Unassociated Document


    STOCK
      PURCHASE AGREEMENT

    


    STOCK
      PURCHASE AGREEMENT (this “Agreement”),
      dated
      as of _____, 2007, by and between (i) Southridge Technology Group, Inc., a
      Delaware corporation (“Pubco”)
      that
      will acquire all of the issued and outstanding capital stock of RxElite Holdings
      Inc., a Delaware corporation (“RxElite”),
      and
      succeed to the business of RxElite as its sole line of business (on a combined,
      post-acquisition basis, Pubco and its subsidiary, RxElite, are collectively
      referred to as “Seller”)
      and
      (ii) the investors listed on Exhibit
      A
      hereto
      (the “Buyers”).

     

    WITNESSETH:

    


    WHEREAS,
      Seller desires to sell to the Buyers the shares of Seller’s common stock (the
“Common
      Stock”)
      and
      warrants to purchase common stock (the “Warrants”
and
      together with the Common Stock, the “Securities”)
      listed
      next to each Buyer’s name on Exhibit
      A
      hereto;
      and

     

    WHEREAS,
      Seller has agreed to effect the registration of the shares of Common Stock
      referred to above and the shares of Common Stock underlying the Warrants (the
      “Underlying
      Shares”)
      subject to and on the terms and conditions set forth in an amended and restated
      registration rights agreement substantially in the form of Exhibit
      B
      hereto
      (the “Registration
      Rights Agreement”
and
      together with this Agreement and the Warrants, the “Transaction
      Documents”).

     

    NOW,
      THEREFORE, in consideration of the mutual covenants and agreements hereinafter
      set forth herein and for good and valuable consideration, the receipt and
      sufficiency of which are hereby mutually acknowledged, the parties agree as
      follows:

     

    1. Sale
      and Purchase of the Common Stock and Warrants.

     

    1.1 Sale
      and Purchase.

     

    Subject
      to the terms and conditions of this Agreement, at the Closing (as defined in
      Section 2 hereof), Seller shall issue to each Buyer, and each Buyer shall
      purchase from Seller, for the Purchase Price per share (as defined in Section
      1.2(a) hereof), the shares of Common Stock and the Warrants listed next to
      each
      Buyer’s name on Exhibit
      A.

    


    1.2 Purchase
      Price and Payment.

     

    (a) Purchase
      Price.
      The
      purchase price per .090606 of one share of Common Stock and for one-half Warrant
      to purchase .090606 of one share shall be US$6.62 (the “Purchase
      Price”).
      Each
      Warrant shall be exercisable for two years following the date Pubco amends
      its
      certificate of incorporation in order to, among other things, increase its
      authorized capital to allow for full exercise of all Warrants, at an exercise
      price of US$9.38 per share, and shall be in the form of Exhibit
      C
      hereto.

     

    (b) Payment
      of Purchase Price.
      Upon
      the execution of this Agreement, the Purchase Price for the Securities shall
      be
      delivered by the Buyers via federal funds wire transfer(s) of immediately
      available funds, in accordance with written instructions on Exhibit
      D.
      All
      funds received in connection with any purchase of Securities hereunder shall
      be
      deposited in a separate escrow account held by Signature Bank (the “Escrow
      Agent”)
      pursuant to the terms hereof and of that certain Escrow Agreement, by and among
      RxElite, the Investor Representative and the Escrow Agent (the “Escrow
      Agreement”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2. Closing.
      (a) The
      closing of the sale and purchase of the Securities hereunder (the “Closing”)
      shall
      be deemed to take place at the offices of Seller, at 4:00 p.m., local time,
      on
      the date hereof, or at such later time or date as the Buyers and Seller may
      mutually agree in writing. The date upon which the Closing shall occur is herein
      called the “Closing
      Date”.
      (b)
      The Closing shall not take place until such time as the Buyers have agreed
      to
      purchase Securities for an aggregate Purchase Price of $3,500,000 or more.
      (c)
      During a period of 90 calendar days after the Closing, Seller may hold one
      or
      more additional Closings with respect to Buyers who desire to purchase
      Securities on the terms set forth in this Agreement and such Buyers shall become
      parties to this Agreement on the date of such subsequent Closing, provided,
      however, that (i) nothing herein shall be implied to require Seller to sell
      Securities to such prospective Buyers and (ii) the representations and
      warranties made herein by Seller shall be made only as of the initial Closing
      Date.

     

    3. Representations
      and Warranties of Seller.
      Except
      as set forth on the disclosure schedules delivered to Buyers herewith (the
      “Disclosure
      Schedules”)
      or in
      the Jumbo 8-K (as defined below) delivered to Buyers contemplated in
      Section 4.4 hereof or the Capitalization Table provided herewith, Seller
      hereby represents and warrants to the Buyers as follows:

     

    3.1 Subsidiaries.
      RxElite
      has no direct or indirect subsidiaries, other than Cendian Pharmaceuticals
      Ltd.,
      an inactive Canadian corporation which is in the process of being
      administratively dissolved. RxElite owns all of the capital stock of the
      foregoing subsidiary.

     

    3.2 Organization
      and Qualification.
      Each of
      Pubco and RxElite is an entity duly incorporated or otherwise organized, validly
      existing and in good standing under the laws of its state of organization,
      with
      the requisite power and authority to own and use its properties and assets
      and
      to carry on its business as currently conducted. Neither Pubco nor RxElite
      is in
      violation or default of any of the provisions of its articles or certificate
      of
      incorporation or bylaws. Each of Pubco and RxElite is duly qualified to conduct
      business and is in good standing as a foreign corporation 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 have or reasonably be expected to result
      in (i) a material adverse effect on the legality, validity or enforceability
      of
      any Transaction Document, (ii) a material adverse effect on the results of
      operations, assets or business of Pubco or RxElite, or (iii) a material adverse
      effect on Pubco or RxElite’s ability to perform in any material respect on a
      timely basis its obligations under any Transaction Document (any of (i), (ii)
      or
      (iii), a “Material
      Adverse Effect”)
      and to
      Seller’s Knowledge, no legal proceeding has been instituted in any such
      jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
      curtail such power and authority or qualification. “Seller’s
      Knowledge”
and
      “Knowledge
      Of Seller”
shall
      mean the actual knowledge of Seller’s executive officers after reasonable
      inquiry.

     

    3.3 Authorization;
      Enforcement.
      Seller
      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 thereunder. The execution and delivery of each
      of
      the Transaction Documents by Seller and the consummation by it of the
      transactions contemplated thereby have been duly authorized by all necessary
      action on the part of Seller and no further action is required by Seller, its
      board of directors or its stockholders in connection therewith. Each Transaction
      Document has been (or upon delivery will have been) duly executed by Seller
      and,
      when delivered in accordance with the terms thereof, will constitute the valid
      and binding obligation of Seller enforceable against Seller in accordance with
      its terms except (i) as limited by general equitable principles and applicable
      bankruptcy, insolvency, reorganization, moratorium and other laws of general
      application affecting enforcement of creditors’ rights generally, (ii) as
      limited by laws relating to the availability of specific performance, injunctive
      relief or other equitable remedies and (iii) insofar as indemnification and
      contribution provisions may be limited by applicable law.

