FORM
      OF SECURITIES PURCHASE AGREEMENT

     

    This
      Securities Purchase Agreement (this “Agreement”)
      is
      dated as of December ___, 2007, by and among Wonder Auto Technology, Inc.,
      a
      Nevada corporation (the “Company”),
      and
      each purchaser identified on the signature pages hereto (each, including its
      successors and assigns, a “Purchaser”
and
      collectively, the “Purchasers”).

     

    RECITALS

     

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

    


    B. Each
      Purchaser, severally and not jointly, wishes to purchase, and the Company wishes
      to sell, upon the terms and conditions stated in this Agreement, that aggregate
      number of shares of common stock, par value $0.0001 per share (the “Common
      Stock”),
      of
      the Company, set forth below such Purchaser’s name on the signature page of this
      Agreement (which aggregate amount for all Purchasers together shall be ________
      shares of Common Stock and shall be collectively referred to herein as the
      “Shares”).

    


    C. The
      Company has engaged Piper Jaffray & Co. as its exclusive placement agent
      (the “Placement
      Agent”)
      for
      the offering of the Shares on a “best efforts” basis.

    


    D. Contemporaneously
      with the execution and delivery of this Agreement, the parties hereto are
      executing and delivering a Registration Rights Agreement, substantially in
      the
      form attached hereto as Exhibit
      A
      (the
“Registration
      Rights Agreement”),
      pursuant to which, among other things, the Company will agree to provide certain
      registration rights with respect to the Shares under the Securities Act and
      the
      rules and regulations promulgated thereunder and applicable state securities
      laws.

    


    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 Purchasers hereby agree as
      follows:

     

    ARTICLE
      I.

    DEFINITIONS

     

    1.1 Definitions.
      For all
      purposes of this Agreement, the following terms shall have the meanings
      indicated in this Section 1.1:

     

    “Action”
means
      any action, suit, inquiry, notice of violation, proceeding (including any
      partial proceeding such as a deposition) or investigation pending or, to the
      Company’s Knowledge, threatened in writing against the Company, any Subsidiary
      or any of their respective properties or any officer, director or employee
      of
      the Company or any Subsidiary acting in his or her capacity as an officer,
      director or employee before or by any federal, state, county, local or foreign
      court, arbitrator, governmental or administrative agency, regulatory authority,
      stock market, stock exchange or trading facility.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

    “Agreement”
shall
      have the meaning ascribed to such term in the Preamble.

     

    “Business
      Day”
means
      a
      day, other than a Saturday or Sunday, on which banks in New York City are open
      for the general transaction of business.

     

    “Buy-In”
has
      the
      meaning set forth in Section 4.1(f).

     

    “Buy-In
      Price”
has
      the
      meaning set forth in Section 4.1(f).

     

    “Closing”
means
      the closing of the purchase and sale of the Shares pursuant to this
      Agreement.

     

    “Closing
      Bid Price”
      means,
      for any security as of any date, the last closing price for such security on
      the
      Principal Trading Market, as reported by Bloomberg, or, if the Principal Trading
      Market begins to operate on an extended hours basis and does not designate
      the
      closing bid price then the last bid price of such security prior to
      4:00:00 p.m., New York City Time, as reported by Bloomberg, or, if the
      Principal Trading Market is not the principal securities exchange or trading
      market for such security, the last closing price of such security on the
      principal securities exchange or trading market where such security is listed
      or
      traded as reported by Bloomberg, or if the foregoing do not apply, the last
      closing price of such security in the over-the-counter market on the electronic
      bulletin board for such security as reported by Bloomberg, or, if no closing
      bid
      price is reported for such security by Bloomberg, the average of the bid prices
      of any market makers for such security as reported in the “pink sheets” by Pink
      Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid
      Price cannot be calculated for a security on a particular date on any of the
      foregoing bases, the Closing Bid Price of such security on such date shall
      be
      the fair market value as mutually determined by the Company and the holder.
      If
      the Company and the holder are unable to agree upon the fair market value of
      such security, then the Company shall, within two Business Days submit via
      facsimile (a) the disputed determination to an independent, reputable investment
      bank selected by the Company and approved by the holder or (b) the disputed
      arithmetic calculation to the Company's independent, outside accountant. The
      Company shall cause at its expense the investment bank or the accountant, as
      the
      case may be, to perform the determinations or calculations and notify the
      Company and the holder of the results no later than ten Business Days from
      the
      time it receives the disputed determinations or calculations. Such investment
      bank's or accountant's determination or calculation, as the case may be, shall
      be binding upon all parties absent demonstrable error. All such determinations
      shall be appropriately adjusted for any stock dividend, stock split, stock
      combination or other similar transaction during the applicable calculation
      period. 

     

    “Closing
      Date”
means
      the Trading Day when all of the Transaction Documents have been executed and
      delivered by the applicable parties thereto, and all of the conditions set
      forth
      in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied or waived, as the case
      may be, or such other date as the parties may agree.

     

    “Commission”
has
      the
      meaning set forth in the Recitals.

     

    “Common
      Stock”
has
      the
      meaning set forth in the Recitals, and also includes any securities into which
      the Common Stock may hereafter be reclassified or changed. 

     

    “Company”
has
      the
      meaning set forth in the Preamble.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    “Company
      Counsel”
means
      Thelen Reid Brown Raysman & Steiner LLP.

    


       “Company
      Deliverables”
has
      the
      meaning set forth in Section 2.2(a).

    


       “Company’s
      Knowledge”
means
      with respect to any statement made to the knowledge of the Company, that the
      statement is based upon the actual knowledge of the executive officers of the
      Company having responsibility for the matter or matters that are the subject
      of
      the statement.

    


    “Control”
      (including the terms “controlling”, “controlled by” or “under common control
      with”) means the possession, direct or indirect, of the power to direct or cause
      the direction of the management and policies of a Person, whether through the
      ownership of voting securities, by contract or otherwise.

     

    “Deadline
      Date”
has
      the
      meaning set forth in Section 4.1(f).

     

    “Disclosure
      Materials”
has
      the
      meaning set forth in Section 3.1(h).

     

    “DTC”
has
      the
      meaning set forth in Section 4.1(c).

     

    “Effective
      Date”
means
      the date on which the initial Registration Statement required by Section 2(a)
      of
      the Registration Rights Agreement is first declared effective by the
      Commission.

     

    “Environmental
      Laws”
has
      the
      meaning set forth in Section 3.1(l).

     

    “Escrow
      Agent”
has
      the
      meaning set forth in Section 2.1(d)(i).

     

    “Escrow
      Agent Duties”
has
      the
      meaning set forth in Section 2.1(d)(iii)(A).

     

    “Escrow
      Amount”
has
      the
      meaning set forth in Section 2.1(d)(i).

     

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

     

    “Fundamental
      Transaction”
means
      (i) any merger or consolidation of the Company with or into another Person,
      in
      which the Company is not the survivor and the stockholders of the Company
      immediately prior to such merger or consolidation do not own, directly or
      indirectly, at least fifty percent (50%) of the voting securities of the
      surviving entity, (ii) any sale of all or substantially all of the Company’s
      assets or acquisition by a third party of a majority of the Company’s Common
      Stock, in each case, in one or a series of related transactions, (iii) any
      tender offer or exchange offer (whether by the Company or another Person)
      pursuant to which all or substantially all of the holders of Common Stock are
      permitted to tender or exchange their shares for other securities, cash or
      property, or (iv) any reclassification of the Company’s Common Stock or any
      compulsory share exchange pursuant to which the Common Stock is effectively
      converted into or exchanged for other securities, cash or property (other than
      as a result of a subdivision or combination of shares of Common
      Stock).

