to the Purchaser, accruing daily from the date such
      liquidated damages are due until such amounts, plus all such interest thereon,
      are paid in full.

     


    
      
         

      

      
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    (e)
       The
      Company shall not, prior to the Effective Date of the Registration Statement,
      prepare and file with the Commission a registration statement relating to an
      offering for its own account or the account of others (other than as
      contemplated in the Transaction Documents) under the Securities Act of any
      of
      its equity securities.

     

    (f)
       If
      the
      Company issues to the Purchasers any Common Stock pursuant to the Transaction
      Documents that is not included in the initial Registration Statement, then
      the
      Company shall file an additional Registration Statement covering such number
      of
      shares of Common Stock on or prior to the Filing Date and shall use its best
      efforts, but in no event later than the Required Filing Date, to cause such
      additional Registration Statement to become effective by the
      Commission.

     

    6.2
       Registration
      Procedures.
      In
      connection with the Company's registration obligations hereunder, the Company
      shall:

     

    (a)
       Not
      less
      than three Trading Days prior to the filing of a Registration Statement or
      any
      related Prospectus or any amendment or supplement thereto (including any
      document that would be incorporated or deemed to be incorporated therein by
      reference), the Company shall (i) furnish to each Purchaser and any counsel
      designated by any Purchaser (each, a “Purchaser
      Counsel”,
      and
      Cranshire Capital, L.P. has initially designated Malhotra & Associates LLP
“LP
      Counsel”)
      copies
      of all such documents proposed to be filed, which documents (other than those
      incorporated or deemed to be incorporated by reference) will be subject to
      the
      review of each Purchaser and Purchaser Counsel, and (ii) cause its officers
      and
      directors, counsel and independent certified public accountants to respond to
      such inquiries as shall be necessary, in the reasonable opinion of respective
      counsel, to conduct a reasonable investigation within the meaning of the
      Securities Act. The Company shall not file a Registration Statement or any
      such
      Prospectus or any amendments or supplements thereto to which Purchasers holding
      a majority of the Registrable Securities shall reasonably object.

     


    
      
         

      

      
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    (b)
       (i)
      Prepare and file with the Commission such amendments, including post-effective
      amendments, to each Registration Statement and the Prospectus used in connection
      therewith as may be necessary to keep the Registration Statement continuously
      effective as to the applicable Registrable Securities for the Effectiveness
      Period and prepare and file with the Commission such additional Registration
      Statements in order to register for resale under the Securities Act all of
      the
      Registrable Securities; (ii) cause the related Prospectus to be amended or
      supplemented by any required Prospectus supplement, and as so supplemented
      or
      amended to be filed pursuant to Rule 424; (iii) respond as promptly as
      reasonably possible, and in any event within ten days, to any comments received
      from the Commission with respect to the Registration Statement or any amendment
      thereto and as promptly as reasonably possible provide the Purchasers true
      and
      complete copies of all correspondence from and to the Commission relating to
      the
      Registration Statement; and (iv) comply in all material respects with the
      provisions of the Securities Act and the Exchange Act with respect to the
      disposition of all Registrable Securities covered by the Registration Statement
      during the applicable period in accordance with the intended methods of
      disposition by the Purchasers thereof set forth in the Registration Statement
      as
      so amended or in such Prospectus as so supplemented

     

    (c)
       Notify
      the Purchasers of Registrable Securities to be sold and Purchaser Counsel as
      promptly as reasonably possible, and (if requested by any such Person) confirm
      such notice in writing no later than one Trading Day thereafter, of any of
      the
      following events: (i) the Commission notifies the Company whether there will
      be
      a “review” of any Registration Statement; (ii) the Commission comments in
      writing on any Registration Statement (in which case the Company shall deliver
      to each Purchaser a copy of such comments and of all written responses thereto);
      (iii) any Registration Statement or any post-effective amendment is declared
      effective; (iv) the Commission or any other Federal or state governmental
      authority requests any amendment or supplement to any Registration Statement
      or
      Prospectus or requests additional information related thereto; (v) the
      Commission issues any stop order suspending the effectiveness of any
      Registration Statement or initiates any Proceedings for that purpose; (vi)
      the
      Company receives notice of any suspension of the qualification or exemption
      from
      qualification of any Registrable Securities for sale in any jurisdiction, or
      the
      initiation or threat of any Proceeding for such purpose; or (vii) the financial
      statements included in any Registration Statement become ineligible for
      inclusion therein or any statement made in any Registration Statement or
      Prospectus or any document incorporated or deemed to be incorporated therein
      by
      reference is untrue in any material respect or any revision to a Registration
      Statement, Prospectus or other document is required so that it will not contain
      any untrue statement of a material fact or omit to state any material fact
      required to be stated therein or necessary to make the statements therein,
      in
      the light of the circumstances under which they were made, not
      misleading.