     

    
      
        
        

      

      
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    3.4 No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by Seller
      and
      the consummation by Seller of the other transactions contemplated hereby and
      thereby do not and will not: (i) conflict with or violate any provision of
      Seller’s articles or certificate of incorporation or bylaws, or (ii) conflict
      with, or constitute a default (or an event that with notice or lapse of time
      or
      both would become a default) under, result in the creation of any lien upon
      any
      of the properties or assets of Seller, 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 Seller debt or otherwise) or other understanding to
      which Seller is a party or by which any property or asset of Seller is bound
      or
      affected, or (iii) to Seller’s Knowledge, conflict with or result in a violation
      of any law, rule, regulation, order, judgment, injunction, decree or other
      restriction of any court or governmental authority to which Seller is subject
      (including federal and state securities laws and regulations), or by which
      any
      property or asset of Seller is bound or affected; except in the case of each
      of
      clauses (ii) and (iii), such as could not have or reasonably be expected to
      result in a Material Adverse Effect.

     

    3.5 Filings,
      Consents and Approvals.
      Seller
      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 Seller of the
      Transaction Documents, other than filings in compliance with U.S. federal and
      state securities laws and Canadian securities laws.

     

    3.6 Issuance
      of the Securities.
      The
      Securities are duly authorized and, when issued and paid for in accordance
      with
      the applicable Transaction Documents, will be duly and validly issued, fully
      paid and nonassessable, free and clear of all liens imposed by Seller other
      than
      restrictions provided for in the Transaction Documents. The Underlying Shares,
      when issued in accordance with the terms of the Transaction Documents, will
      be
      validly issued, fully paid and nonassessable, free and clear of all liens
      imposed by Seller other than restrictions provided for in the Transaction
      Documents. Seller has reserved from its duly authorized capital stock a number
      of shares of Common Stock sufficient for the Warrants to be exercised in
      full.

     

    3.7 Capitalization.
      The
      capitalization of Pubco and RxElite is as set forth in the Jumbo
      8-K.

     

    
      
        
        

      

      
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    3.8 Financial
      Statements.
      The
      audited financial statements of RxElite as of December 31, 2006 are as set
      forth
      in the Jumbo 8-K. 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
      Seller as of and for the dates thereof and the results of operations and cash
      flows for the periods then ended.

     

    3.9 Material
      Changes.
      Since
      December 31, 2006, (i) there has been no event, occurrence or development that
      has had a Material Adverse Effect, (ii) RxElite 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 RxElite’s financial statements
      pursuant to GAAP, (C) liabilities and costs and expenses incurred in connection
      with the raising of funding for RxElite, (iii) RxElite has not altered its
      method of accounting, (iv) RxElite has not declared or made any dividend or
      distribution of cash or other property to its stockholders or purchased,
      redeemed or made any agreements to purchase or redeem any shares of its capital
      stock and (v) RxElite has not issued any equity securities to any officer,
      director or affiliate, except pursuant to existing stock option
      plans.

     

    3.10 Litigation.
      There
      is no action, suit, inquiry, notice of violation, proceeding or investigation
      pending or, to the Knowledge of Seller, threatened against or affecting RxElite
      or any of its properties before or by any court, arbitrator, governmental or
      administrative agency or regulatory authority (federal, state, county, local
      or
      foreign) (collectively, an “Action”)
      which
      (i) adversely affects or challenges the legality, validity or enforceability
      of
      any of the Transaction Documents or the Securities or (ii) could, if there
      were
      an unfavorable decision, have a Material Adverse Effect. Neither RxElite 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. 

     

    3.11 Labor
      Relations.
      No
      material labor dispute exists or, to the Knowledge of Seller, is imminent with
      respect to any of the employees of RxElite that could reasonably be expected
      to
      result in a Material Adverse Effect. None of RxElite’s employees is a member of
      a union that relates to such employee’s relationship with RxElite, and RxElite
      is not a party to a collective bargaining agreement, and Seller believes that
      RxElite’s relationship with its employees is good. No executive officer, to the
      Knowledge of Seller, is, or is now expected to be, in violation of any material
      term of any employment contract, confidentiality, disclosure or proprietary
      information agreement or non-competition agreement, or any other contract or
      agreement with RxElite. To Seller’s Knowledge, RxElite is in compliance with all
      applicable U.S. federal, state, local and foreign laws and regulations relating
      to employment and employment practices, terms and conditions of employment
      and
      wages and hours, except where the failure to be in compliance could not,
      individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect.

     

    3.12 Compliance.
      RxElite
      (i) is not in default under or in violation of (and no event has occurred that
      has not been waived that, with notice or lapse of time or both, would result
      in
      a default by Seller under), nor has RxElite received notice of a claim that
      it
      is in default under or that it is in violation of, any indenture, loan or credit
      agreement or any other agreement or instrument to which it is a party or by
      which it or any of its properties is bound (whether or not such default or
      violation has been waived), (ii) is not in violation of any order of any court,
      arbitrator or governmental body, or (iii) to Seller’s Knowledge, is not and has
      not been in violation of any statute, rule or regulation of any governmental
      authority, including without limitation all foreign, federal, state and local
      laws applicable to its business and all such laws that affect the environment,
      except in each case as could not have or reasonably be expected to result in
      a
      Material Adverse Effect.

     

    
      
        
        

      

      
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    3.13 Regulatory
      Permits.
      To
      Seller’s Knowledge, RxElite possesses all certificates, authorizations and
      permits issued by the appropriate federal, state, local or foreign regulatory
      authorities necessary to conduct its business as is presently conducted, except
      where the failure to possess such permits could not have or reasonably be
      expected to result in a Material Adverse Effect (“Material
      Permits”),
      and
      RxElite has not received any notice of proceedings relating to the revocation
      or
      modification of any Material Permit.

     

    3.14 Title
      to Assets.
      RxElite
      has good and marketable title in fee simple to all real property owned by it
      that is material to its business and good and marketable title in all personal
      property owned by it that is material to its business, 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 RxElite and liens for the payment of federal, state
      or other taxes, the payment of which is neither delinquent nor subject to
      penalties or liens that arose in the ordinary course of RxElite’s business. Any
      real property and facilities held under lease by RxElite are held by it under
      valid, subsisting and enforceable leases with which RxElite is in compliance,
      except for such violations which would not cause a Material Adverse
      Effect.

     

    3.15 Patents
      and Trademarks.
      RxElite
      has, or has rights to use, all patents, patent applications, trademarks,
      trademark applications, service marks, trade names, trade secrets, inventions,
      copyrights, licenses and other intellectual property rights and similar rights
      necessary or material for use in connection with its business as presently
      conducted and which the failure to so have could have a Material Adverse Effect
      (collectively, the “Intellectual
      Property Rights”).
      RxElite has not received a notice (written or otherwise) that the Intellectual
      Property Rights used by RxElite violates or infringes upon the rights of any
      person. To the Knowledge of Seller, (i) all such Intellectual Property Rights
      are enforceable and (ii) there is no existing infringement by another person
      of
      any of the Intellectual Property Rights. RxElite has taken reasonable security
      measures to protect the secrecy, confidentiality and value of all of its
      Intellectual Property Rights, except where failure to do so could not,
      individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect.

     

    3.16 Insurance.
      RxElite
      is 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 RxElite is engaged and for companies similar in size to
      RxElite. Seller has no reason to believe that RxElite 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 RxElite’s
      business without a significant increase in cost. 

     

    
      
        
        

      

      
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    3.17 Private
      Placement.
      Assuming the accuracy of the Buyers’ representations and warranties set forth in
      the Transaction Documents, no registration under the Securities Act of 1933,
      as
      amended (the “Act”),
      is
      required for the offer and sale of the Securities by Seller to the Buyers as
      contemplated hereby.

     

    3.18 Registration
      Rights.
      Other
      than as set forth in the Registration Rights Agreement to which the Buyers
      are a
      party, no person has any right to cause Seller to effect the registration under
      the Act of any securities of Seller. 