     

    “GAAP”
means
      U.S. generally accepted accounting principles, as applied by the
      Company.

     

    “Indemnified
      Person”
has
      the
      meaning set forth in Section 4.9(b).

     

    “Intellectual
      Property”
has
      the
      meaning set forth in Section 3.1(r).

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Irrevocable
      Transfer Agent Instructions”
means,
      with respect to the Company, the Irrevocable Transfer Agent Instructions, in
      the
      form of Exhibit
      D,
      executed by the Company and delivered to and acknowledged in writing by the
      Transfer Agent.

     

    “Legend
      Removal Date”
has
      the
      meaning set forth in Section 4.1(c).

     

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

     

    “Material
      Adverse Effect”
means
      any of (i) a material and adverse effect on the legality, validity or
      enforceability of any Transaction Document, (ii) a material and adverse effect
      on the results of operations, assets, prospects, business or financial condition
      of the Company and the Subsidiaries, taken as a whole, or (iii) any adverse
      impairment to the Company's ability to perform in any material respect on a
      timely basis its obligations under any Transaction Document.

     

    “Material
      Permits”
has
      the
      meaning set forth in Section 3.1(p).

     

    “Money
      Laundering Laws”
has
      the
      meaning set forth in Section 3.1(kk).

     

    “New
      York Courts”
means
      the state and federal courts sitting in the City of New York, Borough of
      Manhattan.

     

    “OFAC”
has
      the
      meaning set forth in Section 3.1(jj).

     

    “Outside
      Date”
means
      the thirtieth day following the date of this Agreement.

     

    “Placement
      Agent”
has
      the
      meaning set forth in the Recitals.

     

    “Person”
means
      an individual, corporation, partnership, limited liability company, trust,
      business trust, association, joint stock company, joint venture, sole
      proprietorship, unincorporated organization, governmental authority or any
      other
      form of entity not specifically listed herein.

     

    “Press
      Release”
has
      the
      meaning set forth in Section 4.7.

     

    “Principal
      Trading Market”
means
      the Trading Market on which the Common Stock is primarily listed on and quoted
      for trading, which, as of the date of this Agreement and the Closing Date,
      shall
      be the NASDAQ Global Market.

     

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

     

    “Purchase
      Price”
means
      $8.65 per share.

     

    “Purchaser”
or
      “Purchasers”
has
      the
      meaning set forth in the Recitals.

     

    “Purchaser
      Deliverables”
has
      the
      meaning set forth in Section 2.2(b).

     

    “Purchaser
      Party”
has
      the
      meaning set forth in Section 4.9(a).

     

    “Registration
      Rights Agreement”
has
      the
      meaning set forth in the Recitals.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    “Registration
      Statement”
means
      a
      registration statement meeting the requirements set forth in the Registration
      Rights Agreement and covering the resale by the Purchasers of the Registrable
      Securities (as defined in the Registration Rights Agreement).

     

    “Regulation
      D”
has
      the
      meaning set forth in the Recitals.

     

    “Required
      Approvals”
has
      the
      meaning set forth in Section 3.1(e).

     

    “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”
has
      the meaning set forth in Section 3.1(h).

     

    “Secretary’s
      Certificate”
has
      the
      meaning set forth in Section 2.2(a)(vi).

     

    “Securities
      Act”
has
      the
      meaning set forth in the Recitals. 

     

    “Shares”
has
      the
      meaning set forth in the Recitals.

     

    “Short
      Sales”
      include, without limitation, all “short sales” as defined in Rule 200
      promulgated under Regulation SHO under the Exchange Act, whether or not against
      the box, and all types of direct and indirect stock pledges, forward sale
      contracts, options, puts, calls, short sales, swaps, “put equivalent positions”
(as defined in Rule 16a-1(h) under the Exchange Act) and similar arrangements
      (including on a total return basis), and sales and other transactions through
      non-U.S. broker dealers or foreign regulated brokers.

     

    “Stock
      Certificates”
has
      the
      meaning set forth in Section 2.2(a)(ii).

     

    “Subscription
      Amount”
means
      with respect to each Purchaser, the aggregate amount to be paid for the Shares
      purchased hereunder as indicated on such Purchaser’s signature page to this
      Agreement next to the heading “Aggregate Purchase Price (Subscription
      Amount)”.

     

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

     

    “Trading
      Affiliate”
has
      the
      meaning set forth in Section 3.2(h).

     

    “Trading
      Day”
means
      (i) a day on which the Common Stock is listed or quoted and traded on its
      Principal Trading Market (other than the OTC Bulletin Board), or (ii) if the
      Common Stock is not listed on a Trading Market (other than the OTC Bulletin
      Board), a day on which the Common Stock is traded in the over-the-counter
      market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock
      is
      not quoted on any Trading Market, a day on which the Common Stock is quoted
      in
      the over-the-counter market as reported in the “pink sheets” by Pink Sheets LLC
      (or any similar organization or agency succeeding to its functions of reporting
      prices); provided,
      that in
      the event that the Common Stock is not listed or quoted as set forth in (i),
      (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

     

    “Trading
      Market”
means
      whichever of the New York Stock Exchange, the American Stock Exchange, the
      NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market
      or the OTC Bulletin Board on which the Common Stock is listed or quoted for
      trading on the date in question.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    “Transaction
      Documents”
means
      this Agreement, the schedules and exhibits attached hereto (including the
      Registration Rights Agreement and the Irrevocable Transfer Agent Instructions)
      and any other documents or agreements executed in connection with the
      transactions contemplated hereunder.

     

    “Transfer
      Agent”
means
      Securities Transfer Corporation, or any successor transfer agent for the
      Company.

     

    ARTICLE
      II.

    PURCHASE
      AND SALE

     

    2.1 Closing.
      

     

    (a) Amount.
      Subject
      to the terms and conditions set forth in this Agreement, at the Closing, the
      Company shall issue and sell to each Purchaser, and each Purchaser shall,
      severally and not jointly, purchase from the Company, such number of Shares
      equal to the quotient resulting from dividing (i) the Subscription Amount for
      such Purchaser by (ii) the Purchase Price, rounded up to the nearest whole
      Share. 

     

    (b) Closing.
      The
      Closing of the purchase and sale of the Shares shall take place at the offices
      of Lowenstein Sandler PC, 1251 Avenue of the Americas, New York, New York on
      the
      Closing Date or at such other locations or remotely by facsimile transmission
      or
      other electronic means as the parties may mutually agree.

     

    (c) Form
      of Payment.
      On the
      Closing Date, (i) the Company and the Placement Agent shall instruct the Escrow
      Agent to wire the Escrow Amount in accordance with the terms of Section 2.1(d),
      and (ii)
      the
      Company shall irrevocably instruct the Transfer Agent to deliver to each
      Purchaser one or more stock certificates, free and clear of all restrictive
      and
      other legends (except as expressly provided in Section 4.1(b) hereof),
      evidencing the number of Shares such Purchaser is purchasing as is set
      forth
      on such
      Purchaser’s signature page to this Agreement next to the heading “Number of
      Shares to be Acquired”,
      within
      three (3) Business Days after the Closing, duly executed on behalf of the
      Company and registered in the name of such Purchaser.
      

     

    (d) Escrow.

    


    (i)
      Simultaneously with the execution and delivery of this Agreement by a Purchaser,
      such Purchaser shall promptly cause a wire transfer of immediately available
      funds (U.S. dollars) in an amount representing such Purchaser’s Subscription
      Amount to be paid to a non-interest bearing escrow account of Lowenstein Sandler
      PC (the “Escrow
      Agent”)
      set
      forth on Exhibit
      G
      attached
      hereto (the aggregate amounts received being held in escrow by the Escrow Agent
      are referred to herein as the “Escrow
      Amount”).
      The
      Escrow Agent shall hold the Escrow Amount in escrow in accordance with Section
      2.1(d)(ii) below. 

