Exhibit
      10.1

    SECURITIES
      PURCHASE AGREEMENT

     

    This
      Securities Purchase Agreement (this “Agreement”)
      is
      dated as of July 25, 2008 by and between Syzygy Entertainment, Ltd., a Nevada
      corporation (the “Company”),
      and
      Shelter Island Opportunity Fund, LLC, or any Affiliate thereof designated by
      it
      (the “Purchaser”).

     

    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 the
      Purchaser, and the Purchaser desires to purchase from the Company securities
      of
      the Company as more fully described in this Agreement.

     

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

     

    ARTICLE
      I.

    DEFINITIONS

     

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

     

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

     

    “Additional
      Closing”
means
      one or more closing of the purchase and sale of an Additional Debenture and
      an
      Additional Warrant pursuant to Section 4.15.

     

    “Additional
      Closing Date”
means
      the date on which an Additional Closing shall occur.

     

    “Additional
      Closing Notice”
      shall
      have the meaning ascribed to such term in Section 4.15(b).

     

    “Additional
      Debenture”
means
      one or more Secured Original Issue Discount Debenture issued by the Company
      to
      the Purchaser, in the form of Exhibit
      A
      hereto
      (and as it may be modified in accordance with Section 4.15(d)(ii)), that the
      Purchaser shall have the option to purchase at an Additional
      Closing.

     

    “Additional
      Subscription Amount”
shall
      have the meaning ascribed to such term in Section 4.15(a).

     

    “Additional
      Warrant”
means
      one or more Common Stock Purchase Warrant, in the form of Exhibit
      B
      hereto
      that shall be delivered to the Purchaser at an Additional Closing, which Warrant
      shall be exercisable immediately upon issuance and have a term of exercise
      equal
      to five years.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    “Additional
      Warrant Share Amount”
means,
      with respect to each Additional Warrant purchased at each Additional Closing,
      the product of (i) the number of shares of Common Stock issuable upon the
      exercise of the Warrant and (ii) a fraction, the numerator of which is the
      face
      value of the Additional Debenture to be purchased at such Additional Closing
      and
      the denominator of which is 1,125,000.

     

    “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. 

     

    “Board”
means
      the Gaming Board of the Turks and Caicos Islands.

     

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

     

    “Change
      of Control Transaction”
shall
      have the meaning ascribed to such term in the Debenture.

     

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

     

    “Closing
      Date”
means
      the Trading Day when all of the Transaction Documents have been executed and
      delivered by the applicable parties thereto, and all conditions precedent to
      (i)
      the Purchaser’s obligation to purchase the Debenture and the Warrant and (ii)
      the Company’s obligation to deliver the Debenture and the Warrant have been
      satisfied or waived.

     

    “Commission”
means
      the Securities and Exchange Commission.

     

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

     

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

     

    “Company
      Counsel”
means
      Roetzel & Andress.


    
      
        
        

      

      
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    “Debenture”
means
      the $1,125,000 Secured Original Issue Discount Debenture issued by the Company
      to the Purchaser at the Closing, in the form of Exhibit
      A
      hereto.

     

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

     

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

    


    “Exempt
      Issuance”
means
      the issuance of (a) shares of Common Stock or options to employees, officers
      or
      directors of the Company pursuant to any stock or option plan duly adopted
      by
      the Board of Directors of the Company or a majority of the members of a
      committee of non-employee directors established for such purpose, (b) securities
      upon the exercise or exchange of any Securities issued hereunder and/or other
      securities exercisable or exchangeable for or convertible into shares of Common
      Stock issued and outstanding on the date of this Agreement, provided that such
      securities have not been amended since the date of this Agreement to increase
      the number of such securities or to decrease the exercise, exchange or
      conversion price of any such securities, and (c) securities issued pursuant
      to
      acquisitions or strategic transactions approved by a majority of the
      disinterested directors of the Company, provided any such issuance shall only
      be
      to a Person which is, itself or through its subsidiaries, an operating company
      in a business synergistic with the business of the Company and in which the
      Company receives benefits in addition to the investment of funds, but shall
      not
      include a transaction in which the Company is issuing securities primarily
      for
      the purpose of raising capital or to an entity whose primary business is
      investing in securities.

     

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

     

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

     

    “Guarantors”
shall
      mean each Subsidiary of the Company, other than The Game International TCI,
      Ltd., a Turks and Caicos company.

     

    “Guaranties”
shall
      mean the several Guaranties, each dated the date hereof, executed by each
      Guarantor to the Purchaser, in the form of Exhibit
      C
      attached
      hereto.

     

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

     

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

     

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


    
      
        
        

      

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

     

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

     

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

     

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

     

    “Principal
      Shareholder”
means
      __________. 

     

    “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.

     

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

     

    “Put
      Agreement”
means
      the Put Option Agreement, dated the date hereof, between the Company and the
      Purchaser, in the form of Exhibit
      D
      attached
      hereto.

     

    “Put
      Note Shares”
mean
      any shares of Common Stock that are issued upon conversion of any convertible
      promissory note issued by the Company to the Purchaser in accordance with the
      Put Agreement.

     

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

     

    “Required
      Minimum”
means,
      as of any date, the maximum aggregate number of Put Note Shares and shares
      of
      Common Stock then issuable pursuant to any Additional Warrant and the
      Warrant.

     

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

     

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

     

    “Securities”
means
      any Additional Debenture, the Debenture, any Additional Warrant, the Warrant,
      the Warrant Shares and the Put Note Shares.

     

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


    
      
        
        

      

      
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    “Security
      Agreements”
means
      the Security Agreements (or Debenture), each dated the date hereof, from each
      of
      the Company, the Subsidiaries and the Principal Shareholder to the Purchaser,
      in
      the form of Exhibits
      E-1, E-2 and E-3
      attached
      hereto.

     

    “Subscription
      Amount”
means
      $1,000,000, which is the amount
      to be
      paid for the Debenture and the Warrant purchased hereunder.

     

    “Subsidiary”
means
      any subsidiary of the Company as set forth on Schedule
      3.1(a).