     

    (d)
       Use
      its
      best efforts to avoid the issuance of or, if issued, obtain the withdrawal
      of
      (i) any order suspending the effectiveness of any Registration Statement, or
      (ii) any suspension of the qualification (or exemption from qualification)
      of
      any of the Registrable Securities for sale in any jurisdiction, as soon as
      possible.

     


    
      
         

      

      
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    (e)
       Furnish
      to each Purchaser and Purchaser Counsel, without charge, at least one conformed
      copy of each Registration Statement and each amendment thereto, including
      financial statements and schedules, all documents incorporated or deemed to
      be
      incorporated therein by reference, and all exhibits to the extent requested
      by
      such Person (including those previously furnished or incorporated by reference)
      promptly after the filing of such documents with the
      Commission.


    (f)
       Promptly
      deliver to each Purchaser and Purchaser Counsel, without charge, as many copies
      of the Prospectus or Prospectuses (including each form of prospectus) and each
      amendment or supplement thereto as such Persons may reasonably request. The
      Company hereby consents to the use of such Prospectus and each amendment or
      supplement thereto by each of the selling Purchasers in connection with the
      offering and sale of the Registrable Securities covered by such Prospectus
      and
      any amendment or supplement thereto.

     

    (g)
       
      (i) In
      the time and manner required by each Trading Market, prepare and file with
      such
      Trading Market an additional shares listing application covering all of the
      Registrable Securities; (ii) take all steps necessary to cause such Registrable
      Securities to be approved for listing on each Trading Market as soon as possible
      thereafter; (iii) provide to the Purchasers evidence of such listing; and (iv)
      maintain the listing of such Registrable Securities on each such Trading Market
      or another Eligible Market.

     

    (h)
       Prior
      to
      any public offering of Registrable Securities, use its reasonable best efforts
      to register or qualify or cooperate with the selling Purchasers and each
      applicable Purchaser Counsel in connection with the registration or
      qualification (or exemption from such registration or qualification) of such
      Registrable Securities for offer and sale under the securities or Blue Sky
      laws
      of such jurisdictions within the United States as any Purchaser requests in
      writing, to keep each such registration or qualification (or exemption
      therefrom) effective during the Effectiveness Period and to do any and all
      other
      acts or things necessary or advisable to enable the disposition in such
      jurisdictions of the Registrable Securities covered by a Registration
      Statement.

     

    (i)
       Cooperate
      with the Purchasers to facilitate the timely preparation and delivery of
      certificates representing Registrable Securities to be delivered to a transferee
      pursuant to a Registration Statement, which certificates shall be free, to
      the
      extent permitted by this Agreement, of all restrictive legends, and to enable
      such Registrable Securities to be in such denominations and registered in such
      names as any such Purchasers may request.

     

    (j)
       Upon
      the
      occurrence of any event described in Section 6.2(c)(vii), as promptly as
      reasonably possible, prepare a supplement or amendment, including a
      post-effective amendment, to the Registration Statement or a supplement to
      the
      related Prospectus or any document incorporated or deemed to be incorporated
      therein by reference, and file any other required document so that, as
      thereafter delivered, neither the Registration Statement nor such Prospectus
      will contain an untrue statement of a material fact or omit to state a material
      fact required to be stated therein or necessary to make the statements therein,
      in the light of the circumstances under which they were made, not
      misleading.

     


    
      
         

      

      
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    (k)
       Cooperate
      with any due diligence investigation undertaken by the Purchasers in connection
      with the sale of Registrable Securities, including, without limitation, by
      making available any documents and information; provided that the Company will
      not deliver or make available to any Purchaser material, nonpublic information
      unless such Purchaser specifically requests in advance to receive material,
      nonpublic information in writing.


    (l)
       If
      Holders of a majority of the Registrable Securities being offered pursuant
      to a
      Registration Statement select underwriters for the offering, the Company shall
      enter into and perform its obligations under an underwriting agreement, in
      usual
      and customary form, including, without limitation, by providing customary legal
      opinions, comfort letters and indemnification and contribution
      obligations.

     

    (m)
       Comply
      with all applicable rules and regulations of the Commission.

    


    6.3
       Registration
      Expenses.
      The
      Company shall pay (or reimburse the Purchasers for) all fees and expenses
      incident to the performance of or compliance with this Agreement by the Company,
      including without limitation (a) all registration and filing fees and expenses,
      including without limitation those related to filings with the Commission,
      any
      Trading Market and in connection with applicable state securities or Blue Sky
      laws, (b) printing expenses (including without limitation expenses of printing
      certificates for Registrable Securities and of printing prospectuses requested
      by the Purchasers), (c) messenger, telephone and delivery expenses, (d) fees
      and
      disbursements of counsel for the Company, (e) fees and expenses of all other
      Persons retained by the Company in connection with the consummation of the
      transactions contemplated by this Agreement, and (f) all listing fees to be
      paid
      by the Company to the Trading Market. 