    


    (ii) The
      Escrow Agent shall continue to hold the Escrow Amount in escrow in accordance
      with and subject to this Agreement, from the date of its receipt of the funds
      constituting the Escrow Amount until the soonest of:

    
       

    

    (A)
      the
      termination of this Agreement in accordance with Section 6.18, in which case,
      if
      the Escrow Agent then holds any portion of the Escrow Amount, then: (1) in
      the
      event of a termination by the Company, the Escrow Agent shall return the portion
      of the Escrow Amount received from each Purchaser which it then holds, to each
      such Purchaser, and in the event of a termination by a Purchaser, the Escrow
      Agent shall return the portion of the Escrow Amount received from such Purchaser
      which it then holds, to such Purchaser, in accordance with written wire transfer
      instructions received from the Purchaser; and (2) if the Escrow Agent has not
      received written wire transfer instructions from any Purchaser before the
      30th
      day
      after such termination date, then the Escrow Agent may, in its sole and absolute
      discretion, either (x) deposit that portion of the Escrow Amount to be returned
      to such Purchaser in a court of competent jurisdiction on written notice to
      such
      Purchaser, and the Escrow Agent shall thereafter have no further liability
      with
      respect to such deposited funds, or (y) continue to hold such portion of the
      Escrow Amount pending receipt of written wire transfer instructions from such
      Purchaser or an order from a court of competent jurisdiction; OR

    
      


      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

         

      

    

    (B)
      the
      Closing, receipt of written instructions from the Company and the Placement
      Agent that the Closing shall have been consummated, in which case, the Escrow
      Agent shall release the Escrow Amount constituting the aggregate purchase price
      as follows: (1) to the Placement Agent, the fees payable to such Placement
      Agent
      (which fees shall be set forth in such instructions), (2) to the Company’s
      Counsel, the fees payable to such Company Counsel, and (3) the balance of the
      aggregate purchase price to the Company.

    


    (iii) The
      Company and the Purchasers acknowledge and agree for the benefit of the Escrow
      Agent (which shall be deemed to be a third party beneficiary of this Section
      2.1(d)) as follows: 

    


    (A) The
      Escrow Agent: (i) is not responsible for the performance by the Company, the
      Purchasers or Placement Agent of this Agreement or any of the Transaction
      Documents or for determining or compelling compliance therewith; (ii) is only
      responsible for (A) holding the Escrow Amount in escrow pending receipt of
      written instructions from the Company and the Placement Agent directing the
      release of the Escrow Amount, and (B) disbursing the Escrow Amount in accordance
      with the written instructions from the Company or the Placement Agent (or the
      Purchaser in accordance with Section 2.1(d)(ii)(A)), each of the
      responsibilities of the Escrow Agent in clause (A) and (B) is ministerial in
      nature, and no implied duties or obligations of any kind shall be read into
      this
      Agreement against or on the part of the Escrow Agent (collectively, the
“Escrow
      Agent Duties”);
      (iii)
      shall not be obligated to take any legal or other action hereunder which might
      in its judgment involve or cause it to incur any expense or liability unless
      it
      shall have been furnished with indemnification acceptable to it, in its sole
      discretion; (iv) may rely on and shall be protected in acting or refraining
      from
      acting upon any written notice, instruction (including, without limitation,
      wire
      transfer instructions, whether incorporated herein or provided in a separate
      written instruction), instrument, statement, certificate, request or other
      document furnished to it hereunder and believed by it to be genuine and to
      have
      been signed or presented by the proper Person, and shall have no responsibility
      for making inquiry as to, or for determining, the genuineness, accuracy or
      validity thereof, or of the authority of the Person signing or presenting the
      same; and (v) may consult counsel satisfactory to it, and the opinion or advice
      of such counsel in any instance shall be full and complete authorization and
      protection in respect of any action taken, suffered or omitted by it hereunder
      in good faith and in accordance with the opinion or advice of such counsel.
      Documents and written materials referred to in this Section 2.1(d)(iii)(A)
      include, without limitation, e-mail and other electronic transmissions capable
      of being printed, whether or not they are in fact printed; and any such e-mail
      or other electronic transmission may be deemed and treated by the Escrow Agent
      as having been signed or presented by a Person if it bears, as sender, the
      Person’s e-mail address. 

     

    (B) The
      Escrow Agent shall not be liable to anyone for any action taken or omitted
      to be
      taken by it hereunder, except in the case of Escrow Agent’s gross negligence or
      willful misconduct in breach of the Escrow Agent Duties. IN NO EVENT SHALL
      THE
      ESCROW AGENT BE LIABLE FOR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGE
      OR LOSS (INCLUDING BUT NOT LIMITED TO LOST PROFITS) WHATSOEVER, EVEN IF THE
      ESCROW AGENT HAS BEEN INFORMED OF THE LIKELIHOOD OF SUCH LOSS OR DAMAGE AND
      REGARDLESS OF THE FORM OF ACTION. 

    


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

    

    (C) The
      Company hereby indemnifies and holds harmless the Escrow Agent from and against
      any and all loss, liability, cost, damage and expense, including, without
      limitation, reasonable counsel fees and expenses, which the Escrow Agent may
      suffer or incur by reason of any action, claim or proceeding brought against
      the
      Escrow Agent arising out of or relating to the performance of the Escrow Agent
      Duties, unless such action, claim or proceeding is exclusively the result of
      the
      willful misconduct, bad faith or gross negligence of the Escrow Agent.


    


    (D) The
      Escrow Agent has acted as legal counsel to the Placement Agent in connection
      with this Agreement and the other Transaction Documents, is merely acting as
      a
      stakeholder under this Agreement and is, therefore, hereby authorized to
      continue acting as legal counsel to the Placement Agent including, without
      limitation, with regard to any dispute arising out of this Agreement, the other
      Transaction Documents, the Escrow Amount or any other matter. The Purchasers
      hereby expressly consent to permit the Escrow Agent to represent the Placement
      Agent in connection with all matters relating to this Agreement, including,
      without limitation, with regard to any dispute arising out of this Agreement,
      the other Transaction Documents, the Escrow Amount or any other matter, and
      hereby waives any conflict of interest or appearance of conflict or impropriety
      with respect to such representation. Each of the Purchasers has consulted with
      its own counsel specifically about this Section 2.1(d) to the extent they deemed
      necessary, and has entered into this Agreement after being satisfied with such
      advice.

    


    (E) The
      Escrow Agent shall have the right at any time to resign for any reason and
      be
      discharged of its duties as escrow agent hereunder (including without limitation
      the Escrow Agent Duties) by giving written notice of its resignation to the
      Company, the Placement Agent and the Purchasers at least ten (10) calendar
      days
      prior to the specified effective date of such resignation. All obligations
      of
      the Escrow Agent hereunder shall cease and terminate on the effective date
      of
      its resignation and its sole responsibility thereafter shall be to hold the
      Escrow Amount, for a period of ten (10) calendar days following the effective
      date of resignation, at which time,

    


    (I) if
      a
      successor escrow agent shall have been appointed and have accepted such
      appointment in a writing to both the Company and the Purchasers, then upon
      written notice thereof given to each of the Purchasers, the Escrow Agent shall
      deliver the Escrow Amount to the successor escrow agent, and upon such delivery,
      the Escrow Agent shall have no further liability or obligation; or

    


    (II) if
      a
      successor escrow agent shall not have been appointed, for any reason whatsoever,
      the Escrow Agent shall at its option in its sole discretion, either (A) deliver
      the Escrow Amount to a court of competent jurisdiction selected by the Escrow
      Agent and give written notice thereof to the Company, the Placement Agent and
      the Purchasers, or (B) continue to hold the Escrow Amount in escrow pending
      written direction from the Company and the Placement Agent in form and formality
      satisfactory to the Escrow Agent.