     

    “Trading
      Day”
means
      a
      day on which the Trading Markets are open for business.

     

    “Trading
      Market”
means
      the following markets or exchanges: the Nasdaq Capital Market, the American
      Stock Exchange, the New York Stock Exchange or the Nasdaq National
      Market.

     

    “Transaction
      Documents”
means
      this Agreement, the Guaranties, any Additional Debenture, the Debenture, any
      Additional Warrant, the Warrant, the Security Agreements, the Put Agreement
      and
      any other documents or agreements executed in connection with the transactions
      contemplated hereunder.

     

    “Transaction
      End Date”
means
      July ___, 2008.

     

    “VWAP”
means,
      for any date, the price determined by the first of the following clauses that
      applies: (a) if the Common Stock is then listed or quoted on a Trading Market,
      the daily volume weighted average price of the Common Stock for such date (or
      the nearest preceding date) on the Trading Market on which the Common Stock
      is
      then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day
      from
      9:30 a.m. New York City time to 4:02 p.m. New York City time); (b)  if the
      OTC Bulletin Board is not a Trading Market, the volume weighted average price
      of
      the Common Stock for such date (or the nearest preceding date) on the OTC
      Bulletin Board; (c) if the Common Stock is not then listed or quoted on the
      OTC
      Bulletin Board and if prices for the Common Stock are then reported in the
“Pink
      Sheets” published by Pink Sheets, LLC (or a similar organization or agency
      succeeding to its functions of reporting prices), the most recent bid price
      per
      share of the Common Stock so reported; or (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 the Purchaser and reasonably acceptable
      to
      the Company.

     

    “Warrant”
mean
      the Common Stock Purchase Warrant, in the form of Exhibit
      B attached
      hereto delivered to the Purchaser at the Closing in accordance with Section
      2.2(a) hereof, which Warrant shall be exercisable immediately and have a term
      of
      exercise equal to five years.

     

    “Warrant
      Shares”
means
      the shares of Common Stock issued and issuable upon exercise of any Additional
      Warrant and the Warrant. 


    
      
        
        

      

      
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     ARTICLE
      II.

    PURCHASE
      AND SALE

     

    2.1 Closing.
      On the
      Closing Date, upon the terms and subject to the conditions set forth herein,
      substantially concurrent with the execution and delivery of this Agreement
      by
      the parties hereto, the Company agrees to sell, and the Purchaser agrees to
      purchase, the Debenture and the Warrant. The Purchaser shall deliver to the
      Company via wire transfer or a certified check in immediately available funds
      equal to the Subscription Amount and the Company shall deliver to the Purchaser
      the Debenture and the Warrant and the other items set forth in Section 2.2
      issuable at the Closing. Upon satisfaction of the conditions set forth in
      Sections 2.2 and 2.3, the Closing shall occur at the offices of FW, or such
      other location as the parties shall mutually agree.

     

    2.2 Deliveries.

     

    (a) On
      the
      Closing Date, the Company shall deliver or cause to be delivered to the
      Purchaser (or as otherwise specified) the following:

     

    
      
        (i)
          this
          Agreement duly executed by the Company;

      

    

     

    (ii) a
      legal
      opinion of Company Counsel, in the form of Exhibit
      F
      attached
      hereto; 

     

    (iii) the
      Debenture, duly executed by the Company;

     

    (iv) the
      Warrant registered in the name of the Purchaser to purchase up to 1,334,813
      shares of Common Stock, with a per share exercise price and subject to
      adjustment as specified therein;

     

    (v) resolutions
      duly adopted by the respective Boards of Directors of the Company and the
      Subsidiaries authorizing the transactions contemplated by the Transaction
      Documents; 

     

    (vi) the
      Security Agreements duly executed by the Persons named therein; 

     

    
      	 	
              (vii)

            	
              the
                Put Agreement, duly executed by the
                Company;

            


    

    


    (viii) by
      wire
      transfer to the account as specified in writing by the Purchaser, the amount
      of
      $20,000, representing
      payment of a collateral management fee;

     

    (ix) the
      certificates representing the shares of Common Stock being pledged by the
      Principal Shareholder to Purchaser pursuant to its Security Agreement, together
      with stock powers executed in blank by the Principal Shareholder with signatures
      guaranteed; 


    
      
        
        

      

      
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    (x)  the
      Guaranties, duly
      executed by the Subsidiaries; 

    


    (xi)  the
      items
      required to be delivered pursuant to the Security Agreement in the form of
      Exhibit
      E-3;
      and

    


    (xii) evidence
      that the Subsidiaries’ gaming licenses are in good standing with the
      Board.

    


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

     

    
      
        (i)
          this
          Agreement duly executed by the Purchaser;

      

    

     

    (ii) the
      Subscription Amount by wire transfer to the account as specified in writing
      by
      the Company; 

     

    (iii) the
      Put
      Agreement, duly executed by the Purchaser; and

     

    (iv) the
      Security Agreements, duly executed by the Purchaser.

     

    2.3 Closing
      Conditions. 

     

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

     

    (i) the
      accuracy in all material respects when made and on the Closing Date (except
      for
      those that speak as of a specific date, which shall be true and correct in
      all
      material respects as of such date) of the representations and warranties of
      the
      Purchaser contained herein;

     

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

     

    (iii) the
      delivery by the Purchaser of the items set forth in Section 2.2(b) of this
      Agreement.

     

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

     

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

     

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

     

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


    
      
        
        

      

      
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    (iv) there
      shall have been no Material Adverse Effect since the date hereof;
      and

     

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

    


    ARTICLE
      III.

    REPRESENTATIONS
      AND WARRANTIES

    


    3.1 Representations
      and Warranties of the Company.
      Except
      as set forth under the corresponding section of the disclosure schedules
      delivered to the Purchaser concurrently herewith (the “Disclosure
      Schedules”),
      which
      Disclosure Schedules shall be deemed a part hereof and to qualify any
      representation or warranty otherwise made herein to the extent of such
      disclosure, the Company hereby make the representations and warranties set
      forth
      below to the Purchaser.