     

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

     

    3.20 Transactions
      with Affiliates and Employees.
      None of
      the officers or directors of RxElite and, to the Knowledge of Seller, none
      of
      the employees of RxElite is presently a party to any transaction with RxElite
      (other than for services as employees, officers and directors or in connection
      with such person’s acquisition or holding of securities of RxElite), 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 Seller, any entity in which any officer,
      director, or any such employee has a substantial interest or is an officer,
      director, trustee or partner, in each case in excess of $60,000 other than
      for
      (i) payment of salary or consulting fees for services rendered, (ii)
      reimbursement for expenses incurred on behalf of RxElite and (iii) other
      employee benefits, including stock option agreements under any stock option
      plan
      of RxElite.

     

    3.21 Certain
      Fees.
      No
      brokerage or finder’s fees or commissions are or will be payable by Seller to
      any broker, financial advisor or consultant, finder, placement agent, investment
      banker, bank or other person with respect to the transactions contemplated
      by
      the Transaction Documents. The Buyers shall have no obligation with respect
      to
      any fees or with respect to any claims made by or on behalf of other persons
      for
      fees of a type contemplated in this Section that may be due in connection with
      the transactions contemplated by the Transaction Documents. 

     

    3.22 Accountants.
      Seller’s accounting firm is H. J. & Associates.

     

    3.23 No
      Disagreements with Accountants and Lawyers.
      There
      are no disagreements of any kind presently existing, or reasonably anticipated
      by Seller to arise, between Seller and the accountants and lawyers formerly
      or
      presently employed by RxElite.

     

    3.24 No
      General Solicitation.
      Neither
      RxElite nor any person acting on behalf of RxElite has offered or sold any
      of
      the Securities by any form of general solicitation or general advertising.
      Seller has offered the Securities for sale only to the Buyers and certain other
      “accredited investors” within the meaning of Rule 501 under the
      Act.

     

    
      
        
        

      

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

     

    4. Representations
      and Warranties of Buyer.
      Each of
      the Buyers, severally and not jointly, hereby represents and warrants to Seller
      as follows:

     

    4.1 Due
      Existence; Authority.
      If the
      Buyer is a company, it is a duly organized legal entity, validly existing and
      in
      good standing under the laws of the state of its organization and has the
      requisite company power and authority to execute and deliver this Agreement
      and
      to perform its obligations hereunder. If the Buyer is a partnership, syndicate
      or other form of unincorporated organization, the Buyer has the necessary legal
      capacity and authority to execute and deliver this Agreement and to observe
      and
      perform its covenants and obligations hereunder and has obtained all necessary
      approvals in respect thereof. If the Buyer is a natural person, the Buyer has
      obtained the age of majority and has the legal capacity and competence to
      execute this Agreement and to take all actions required pursuant
      thereto.

     

    4.2 Enforceability.
      This
      Agreement has been duly executed and delivered by Buyer and is the valid and
      binding obligation of the Buyer, enforceable against the Buyer in accordance
      with its terms, except as such enforceability may be limited by bankruptcy,
      moratorium, insolvency, reorganization or other similar laws generally affecting
      the enforcement of creditors' rights, specific performance, injunctive or other
      equitable remedies.

     

    4.3 Investment
      Representations.
      The
      Buyer is acquiring the Securities, and any capital stock issuable upon exercise
      of the Securities, for the Buyer’s own account, for investment and not with a
      view to, or for sale in connection with, any distribution of such securities
      or
      any part thereof. The Buyer (i) has such knowledge and experience in financial
      and business affairs that it is capable of evaluating the merits and risks
      involved in purchasing the Securities, (ii) is able to bear the economic risks
      (including, a complete loss) involved in purchasing the Securities and has
      the
      adequate means of providing for its current needs and contingencies, (iii)
      has
      had the opportunity to ask questions of, and receive answers from, Seller and
      persons acting on Seller’s behalf concerning Seller’s business, management, and
      financial affairs and the terms and conditions of the Securities. The Buyer’s
      jurisdiction of residence is set forth on Exhibit
      A.
      

     

    4.4 1933
      SEC Act.
      The
      Buyer acknowledges that (i) it has received and had the opportunity to review
      the Jumbo 8-K with respect to the pending acquisition of RxElite by Pubco
      describing Seller’s business and operations following such acquisition, and (ii)
      it has reviewed the Jumbo 8-K, including, without limitation, the description
      of
      business and risk factors with respect to Seller and this offering set forth
      in
      the Jumbo 8-K. The Buyer acknowledges that all documents, records and books
      pertaining to this investment have been made available for inspection by the
      Buyer, the Buyer’s attorney and/or the Buyer’s accountant as set forth in Rule
      502 of Regulation D under the Act and that all records and books of RxElite
      were
      available during reasonable business hours at RxElite’s principal place of
      business. The Buyer and/or its adviser(s) have had a reasonable opportunity
      to
      ask questions of and receive answers from RxElite, or a person or persons acting
      on its behalf, concerning the terms and conditions of the offering of the
      Securities, and to obtain additional information, to the extent possessed or
      obtainable without unreasonable effort or expense. All such questions have
      been
      answered to the full satisfaction of the Buyer. 

     

    
      
        
        

      

      
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    4.5 Accredited
      Investor; Residence.
      The
      Buyer is an “accredited investor” as such term is defined in Rule 501 of
      Regulation D under the Act. The jurisdiction referred to under “Address” in
Exhibit
      A
      attached
      hereto is the Buyer’s residence or place of business and is not created or used
      solely for the purpose of acquiring the Securities and the Buyer is not
      purchasing the Securities for the account or benefit of any person in any
      jurisdiction other than such jurisdiction;

     

    4.6 THE
      BUYER RECOGNIZES THAT AN INVESTMENT IN SELLER IS SPECULATIVE AND INVOLVES A
      HIGH
      DEGREE OF RISK, AND THAT PURCHASERS OF SECURITIES COULD LOSE THEIR ENTIRE
      INVESTMENT.

     

    4.7 Certain
      Securities Matters.
      In
      reliance upon the Buyers’ representations and warranties in this Agreement
      (including Appendix
      A
      and
Appendix
      B
      to this
      Agreement), neither the offering nor the sale of the Securities has been
      registered under the Act or any state securities laws or regulations. The Buyer
      was not offered or sold the Securities, directly or indirectly, by means of
      any
      form of general solicitation or general advertising, including the following:
      (i) any advertisement, article, notice, or other communication published in
      any
      newspaper, magazine, or similar medium or broadcast over television or radio;
      or
      (ii) to the knowledge of the Buyer, any seminar or meeting whose attendees
      had
      been invited by any general advertising. There is no public market for the
      Securities and Seller is under no obligation to register the Securities on
      the
      Buyer’s behalf or to assist the Buyer in complying with any exemption from
      registration (other than as set forth in the Registration Rights Agreement).
      The
      Buyer has not received or been provided with a prospectus, offering memorandum
      or sales or advertising literature and the Buyer’s decision to purchase the
      Securities was not based upon and the Buyer has not relied upon any verbal
      or
      written representations as to fact made by Seller or any other person (other
      than those representations and warranties set forth in Article 3 of this
      Agreement) but that the Buyer’s decision was based upon the information about
      Seller that is publicly available.