     

    (F) In
      the
      event that the Escrow Agent shall be uncertain as to its duties or rights
      hereunder or shall receive instructions with respect to the Escrow Amount or
      any
      portion thereunder which, in its sole discretion, are in conflict either with
      other instructions received by it or with any provision of this Agreement,
      the
      Escrow Agent shall have the absolute right to suspend all further performance
      of
      its duties under this Agreement (except for the safekeeping of such Escrow
      Amount) until such uncertainty or conflicting instructions have been resolved
      to
      the Escrow Agent’s sole satisfaction by final judgment of a court of competent
      jurisdiction, joint written instructions from the Company, the Placement Agent
      and all of the Purchasers, or otherwise. In the event that any controversy
      arises between the Company and one or more of the Purchasers or any other party
      with respect to this Agreement or the Escrow Amount, the Escrow Agent shall
      not
      be required to determine the proper resolution of such controversy or the proper
      disposition of the Escrow Amount, and shall have the absolute right, in its
      sole
      discretion, to deposit the Escrow Amount with the clerk of a court selected
      by
      the Escrow Agent and file a suit in interpleader in that court and obtain an
      order from that court requiring all parties involved to litigate in that court
      their respective claims arising out of or in connection with the Escrow Amount.
      Upon the deposit by the Escrow Agent of the Escrow Amount with the clerk of
      such
      court in accordance with this provision, the Escrow Agent shall thereupon be
      relieved of all further obligations and released from all liability
      hereunder.

    


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (G) The
      provisions of this Section 2.1(d) shall survive any termination of this
      Agreement.

     

    2.2 Closing
      Deliveries.
        

     

    (a)
       On
      or
      prior to the Closing, the Company shall issue, deliver or cause to be delivered
      to each Purchaser the following (the “Company
      Deliverables”):

     

    (i) this
      Agreement, duly executed by the Company;

     

    (ii) irrevocable
      instructions from the Company to the Transfer Agent to deliver to each
      Purchaser
      one or
      more stock certificates, free and clear of all restrictive and other legends
      (except as provided in Section
      4.1(b)
      hereof),
      evidencing the Shares subscribed for by Purchaser hereunder, registered in
      the
      name of such Purchaser as set forth on the Stock Certificate Questionnaire
      included as Exhibit
      B-2
      hereto
      (the “Stock
      Certificates”),
      within three (3) Business Days of Closing; 

     

    (iii) a
      legal
      opinion of Company Counsel, dated as of the Closing Date and in the form
      attached hereto as Exhibit
      C,
      executed by such counsel and addressed to the Purchasers and the Placement
      Agent; 

     

    (iv) the
      Registration Rights Agreement, duly executed by the Company; 

     

    (v) duly
      executed Irrevocable Transfer Agent Instructions acknowledged in writing by
      the
      Transfer Agent;

     

    (vi) a
      certificate of the Secretary of the Company (the “Secretary’s
      Certificate”),
      dated
      as of the Closing Date, (a) certifying the resolutions adopted by the Board
      of
      Directors of the Company or a duly authorized committee thereof approving the
      transactions contemplated by this Agreement and the other Transaction Documents
      and the issuance of the Shares, (b) certifying the current versions of the
      certificate or articles of incorporation, as amended, and by-laws of the Company
      and (c) certifying as to the signatures and authority of persons signing the
      Transaction Documents and related documents on behalf of the Company, in the
      form attached hereto as Exhibit
      E;
      

     

    (vii) the
      Compliance Certificate referred to in Section 5.1(h); 

     

    (viii) a
      certificate evidencing the formation and good standing of the Company in such
      entity’s jurisdiction of formation issued by the Secretary of State (or
      comparable office) of such jurisdiction, as of a date within five (5) days
      of
      the Closing Date; and 

     

    (ix) a
      certified copy of the Certificate of Incorporation, as certified by the
      Secretary of State of the State (or comparable office) of such entity’s
      jurisdiction of formation, as of a date within ten (10) days of the Closing
      Date.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (b) On
      or
      prior to the Closing, each Purchaser shall deliver or cause to be delivered
      to
      the Company the following (the “Purchaser
      Deliverables”):

     

    (i) this
      Agreement, duly executed by such Purchaser;

     

    (ii) its
      Subscription Amount, in United States dollars and in immediately available
      funds, in the amount set forth as the “Purchase Price” indicated below such
      Purchaser’s name on the applicable signature page hereto under the heading
“Aggregate Purchase Price (Subscription Amount)” by wire transfer to the escrow
      account set forth on Exhibit
      G
      attached
      hereto; 

     

    (iii) the
      Registration Rights Agreement, duly executed by such Purchaser; 

     

    (iv) a
      fully
      completed and duly executed Selling Stockholder Questionnaire in the form
      attached as Annex B to the Registration Rights Agreement; and

     

    (v) a
      fully
      completed and duly executed Accredited Investor Questionnaire and Stock
      Certificate Questionnaire in the forms attached hereto as Exhibits B-1
      and
B-2,
      respectively.

     

    ARTICLE
      III.

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1 Representations
      and Warranties of the Company.
      The
      Company hereby represents and warrants as of the date hereof and the Closing
      Date (except for the representations and warranties that speak as of a specific
      date, which shall be made as of such date), to each of the Purchasers and the
      Placement Agent that, except as set forth in the Schedules delivered herewith
      and the SEC Reports filed with the Commission:

     

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


     

    (b) Organization
      and Qualification.
      The
      Company and each of its 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 corporate power and authority to own or lease and use its properties
      and assets and to carry on its business as currently conducted. Neither the
      Company nor any Subsidiary is in violation of any of the provisions of its
      respective certificate or articles of incorporation, bylaws or other
      organizational or charter documents. The Company and each of its Subsidiaries
      is
      duly qualified to conduct business and is in good standing as a foreign
      corporation or other entity in each jurisdiction in which the nature of the
      business conducted or property owned by it makes such qualification necessary,
      except where the failure to be so qualified or in good standing, as the case
      may
      be, would not have a Material Adverse Effect, and no Proceeding has been
      instituted, is pending, or, to the Company’s Knowledge, has been threatened in
      writing in any such jurisdiction revoking, limiting or curtailing or seeking
      to
      revoke, limit or curtail such power and authority or qualification.


     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (c) Authorization;
      Enforcement; Validity.
      The
      Company 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 each of the Transaction Documents
      to
      which it is a party by the Company and the consummation by it of the
      transactions contemplated hereby and thereby (including, but not limited to,
      the
      sale and delivery of the Shares) have been duly authorized by all necessary
      corporate action on the part of the Company, and no further corporate action
      is
      required by the Company, its Board of Directors or its stockholders in
      connection therewith other than in connection with the Required Approvals.
      Each
      of the Transaction Documents to which it is a party has been (or upon delivery
      will have been) duly executed by the Company and is, or when delivered in
      accordance with the terms hereof, will constitute the legal, valid and binding
      obligation of the Company enforceable against the Company in accordance with
      its
      terms, except (i) as such enforceability may be limited by applicable
      bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
      laws
      relating to, or affecting generally the enforcement of, creditors’ rights and
      remedies or by other equitable principles of general application or (ii) as
      limited by laws relating to the availability of specific performance, injunctive
      relief or other equitable remedies. There are no stockholder agreements, voting
      agreements, or other similar arrangements with respect to the Company’s capital
      stock to which the Company is a party or, to the Company’s Knowledge, between or
      among any of the Company’s stockholders.