     

    6.4
       Indemnification

     

    (a)
       Indemnification
      by the Company.
      The
      Company shall, notwithstanding any termination of this Agreement, indemnify
      and
      hold harmless each Purchaser, the officers, directors, partners, members,
      agents, brokers (including brokers who offer and sell Registrable Securities
      as
      principal as a result of a pledge or any failure to perform under a margin
      call
      of Common Stock), investment advisors and employees of each of them, each Person
      who controls any such Purchaser (within the meaning of Section 15 of the
      Securities Act or Section 20 of the Exchange Act) and the officers, directors,
      partners, members, agents and employees of each such controlling Person, to
      the
      fullest extent permitted by applicable law, from and against any and all Losses,
      as incurred, arising out of or relating to any untrue or alleged untrue
      statement of a material fact contained in the Registration Statement, any
      Prospectus or any form of prospectus or in any amendment or supplement thereto
      or in any preliminary prospectus, or arising out of or relating to any omission
      or alleged omission of a material fact required to be stated therein or
      necessary to make the statements therein (in the case of any Prospectus or
      form
      of prospectus or supplement thereto, in the light of the circumstances under
      which they were made) not misleading, except to the extent, but only to the
      extent, that (i) such untrue statements, alleged untrue statements, omissions
      or
      alleged omissions are based solely upon information regarding such Purchaser
      furnished in writing to the Company by such Purchaser expressly for use therein,
      or to the extent that such information relates to such Purchaser or such
      Purchaser's proposed method of distribution of Registrable Securities and was
      reviewed and expressly approved in writing by such Purchaser expressly for
      use
      in the Registration Statement, such Prospectus or such form of Prospectus or
      in
      any amendment or supplement thereto or (ii) in the case of an occurrence of
      an
      event of the type specified in Section 6.2(c)(v)-(vii), the use by such
      Purchaser of an outdated or defective Prospectus after the Company has notified
      such Purchaser in writing that the Prospectus is outdated or defective and
      prior
      to the receipt by such Purchaser of the Advice contemplated in Section 6.5.
      The
      Company shall notify the Purchasers promptly of the institution, threat or
      assertion of any Proceeding of which the Company is aware in connection with
      the
      transactions contemplated by this Agreement.

     


    
      
         

      

      
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    (b)
       Indemnification
      by Purchasers.
      Each
      Purchaser shall, severally and not jointly, indemnify and hold harmless the
      Company, its directors, officers, agents and employees, each Person who controls
      the Company (within the meaning of Section 15 of the Securities Act and Section
      20 of the Exchange Act), and the directors, officers, agents or employees of
      such controlling Persons, to the fullest extent permitted by applicable law,
      from and against all Losses (as determined by a court of competent jurisdiction
      in a final judgment not subject to appeal or review) arising solely out of
      any
      untrue statement of a material fact contained in the Registration Statement,
      any
      Prospectus, or any form of prospectus, or in any amendment or supplement
      thereto, or arising solely out of any omission of a material fact required
      to be
      stated therein or necessary to make the statements therein (in the case of
      any
      Prospectus or form of prospectus or supplement thereto, in the light of the
      circumstances under which they were made) not misleading to the extent, but
      only
      to the extent, that such untrue statement or omission is contained in any
      information so furnished in writing by such Purchaser to the Company
      specifically for inclusion in such Registration Statement or such Prospectus
      or
      to the extent that (i) such untrue statements or omissions are based solely
      upon
      information regarding such Purchaser furnished in writing to the Company by
      such
      Purchaser expressly for use therein, or to the extent that such information
      relates to such Purchaser or such Purchaser's proposed method of distribution
      of
      Registrable Securities and was reviewed and expressly approved in writing by
      such Purchaser expressly for use in the Registration Statement, such Prospectus
      or such form of Prospectus or in any amendment or supplement thereto or (ii)
      in
      the case of an occurrence of an event of the type specified in Section
      6.2(c)(v)-(vii),
      the use
      by such Purchaser of an outdated or defective Prospectus after the Company
      has
      notified such Purchaser in writing that the Prospectus is outdated or defective
      and prior to the receipt by such Purchaser of the Advice contemplated in
Section
      6.5.
      In no
      event shall the liability of any selling Purchaser hereunder be greater in
      amount than the dollar amount of the net proceeds received by such Purchaser
      upon the sale of the Registrable Securities giving rise to such indemnification
      obligation.

     

    (c)
       Conduct
      of Indemnification Proceedings.
      If any
      Proceeding shall be brought or asserted against any Person entitled to indemnity
      hereunder (an “Indemnified
      Party”),
      such
      Indemnified Party shall promptly notify the Person from whom indemnity is sought
      (the “Indemnifying
      Party”)
      in
      writing, and the Indemnifying Party shall assume the defense thereof, including
      the employment of counsel reasonably satisfactory to the Indemnified Party
      and
      the payment of all fees and expenses incurred in connection with defense
      thereof; provided, that the failure of any Indemnified Party to give such notice
      shall not relieve the Indemnifying Party of its obligations or liabilities
      pursuant to this Agreement, except (and only) to the extent that it shall be
      finally determined by a court of competent jurisdiction (which determination
      is
      not subject to appeal or further review) that such failure shall have
      proximately and materially adversely prejudiced the Indemnifying
      Party.