     

    4.8 Liquidity.
      The
      Buyer must hold the Securities indefinitely unless the sale or transfer thereof
      is subsequently registered under the Act or an exemption from such registration
      is available. The Buyer may not subsequently sell, assign, pledge, or otherwise
      transfer the Securities except: (i) pursuant to an effective registration
      statement registering the securities under the Act and/or applicable state
      securities laws, or (ii) pursuant to the opinion of counsel, which is
      satisfactory to Seller, that such registration under the Act and/or such state
      securities laws is not required to effect such subsequent sale, assignment,
      pledge, or other transfer. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    4.9 Legend.
      The
      following legend referring to the foregoing restrictions will be set forth
      on
      certificates representing the Securities, as set forth below:

     

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH
      A
      VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE
      OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
      RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY
      THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
      1933.

     

    The
      following additional legend shall be set forth on certificates representing
      the
      Securities issued to Buyers resident in Canada:

     

    UNLESS
      PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
      TRADE THE SECURITY BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE
      LATER
      OF (I) [insert issuance date], AND (II) THE DATE THE ISSUER BECAME A REPORTING
      ISSUER IN ANY PROVINCE OR TERRITORY.

    


    4.10 Certain
      Prohibited Persons.
      The
      Buyer is not a person or entity (a “Person”)
      with
      whom a United States citizen, entity organized under the laws of the United
      States or its territories or entity having its principal place of business
      within the United States or any of its territories (collectively, a
“U.S.
      Person”)
      is
      prohibited from transacting business of the type contemplated by this Agreement,
      whether such prohibition arises under United States law, regulation, executive
      orders and lists published by the Office of Foreign Assets Control, Department
      of the Treasury (“OFAC”)
      (including those executive orders and lists published by OFAC with respect
      to
      Persons that have been designated by executive order or by the sanction
      regulations of OFAC as Persons with whom U.S. Persons may not transact business
      or must limit their interactions to types approved by OFAC (“Specially
      Designated Nationals and Blocked Persons”)
      or
      otherwise. Neither the Buyer nor any Person who owns an interest in the Buyer
      (collectively, a “Purchaser
      Party”)
      is a
      Person with whom a U.S. Person, including a United States Financial Institution
      as defined in 31 U.S.C. Section 5312, as amended (“Financial
      Institution”),
      is
      prohibited from transacting business of the type contemplated by this Agreement,
      whether such prohibition arises under United States law, regulation, executive
      orders and lists published by the OFAC (including those executive orders and
      lists published by OFAC with respect to Specially Designated Nationals and
      Blocked Persons) or otherwise.

     

    4.11 Source
      of Funds.
      The
      Buyer has taken such measures as are required by law to assure that the funds
      used to pay to Seller the Purchase Price are derived: (i) from transactions
      that
      do not violate United States law nor, to the extent such funds originate outside
      the United States, do not violate the laws of the jurisdiction in which they
      originated; and (ii) from permissible sources under United States law and to
      the
      extent such funds originate outside the United States, under the laws of the
      jurisdiction in which they originated.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    4.12 Certain
      Legislation.
      To the
      best of the Buyer’s knowledge, neither the Buyer nor any Purchaser Party, nor
      any Person providing funds to the Buyer: (i) is under investigation by any
      governmental authority for, or has been charged with, or convicted of, money
      laundering, drug trafficking, terrorist related activities, any crimes which
      in
      the United States would be predicate crimes to money laundering, or any
      violation of any Anti-Money Laundering Laws (as hereinafter defined); (ii)
      has
      been assessed civil or criminal penalties under any Anti-Money Laundering Laws;
      or (iii) has had any of its funds seized or forfeited in any action under any
      Anti-Money Laundering Laws. For purposes of this Section,
      the
      term “Anti-Money
      Laundering Laws”
shall
      mean laws, regulations and sanctions, state and federal, criminal and civil,
      that: (i) limit the use of and/or seek the forfeiture of proceeds from illegal
      transactions; (ii) limit commercial transactions with designated countries
      or
      individuals believed to be terrorists, narcotics dealers or otherwise engaged
      in
      activities contrary to the interests of the United States; (iii) require
      identification and documentation of the parties with whom a Financial
      Institution conducts business; or (iv) are designed to disrupt the flow of
      funds
      to terrorist organizations. Such laws, regulations and sanctions shall be deemed
      to include the USA Patriot Act of 2001, Pub. L. No. 107-56 (the “Patriot
      Act”),
      the
      Bank Secrecy Act, 31 U.S.C. Section 5311 et. seq. (the “Bank
      Secrecy Act”),
      the
      Trading with the Enemy Act, 50 U.S.C. Appendix, the International Emergency
      Economic Powers Act, 50 U.S.C. Section 1701 et. seq., and the sanction
      regulations promulgated pursuant thereto by the OFAC, as well as laws relating
      to prevention and detection of money laundering in 18 U.S.C. Sections 1956
      and
      1957.

     

    4.13 Bank
      Act.
      The
      Buyer is in compliance with any and all applicable provisions of the Patriot
      Act
      including, without limitation, amendments to the Bank Secrecy Act. If the Buyer
      is a Financial Institution, it has established and is in compliance with all
      procedures required by the Buyer and the Bank Secrecy Act.

     

    4.14 Appendix.
      The
      Buyer has accurately and truthfully completed Appendix
      A
      attached
      hereto. Each Buyer that is a resident of Canada or is otherwise subject to
      the
      securities laws of any Province of Canada (a “Canadian
      Buyer”)
      has
      accurately and truthfully also completed Appendix
      B
      attached
      hereto.

     

    4.15 Canadian
      Representations.
      Each
      Canadian Buyer hereby represents and warrants to Seller that the
      representations, warranties and acknowledgements set out in Exhibit
      E
      attached
      hereto.

     

    4.16 Covenants
      of Purchasers Not to Short Stock.
      The
      Buyer, on behalf of itself and its affiliates, hereby covenants and agree not
      to, directly or indirectly, offer to “short sell”, contract to “short sell” or
      otherwise “short sell” the securities of Seller, including, without limitation,
      shares of Common Stock that will be received as a result of the exercise of
      the
      Warrants.

     

    5. Further
      Assurances.
      Each of
      the parties shall, prior to or at the Closing, as may be appropriate, execute
      such documents and other papers and take such other further actions as may
      be
      reasonably required to carry out the provisions hereof and effectuate the
      transactions contemplated hereby. Each party shall use its commercially
      reasonable efforts to fulfill or obtain the fulfillment of the conditions to
      its
      obligation to effect the Closing, including promptly obtaining any consents
      required in connection herewith.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    6. Conditions
      Precedent to the Obligation of Buyer to Close.
      The
      obligation of each Buyer to complete the Closing, and the right for Seller
      to
      accept any purchase of Securities hereunder, is subject to the fulfillment
      on or
      prior to the Closing Date of all of the following conditions, any one or more
      of
      which may be waived by the holders of a majority of the Securities sold
      hereunder, collectively, in writing:

     

    6.1 Agreements
      and Conditions.
      On or
      before the Closing Date, Seller shall have complied with and duly performed
      and
      satisfied in all material respects all agreements and conditions on its part
      to
      be complied with and performed by such date pursuant to this
      Agreement.

     

    6.2 Consents.
      Seller
      shall have obtained any consents necessary to effectuate this Agreement and
      to
      consummate the transactions contemplated hereby.

     

    6.3 Registration
      Rights Agreement.
      Seller
      shall have duly executed and delivered to the Buyers the Registration Rights
      Agreement.

     

    6.4 Minimum
      Amount.
      The
      Buyers shall have delivered to the Escrow Agent at least $3,500,000 in the
      aggregate.