     

    (d) No
      Conflicts.
      The
      execution, delivery and performance by the Company of the Transaction Documents
      to which it is a party and the consummation by the Company of the transactions
      contemplated hereby or thereby (including, without limitation, the issuance
      of
      the Shares) do not and will not (i) conflict with or violate any provisions
      of
      the Company’s or any Subsidiary’s certificate or articles of incorporation,
      bylaws or otherwise result in a violation of the organizational documents of
      the
      Company, (ii) conflict with, or constitute a default (or an event that with
      notice or lapse of time or both would result in 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) to which the Company or any Subsidiary is a party
      or by which any property or asset of the Company or any Subsidiary is bound,
      or
      affected, or (iii) 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 and the rules and regulations, assuming the correctness of the
      representations and warranties made by the Purchasers herein, of any
      self-regulatory organization to which the Company or its securities are subject,
      including all applicable Trading Markets), or by which any property or asset
      of
      the Company or a Subsidiary is bound or subject, except in the case of clauses
      (ii) and (iii) such as would not, individually or in the aggregate, have a
      Material Adverse Effect.

     

    (e) Filings,
      Consents and Approvals.
      The
      Company is not required to obtain any consent, waiver, authorization or order
      of, give any notice to, or make any filing or registration with, any court
      or
      other federal, state, local or other governmental authority or other Person
      in
      connection with the execution, delivery and performance by the Company of the
      Transaction Documents (including the issuance of the Shares), other than (i)
      the
      filing with the Commission of one or more Registration Statements in accordance
      with the requirements of the Registration Rights Agreement, (ii) filings
      required by applicable state securities laws, (iii) the filing of a Notice
      of
      Sale of Securities on Form D with the Commission under Regulation D of the
      Securities Act, (iv) the filing of any requisite notices and/or application(s)
      to the Principal Trading Market for the issuance and sale of the Common Stock
      and the listing of the Common Stock for trading or quotation, as the case may
      be, thereon in the time and manner required thereby, and (v) the filings
      required in accordance with Section 4.7 of this Agreement (collectively, the
      “Required
      Approvals”).
      

     

    (f)  Issuance
      of the Shares.
      The
      Shares have been duly authorized and, when issued and paid for in accordance
      with the terms of the Transaction Documents, will be duly and validly issued,
      fully paid and nonassessable and free and clear of all Liens, other than
      restrictions on transfer provided for in the Transaction Documents or imposed
      by
      applicable securities laws, and shall not be subject to preemptive or similar
      rights. Assuming the accuracy of the representations and warranties of the
      Purchasers in this Agreement, the Shares will be issued in compliance with
      all
      applicable federal and state securities laws. 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (g)  Capitalization.
      The
      number of shares and type of all authorized, issued and outstanding capital
      stock, options and other securities of the Company (whether or not presently
      convertible into or exercisable or exchangeable for shares of capital stock
      of
      the Company) has been set forth in the SEC Reports and has changed since the
      date of such SEC Reports only to reflect stock option and warrant exercises
      that
      do not, individually or in the aggregate, have a material affect on the issued
      and outstanding capital stock, options and other securities. All of the
      outstanding shares of capital stock of the Company are duly authorized, validly
      issued, fully paid and non-assessable, have been issued in compliance in all
      material respects with all applicable federal and state securities laws, and,
      to
      the Company’s Knowledge, none of such outstanding shares was issued in violation
      of any preemptive rights or similar rights to subscribe for or purchase any
      capital stock of the Company. Except as specified in the SEC Reports: (i) no
      shares of the Company's capital stock are subject to preemptive rights or any
      Liens established by the Company; (ii) there are no outstanding options,
      warrants, scrip, rights to subscribe to, calls or commitments of any character
      whatsoever relating to, or securities or rights convertible into, or exercisable
      or exchangeable for, any shares of capital stock of the Company, or contracts,
      commitments, understandings or arrangements by which the Company is or may
      become bound to issue additional shares of capital stock of the Company or
      options, warrants, scrip, rights to subscribe to, calls or commitments of any
      character whatsoever relating to, or securities or rights convertible into,
      or
      exercisable or exchangeable for, any shares of capital stock of the Company;
      (iii) there are no outstanding debt securities, notes, credit agreements, credit
      facilities or other agreements, documents or instruments evidencing indebtedness
      of the Company or by which the Company is or may become bound; (iv) there are
      no
      financing statements securing obligations in any material amounts, either singly
      or in the aggregate, filed in connection with the Company; (v) there are no
      agreements or arrangements under which the Company is obligated to register
      the
      sale of any of their securities under the Securities Act (except the
      Registration Rights Agreement); (vi) there are no outstanding securities or
      instruments of the Company or which contain any redemption or similar
      provisions, and there are no contracts, commitments, understandings or
      arrangements by which the Company is or may become bound to redeem a security
      of
      the Company; and (vii) there are no securities or instruments containing
      anti-dilution or similar provisions that will be triggered by the issuance
      of
      the Shares. 

     

    (h) SEC
      Reports.
      The
      Company has filed all reports, schedules, forms, statements and other documents
      required to be filed by it under the Exchange Act, including pursuant to Section
      13(a) or 15(d) thereof, for the two years preceding the date hereof (or such
      shorter period as the Company was required by law 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”
and
      together with this Agreement and the Schedules to this Agreement (if any),
      the
“Disclosure
      Materials”),
      on a
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Reports prior to the expiration of any such extension. As
      of
      their respective filing dates, or to the extent corrected by a subsequent
      restatement, the SEC Reports complied in all material respects with the
      requirements of the Securities Act and the Exchange Act and the rules and
      regulations of the Commission promulgated thereunder, and none of the SEC
      Reports, when filed, contained any untrue statement of a material fact or
      omitted to state a material fact required to be stated therein or necessary
      in
      order to make the statements therein, in light of the circumstances under which
      they were made, not misleading. All material agreements to which the Company
      or
      any Subsidiary is a party or to which the property or assets of the Company
      or
      any of its Subsidiaries are subject are included as part of or specifically
      identified in the SEC Reports.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (i) Financial
      Statements. 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 (or to the extent corrected by a subsequent restatement). Such financial
      statements have been prepared in accordance with GAAP applied on a consistent
      basis during the periods involved, 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 taken as a whole 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, year-end audit adjustments. 

     

    (j) Tax
      Matters.
      The
      Company and each of its Subsidiaries (i) has accurately and timely prepared
      and
      filed (or has received a valid extension of such time of filing and has filed
      prior to the expiration of any such extension) all foreign, federal and state
      income and all other tax returns, reports and declarations required by any
      jurisdiction to which it is subject, (ii) has paid all taxes and other
      governmental assessments and charges that are material in amount, shown or
      determined to be due on such returns, reports and declarations, except those
      being contested in good faith, with respect to which adequate reserves have
      been
      set aside on the books of the Company and (iii) has set aside on its books
      provisions reasonably adequate for the payment of all taxes for periods
      subsequent to the periods to which such returns, reports or declarations apply,
      except, in the case of clauses (i) and (ii) above, where the failure to so
      pay
      or file any such tax, assessment, charge or return would not have a Material
      Adverse Effect. There are no unpaid taxes in any material amount claimed to
      be
      due by the Company or any of its Subsidiaries by the taxing authority of any
      jurisdiction. 