     


    
      
         

      

      
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    An
      Indemnified Party shall have the right to employ separate counsel in any such
      Proceeding and to participate in the defense thereof, but the fees and expenses
      of such counsel shall be at the expense of such Indemnified Party or Parties
      unless: (i) the Indemnifying Party has agreed in writing to pay such fees and
      expenses; or (ii) the Indemnifying Party shall have failed promptly to assume
      the defense of such Proceeding and to employ counsel reasonably satisfactory
      to
      such Indemnified Party in any such Proceeding; or (iii) the named parties to
      any
      such Proceeding (including any impleaded parties) include both such Indemnified
      Party and the Indemnifying Party, and such Indemnified Party shall have been
      advised by counsel that a conflict of interest is likely to exist if the same
      counsel were to represent such Indemnified Party and the Indemnifying Party
      (in
      which case, if such Indemnified Party notifies the Indemnifying Party in writing
      that it elects to employ separate counsel at the expense of the Indemnifying
      Party, the Indemnifying Party shall not have the right to assume the defense
      thereof and such counsel shall be at the expense of the Indemnifying Party).
      The
      Indemnifying Party shall not be liable for any settlement of any such Proceeding
      effected without its written consent, which consent shall not be unreasonably
      withheld. No Indemnifying Party shall, without the prior written consent of
      the
      Indemnified Party, effect any settlement of any pending Proceeding in respect
      of
      which any Indemnified Party is a party, unless such settlement includes an
      unconditional release of such Indemnified Party from all liability on claims
      that are the subject matter of such Proceeding.


    All
      fees
      and expenses of the Indemnified Party (including reasonable fees and expenses
      to
      the extent incurred in connection with investigating or preparing to defend
      such
      Proceeding in a manner not inconsistent with this Section) shall be paid to
      the
      Indemnified Party, as incurred, within ten Trading Days of written notice
      thereof to the Indemnifying Party (regardless of whether it is ultimately
      determined that an Indemnified Party is not entitled to indemnification
      hereunder; provided, that the Indemnifying Party may require such Indemnified
      Party to undertake to reimburse all such fees and expenses to the extent it
      is
      finally judicially determined that such Indemnified Party is not entitled to
      indemnification hereunder). 

     

    (d)
       Contribution.
      If a
      claim for indemnification under Section
      6.4(a)
      or
(b)
      is
      unavailable to an Indemnified Party (by reason of public policy or otherwise),
      then each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
      shall contribute to the amount paid or payable by such Indemnified Party as
      a
      result of such Losses, in such proportion as is appropriate to reflect the
      relative fault of the Indemnifying Party and Indemnified Party in connection
      with the actions, statements or omissions that resulted in such Losses as well
      as any other relevant equitable considerations. The relative fault of such
      Indemnifying Party and Indemnified Party shall be determined by reference to,
      among other things, whether any action in question, including any untrue or
      alleged untrue statement of a material fact or omission or alleged omission
      of a
      material fact, has been taken or made by, or relates to information supplied
      by,
      such Indemnifying Party or Indemnified Party, and the parties' relative intent,
      knowledge, access to information and opportunity to correct or prevent such
      action, statement or omission. The amount paid or payable by a party as a result
      of any Losses shall be deemed to include, subject to the limitations set forth
      in Section
      6.4(c),
      any
      reasonable attorneys' or other reasonable fees or expenses incurred by such
      party in connection with any Proceeding to the extent such party would have
      been
      indemnified for such fees or expenses if the indemnification provided for in
      this Section was available to such party in accordance with its
      terms.

     


    
      
         

      

      
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    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section
      6.4(d)
      were
      determined by pro rata allocation or by any other method of allocation that
      does
      not take into account the equitable considerations referred to in the
      immediately preceding paragraph. Notwithstanding the provisions of this Section
      6.4(d), no Purchaser shall be required to contribute, in the aggregate, any
      amount in excess of the amount by which the proceeds actually received by such
      Purchaser from the sale of the Registrable Securities subject to the Proceeding
      exceeds the amount of any damages that such Purchaser has otherwise been
      required to pay by reason of such untrue or alleged untrue statement or omission
      or alleged omission. No Person guilty of fraudulent misrepresentation (within
      the meaning of Section 11(f) of the Securities Act) shall be entitled to
      contribution from any Person who was not guilty of such fraudulent
      misrepresentation.


    The
      indemnity and contribution agreements contained in this Section are in addition
      to any liability that the Indemnifying Parties may have to the Indemnified
      Parties.