     

    6.5 Jumbo
      8-K.
      RxElite
      shall have provided each Buyer with a substantially completed draft of a Current
      Report on Form 8-K containing such information about RxElite as would be
      required to be disclosed in a Registration Statement on Form 10-SB (the
“Jumbo
      8-K”),
      and
      following receipt of such Jumbo 8-K, each Buyer shall have reconfirmed, in
      writing, its purchase of the Securities hereunder.

     

    6.6 Pubco
      Merger.
      Pubco
      shall have consummated its acquisition of RxElite’s issued and outstanding
      capital stock and Pubco shall have succeeded to RxElite’s business as its sole
      line of business.

     

    7. Conditions
      Precedent to the Obligation of Seller to Close.
      The
      obligation of Seller to complete the Closing is subject to the fulfillment
      on or
      prior to the Closing Date of all of the following conditions, any one or more
      of
      which may be waived by Seller in writing:

     

    7.1 Agreements
      and Conditions.
      On or
      before the Closing Date, each Buyer shall have complied with and performed
      and
      satisfied in all material respects all agreements and conditions to be complied
      with and performed by such date pursuant to this Agreement.

     

    7.2 Payment
      of Purchase Price.
      Each
      Buyer shall have paid to the Escrow Agent the entire Purchase
      Price.

     

    7.3 Registration
      Rights Agreement.
      Each
      Buyer shall have duly executed and delivered to Seller the Registration Rights
      Agreement.

     

    7.4 Appendices.
      Each
      Buyer shall have completed and delivered to Seller Appendix A
      or
Appendix
      B,
      as the
      case may be, to this Agreement, which shall be acceptable to Seller, in Seller’s
      discretion.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    7.5 Minimum
      Amount.
      The
      Buyers shall have delivered to the Escrow Agent at least $3,500,000 in the
      aggregate.

     

    7.6 Jumbo
      8-K.
      RxElite
      shall have provided each Buyer with the Jumbo 8-K and, following receipt of
      such
      Jumbo 8-K, each Buyer shall have reconfirmed, in writing, its purchase of the
      Securities hereunder.

     

    7.7 Pubco
      Merger.
      Pubco
      shall have consummated its acquisition of RxElite’s issued and outstanding
      capital stock and Pubco shall have succeeded to RxElite’s business as its sole
      line of business.

     

    8. Miscellaneous.

     

    8.1 Publicity.
      Subject
      to the requirements of the applicable securities laws, no publicity release
      or
      announcement concerning this Agreement or the transactions contemplated hereby
      shall be issued without advance approval of the form and substance thereof
      by
      the Buyers and Seller jointly.

     

    8.2 Notices.
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed to have been given when delivered by hand or by facsimile transmission,
      when telexed, or upon receipt when mailed by registered or certified mail
      (return receipt requested), postage prepaid, to the parties at the following
      addresses (or at such other address for a party as shall be specified by like
      notice):

     

    (i) If
      to
      Seller:

    


    RxElite
      Holdings Inc.

    1404
      N.
      Main St., Ste. 200

    Meridian,
      ID 83642

    Attention:
      Daniel Chen, CEO

    Facsimile:
      (208) 288-1191

    


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

    


    Morrison
      Foerster

    12531
      High Bluff Drive, Suite 100

    San
      Diego, California 92130

    Attention:
      Jay de Groot

    Facsimile:
      (858) 720-5125

    


    And

    Aird
      & Berlis LLP

    BCE
      Place

    1800
      -
      181 Bay Street

    Toronto,
      Ontario M5J 2T9

    Attention:
      Richard M. Kimel

    Facsimile:
      (416) 863-1515

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    


    (ii) If
      to the
      Buyers: to the address(es) listed on Exhibit
      A
      hereto

    


    8.3 Entire
      Agreement; Exercise of Rights.
      

     

    (a) This
      Agreement (including the Appendices and Exhibits hereto) embodies the entire
      agreement and understanding of the parties hereto with respect to the subject
      matter hereof. No amendment or waiver of any provision of this Agreement, or
      consent to the departure by any party from any such provision, shall be
      effective unless it is in writing and signed by Seller and the holders of a
      majority of the Securities sold hereunder. Any such waiver or consent shall
      be
      effective only in the specific instance and for the specific purpose for which
      given.

     

    (b) No
      failure on the part of a party to exercise, and no delay in exercising, any
      right under this Agreement, or any agreement contemplated hereby, shall operate
      as a waiver hereof by such party, nor shall any single or partial exercise
      of
      any right under this Agreement, or any agreement contemplated hereby, preclude
      any other or further exercise thereof or the exercise of any other right.


     

    8.4 Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by and construed and enforced in accordance
      with the internal laws of the State of New York, without regard to the
      principles of conflicts of law thereof. Each party agrees that all legal
      proceedings concerning the interpretations, enforcement and defense of the
      transactions contemplated by this Agreement (whether brought against a party
      hereto or its respective affiliates, directors, officers, shareholders,
      employees or agents) shall be commenced exclusively in the state and federal
      courts sitting in the County of New York, State of New York. Each party hereto
      hereby irrevocably submits to the exclusive jurisdiction of the state and
      federal courts sitting in the County of New York, State of New York for the
      adjudication of any dispute hereunder or in connection herewith or with any
      transaction contemplated hereby or discussed herein (including with respect
      to
      the enforcement of this Agreement), and hereby irrevocably waives, and agrees
      not to assert in any suit, action or proceeding, any claim that it is not
      personally subject to the jurisdiction of any such court. Each party hereto
      hereby irrevocably waives personal service of process and consents to process
      being served in any such suit, action or proceeding by delivering a copy thereof
      via 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. Each party hereto hereby irrevocably
      waives, to the fullest extent permitted by applicable law, any and all right
      to
      trial by jury in any legal proceeding arising out of or relating to this
      Agreement or the transactions contemplated hereby. If either party shall
      commence an action or proceeding to enforce any provisions of this Agreement,
      then the prevailing party in such action or proceeding shall be reimbursed
      by
      the other party for its attorneys fees and other costs and expenses incurred
      with the investigation, preparation and prosecution of such action or
      proceeding. 

     

    8.5 Expenses.
      Seller
      and the Buyers shall, bear their respective expenses incurred in connection
      with
      the negotiation, preparation, execution and performance of this Agreement and
      the consummation of the transactions contemplated hereby, including, without
      limitation, all fees and expenses of agents, representatives, counsel, brokers
      or finders, and accountants.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    8.6 Acknowledgment;
      Waiver of Conflicts.
      Each
      Buyer acknowledges that: (a) it has read this Agreement; (b) it has been
      represented in the preparation, negotiation and execution of this Agreement
      by
      legal counsel of its own choice or has voluntarily declined to seek such
      counsel; and (c) it understands the terms and consequences of this Agreement
      and
      is fully aware of the legal and binding effect of this Agreement. Each Buyer
      understands that RxElite has been represented in the preparation, negotiation
      and execution of this Agreement by Morrison & Foerster LLP, counsel to
      RxElite, and that Morrison & Foerster LLP has not represented any Buyer or
      any stockholder, director or employee of Seller or any Investor in the
      preparation, negotiation and execution of this Agreement. Each Buyer and Seller
      acknowledges that Morrison & Foerster LLP has in the past represented and is
      now or may in the future represent one or more Buyers or their affiliates in
      matters unrelated to the transactions contemplated by this Agreement, including
      the representation of such Buyers or their affiliates in matters of a nature
      similar to those contemplated by this Agreement. Each Buyer and Seller hereby
      acknowledges that it has had an opportunity to ask for and has obtained
      information relevant to such representation, including disclosure of the
      reasonably foreseeable adverse consequences of such representation, and hereby
      waives any conflict arising out of such representation with respect to the
      matters contemplated by this Agreement.