     

    (a) Subsidiaries.
      All of
      the direct and indirect subsidiaries of the Company are set forth on
Schedule
      3.1(a).
      The
      Company owns, directly or indirectly, all of the capital stock or other equity
      interests of the Subsidiaries, free and clear of any Liens (other than in favor
      of the Purchaser), and all the issued and outstanding shares of capital stock
      of
      the Company and the Subsidiaries are validly issued and are fully paid,
      non-assessable and free of preemptive and similar rights to subscribe for or
      purchase securities. The Game International TCI, Ltd., a Turks and Caicos
      company, has no material assets, operations or business activities. 

     

    (b) Organization
      and Qualification.
      The
      Company and each of the Subsidiaries is an entity duly incorporated or otherwise
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its incorporation or organization (as applicable), with the
      requisite power and authority to own and use its properties and assets and
      to
      carry on its business as currently conducted. None of the Company nor any
      Subsidiary is in violation or default of any of the provisions of its respective
      certificate or articles of incorporation, bylaws or other organizational or
      charter documents. Each of the Company and the Subsidiaries is duly qualified
      to
      conduct business and is in good standing as a foreign corporation or other
      entity in the 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, business,
      prospects or financial condition of the Company and the Subsidiaries, taken
      as a
      whole, or (iii) a material adverse effect on the Company’s or any Subsidiary’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 no
      Proceeding has been instituted in any such jurisdiction revoking, limiting
      or
      curtailing or seeking to revoke, limit or curtail such power and authority
      or
      qualification. 


    
      
        
        

      

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

     

    (d) No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by the Company
      and the Subsidiaries, and the consummation by them 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
      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 the Company or any Subsidiary,
      or give to others any rights of termination, amendment, acceleration or
      cancellation (with or without notice, lapse of time or both) of, any agreement,
      credit facility, debt or other instrument (evidencing a Company or Subsidiary
      debt or otherwise) or other understanding to which the Company or any Subsidiary
      is a party or by which any property or asset of theirs is bound or affected,
      or
      (iii) subject to the Required Approvals, conflict with or result in a violation
      of any law, rule, regulation, order, judgment, injunction, decree or other
      restriction of any court or governmental authority to which the Company or
      a
      Subsidiary is subject (including federal and state securities laws and
      regulations), or by which any property or asset of theirs is bound or affected;
      except in the case of clauses (ii) and (iii), such as could not have or
      reasonably be expected to result in a Material Adverse Effect. 


    
      
        
        

      

      
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    (e) Filings,
      Consents and Approvals.
      Neither
      the Company nor any Subsidiary is 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 (including, without limitation, the Board) or other
      Person in connection with the execution, delivery, assumption and performance
      by
      them of the Transaction Documents to which any of them is a party, other than
      (i) the notice and/or application(s) to the applicable Trading Market for the
      issuance and sale of the Warrant Shares and the Put Note Shares and the listing
      of the Warrant Shares and the Put Note Shares for trading thereon in the time
      and manner required thereby, (ii)
      the
      filing of Form D with the Commission and such filings as are required to be
      made
      under applicable state securities laws and (iii) filings required to perfect
      the
      security interest granted under the Security Agreements (collectively,
      the “Required
      Approvals”).

     

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

     

    (g) Capitalization.
      The
      authorized and issued capitalization of the Company is as set forth on
Schedule
      3.1(g).
      No
      Person has any right of first refusal, preemptive right, right of participation,
      or any similar right to participate in the transactions contemplated by the
      Transaction Documents. Except as a result of the purchase and sale of the
      Securities and as described on Schedule
      3.1(g),
      there
      are no outstanding options, warrant, 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 Common Stock Equivalents. All of the outstanding shares of capital stock
      of
      the Company are validly issued, fully paid and nonassessable, have been issued
      in compliance with all federal and state securities laws, and none of such
      outstanding shares was issued in violation of any preemptive rights or similar
      rights to subscribe for or purchase securities. No further approval or
      authorization of any stockholder, the Board of Directors of the Company, the
      Board or others is required for the issuance and sale of the Securities. There
      are no stockholders agreements, voting agreements or other similar agreements
      with respect to the Company’s capital stock to which the Company is a party or,
      to the knowledge of the Company, between or among any of the Company’s
      stockholders. 


    
      
        
        

      

      
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    (h) SEC
      Reports; Financial Statements.
      The
      Company has filed all reports, schedules, forms, statements and other documents
      required to be filed by it under the Securities Act and 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 or regulation to file such material) (the foregoing materials, including
      the
      exhibits thereto and documents incorporated by reference therein, being
      collectively referred to herein as the “SEC
      Reports”)
      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, as applicable, 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 except that unaudited financial statements may not contain all
      footnotes required by GAAP, and fairly present in all material respects the
      financial position of the Company and its consolidated subsidiaries as of and
      for the dates thereof and the results of operations and cash flows for the
      periods then ended, subject, in the case of unaudited statements, to normal,
      immaterial, year-end audit adjustments.

     

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


    
      
        
        

      

      
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    (j) Litigation.
      There
      is no action, suit, inquiry, notice of violation, proceeding or investigation
      pending or, to the knowledge of the Company, threatened against or affecting
      the
      Company, any Subsidiary or any of their respective properties before or by
      the
      Board, any court, arbitrator, governmental or administrative agency or
      regulatory authority (federal, state, county, local or foreign) (collectively,
      an “Action”)
      which
      (i) adversely affects or challenges the legality, validity or enforceability
      of
      any of the Transaction Documents or the Securities or (ii) could, if there
      were
      an unfavorable decision, have or reasonably be expected to result in a Material
      Adverse Effect. There has not been, and to the knowledge of the Company, there
      is not pending or contemplated, any investigation by the Board or any
      governmental authority involving the Company or any Subsidiary or any current
      or
      former director or officer of the Company or any Subsidiary. 

     

    (k) Labor
      Relations.
      No
      material labor dispute exists or, to the knowledge of the Company, is imminent
      with respect to any of the employees of the Company or any Subsidiary which
      could reasonably be expected to result in a Material Adverse Effect.