     

    6.5
       Dispositions.
      Each
      Purchaser agrees that it will comply with the prospectus delivery requirements
      of the Securities Act as applicable to it in connection with sales of
      Registrable Securities pursuant to the Registration Statement. Each Purchaser
      further agrees that, upon receipt of a notice from the Company of the occurrence
      of any event of the kind described in Sections
      6.2(c)(v),
      (vi)
      or
(vii),
      such
      Purchaser will discontinue disposition of such Registrable Securities under
      the
      Registration Statement until such Purchaser's receipt of the copies of the
      supplemented Prospectus and/or amended Registration Statement contemplated
      by
Section
      6.2(j),
      or
      until it is advised in writing (the “Advice”)
      by the
      Company that the use of the applicable Prospectus may be resumed, and, in either
      case, has received copies of any additional or supplemental filings that are
      incorporated or deemed to be incorporated by reference in such Prospectus or
      Registration Statement. The Company may provide appropriate stop orders to
      enforce the provisions of this paragraph.

     

    6.6
       No
      Piggyback on Registrations.
      Except
      as set forth on Schedule 6.6, neither the Company nor any of its security
      holders (other than the Purchasers in such capacity pursuant hereto) may include
      securities of the Company in the Registration Statement other than the
      Registrable Securities, and the Company shall not after the date hereof enter
      into any agreement providing any such right to any of its security
      holders.

     

    6.7
       Piggy-Back
      Registrations.
      If at
      any time during the Effectiveness Period there is not an effective Registration
      Statement covering all of the Registrable Securities and the Company shall
      determine to prepare and file with the Commission a registration statement
      relating to an offering for its own account or the account of others under
      the
      Securities Act of any of its equity securities, other than on Form S-4 or Form
      S-8 (each as promulgated under the Securities Act) or their then equivalents
      relating to equity securities to be issued solely in connection with any
      acquisition of any entity or business or equity securities issuable in
      connection with stock option or other employee benefit plans, then the Company
      shall send to each Purchaser written notice of such determination and if, within
      fifteen days after receipt of such notice, any such Purchaser shall so request
      in writing, the Company shall include in such registration statement all or
      any
      part of such Registrable Securities such Purchaser requests to be
      registered.

     

    
      
         

      

      
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    ARTICLE
      VII

    MISCELLANEOUS

     

    7.1
       Termination.
      This
      Agreement may be terminated by the Company or any Purchaser, by written notice
      to the other parties, if the Closing has not been consummated by the third
      Trading Day following the date of this Agreement; provided that no such
      termination will affect the right of any party to sue for any breach by the
      other party (or parties).


    7.2
       Fees
      and Expenses.
      At the
      Closing, the Company shall pay to Cranshire Capital, L.P. an aggregate of
      $10,000 for their legal fees and expenses incurred in connection with the
      preparation and negotiation of this Agreement. In lieu of the foregoing payment,
      Cranshire Capital, L.P. may retain such amount at the Closing. Except as
      expressly set forth in the Transaction Documents to the contrary, each party
      shall pay the fees and expenses of its advisers, counsel, accountants and other
      experts, if any, and all other expenses incurred by such party incident to
      the
      negotiation, preparation, execution, delivery and performance of this Agreement.
      The Company shall pay all transfer agent fees, stamp taxes and other taxes
      and
      duties levied in connection with the issuance of the Securities.

     

    7.3
       Entire
      Agreement.
      The
      Transaction Documents, together with the Exhibits and Schedules thereto, contain
      the entire understanding of the parties with respect to the subject matter
      hereof and supersede all prior agreements and understandings, oral or written,
      with respect to such matters, which the parties acknowledge have been merged
      into such documents, exhibits and schedules. At or after the Closing, and
      without further consideration, the Company will execute and deliver to the
      Purchasers such further documents as may be reasonably requested in order to
      give practical effect to the intention of the parties under the Transaction
      Documents. Notwithstanding anything to the contrary herein, Securities may
      be
      assigned to any Person in connection with a bona fide margin account or other
      loan or financing arrangement secured by such Company Securities.

     

    7.4
       Notices.
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be in writing and shall be deemed given and effective
      on the earliest of (a) the date of transmission, if such notice or communication
      is delivered via facsimile at the facsimile number specified in this Section
      prior to 6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading
      Day after the date of transmission, if such notice or communication is delivered
      via facsimile at the facsimile number specified in this Section on a day that
      is
      not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading
      Day, (c) the Trading Day following the date of deposit with a nationally
      recognized overnight courier service, or (d) upon actual receipt by the party
      to
      whom such notice is required to be given. The addresses and facsimile numbers
      for such notices and communications are those set forth on the signature pages
      hereof, or such other address or facsimile number as may be designated in
      writing hereafter, in the same manner, by any such Person.