     

    8.7 Investor
      Representative.
      Each
      Buyer hereby appoints Mark Groussman (the “Investor
      Representative”)
      as the
      agent and attorney-in-fact for and on behalf of each holder of Buyer to take
      all
      actions specified in the Escrow Agreement. No bond shall be required of the
      Investor Representative and the Investor Representative shall receive no
      compensation for services rendered from RxElite or the Seller. Any decision,
      act, consent or instruction of the Investor Representative shall be final,
      binding and conclusive upon each of the Buyers and Seller and the Escrow Agent
      may rely upon any written decision, act, consent or instruction of the Investor
      Representative. Seller is hereby relieved from any liability to any Person
      for
      any acts done by it in accordance with such written decision, act, consent
      or
      instruction of the Investor Representative. 

     

    8.8 Stock
      Dividend.
      As soon
      as practicable following the Closing, Pubco shall declare a stock dividend
      of
      10.036789 shares for each outstanding share of Common Stock (the “Dividend”),
      such
      that following consummation of the Dividend, each stockholder shall hold
      11.036789 shares of Common Stock for each one share of stock held prior to
      the
      Dividend and the adjusted Purchase Price for one share of Common Stock shall
      be
      $.60, the adjusted exercise price of each Warrant shall be $0.85 per share
      and
      the adjusted number of shares of Common Stock issuable pursuant to a whole
      Warrant shall be one share. 

     

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
      first above written.

     

    
      	 	 	Seller:
	 
 	 
 	
            
	
            	
            	By:  
	 	
              
                

              

            
	 	
              Name:  

              
                

              

            
	 	
              Title: 

              
                

              

            
	 	 
	 	Buyer:
	 	 
	 	 
	 	 By:
	 	
              
                

              

            
	 	 Name: 
	 	
              
                
 

            
	 	Title:
	 	
              
                
  

            


    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    APPENDIX
      A

    


    THIS
      APPENDIX MUST BE COMPLETED BY EACH BUYER THAT IS RESIDENT IN THE UNITED STATES
      OF AMERICA


    


    NAME
      OF BUYER:
      ___________________________________________

     

    I. PLEASE
      INITIAL THE SPACE AFTER THE DEFINITION OF “ACCREDITED INVESTOR” THAT APPLIES TO
      YOU. (ONLY ONE SPACE NEEDS TO BE INITIALED.)

    


    (i) Any
      natural person whose individual net worth, or joint net worth with that person’s
      spouse, at the time of his purchase exceeds $1,000,000. __________

     

    (For
      purposes of calculating an investor’s net worth, “net worth” is defined as the
      difference between total assets and total liabilities, including home, home
      furnishings, and personal automobiles.) 

    


    (ii) Any
      natural person who had an individual income in excess of $200,000 in each of
      the
      two most recent years or joint income with that person’s spouse in excess of
      $300,000 in each of those years and has a reasonable expectation of reaching
      the
      same income level in the current year. __________

     

    (iii) Any
      entity in which all of the equity owners are accredited investors.
      __________

     

    II. Please
      indicate the form of ownership desired for the Securities:

    


    _______
      Individual (one signature required)

    


    _______
      Joint Tenants with right of survivorship (both parties must sign)

    


    _______
      Tenants by the Entirety (both parties must sign)

    


    _______
      Tenants in Common (all parties must sign)

    


    _______
      Limited Liability Company (signature of authorized party or parties
      required)


    


    III.

       
       _____________________________________________________________________________

    Please
      PRINT here the exact name Buyer desires for registration of the
      Securities.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    APPENDIX
      B

    


    THIS
      APPENDIX MUST BE COMPLETED BY EACH BUYER THAT IS RESIDENT IN
      CANADA

    


    PLEASE
      MARK YOUR INITIALS BESIDE THE CATEGORY TO WHICH YOU BELONG

    


    In
      connection with the purchase by the undersigned purchaser (“Canadian Buyer”) of
      Securities of Seller, Canadian Buyer or the undersigned on behalf of Canadian
      Buyer, as the case may be, certifies for the benefit of Seller:

    


    Canadian
      Buyer, or one or more beneficial purchaser(s) for whom Canadian Buyer is acting,
      is a resident of, or the purchase and sale of securities to Canadian Buyer
      is
      otherwise subject to the securities legislation of, a Province or Territory
      of
      Canada and Canadian Buyer is (and will at the time of acceptance of the
      subscription be) an accredited investor within the meaning of National
      Instrument 45-106 - Prospectus and Registration Exemptions (“NI 45-106”) because
      Canadian Buyer, or beneficial purchaser(s) is/are: 

    


    (a) a
      Canadian financial institution, or a bank listed in Schedule III of the Bank
      Act
      (Canada);

     

    (b) the
      Business Development Bank of Canada incorporated under the Business Development
      Bank Act (Canada);

     

    (c) a
      subsidiary of any person referred to in paragraphs (a) or (b), if the person
      owns all of the voting securities of the subsidiary, except the voting
      securities required by law to be owned by directors of that
      subsidiary;

     

    (d) a
      person
      registered under the securities legislation of a jurisdiction of Canada as
      an
      adviser or dealer, other than a person registered solely as a limited market
      dealer under one or both of the Securities Act (Ontario) or the Securities
      Act
      (Newfoundland and Labrador);

     

    (e) an
      individual registered or formerly registered under the securities legislation
      of
      a jurisdiction of Canada as a representative of a person referred to in
      paragraph (d);

     

    (f) the
      Government of Canada or a jurisdiction of Canada, or any crown corporation,
      agency or wholly owned entity of the Government of Canada or a jurisdiction
      of
      Canada;

     

    (g) a
      municipality, public board or commission in Canada and a metropolitan community,
      school board, the Comité de gestion de la taxe scolaire de l’ île
      de Montréal or an intermunicipal management board in Québec;

     

    (h) any
      national, federal, state, provincial, territorial or municipal government of
      or
      in any foreign jurisdiction, or any agency of that government;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i) a
      pension
      fund that is regulated by either the Office of the Superintendent of Financial
      Institutions (Canada) or a pension commission or similar regulatory authority
      of
      a jurisdiction of Canada;

     

    (j) an
      individual who, either alone or with a spouse, beneficially owns, directly
      or
      indirectly, financial assets having an aggregate realizable value that before
      taxes, but net of any related liabilities, exceeds CDN$1,000,000;

     

    (k) an
      individual whose net income before taxes exceeded CDN$200,000 in each of the
      two
      most recent calendar years or whose net income before taxes combined with that
      of a spouse exceeded CDN$300,000 in each of the two most recent calendar years
      and who, in either case, reasonably expects to exceed that net income level
      in
      the current calendar year;

     

    (l) an
      individual who, either alone or with a spouse, has net assets of at least
      CDN$5,000,000;

     

    (m) a
      person,
      other than an individual or an investment fund, that has net assets of at least
      CDN$5,000,000, as shown on its most recently prepared financial
      statements;

     

    (n) an
      investment fund that distributes or has distributed its securities only
      to:

     

    (i) a
      person
      that is or was an accredited investor at the time of the
      distribution,

     

    (ii) a
      person
      that acquires or acquired securities in the circumstances referred to in
      sections 2.10 of NI 45-106 (where the person subscribes for a minimum amount
      investment) and 2.19 of NI 45-106 (where the person makes an additional
      investment in investment funds), or

     