     

    (l) Compliance.
      Neither
      the Company nor any Subsidiary (i) is in default under or in violation of (and
      no event has occurred that has not been waived that, with notice or lapse of
      time or both, would result in a default by the Company or any Subsidiary under),
      nor has the Company or any Subsidiary received notice of a claim that it is
      in
      default under or that it is in violation of, any indenture, loan or credit
      agreement or any other agreement or instrument to which it is a party or by
      which it or any of its properties is bound (whether or not such default or
      violation has been waived), (ii) is in violation of any order of any court,
      arbitrator or governmental body, or (iii) is or has been in violation of any
      statute, rule or regulation of the Board, 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 the case
      as
      could not have or reasonably be expected to result in a Material Adverse Effect.
      The Company and the Subsidiaries are in compliance in all material respects
      with
      all applicable foreign, federal, state and local laws and regulations relating
      to the protection of human health and safety, the environment or hazardous
      or
      toxic substances or wastes, pollutants or contaminants.

     

    (m) Regulatory
      Permits.
      The
      Company and the Subsidiaries possess all certificates, authorizations and
      permits issued by the appropriate federal, state, local or foreign regulatory
      authorities (including the Board) necessary to conduct their respective
      businesses as described in the SEC Reports, 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
      neither the Company nor any Subsidiary has received any notice of proceedings
      relating to the revocation or modification of any Material Permit.

     

    (n) Title
      to Assets.
      The
      Company and the Subsidiaries have good and marketable title in fee simple to
      all
      real property owned by them that is material to their respective businesses
      and
      good and marketable title in all personal property owned by them that is
      material to their businesses, including without limitation those assets set
      forth on Schedule
      3.1(n),
      in each
      case free and clear of all Liens, except for Liens as do not materially affect
      the value of such property and do not materially interfere with the use made
      and
      proposed to be made of such property by the Company and the Subsidiaries and
      Liens for the payment of federal, state or other taxes, the payment of which
      is
      neither delinquent nor subject to penalties. 


    
      
        
        

      

      
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    (o) Patents
      and Trademarks.
      The
      Company and the Subsidiaries have, or have rights to use, all patents, patent
      applications, trademarks, trademark applications, service marks, trade names,
      trade secrets, inventions, copyrights, licenses and other intellectual property
      rights necessary or material for use in connection with their respective
      businesses and which the failure to so have could have a Material Adverse Effect
      (collectively, the “Intellectual
      Property Rights”).
      Neither the Company nor any Subsidiary has received a notice (written or
      otherwise) that the Intellectual Property Rights used by them 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.
      

     

    (p) Insurance.
      The
      Company and the Subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are prudent
      and customary in the businesses in which they are engaged.

     

    (q) Transactions
      With Affiliates and Employees.
      None of
      the officers or directors of the Company and, to the knowledge of the Company,
      none of the employees of the Company is a party to any transaction with the
      Company or any Subsidiary (other than for services as employees, officers and
      directors), including any contract, agreement or other arrangement providing
      for
      the furnishing of services to or by, providing for rental of real or personal
      property to or from, or otherwise requiring payments to or from any officer,
      director or such employee or, to the knowledge of the Company, any entity in
      which any officer, director, or any such employee has a substantial interest
      or
      is an officer, director, trustee or partner, in the case in excess of $60,000
      other than (i) for payment of salary or consulting fees for services rendered,
      (ii) reimbursement for expenses incurred on behalf of the Company and (iii)
      for
      other employee benefits, including stock option agreements under any stock
      option plan of the .Company.

     

    (r) Sarbanes-Oxley.
      The
      Company is in material compliance with all provisions of the Sarbanes-Oxley
      Act
      of 2002 which are applicable to it. 

     

    (s) Certain
      Fees.
      No
      brokerage or finder’s fees or commissions are or will be payable by the Company
      to any broker, financial advisor or consultant, finder, placement agent,
      investment banker, bank or other Person with respect to the transactions
      contemplated by the Transaction Documents. The Purchaser 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. 


    
      
        
        

      

      
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    (t) Private
      Placement.
      Assuming the accuracy of the Purchaser 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 Purchaser as contemplated
      hereby. The issuance and sale of any Additional Warrant or the Warrant hereunder
      does not contravene the applicable rules and regulations of any Trading Market
      on which any of the securities of the Company are listed or
      designated.

     

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

     

    (v) Registration
      Rights.
      Other
      than as set forth in Schedule
      3.1(v),
      no
      Person has any right to cause the Company to effect the registration under
      the
      Securities Act of any securities of the Company.

     

    (w) Listing
      and Maintenance Requirements.
      Except
      as set forth in Schedule
      3.1(w),
      the
      Company has not, in the 12 months preceding the date hereof, received notice
      from any Trading Market on which the Common Stock is or has been listed or
      quoted to the effect that the Company is not in compliance with the listing
      or
      maintenance requirements of such Trading Market. The Company 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 to which it is
      now
      subject.

     

    (x) Application
      of Takeover Protections.
      The
      Company and its Board of Directors have taken all necessary action, if any,
      in
      order to render inapplicable any control share acquisition, business
      combination, poison pill (including any distribution under a rights agreement)
      or other similar anti-takeover provision under the Company’s Certificate of
      Incorporation (or similar charter documents) or the laws of its state of
      incorporation that is or could become applicable to the Purchaser as a result
      of
      the Purchaser 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 Purchaser’s ownership of the
      Securities.

     

    (y) Disclosure.
      Except
      with respect to the material terms and conditions of the transactions
      contemplated by the Transaction Documents, the Company confirms that neither
      it
      nor any other Person acting on its behalf has provided the Purchaser or its
      agents or counsel with any information that it believes constitutes or might
      constitute material, non-public information. The Company understands and
      confirms that the Purchaser will rely on the foregoing representation in
      effecting transactions in securities of the Company. All
      disclosure furnished by or on behalf of the Company to the Purchaser regarding
      the Company, its business and the transactions contemplated hereby, including
      the Disclosure Schedules to this Agreement, with respect to the representations
      and warranties made herein are true and correct with respect to such
      representations and warranties 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 light of the circumstances under which they were
      made, not misleading. The Company acknowledges and agrees that the Purchaser
      has
      not made any representations or warranties with respect to the transactions
      contemplated hereby other than those specifically set forth in Section 3.2
      hereof.