     

    7.5
       Amendments;
      Waivers.
      No
      provision of this Agreement may be waived or amended except in a written
      instrument signed, in the case of an amendment, by the Company and each of
      the
      Purchasers or, in the case of a waiver, by the party against whom enforcement
      of
      any such waiver is sought. No waiver of any default with respect to any
      provision, condition or requirement of this Agreement shall be deemed to be
      a
      continuing waiver in the future or a waiver of any subsequent default or a
      waiver of any other provision, condition or requirement hereof, nor shall any
      delay or omission of either party to exercise any right hereunder in any manner
      impair the exercise of any such right. Notwithstanding the foregoing, a waiver
      or consent to depart from the provisions hereof with respect to a matter that
      relates exclusively to the rights of Purchasers under Article
      VI
      and that
      does not directly or indirecty affect the rights of other Purchasers may be
      given by Purchasers holding at least a majority of the Registrable Securities
      to
      which such waiver or consent relates.

     


    
      
         

      

      
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    7.6
       Construction.
      The
      headings herein are for convenience only, do not constitute a part of this
      Agreement and shall not be deemed to limit or affect any of the provisions
      hereof. 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.

     

    7.7
       Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and permitted assigns. The Company may not assign this
      Agreement or any rights or obligations hereunder without the prior written
      consent of the Purchasers. Any Purchaser may assign its rights under this
      Agreement to any Person to whom such Purchaser assigns or transfers any
      Securities, provided such transferee agrees in writing to be bound, with respect
      to the transferred Securities, by the provisions hereof that apply to the
“Purchasers.” Notwithstanding anything to the contrary herein, Securities may be
      assigned to any Person in connection with a bona fide margin account or other
      loan or financing arrangement secured by such Securities.

     

    7.8
       No
      Third-Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      successors and permitted assigns and is not for the benefit of, nor may any
      provision hereof be enforced by, any other Person, except that each Related
      Person is an intended third party beneficiary of Section 4.8 and each
      Indemnified Party is an intended third party beneficiary of Section 6.4 and
      (in
      each case) may enforce the provisions of such Sections directly against the
      parties with obligations thereunder.

     

    7.9
       Governing
      Law; Venue; Waiver Of Jury Trial.
      ALL
      QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION
      OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
      WITH THE LAWS OF THE STATE OF NEW YORK. THE COMPANY AND PURCHASERS HEREBY
      IRREVOCABLY SUBMIT 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 BROUGHT BY THE COMPANY OR ANY PURCHASER HEREUNDER, IN CONNECTION
      HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN
      (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS),
      AND HEREBY IRREVOCABLY WAIVE, AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR
      PROCEEDING BROUGHT BY THE COMPANY OR ANY PURCHASER, ANY CLAIM THAT IT IS NOT
      PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, OR THAT 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 VIA REGISTERED OR CERTIFIED MAIL OR
      OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS
      IN
      EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE
      SHALL
      CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING
      CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS
      IN ANY MANNER PERMITTED BY LAW. THE COMPANY AND PURCHASERS HEREBY WAIVE ALL
      RIGHTS TO A TRIAL BY JURY.

     


    
      
         

      

      
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    7.10
       Survival.
      The
      representations, warranties, agreements and covenants contained herein shall
      survive the Closing and the delivery and/or exercise of the Securities, as
      applicable. 

     

    7.11
       Execution.
      This
      Agreement may be executed in two or more counterparts, all of which when taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission, such signature shall create a valid and binding obligation of
      the
      party executing (or on whose behalf such signature is executed) with the same
      force and effect as if such facsimile signature page were an original
      thereof.

     

    7.12
       Severability.
      If any
      provision of this Agreement is held to be invalid or unenforceable in any
      respect, the validity and enforceability of the remaining terms and provisions
      of this Agreement shall not in any way be affected or impaired thereby and
      the
      parties will attempt to agree upon a valid and enforceable provision that is
      a
      reasonable substitute therefor, and upon so agreeing, shall incorporate such
      substitute provision in this Agreement.

     

    7.13
       Rescission
      and Withdrawal Right.
      Notwithstanding anything to the contrary contained in (and without limiting
      any
      similar provisions of) the Transaction Documents, whenever any Purchaser
      exercises a right, election, demand or option under a Transaction Document
      and
      the Company does not timely perform its related obligations within the periods
      therein provided, then such Purchaser may rescind or withdraw, in its sole
      discretion from time to time upon written notice to the Company, any relevant
      notice, demand or election in whole or in part without prejudice to its future
      actions and rights.

     

    7.14
       Replacement
      of Securities.
      If any
      certificate or instrument evidencing any Securities is mutilated, lost, stolen
      or destroyed, the Company shall issue or cause to be issued in exchange and
      substitution for and upon cancellation thereof, or in lieu of and substitution
      therefor, a new certificate or instrument, but only upon receipt of evidence
      reasonably satisfactory to the Company of such loss, theft or destruction and
      customary and reasonable indemnity, if requested. The applicants for a new
      certificate or instrument under such circumstances shall also pay any reasonable
      third-party costs associated with the issuance of such replacement
      Securities.

     

    7.15
       Remedies.
      In
      addition to being entitled to exercise all rights provided herein or granted
      by
      law, including recovery of damages each of the Purchasers and the Company will
      be entitled to specific performance under the Transaction Documents. The parties
      agree that monetary damages may not be adequate compensation for any loss
      incurred by reason of any breach of obligations described in the foregoing
      sentence and hereby agrees to waive in any action for specific performance
      of
      any such obligation the defense that a remedy at law would be
      adequate.