    (iii) a
      person
      described in paragraph (i) or (ii) that acquires or acquired securities under
      section 2.18 of NI 45-106 (investment fund reinvestment);

     

    (o) an
      investment fund that distributes or has distributed securities under a
      prospectus in a jurisdiction of Canada for which the regulator or, in Québec,
      the securities regulatory authority, has issued a receipt;

     

    (p) a
      trust
      company or trust corporation registered or authorized to carry on business
      under
      the Trust and Loan Companies Act (Canada) or under comparable legislation in
      a
      jurisdiction of Canada or a foreign jurisdiction acting on behalf of a fully
      managed account managed by the trust company or trust corporation, as the case
      may be;

     

    (q) a
      person
      acting on behalf of a fully managed account managed by that person, if that
      person

     

    (i) is
      registered or authorized to carry on business as an adviser or the equivalent
      under the securities legislation of a jurisdiction of Canada or a foreign
      jurisdiction, and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (ii) in
      Ontario, is purchasing a security that is not a security of an investment
      fund;

     

    (r) a
      registered charity under the Income Tax Act (Canada) that, in regard to the
      trade, has obtained advice from an eligibility adviser or an adviser registered
      under the securities legislation of the jurisdictions of the registered charity
      to give advice on the securities being traded;

     

    (s) an
      entity
      organized in a foreign jurisdiction that is analogous to any of the entities
      referred to in paragraphs (a) to (d) or paragraph (i) in form and
      function;

     

    (t) a
      person
      in respect of which all of the owners of interests, direct, indirect or
      beneficial, except the voting securities required by law to be owned by
      directors, are persons that are accredited investors;

     

    (u) an
      investment fund that is advised by a person registered as an adviser or a person
      that is exempt from registration as an adviser; or

     

    (v) a
      person
      that is recognized or designated by the securities regulatory authority or,
      except in Ontario and Québec, the regulator as

     

    (i) an
      accredited investor, or

     

    (ii) an
      exempt
      purchaser in Alberta or British Columbia after NI 45-106 comes into
      force.

     

    Interpretative
      Aids

    


    The
      following definitions relate to certain of the categories of NI 45-106 -
      Accredited Investor set forth above:

    


    (a) “bank”
      means a bank named in Schedule I or II of the Bank Act (Canada);

     

    (b) “Canadian
      financial institution” means

     

    (i) an
      association governed by the Cooperative Credit Associations Act (Canada) or
      a
      central cooperative credit society for which an order has been made under
      section 473(1) of that Act, or

     

    (ii) a
      bank,
      loan corporation, trust company, trust corporation, insurance company, treasury
      branch, credit union, caisse populaire, financial services cooperative, or
      league that, in each case, is authorized by an enactment of Canada or a
      jurisdiction of Canada to carry on business in Canada or a jurisdiction of
      Canada;

     

    (c) “control
      person” has the same meaning as in securities legislation except in Manitoba,
      Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario,
      Prince Edward Island and Québec where control person means any person that holds
      or is one of a combination of persons that holds

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i) a
      sufficient number of any of the securities of an issuer so as to affect
      materially the control of the issuer, or

     

    (ii) more
      than
      20% of the outstanding voting securities of an issuer except where there is
      evidence showing that the holding of those securities does not affect materially
      the control of the issuer;

     

    (d) “director”
      means:

     

    (i) a
      member
      of the board of directors of a company or an individual who performs similar
      functions for a company, and

     

    (ii) with
      respect to a person that is not a company, an individual who performs functions
      similar to those of a director of a company;

     

    (e) “eligibility
      adviser” means 

     

    (i) a
      person
      that is registered as an investment dealer or in an equivalent category of
      registration under the securities legislation of the jurisdiction of a purchaser
      and authorized to give advice with respect to the type of security being
      distributed, and

     

    (ii) in
      Saskatchewan and Manitoba, also means a lawyer who is a practicing member in
      good standing with a law society of a jurisdiction of Canada or a public
      accountant who is a member in good standing of an institute or association
      of
      chartered accountants, certified general accountants or certified management
      accountants in a jurisdiction of Canada provided that the lawyer or public
      accountant must not

     

    (A) have
      a
      professional, business or personal relationship with the issuer, or any of
      its
      directors, executive officer, founders, or control persons, and

     

    (B) have
      acted for or been retained personally or otherwise as an employee, executive
      officer, director, associate or partner of a person that has acted for or been
      retained by the issuer or any of its directors, executive officers, founders
      or
      control persons within the previous 12 months;

     

    (f) “executive
      officer” means, for an issuer, an individual who is

     

    (i) a
      chair,
      vice-chair or president,

     

    (ii) a
      vice-president in charge of a principal business unit, division or function
      including sales, finance or production,

     

    (iii) an
      officer of the issuer or any of its subsidiaries and who performs a
      policy-making function in respect of the issuer, or

     

    (iv) performing
      a policy-making function in respect of the issuer;

     

    (g) “financial
      assets” means

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i) cash,

     

    (ii) securities,
      or

     

    (iii) a
      contract of insurance, a deposit or an evidence of a deposit that is not a
      security for the purposes of securities legislation;

     

    (h) “founder”
      means, in respect of an issuer, a person who,

     

    (i) acting
      alone, in conjunction, or in concert with one or more persons, directly or
      indirectly, takes the initiative in founding, organizing or substantially
      reorganizing the business of the issuer, and

     

    (ii) at
      the
      time of the trade is actively involved in the business of the issuer;


     

    (i) “foreign
      jurisdiction” means a country other than Canada or a political subdivision of a
      country other than Canada;

     

    (j) “fully
      managed account” means an account of a client for which a person makes the
      investment decisions if that person has full discretion to trade in securities
      for the account without requiring the client's express consent to a
      transaction;

     

    (k) “investment
      fund” has the same meaning as in National Instrument 81-106 - Investment Fund
      Continuous Disclosure;

     

    (l) “jurisdiction”
      means a province or territory of Canada except when used in the term foreign
      jurisdiction;

     

    (m) “non-redeemable
      investment fund” means an issuer,

     

    (i) where
      contributions of securityholders are pooled for investment,

     

    (ii) where
      securityholders do not have day to day control over the management and
      investment decisions of the issuer, whether or not they have the right to be
      consulted or to give directions, and

     

    (iii) whose
      securities do not entitle the securityholder to receive on demand, or within
      a
      specified period after demand, an amount computed by reference to the value
      of a
      proportionate interest in the whole or in part of the net assets of the
      issuer;

     

    (n) “person”
      includes

     

    (i) an
      individual,

     

    (ii) a
      corporation,

     

    (iii) a
      partnership, trust, fund and an association, syndicate, organization or other
      organized group of persons, whether incorporated or not, and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iv) an
      individual or other person in that person's capacity as a trustee, executor,
      administrator or personal or other legal representative;

     

    (o) “regulator”
      means, for the local jurisdiction, the Executive Director as defined under
      securities legislation of the local jurisdiction;

     

    (p) “related
      liabilities” means

     

    (i) liabilities
      incurred or assumed for the purpose of financing the acquisition or ownership
      of
      financial assets, or

     

    (ii) liabilities
      that are secured by financial assets;

     

    (q) “Schedule
      III bank” means an authorized foreign bank named in Schedule III of the Bank Act
      (Canada);

     

    (r) “spouse”
      means, an individual who,

     

    (i) is
      married to another individual and is not living separate and apart within the
      meaning of the Divorce Act (Canada), from the other individual,

     

    (ii) is
      living
      with another individual in a marriage-like relationship, including a
      marriage-like relationship between individuals of the same gender,
      or

     