    
      
        
        

      

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

     

    (aa) Solvency.
      Based
      on the financial condition of the Company as of the Closing Date after giving
      effect to the receipt by the Company of the proceeds of the Subscription Amount,
      the Company is solvent and has the necessary capital to pay its liabilities
      and
      obligations as they become due. 

     

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

     

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

     

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

     

    (ee) Seniority.
      As of
      the Closing Date, no indebtedness or other claim against the Company is senior
      to the Debenture or any Additional Debenture in right of payment, whether with
      respect to interest or upon liquidation or dissolution, or
      otherwise.


    
      
        
        

      

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

    


    3.2
       Representations
      and Warranties of the Purchaser.
      The
      Purchaser hereby represents and warrants as of the date hereof and as of the
      Closing Date to the Company as follows:

     

    (a) Own
      Account.
      The
      Purchaser understands that the Securities are “restricted securities” and have
      not been registered under the Securities Act or any applicable state securities
      law and is acquiring the Securities as principal for its own account and not
      with a view to or for distributing or reselling such Securities or any part
      thereof in violation of the Securities Act or any applicable state securities
      law.

     

    (b) Purchaser
      Status.
      At the
      time the Purchaser was offered the Securities, it was, and at the date hereof
      it
      is, and on the date on which it exercises the Warrants or any Additional Warrant
      it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1),
      (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified
      institutional buyer” as defined in Rule 144A(a) under the Securities
      Act.

    


    ARTICLE
      IV.

    OTHER
      AGREEMENTS OF THE PARTIES

     

    4.1 Transfer
      Restrictions. The
      Securities may only be disposed of in compliance with state and federal
      securities laws, and the certificates representing the Securities shall contain
      a legend to such effect, except that certificates evidencing the Put Note Shares
      and the Warrant Shares shall not contain any restrictive or other legend: (i)
      while a registration statement covering the resale of such Security is effective
      under the Securities Act, or (ii) following any sale of such Put Note Shares
      or
      Warrant Shares pursuant to Rule 144, or (iii) if such Put Note Shares or Warrant
      Shares are eligible for sale under Rule 144 without the requirement for the
      Company to be in compliance with the current public information required under
      Rule 144 as to such Securities and without volume or manner-of-sale
      restrictions, or (iv) if such legend is not required under applicable
      requirements of the Securities Act (including judicial interpretations and
      pronouncements issued by the staff of the Commission). The
      Company shall cause its counsel to issue a legal opinion to the Company’s
      transfer agent promptly after the occurrence of any of the foregoing events
      if
      required by the Company’s transfer agent to effect the removal of any legend on
      any of the Put
      Note
      Shares
      and
      Warrant Shares. The Company agrees that following the occurrence of any of
      the
      foregoing events, it will, no later than three Trading Days following the
      delivery by the Purchaser to the Company or the Company’s transfer agent of a
      certificate representing Put
      Note
      Shares
      and
      Warrant Shares, as applicable, issued with a restrictive legend (such third
      Trading Day, the “Legend
      Removal Date”),
      deliver or cause to be delivered to the Purchaser a certificate representing
      such shares that is free from all restrictive and other legends. The Company
      may
      not make any notation on its records or give instructions to any transfer agent
      of the Company that enlarge the restrictions on transfer set forth in this
      Section. Certificates for Put
      Note
      Shares
      and
      Warrant Shares subject to legend removal hereunder shall be transmitted by
      the
      transfer agent of the Company to the Purchaser by crediting the account of
      the
      Purchaser’s prime broker with the Depository Trust Company System. In addition
      to the Purchaser’s other available remedies, the Company shall pay to the
      Purchaser, in cash, as partial liquidated damages and not as a penalty, for
      each
      $1,000 of Put
      Note
      Shares
      or
      Warrant Shares (based on the VWAP of the Common Stock on the date such
      Securities are submitted to the Company’s transfer agent) delivered for removal
      of the restrictive legend, $10 per Trading Day (increasing to $20 per Trading
      Day five Trading Days after such damages have begun to accrue) for the Trading
      Day after the Legend Removal Date until such certificate is delivered without
      a
      legend. Nothing herein shall limit the Purchaser’s right to pursue actual
      damages for the Company’s failure to deliver certificates representing any
Put
      Note
      Shares
      or
      Warrant Shares as required by the Transaction Documents, and the Purchaser
      shall
      have the right to pursue all remedies available to it at law or in equity
      including, without limitation, a decree of specific performance and/or
      injunctive relief, without the necessity of posting a bond.


    
      
        
        

      

      
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    4.2 Acknowledgment
      of Dilution.
      The
      Company acknowledges that the issuance of the Securities may result in dilution
      of the outstanding shares of Common Stock, which dilution may be substantial
      under certain market conditions. 

     

    4.3 Furnishing
      of Information.
      As long
      as the Purchaser owns any Additional Warrant, the Warrant, any Put
      Note
      Shares
      or any
      Warrant Shares, 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. As long as the Purchaser owns any Additional Warrant, the Warrant,
      any Put
      Note
      Shares
      or any
      Warrant Shares, if the Company is not required to file reports pursuant to
      the
      Exchange Act, it will prepare and furnish to the Purchaser and make publicly
      available in accordance with Rule 144(c) such information as is required for
      the
      Purchaser to sell the
      Put
      Note Shares
      and
      Warrant Shares under Rule 144. The Company further covenants that it will take
      such further action as any holder of any Additional Warrant, the Warrant, any
      Put
      Note
      Shares
      or any
      Warrant Shares may
      reasonably request, to the extent required from time to time to enable such
      Person to sell Put Note Shares and Warrant Shares without registration under
      the
      Securities Act within the requirements of the exemption provided by Rule
      144.