     

    (k) Material
      Changes.
      Since
      the date of the latest financial statements included within the SEC Reports,
      except as specifically disclosed in the SEC Reports, (i) there have been no
      events, occurrences or developments that have had or would reasonably be
      expected to have, either individually or in the aggregate, a Material Adverse
      Effect, (ii) the Company has not incurred any material liabilities (contingent
      or otherwise) other than (A) trade payables, accrued expenses and other
      liabilities incurred in the ordinary course of business consistent with past
      practice and (B) liabilities not required to be reflected in the Company's
      financial statements pursuant to GAAP or required to be disclosed in filings
      made with the Commission, (iii) the Company has not altered its method of
      accounting or the manner in which it keeps its accounting books and records,
      (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 (other than
      in
      connection with repurchases of unvested stock issued to employees of the
      Company), and (v) the Company has not issued any equity securities to any
      officer, director or Affiliate, except Common Stock issued in the ordinary
      course as dividends on outstanding preferred stock or pursuant to existing
      Company stock option or stock purchase plans or executive and director corporate
      arrangements disclosed in the SEC Reports.

     

    (l) Environmental
      Matters.
      To the
      Company’s Knowledge, neither the Company nor any of its Subsidiaries is in
      violation of any statute, rule, regulation, decision or order of any
      governmental agency or body or any court, domestic or foreign, relating to
      the
      use, disposal or release of hazardous or toxic substances or relating to the
      protection or restoration of the environment or human exposure to hazardous
      or
      toxic substances (collectively, “Environmental
      Laws”),
      and
      there is no Proceeding pending or, to the Company’s Knowledge, threatened in
      writing that might lead to such a claim.

     

    (m) Litigation.
      There
      is no Action which (i) adversely affects or challenges the legality, validity
      or
      enforceability of any of the Transaction Documents or the Shares or (ii) except
      as specifically disclosed in the SEC Reports, could, if there were an
      unfavorable decision, individually or in the aggregate, have a Material Adverse
      Effect. The Commission has not issued any stop order or other order suspending
      the effectiveness of any registration statement filed by the Company or any
      of
      its Subsidiaries under the Exchange Act or the Securities Act.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (n) Employment
      Matters.
      No
      material labor dispute exists or, to the Company’s Knowledge, is imminent with
      respect to any of the employees of any Subsidiaries of the Company which would
      have a Material Adverse Effect.

     

    (o) Compliance.
      Neither
      the Company nor any of its Subsidiaries (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 of its
      Subsidiaries under), nor has the Company or any of its Subsidiaries received
      written notice of a claim that it is in default under or that it is in violation
      of, any indenture, loan or credit agreement or any other agreement or instrument
      to which it is a party or by which it or any of its properties is bound (whether
      or not such default or violation has been waived), (ii) is in violation of
      any
      order of any court, arbitrator or governmental body having jurisdiction over
      the
      Company or its properties or assets, or (iii) is or has been in violation of,
      or
      in receipt of written notice that it is in violation of, any statute, rule
      or
      regulation of any governmental authority applicable to the Company, except
      in
      each case as would not, individually or in the aggregate, have a Material
      Adverse Effect.

     

    (p) Regulatory
      Permits.
      The
      Company and each of its Subsidiaries possess all certificates, authorizations
      and permits issued by the appropriate federal, state, local or foreign
      regulatory authorities necessary to conduct its respective business as currently
      conducted and as described in the SEC Reports, except where the failure to
      possess such permits, individually or in the aggregate, has not and would not
      have, individually or in the aggregate, a Material Adverse Effect (“Material
      Permits”),
      and
      (i) neither the Company nor any of its Subsidiaries has received any notice
      of
      Proceedings relating to the revocation or modification of any such Material
      Permits and (ii) the Company is unaware of any facts or circumstances that
      the
      Company would reasonably expect to give rise to the revocation or modification
      of any Material Permit.

     

    (q) Title
      to Assets.
      Except
      for property that is specifically the subject of, and covered by, other
      representations and warranties as to ownership or title contained herein, the
      Company and its Subsidiaries have good and marketable title in fee simple to
      all
      real property. The Company and its Subsidiaries have good and marketable title
      to all personal property owned by them which is material to the business of
      the
      Company and its Subsidiaries, taken as whole, in each case free and clear of
      all
      Liens except such as do not materially affect the value of such property and
      do
      not interfere with the use made and proposed to be made of such property by
      the
      Company and any of its Subsidiaries. Any real property and facilities held
      under
      lease by the Company and any of its Subsidiaries are held, to the Company’s
      Knowledge, by them under valid, subsisting and enforceable leases with such
      exceptions as are not material and, to the Company’s Knowledge, do not interfere
      with the use made and proposed to be made of such property and buildings by
      the
      Company and its Subsidiaries. 

     

    (r) Patents
      and Trademarks.
      The
      Company and its Subsidiaries own, possess, license or have other rights to
      use
      all foreign and domestic patents, patent applications, trade and service marks,
      trade and service mark registrations, trade names, copyrights, licenses,
      inventions, trade secrets, technology, Internet domain names, know-how and
      other
      intellectual property (collectively, the “Intellectual
      Property”)
      necessary for the conduct of their respective businesses as now conducted or
      as
      proposed to be conducted or which could reasonably be expected to result in
      a
      Material Adverse Effect if the Company fails to maintain such protection on
      its
      Intellectual Property. Except as set forth in the SEC Reports and except where
      such violations or infringements would not have, either individually or in
      the
      aggregate, a Material Adverse Effect, (a) there are no rights of third
      parties to any such Intellectual Property; and (b) to the Company’s Knowledge,
      there is no infringement by third parties of any such Intellectual
      Property.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (s) Insurance.
      The
      Company and each of the Subsidiaries are insured by insurers of recognized
      financial responsibility against such losses and risks and in such amounts
      as
      are sufficient for the operation of the businesses and locations in which the
      Company and the Subsidiaries are engaged. Neither the Company nor any of its
      Subsidiaries has received any notice of cancellation of any such insurance,
      nor
      does the Company or any Subsidiary have any knowledge that it will be unable
      to
      renew its existing insurance coverage for the Company and the Subsidiaries
      as
      and when such coverage expires or to obtain similar coverage from similar
      insurers as may be necessary to continue its business without a significant
      increase in cost.

     

    (t)
      Transactions
      With Affiliates and Employees.
      Except
      as set forth in the SEC Reports, none of the officers or directors of the
      Company and, to the Company’s Knowledge, none of the employees of the Company,
      is presently a party to any transaction with the Company or to a presently
      contemplated transaction (other than for services as employees, officers and
      directors) that would be required to be disclosed pursuant to Item 404 of
      Regulation S-K promulgated under the Securities Act.

     

    (u) Internal
      Accounting Controls.
      The
      Company and each of its Subsidiaries have established a system of internal
      accounting controls designed to provide reasonable assurance that (i)
      transactions are executed in accordance with management's general or specific
      authorizations, (ii) transactions are recorded as necessary to permit
      preparation of financial statements in conformity with GAAP and to maintain
      asset and liability accountability, (iii) access to assets or incurrence of
      liabilities is permitted only in accordance with management's general or
      specific authorization, and (iv) the recorded accountability for assets and
      liabilities is compared with the existing assets and liabilities at reasonable
      intervals and appropriate action is taken with respect to any differences.
      

     

    (v)
      Sarbanes-Oxley;
      Disclosure Controls.
      The
      Company is in compliance in all material respects with all of the provisions
      of
      the Sarbanes-Oxley Act of 2002 which are applicable to it, except where such
      noncompliance would not have, individually or in the aggregate, a Material
      Adverse Effect. The Company maintains disclosure controls and procedures (as
      such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act).
      