    (iii) in
      Alberta, is an individual referred to in paragraph (i) or (ii) above, or is
      an
      adult interdependent partner within the meaning of the Adult Interdependent
      Relationships Act (Alberta); 

     

    (s) “subsidiary”
      means an issuer that is controlled directly or indirectly by another issuer
      and
      includes a subsidiary of that subsidiary;

     

    (t) An
      issuer
      is an affiliate of another issuer if:

     

    (i) one
      of
      them is the subsidiary of the other, or

     

    (ii) each
      of
      them is controlled by the same person, and

     

    (u) A
      person
      (first person) is considered to control another person (second person)
      if:

     

    (i) the
      first
      person, directly or indirectly, beneficially owns or exercises control or
      direction over securities of the second person carrying votes which, if
      exercised, would entitle the first person to elect a majority of the directors
      of the second person, unless that first person holds the voting securities
      only
      to secure an obligation,

     

    (ii) the
      second person is a partnership, other than a limited partnership, and the first
      person holds more than 50% of the interest of the partnership, or

     

    (iii) the
      second person is a limited partnership and the general partner of the limited
      partnership is the first person. 
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

    

    EXHIBIT
      A

     

    
      	
              Name

            	 	
              Address

            	 	
              #
                Shares of Common Stock

            	 	
              #
                Warrants

            	 	
              Purchase
                Price

            
	 ___________	 	  ____________	 	 ____________	 	 ___________	 	
              US$___________

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

    


    FORM
      OF
      REGISTRATION RIGHTS AGREEMENT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C

    


    WARRANT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      EXHIBIT
        D

      


      WIRE
        TRANSFER INSTRUCTIONS

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

    


    EXHIBIT
      E

    


    CANADIAN
      BUYER REPRESENTATIONS

    


    Each
      of
      the Canadian Buyers, severally and not jointly, hereby represents, warrants
      and
      acknowledges to Seller as follows:

    


    (a) the
      jurisdiction referred to under “Address” in Exhibit A attached hereto is
      Canadian Buyer’s residence or place of business and is not created or used
      solely for the purpose of acquiring the Securities and Canadian Buyer is not
      purchasing the Securities for the account or benefit of any person in any
      jurisdiction other than such jurisdiction;

     

    (b) Canadian
      Buyer is acting for Canadian Buyer’s own account and is acquiring the Securities
      as principal, to be held for investment purposes only and not with a view to
      resale or distribution (or Canadian Buyer is a duly licensed trust company
      or
      insurance company, or a duly registered dealer or adviser and is subscribing
      for
      the Securities for the portfolio of a person managed solely by such company,
      dealer or adviser);

     

    (c) Canadian
      Buyer meets the definition of “accredited investor” pursuant to National
      Instrument 45-106 - Prospectus and Registration Exemptions and has delivered
      to
      Seller together with this Agreement a fully executed Certificate of Accredited
      Investor set out as Appendix B hereto;

     

    (d) no
      securities commission or similar regulatory authority has reviewed or passed
      on
      the merits of the Securities;

     

    (e) the
      Securities issued hereunder are subject to resale restrictions under applicable
      securities legislation. Canadian Buyer agrees not to resell and not to cause
      any
      purchaser of Securities to resell the Securities in Canada or to any Canadian
      person for a period of at least four months following the Closing Date, or
      for
      such period as is prescribed by applicable securities laws, whichever is longer,
      and to file all required reports of the resale of the Securities as may be
      required by applicable securities laws within the time periods
      prescribed;

     

    (f) the
      certificates representing the Securities will bear the legend set forth in
      Section 4.9;

     

    (g) Canadian
      Buyer has not received or been provided with a prospectus, offering memorandum
      or sales or advertising literature and Canadian Buyer’s decision to purchase the
      Securities was not based upon and Canadian Buyer has not relied upon any verbal
      or written representations as to fact made by Seller or any other person but
      that Canadian Buyer’s decision was based upon the information about Seller which
      is publicly available;

     

    (h) no
      person
      has made any written or oral representations:

     

    (i) that
      any
      person will resell or repurchase the Securities;

     

    (ii) that
      any
      person will refund the aggregate Purchase Price for the Securities;
      or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iii) as
      to the
      future price or value of the Securities;

     

    (i) Canadian
      Buyer is not purchasing the Securities with knowledge of material information
      concerning Seller which has not been generally disclosed;

     

    (j) Canadian
      Buyer’s purchase of the Securities has not been made through or as a result of,
      and the distribution of the Securities is not being accompanied by, an
      advertisement, including in electronic display, or general
      solicitation;

     

    (k) Seller
      is
      relying on an exemption from the requirement to provide Canadian Buyer with
      a
      prospectus under applicable securities laws and, as a consequence of acquiring
      the Securities pursuant to such exemption, certain protections, rights and
      remedies provided by applicable securities laws, including statutory rights
      of
      rescission or damages, may not be available to Canadian Buyer (depending on
      the
      jurisdiction in which Canadian Buyer resides);

     

    (l) Canadian
      Buyer has been advised to consult its own legal advisors with respect to trading
      in the Securities and with respect to resale restrictions imposed thereon by
      applicable securities laws;

     

    (m) Canadian
      Buyer is solely responsible (and Seller is not in any way responsible) for
      compliance with applicable resale restrictions under applicable securities
      laws;

     

    (n) to
      Canadian Buyer’s knowledge, none of the funds being used to purchase the
      Securities are proceeds obtained or derived directly or indirectly as a result
      of illegal activity;

     

    (o) Canadian
      Buyer is not and any beneficial purchaser for whom Canadian Buyer is contracting
      hereunder is not a promoter of Seller within the meaning of applicable
      securities laws;

     

    (p) in
      order
      to comply with Canadian legislation aimed at the prevention of money laundering,
      Seller may require additional information concerning investors from time to
      time, and Canadian Buyer agrees to provide all such information. Canadian Buyer
      further acknowledges that if, as a result of any information or other matter
      which comes to Seller’s attention, any director, officer or employee of Seller,
      or its professional advisers, knows or suspects that a Canadian Buyer is engaged
      in money laundering, such person is required to report such information or
      other
      matter to the Financial Transactions and Reports Analysis Centre of Canada
      and
      such report shall not be treated as a breach of any restriction upon the
      disclosure of information imposed by Canadian law or otherwise; and

     

    (q) if
      Canadian Buyer is resident in the Province of Ontario, Seller is required to
      file an Authorization of Indirect Collection of Personal Information for
      Distributions in Ontario, which contains Canadian Buyer’s personal information
      and details of the sale of the Common Stock and Warrants. Canadian Buyer is
      hereby notified: (i) of the delivery to the Ontario Securities Commission of
      Canadian Buyer’s full name, residential address and telephone number; (ii) that
      this information is being collected indirectly by the Ontario Securities
      Commission under the authority granted to it in securities legislation; (iii)
      that this information is being collected for the purposes of the administration
      and enforcement of the securities legislation of Ontario; and (iv) that the
      public official set out below can answer questions about the Ontario Securities
      Commission’s indirect collection of the information. By signing this Agreement,
      Canadian Buyer hereby authorizes the indirect collection of the information
      by
      the Ontario Securities Commission.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Ontario
      Securities Commission

    Suite
      1903, Box 5520 Queen Street West

    Toronto,
      Ontario M5H 3S8

    


    Telephone: (416)
      593-3682

    Facsimile: (416)
      593-8252

    


    Public
      official contact regarding indirect collection of information:

    Administrative
      Assistant to the Director of Corporate Finance

    


    Telephone: (416)
      593-8086