     

    4.4 Integration.
      The
      Company shall not sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the Securities
      Act) that would be integrated with the offer or sale of the Securities in a
      manner that would require the registration under the Securities Act of the
      sale
      of the Securities to the Purchaser or that would be integrated with the offer
      or
      sale of the Securities for purposes of the applicable rules and regulations
      of
      any Trading Market.

     

    4.5 Publicity.
       The
      Company and the Purchaser shall consult with the other in issuing any other
      press releases with respect to the transactions contemplated hereby, and neither
      the Company nor the Purchaser shall issue any such press release or otherwise
      make any such public statement without the prior consent of the Company, with
      respect to any press release of the Purchaser, or without the prior consent
      of
      the Purchaser, with respect to any press release of the Company, which consent
      shall not unreasonably be withheld or delayed, except if such disclosure is
      required by law, in which case the disclosing party shall promptly provide
      the
      other party with prior notice of such public statement or communication; it
      being understood and agreed however, that the Purchaser may place “tombstone”
advertisements with respect to the transactions contemplated hereby without
      the
      Company’s consent, .


    
      
        
        

      

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

     

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

     

    4.8 Use
      of
      Proceeds; Financial Calculations.
      The
      Company shall use the net proceeds of the Subscription Amount and any Additional
      Subscription Amount for working capital for itself and the Subsidiaries. Unless
      otherwise specifically stated, all financial calculations required to be made
      pursuant to the Transaction Documents shall be made in accordance with
      GAAP.

     

    4.9 Reimbursement.
      If the
      Purchaser becomes involved in any capacity in any Proceeding by or against
      any
      Person who is a stockholder of the Company (except as a result of sales,
      pledges, margin sales and similar transactions by the Purchaser to or with
      any
      other stockholder), solely as a result of the Purchaser’s acquisition of the
      Securities under this Agreement, the Company agrees to reimburse the Purchaser
      for its reasonable legal and other expenses (including the cost of any
      investigation preparation and travel in connection therewith) incurred in
      connection therewith, as such expenses are incurred. The reimbursement
      obligations of the Company under this paragraph shall be in addition to any
      liability which the Company may otherwise have, shall extend upon the same
      terms
      and conditions to any Affiliates of the Purchaser who are actually named in
      such
      action, proceeding or investigation, and partners, directors, agents, employees
      and controlling persons (if any), as the case may be, of the Purchaser and
      any
      such Affiliate, and shall be binding upon and inure to the benefit of any
      successors, assigns, heirs and personal representatives of the Company, the
      Purchaser and any such Affiliate and any such Person. The Company also agrees
      that neither the Purchaser nor any such Affiliates, partners, directors, agents,
      employees or controlling persons shall have any liability to the Company or
      any
      Person asserting claims on behalf of or in right of the Company solely as a
      result of acquiring the Securities under this Agreement.


    
      
        
        

      

      
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    4.10 Indemnification
      of Purchaser.
      Subject
      to the provisions of this Section 4.10, the Company will indemnify and hold
      the
      Purchaser and its directors, officers, shareholders, members, partners,
      employees and agents (and any other Persons with a functionally equivalent
      role
      of a Person holding such titles notwithstanding a lack of such title or any
      other title), the Persons who control the Purchaser (within the meaning of
      Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
      directors, officers, shareholders, agents, members, partners or employees (and
      any other Persons with a functionally equivalent role of a Person holding such
      titles notwithstanding a lack of such title or any other title) of such
      controlling Persons (the, a “Purchaser
      Party”)
      harmless from any and all losses, liabilities, obligations, claims,
      contingencies, damages, costs and expenses, including all judgments, amounts
      paid in settlements, court costs and reasonable attorneys’ fees and costs of
      investigation that any such Purchaser Party may suffer or incur as a result
      of
      or relating to (a) any breach of any of the representations, warranties,
      covenants or agreements made to the Purchaser in this Agreement or in the other
      Transaction Documents or (b) any action instituted against the Purchaser, or
      any
      of its Affiliates, by any stockholder of the Company who is not an Affiliate
      of
      the Purchaser, with respect to any of the transactions contemplated by the
      Transaction Documents (unless such action is based upon a breach of the
      Purchaser’s representations, warranties or covenants under the Transaction
      Documents or any agreements or understandings the Purchaser may have with any
      such stockholder or any violations by the Purchaser of state or federal
      securities laws or any conduct by the Purchaser which constitutes fraud, gross
      negligence, willful misconduct or malfeasance). 

     

    4.11 Reservation
      and Listing of Securities.

     

    (a) The
      Company shall maintain a reserve from its duly authorized shares of Common
      Stock
      for issuance as Put Note Shares or pursuant to any Additional Warrant and the
      Warrant in an amount equal to the Required Minimum.

     

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

     

    (c) The
      Company shall, if and when applicable to the Common Stock: (i) in the time
      and
      manner required by the principal Trading Market for the Common Stock, prepare
      and file with such Trading Market an additional shares listing application
      covering a number of shares of Common Stock at least equal to the Required
      Minimum on the date of such application, (ii) take all steps necessary to cause
      such shares of Common Stock to be approved for listing on such Trading Market
      as
      soon as possible thereafter, (iii) provide to the Purchaser evidence of such
      listing, and (iv) maintain the listing of such Common Stock on any date at
      least
      equal to the Required Minimum on such date on such Trading Market or another
      Trading Market. 


    
      
        
        

      

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

     

    4.13 Certain
      Notices.
      Within
      one Trading Day after the Company enters into any agreement, arrangement or
      understanding that could reasonably be expected to result in a Change of Control
      Transaction, the Company shall notify the Purchaser thereof and shall furnish
      the Purchaser with a copy of any writing evidencing such agreement, arrangement
      or understanding. The Company shall further notify the Purchaser promptly of
      all
      events relating to any such Change of Control Transaction, including, without
      limitation, the consummation thereof. The failure of the Company to provide
      any
      such notice or any defect therein shall not have any effect on the Company’s
      obligation to pre-pay the Debenture when required by the holder thereof in
      accordance with the terms thereof.