     


    
      
         

      

      
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    7.16
       Payment
      Set Aside.
      To the
      extent that the Company makes a payment or payments to any Purchaser hereunder
      or pursuant to the Warrants or any Purchaser enforces or exercises its rights
      hereunder or thereunder, and such payment or payments or the proceeds of such
      enforcement or exercise or any part thereof are subsequently invalidated,
      declared to be fraudulent or preferential, set aside, recovered from, disgorged
      by or are required to be refunded, repaid or otherwise restored to the Company
      by a trustee, receiver or any other Person under any law (including, without
      limitation, any bankruptcy law, state or federal law, common law or equitable
      cause of action), then to the extent of any such restoration the obligation
      or
      part thereof originally intended to be satisfied shall be revived and continued
      in full force and effect as if such payment had not been made or such
      enforcement or setoff had not occurred.

     

    7.17
       Adjustments
      in Share Numbers and Prices.
      In the
      event of any stock split, subdivision, dividend or distribution payable in
      shares of Common Stock (or other securities or rights convertible into, or
      entitling the holder thereof to receive directly or indirectly shares of Common
      Stock), combination or other similar recapitalization or event occurring after
      the date hereof, each reference in any Transaction Document to a number of
      shares or a price per share shall be amended to appropriately account for such
      event.

     

    7.18
       Independent
      Nature of Purchasers' Obligations and Rights.
      The
      obligations of each Purchaser under any Transaction Document are several and
      not
      joint with the obligations of any other Purchaser, and no Purchaser shall be
      responsible in any way for the performance of the obligations of any other
      Purchaser under any Transaction Document. The decision of each Purchaser to
      purchase Securities pursuant to this Agreement has been made by such Purchaser
      independently of any other Purchaser and independently of any information,
      materials, statements or opinions as to the business, affairs, operations,
      assets, properties, liabilities, results of operations, condition (financial
      or
      otherwise) or prospects of the Company or of the Subsidiary which may have
      been
      made or given by any other Purchaser or by any agent or employee of any other
      Purchaser, and no Purchaser or any of its agents or employees shall have any
      liability to any other Purchaser (or any other Person) relating to or arising
      from any such information, materials, statements or opinions. Nothing contained
      herein or in any Transaction Document, and no action taken by any Purchaser
      pursuant thereto, shall be deemed to constitute the Purchasers as a partnership,
      an association, a joint venture or any other kind of entity, or create a
      presumption that the Purchasers are in any way acting in concert or as a group
      with respect to such obligations or the transactions contemplated by the
      Transaction Document. The Company hereby confirms that it understands and agrees
      that the Purchasers are not acting as a “group” as that term is used in Section
      13(d) of the Exchange Act. Each Purchaser acknowledges that no other Purchaser
      has acted as agent for such Purchaser in connection with making its investment
      hereunder and that no other Purchaser will be acting as agent of such Purchaser
      in connection with monitoring its investment hereunder. Each Purchaser shall
      be
      entitled to independently protect and enforce its rights, including without
      limitation the rights arising out of this Agreement or out of the other
      Transaction Documents, and it shall not be necessary for any other Purchaser
      to
      be joined as an additional party in any proceeding for such purpose. Each
      Purchaser represents that it has been represented by its own separate legal
      counsel in its review and negotiations of this Agreement and the Transaction
      Documents and each party represents and confirms that Malhotra & Associates
      LLP represents only Cranshire Capital, L.P. in connection with this Agreement
      and the other Transaction Documents.

     

    


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

     

    
      	 	
              GENEREX
                BIOTECHNOLOGY CORPORATION

            
	 	 
	 	 
	 	
              By:                     /s/                                                  
                

            
	 	
              Name: Anna
                E. Gluskin

            
	 	
              Title:   
                President,
                Chief Executive Officer

            
	 	 
	 	
              
                
                  By:                     /s/                                                  
                    

                

              

            
	 	
              Name:
                Mark A Fletcher

            
	 	
              Title:  
                Executive
                Vice-President, General Counsel

            
	 	 
	 	 
	 	
              Address
                for Notice:

            
	 	 
	 	
              33
                Harbour Square

            
	 	
              Suite
                202

            
	 	
              Toronto,
                Ontario

            
	 	
              Canada,
                M5J 2G2

            
	 	
              Facsimile
                No.: 416-364-9363

            
	 	
              Telephone
                No.: 416-364-2551

            
	 	
              Attn:
                Mark A. Fletcher

            
	 	 
	 	 
	
              With
                a copy to:

            	
              Eckert
                Seamans Cherin & Mellott, LLC

            
	 	
              1515
                Market St.

            
	 	
              9th
                Floor

            
	 	
              Philadelphia,
                PA 19102-1909

            
	 	
              Facsimile
                No.: 215-851-8383

            
	 	
              Telephone
                No.: 215-851-8400

            
	 	
              Attn:
                ____________________

            


    

    


    


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              CRANSHIRE
                CAPITAL, L.P.