     

    (w) Certain
      Fees.
      No
      person
      or entity will have, as a result of the transactions contemplated by this
      Agreement, any valid right, interest or claim against or upon the Company or
      a
      Purchaser for any commission, fee or other compensation pursuant to any
      agreement, arrangement or understanding entered into by or on behalf of the
      Company, other than the Placement Agent with respect to the offer and sale
      of
      the Shares (which placement agent fees are being paid by the Company).


     

    (x) Private
      Placement.
      Assuming the accuracy of the Purchasers’ representations and warranties set
      forth in Section 3.2 of this Agreement and the accuracy of the information
      disclosed in the Accredited Investor Questionnaires, no registration under
      the
      Securities Act is required for the offer and sale of the Shares by the Company
      to the Purchasers under the Transaction Documents. 

     

    (y) Registration
      Rights.
      Other
      than each of the Purchasers or as set forth in Schedule
      3.1(y)
      hereto,
      no Person has any right to cause the Company to effect the registration under
      the Securities Act of any securities of the Company other than those securities
      which are currently registered on an effective registration statement on file
      with the Commission. 

     

    (z) No
      Integrated Offering.
      Assuming the accuracy of the Purchasers’ representations and warranties set
      forth in Section 3.2, none of the Company, its Subsidiaries nor any of their
      Affiliates, nor any Person acting on its or their behalf has, directly or
      indirectly, at any time within the past six months, made any offers or sales
      of
      any Company security or solicited any offers to buy any security under
      circumstances that would (i) eliminate the availability of the exemption from
      registration under Regulation D under the Securities Act in connection with
      the
      offer and sale by the Company of the Shares as contemplated hereby or (ii)
      cause
      the offering of the Shares pursuant to the Transaction Documents to be
      integrated with prior offerings by the Company for purposes of any applicable
      law, regulation or stockholder approval provisions, including, without
      limitation, under the rules and regulations of any Trading Market on which
      any
      of the securities of the Company are listed or designated.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (aa) Listing
      and Maintenance Requirements.
      The
      Company’s Common Stock is registered pursuant to Section 12(b) or 12(g) of the
      Exchange Act, and the Company has taken no action designed to terminate the
      registration of the Common Stock under the Exchange Act nor has the Company
      received any notification that the Commission is contemplating terminating
      such
      registration. The Company has not, in the 12 months preceding the date hereof,
      received written 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 in compliance in all material respects with the listing and maintenance
      requirements for continued trading of the Common Stock on the Principal Trading
      Market. 

     

    (bb) Investment
      Company.
      Neither
      the Company nor any of its Subsidiaries is required to be registered as, and
      is
      not an Affiliate of, and immediately following the Closing will not be required
      to register as, an “investment company” within the meaning of the Investment
      Company Act of 1940, as amended.

     

    (cc) Questionable
      Payments. Neither
      the Company nor any of its Subsidiaries, nor, to the Company’s Knowledge, any
      directors, officers, employees, agents or other Persons acting on behalf of
      the
      Company or any of its Subsidiaries has, in the course of its actions for, or
      on
      behalf of, the Company: (a) directly or indirectly, used any corporate funds
      for
      unlawful contributions, gifts, entertainment or other unlawful expenses relating
      to foreign or domestic political activity; (b) made any direct or indirect
      unlawful payments to any foreign or domestic governmental officials or employees
      or to any foreign or domestic political parties or campaigns from corporate
      funds; (c) violated in any material respect any provision of the Foreign Corrupt
      Practices Act of 1977, as amended, or (d) failed to disclose fully any
      contribution made by the Company or any Subsidiary (or made by and Person acting
      on their behalf of which the Company is aware) where such failure to disclose
      is
      in violation of law.

     

    (dd) Application
      of Takeover Protections; Rights Agreements.
      The
      Company and its Board of Directors have taken all action (if any) deemed
      necessary by the Company and the Board of Directors, 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 charter documents or the laws of
      its
      state of incorporation that is or could reasonably be expected to become
      applicable to any of the Purchasers as a result of the Purchasers and the
      Company fulfilling their obligations or exercising their rights under the
      Transaction Documents, including, without limitation, the Company's issuance
      of
      the Shares and the Purchasers' ownership of the Shares. The Company has not
      adopted a stockholder rights plan or similar arrangement relating to
      accumulations of beneficial ownership of Common Stock or a change in control
      of
      the Company.

     

    (ee) Disclosure.
      The
      Company confirms that neither it nor any of its officers or directors nor any
      other Person acting on its or their behalf has provided, and it has not
      authorized the Placement Agent to provide, any Purchaser or its respective
      agents or counsel with any information that it believes constitutes or could
      reasonably be expected to constitute material, non-public information except
      insofar as the existence, provisions and terms of the Transaction Documents
      and
      the proposed transactions hereunder may constitute such information, all of
      which will be disclosed by the Company in the Press Release as contemplated
      by
      Section 4.7 hereof. The Company understands and confirms that the Purchasers
      will rely on the foregoing representations in effecting transactions in
      securities of the Company. No event or circumstance has occurred or information
      exists with respect to the Company or any of its Subsidiaries or its or their
      business, properties, operations or financial conditions, which, under
      applicable law, rule or regulation, requires public disclosure or announcement
      by the Company but which has not been so publicly announced or disclosed
      (assuming for this purpose that the Company’s reports filed under the Exchange
      Act are being incorporated into an effective registration statement filed by
      the
      Company under the Securities Act), except for the announcement of this Agreement
      and related transactions.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

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

     

    (gg) Acknowledgment
      Regarding Purchasers’ Purchase of Shares. 
      The Company acknowledges and agrees that each of the Purchasers is acting solely
      in the capacity of an arm’s length purchaser with respect to the Transaction
      Documents and the transactions contemplated hereby and thereby.  The
      Company further acknowledges that no Purchaser is acting as a financial advisor
      or fiduciary of the Company (or in any similar capacity) with respect to the
      Transaction Documents and the transactions contemplated thereby and any advice
      given by any Purchaser or any of their respective representatives or agents
      in
      connection with the Transaction Documents and the transactions contemplated
      thereby is merely incidental to the Purchasers’ purchase of the Shares. 


     

    (hh) Regulation
      M Compliance. 
      The Company has not, and to the Company’s 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 Shares, (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, other than, in the case of clauses (ii) and (iii) compensation paid
      to
      the Placement Agent in connection with the placement of the Shares.

     

    (ii)  PFIC.
      Neither
      the Company nor any Subsidiary is or intends to become a “passive foreign
      investment company” within the meaning of Section 1297 of the U.S. Internal
      Revenue Code of 1986, as amended.

     

    (jj)  OFAC.
      Neither
      the Company nor any Subsidiary nor, to the Company’s Knowledge, any director,
      officer, agent, employee, Affiliate or Person acting on behalf of the Company
      or
      any Subsidiary is currently identified on the specially designated nationals
      or
      other blocked person list administered by the Office of Foreign Assets Control
      of the U.S. Treasury Department (“OFAC”);
      and
      the Company will not directly or indirectly use the proceeds of the sale of
      the
      Shares, or lend, contribute or otherwise make available such proceeds to any
      Subsidiary, joint venture partner or other Person or entity, in violation of
      any
      U.S. sanctions administered by OFAC.

     

    (kk) Money
      Laundering Laws.
      The
      operations of each of the Company and any Subsidiary are and have been conducted
      at all times in compliance with any applicable money laundering statutes of
      applicable jurisdictions, the rules and regulations thereunder and any related
      or similar rules, regulations or guidelines, issued, administered or enforced
      by
      any applicable governmental agency (collectively, the “Money
      Laundering Laws”)
      and no
      action, suit or proceeding by or before any court or governmental agency,
      authority or body or any arbitrator involving the Company and/or any Subsidiary
      with respect to the Money Laundering Laws is pending or, to the Company’s
      Knowledge, threatened.