     

    4.14 Participation
      in Future Financings.
      

     

    (a) In
      connection with the issuance by the Company or any of its Subsidiaries of any
      promissory note, debenture or other debt security on terms that are equivalent
      to those provided in the Transaction Documents (a “Subsequent
      Financing”)
      at any
      time that any amount is owing to the Purchaser under the Debenture or any other
      Transaction Document, the Purchaser shall have the right (in addition to the
      rights set forth in Section 4.15) to participate in up to an amount of the
      Subsequent Financing equal to 100% of the Subsequent Financing (the
“Participation
      Maximum”)
      on the
      same terms, conditions and price provided for in the Subsequent Financing.
      

     

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

     

    (c) If
      the
      Purchaser desires to participate in such Subsequent Financing, it must provide
      written notice to the Company by not later than 5:30 p.m. (New York City time)
      on the 10th Trading Day after it has received the Pre-Notice that the Purchaser
      is willing to participate in the Subsequent Financing, the amount of the
      Purchaser’s participation, and that the Purchaser has such funds ready, willing,
      and available for investment on the terms set forth in the Subsequent Financing
      Notice. If the Company receives no notice from the Purchaser as of such fifth
      Trading Day, the Purchaser shall be deemed to have notified the Company that
      it
      does not elect to participate. 


    
      
        
        

      

      
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    (d) If
      by
      5:30 p.m. (New York City time) on the 10th Trading Day after the Purchaser
      has
      received the Pre-Notice, notification by the Purchaser of its willingness to
      participate in the Subsequent Financing (or to cause its designees to
      participate) is, in the aggregate, less than the total amount of the Subsequent
      Financing, then the Company may effect the remaining portion of such Subsequent
      Financing on the terms and with the Persons set forth in the Subsequent
      Financing Notice. 

     

    (e) The
      Company must provide the Purchaser with a second Subsequent Financing Notice,
      and the Purchaser will again have the right of participation set forth above
      in
      this Section 4.14, if the Subsequent Financing subject to the initial Subsequent
      Financing Notice is not consummated for any reason on the terms set forth in
      such Subsequent Financing Notice within 60 Trading Days after the date of the
      initial Subsequent Financing Notice. 

     

    (f) Notwithstanding
      the foregoing, this Section 4.14 shall not apply in respect of (i) an Exempt
      Issuance or (ii) an underwritten public offering of securities of the
      Company.

    


    
      	 	
              4.15

            	
              Additional
                Closing.

            


    

    


    (a) At
      any
      time from the Closing Date until the one-year anniversary of the Closing Date,
      the Purchaser shall have (in addition to the rights set forth in Section 4.14)
      the option, in its sole and absolute discretion, to purchase at up to (but
      no
      more than) three Additional Closings, Additional Debentures with an aggregate
      face value of $1,125,000. The amount the Purchaser shall pay for each Additional
      Debenture shall be equal to 88.889% of the face value of the Additional
      Debenture (the “Additional
      Subscription Amount”)
      and
      the Purchaser may purchase at each Additional Closing Additional Debentures
      with
      any face value that it shall determine (up to an aggregate face value of
      $1,125,000) that is in excess of $200,000. NOTWITHSTANDING
      ANY OTHER PROVISION OF THIS AGREEMENT OR OF ANY OTHER TRANSACTION DOCUMENT,
      THE
      PURCHASER SHALL HAVE NO OBLIGATION TO PURCHASE ANY ADDITIONAL DEBENTURE, WHICH
      PURCHASE SHALL BE MADE IN THE SOLE AND ABSOLUTE DISCRETION OF THE
      PURCHASER. 

    


    (b)
       The
      Purchaser shall exercise its option to purchase one or more Additional
      Debentures by delivering a notice thereof (an “Additional
      Closing Notice”)
      to the
      Company not more than 15 Trading Days and not less than five Trading Days prior
      to the Additional Closing Date for such purchase. Each Additional Closing Notice
      shall specify (i) the Additional Closing Date and (ii) the face value and
      Additional Subscription Amount of the Additional Debenture to be purchased
      at
      such Additional Closing. 


    
      
        
        

      

      
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    (c) On
      each
      Additional Closing Date specified in an Additional Closing Notice, upon the
      terms and subject to the conditions set forth herein, the Company shall sell,
      and the Purchaser shall purchase, the Additional Debenture in the amount
      specified in such Additional Closing Notice and an Additional Warrant
      exercisable for the Additional Warrant Share Amount. The Purchaser shall deliver
      to the Company via wire transfer or a certified check in immediately available
      funds equal to the Additional Subscription Amount for the Additional Debentures
      to be purchased at such Additional Closing Date and the Company shall deliver
      to
      the Purchaser such Additional Debenture and Additional Warrant and the other
      items set forth in Section 4.15(d). Upon satisfaction of the conditions set
      forth in Sections 4.15(f) and 4.15(g), the Additional Closing shall occur at
      the
      offices of FW, or such other location as the parties shall mutually
      agree.

     

    (d) On
      each
      Additional Closing Date, the Company shall deliver or cause to be delivered
      to
      the Purchaser (or as otherwise specified) the following:

     

    (i) a
      legal
      opinion of Company Counsel, in the form of Exhibit
      F
      attached
      hereto; 

     

    (ii) the
      Additional Debenture to be purchased at such Additional Closing, duly executed
      by the Company (in the event the Additional Debenture purchased at an Additional
      Closing has a face value of less than $1,125,000, the repayment terms of the
      form of Additional Debenture attached hereto as Exhibit
      A
      shall be
      adjusted in the Additional Debenture executed and delivered by the Company
      at
      such Additional Closing to correspond to that portion of such maximum face
      value
      represented by the face value of such Additional Debenture);

     

    (iii) the
      Additional Warrant to be purchased at such Additional Closing registered in
      the
      name of the Purchaser to purchase up to the Additional Warrant Share Amount
      of
      such Additional Warrant;

     

    (iv) resolutions
      duly adopted by the respective Boards of Directors of the Company and the
      Subsidiaries authorizing the execution, delivery and performance of the
      documents delivered at such Additional Closing; 

     

    (v) by
      wire
      transfer to the account as specified in writing by the Purchaser, an amount
      equal to 2.00% of the Additional Subscription Amount paid at such Additional
      Closing, representing
      payment of a collateral management fee; 

     

    (vi) a
      certificate of the chief executive officer of the Company confirming the
      compliance by the Company with the conditions set forth in Section 4.15(g);
      

     

    (vii) payment
      of the fees and expenses of the Purchaser’s counsel in connection with such
      Additional Closing; and 

     

    (viii) evidence
      that the Subsidiaries’ gaming licenses are in good standing with the
      Board.