            
	 	
              
By:
                Downsview
                Capital, Inc., its General Partner

            
	 	 
	 	 
	 	
              By: ________________________________

            
	 	
              Name:

            
	 	
              Title:

            
	 	 
	 	
              Aggregate
                Purchase Price: 

            	1,750,000.95
	 	 	 
	 	
              Units
                Purchased: 

            	853,659
	 	 	 
	 	
              Warrant
                Shares: 

            	640,245
	 	 
	 	
              Address
                for Notice:

            
	 	 
	 	
              Cranshire
                Capital, L.P

            
	 	
              c/o
                Downsview Capital, Inc.

            
	 	
              3100
                Dundee Road, Suite 703

            
	 	
              Northbrook,
                IL 60062

            
	 	
              Facsimile
                No.: (847)
                562-9031

            
	 	
              Telephone
                No.: (847)
                562-9030

            
	 	
              Attn:
                Mitchell P. Kopin

            
	 	 
	
              With
                a copy to:

            	
              Malhotra
                & Associates LLP

            
	 	
              11
                Penn Plaza, 5th
                Floor

            
	 	
              New
                York, New York 10001

            
	 	
              Facsimile
                No.: (212) 504-0863

            
	 	
              Telephone
                No.: (212) 593-2284

              Attn:
                Gary Malhotra,
                Esq.

            


    

     


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    


    


     

    
      	 	
              ROCKMORE
                INVESTMENT MASTER FUND

              By:
                Rockmore Capital, LLC as Managing Member   

            
	 	 
	 	 
	 	
              
                
                  By:                     /s/                                                  
                    

                

              

            
	 	
              Name: Bruce
                Bernstein

            
	 	
              Title:   President

            
	 	 
	 	 
	 	
              Aggregate
                Purchase Price:      1,750,000.95

            
	 	 
	 	
              Units
                Purchased:   

            
	 	 
	 	
              Warrant
                Shares:   

            
	 	 
	 	 
	 	
              Address
                for Notice:

            
	 	 
	 	
              650
                Fifth Avenue

            
	 	
              24th
                Floor

            
	 	
              New
                York, NY 10019

            
	 	
              Facsimile
                No.: 212-258-2315

            
	 	
              Telephone
                No.: 212-258-2302

            
	 	
              Attn:
                Bruce Bernstein

            


    

     


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    


    


    
      	 	
              Iroquois
                Mater Fund Ltd.       

            
	 	
              (Name
                of Purchaser)

            
	 	 
	 	
              
                By:                         
                    /s/       
                                                  
                  

              

            
	 	
              Name:
                Joshua
                Silverman

            
	 	
              Title:  Authorized
                Signatory

            
	 	 
	 	
              Aggregate
                Purchase Price:  

            	1,750,000.95
	 	 
	 	
              Units
                Purchased:   

            	853,658
	 	 
	 	
              Warrant
                Shares:   

            	640,244
	 	 
	 	 
	 	
              Address
                for Notice:

            
	 	 
	 	
              641
                Lexington Avenue, 26th
                Fl.

            
	 	
              New
                York, NY 10021

            
	 	
              Facsimile
                No.: 212-207-3452

            
	 	
              Telephone
                No.: 212-974-3070

            
	 	
              Attn:
                Joshua Silverman

            


    


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    


     

    
      	 	
              SMITHFIELD
                FIDUCIARY, LLC

              By:
                Rockmore Capital, LLC as Managing Member   

            
	 	 
	 	 
	 	
              
                
                  By:                     /s/                                                     
                    

                

              

            
	 	
              Name:
                Adam
                J. Chill

            
	 	
              Title:  
                Authorized
                Signatory

            
	 	 
	 	 
	 	
              Aggregate
                Purchase Price:  

            	1,749,998.90
	 	 
	 	
              Units
                Purchased:   

            	853,658
	 	 
	 	
              Warrant
                Shares:   

            	640,243
	 	 
	 	 
	 	
              Address
                for Notice:

            
	 	 
	 	
              c/o
                Highbridge Capital Management

            
	 	
              9
                West 57th
                Street, 27th
                Floor

            
	 	
              New
                York, New York 10019

            
	 	
              Facsimile
                No.: 212-751-0755

            
	 	
              Telephone
                No.: 212-287-4720

            
	 	
              Attn:
                Ari J. Storch/Adam J. Still

            


    

     


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    


    Exhibits:

     

    
      	
              A

            	
              Form
                of Warrant

            
	
              B

            	
              Form
                of Opinion of Company Counsel

            
	
              C

            	
              Form
                of Transfer Agent Instructions

            
	
              D

            	
              Plan
                of Distribution

            
	
              E-1

            	
              Acceleration
                Letter

            
	
              E-2

            	
              Additional
                Warrant