    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    


    (e)
       On
      each
      Additional Closing Date, the Purchaser shall deliver or cause to be delivered
      to
      the Company, the Additional Subscription Amount of the Additional Debenture
      to
      be purchased at such Additional Closing, by wire transfer to the account as
      specified in writing by the Company.

    


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

     

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

     

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

     

    (iii) the
      delivery by the Purchaser of the item set forth in Section 4.15(e) of this
      Agreement.

     

    (g)
      The
      obligations of the Purchaser hereunder in connection with each Additional
      Closing are subject to the following conditions being met:

     

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

     

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


     

    (iii) the
      delivery by the Company of the items set forth in Section 4.15(d) of this
      Agreement; 

     

    (iv) there
      shall have been no Material Adverse Effect since the date hereof;
      and

     

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


    
      
        
        

      

      
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    ARTICLE
      V.

    MISCELLANEOUS

     

    5.1 Termination.
      This
      Agreement may be terminated by the Purchaser if the Closing has not been
      consummated on or before the Transaction End Date; provided,
      however,
      that no
      such termination will affect the right of any party to sue for any breach by
      the
      other party (or parties).

     

    5.2 Fees
      and Expenses.
      At the
      Closing, the Company shall pay FW the legal fees and expenses incurred by the
      Purchaser in connection with the preparation, execution and delivery of the
      Transaction Documents. Except as expressly set forth in the Transaction
      Documents to the contrary, each party shall pay the fees and expenses of its
      advisers, counsel, accountants and other experts, if any, and all other expenses
      incurred by such party incident to the negotiation, preparation, execution,
      delivery and performance of this Agreement. The Company shall pay all transfer
      agent fees, stamp taxes and other taxes and duties levied in connection with
      the
      delivery of any Securities to the Purchaser.

     

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

     

    5.4 Notices.
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be in writing and shall be deemed given and effective
      on the earliest of (a) the date of transmission, if such notice or communication
      is delivered via facsimile at the facsimile number set forth on the signature
      pages attached hereto prior to 5:30 p.m. (New York City time) on a Trading
      Day,
      (b) the next Trading Day after the date of transmission, if such notice or
      communication is delivered via facsimile at the facsimile number set forth
      on
      the signature pages attached hereto on a day that is not a Trading Day or later
      than 5:30 p.m. (New York City time) on any Trading Day, (c) the 2nd
      Trading
      Day following the date of mailing, if sent by U.S. nationally recognized
      overnight courier service, or (d) upon actual receipt by the party to whom
      such
      notice is required to be given. The address for such notices and communications
      shall be as set forth on the signature pages attached hereto.

     

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


    
      
        
        

      

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

     

    5.7 Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and permitted assigns. The Company may not assign this
      Agreement or any rights or obligations hereunder without the prior written
      consent of the Purchaser. The Purchaser may assign any or all of its rights
      under this Agreement to any Person to whom such Purchaser assigns or transfers
      any Securities, provided such transferee agrees in writing to be bound, with
      respect to the transferred Securities, by the provisions of the Transaction
      Documents that apply to the “Purchaser”.

     

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

     

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


    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    


    5.10 Survival.
      The
      representations, warranties, covenants and other agreements contained herein
      shall survive the Closing and the delivery and/or exercise of the Securities,
      as
      applicable for the applicable statue of limitations.

     

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

     

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

     

    5.13 Rescission
      and Withdrawal Right.
      Notwithstanding anything to the contrary contained in (and without limiting
      any
      similar provisions of) any of the other Transaction Documents, whenever the
      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 the Purchaser may rescind or withdraw, in
      its
      sole discretion from time to time upon written notice to the Company, any
      relevant notice, demand or election in whole or in part without prejudice to
      its
      future actions and rights; provided,
      however,
      in the
      case of a rescission of an exercise of the Warrant, the Purchaser shall be
      required to return any shares of Common Stock subject to any such rescinded
      exercise notice.

     

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

     

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


    
      
        
        

      

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

     

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

     

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

     

    5.19 Construction.
      The
      parties agree that each of them and/or their respective counsel has reviewed
      and
      had an opportunity to revise the Transaction Documents and, therefore, the
      normal rule of construction to the effect that any ambiguities are to be
      resolved against the drafting party shall not be employed in the interpretation
      of the Transaction Documents or any amendments hereto.

     

    (Signature
      Pages Follow)


    
      
        
        

      

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

     

    
      	
              SYZYGY
                ENTERTAINMENT, LTD.

            	 	
              Address
                for Notice:

            
	 	 	 	 
	
              By:
                   

            	
              /s/
                Sean Sullivan

            	 	
              The
                Rotunda

            
	
               Name:
                Sean Sullivan

            	 	
              4201
                Congress Street, Suite 145

            
	
               Title:
                President

            	 	
              Charlotte,
                NC 28209

            


    

    


    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
      PAGE FOR PURCHASER FOLLOWS]


    
      
        
        

      

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

     

    
      	
              SHELTER
                ISLAND OPPORTUNITY FUND , LLC 

              By:
                By: Shelter Island GP, LLC, its Manager

            	 	
              Address
                for Notice:

            
	 	 	 
	
              By:

            	/s/	 	
              One
                East 52nd Street

            
	 	
              Name:

            	 	
              Sixth
                Floor

            
	 	
              Title:

            	 	
              New
                York, NY 10022

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

              Feldman
                Weinstein & Smith LLP 

              420
                Lexington Avenue 

              New
                York, New York 10170-0002 

              Telecopy:
                212 997 4242 

              Attention:
                Saul H. Finkelstein, Esq.

            	 	 


    


    
      
        
        

      

      
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