     

    
      
        
        

      

      
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    (ll) Acknowledgment
      Regarding Purchasers Trading Activity. 
      Anything in this Agreement or elsewhere herein to the contrary notwithstanding
      (except for Sections 3.2(h) and 4.12 hereof), it is understood and acknowledged
      by the Company that, to the Company's Knowledge (i) that none of the Purchasers
      have been asked to agree, nor has any Purchaser agreed, to desist from
      purchasing or selling, long and/or short, securities of the Company, or
“derivative” securities based on securities issued by the Company or to hold the
      Shares for any specified term; (ii) that past or future open market or other
      transactions by any Purchaser, including Short Sales, and specifically
      including, without limitation, Short Sales or “derivative” transactions, may
      negatively impact the market price of the Company’s publicly-traded securities;
      (iii) that any Purchaser, and counter-parties in “derivative” transactions to
      which any such Purchaser is a party, directly or indirectly, presently may
      have
      a “short” position in the Common Stock, and (iv) that each Purchaser shall not
      be deemed to have any affiliation with or control over any arm’s length
      counter-party in any “derivative” transaction.  The Company further
      understands and acknowledges that, to the Company's Knowledge (a) one or more
      Purchasers may engage in hedging activities at various times during the period
      that the Shares are outstanding and (b) such hedging activities (if any) could
      reduce the value of the existing stockholders’ equity interests in the Company
      at and after the time that the hedging activities are being conducted.  The
      Company acknowledges that such aforementioned hedging activities do not
      constitute a breach of any of the Transaction Documents.

     

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

     

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

     

    (a) Organization;
      Authority.
      Such
      Purchaser is an entity duly organized, validly existing and in good standing
      under the laws of the jurisdiction of its organization with the requisite
      corporate or partnership power and authority to enter into and to consummate
      the
      transactions contemplated by the applicable Transaction Documents and otherwise
      to carry out its obligations hereunder and thereunder. The execution, delivery
      and performance by such Purchaser of the transactions contemplated by this
      Agreement have been duly authorized by all necessary corporate or, if such
      Purchaser is not a corporation, such partnership, limited liability company
      or
      other applicable like action, on the part of such Purchaser. Each of this
      Agreement and the Registration Rights Agreement has been duly executed by such
      Purchaser, and when delivered by such Purchaser in accordance with the terms
      hereof, will constitute the valid and legally binding obligation of such
      Purchaser, enforceable against it in accordance with its terms, except as such
      enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium, liquidation or similar laws relating to, or
      affecting generally the enforcement of, creditors’ rights and remedies or by
      other equitable principles of general application.

     

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

     

    
      
        
        

      

      
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    (c) Acquisition
      and Disposition of Shares.
      Such
      Purchaser understands that the Shares are “restricted securities” and have not
      been registered under the Securities Act or any applicable state securities
      law
      and is acquiring the Shares as principal for its own account and not with a
      view
      to, or for distributing or reselling such Shares or any part thereof in
      violation of the Securities Act or any applicable state securities laws,
provided,
      however,
      that by
      making the representations herein, such Purchaser does not agree to hold any
      of
      the Shares for any minimum period of time and reserves the right, subject to
      the
      provisions of this Agreement and the Registration Rights Agreement, at all
      times
      to sell or otherwise dispose of all or any part of such Shares pursuant to
      an
      effective registration statement under the Securities Act or under an exemption
      from such registration and in compliance with applicable federal and state
      securities laws. Such Purchaser is acquiring the Shares hereunder in the
      ordinary course of its business. Such Purchaser does not presently have any
      agreement, plan or understanding, directly or indirectly, with any Person to
      distribute or effect any distribution of any of the Shares (or any securities
      which are derivatives thereof) to or through any person or entity.

     

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


     

    (e) General
      Solicitation.
      Such
      Purchaser is not purchasing the Shares as a result of any advertisement,
      article, notice or other communication regarding the Shares published in any
      newspaper, magazine or similar media or broadcast over television or radio
      or
      presented at any seminar or any other general advertisement.

     

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

     

    (g) Access
      to Information.
      Such
      Purchaser acknowledges that it has had the opportunity to review the Disclosure
      Materials and has been afforded (i) the opportunity to ask such questions as
      it
      has deemed necessary of, and to receive answers from, representatives of the
      Company concerning the terms and conditions of the offering of the Shares and
      the merits and risks of investing in the Shares; (ii) access to information
      about the Company and the Subsidiaries and their respective financial condition,
      results of operations, business, properties, management and prospects sufficient
      to enable it to evaluate its investment; and (iii) the opportunity to obtain
      such additional information that the Company possesses or can acquire without
      unreasonable effort or expense that is necessary to make an informed investment
      decision with respect to the investment. Neither such inquiries nor any other
      investigation conducted by or on behalf of such Purchaser or its representatives
      or counsel shall modify, amend or affect such Purchaser's right to rely on
      the
      truth, accuracy and completeness of the Disclosure Materials and the Company's
      representations and warranties contained in the Transaction Documents. Such
      Purchaser has sought such accounting, legal and tax advice as it has considered
      necessary to make an informed decision with respect to its acquisition of the
      Shares.

     

    (h)  Certain
      Trading Activities.
      Other
      than with respect to the transactions contemplated herein, since the earlier
      to
      occur of (1) the time that such Purchaser was first contacted by the Company,
      the Placement Agent or any other Person regarding the transactions contemplated
      hereby and (2) the tenth (10th)
      day
      prior to the date of this Agreement, neither the Purchaser nor any Affiliate
      of
      such Purchaser which (x) had knowledge of the transactions contemplated hereby,
      (y) has or shares discretion relating to such Purchaser’s investments or trading
      or information concerning such Purchaser’s investments, including in respect of
      the Shares, and (z) is subject to such Purchaser’s review or input concerning
      such Affiliate’s investments or trading (collectively, “Trading
      Affiliates”)
      has
      directly or indirectly, nor has any Person acting on behalf of or pursuant
      to
      any understanding with such Purchaser or Trading Affiliate, effected or agreed
      to effect any purchases or sales of the securities of the Company (including,
      without limitation, any Short Sales involving the Company’s securities).
      Notwithstanding the foregoing, in the case of a Purchaser and/or Trading
      Affiliate that is, individually or collectively, a multi-managed investment
      bank
      or vehicle whereby separate portfolio managers manage separate portions of
      such
      Purchaser's or Trading Affiliate’s assets and the portfolio managers have no
      direct knowledge of the investment decisions made by the portfolio managers
      managing other portions of such Purchaser's or Trading Affiliate’s assets, the
      representation set forth above shall apply only with respect to the portion
      of
      assets managed by the portfolio manager that have knowledge about the financing
      transaction contemplated by this Agreement. Other than to other Persons party
      to
      this Agreement, such Purchaser has maintained the confidentiality of all
      disclosures made to it in connection with this transaction (including the
      existence and terms of this transaction). Notwithstanding the foregoing, no
      Purchaser makes any representation, warranty or covenant hereby that it will
      not
      engage in Short Sales in the securities of the Company after the time that
      the
      transactions contemplated by this Agreement are first publicly announced as
      described in Section 4.7.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (i) Brokers
      and Finders.
      No
      Person will have, as a result of the transactions contemplated by this
      Agreement, any valid right, interest or claim against or upon the Company or
      any
      Purchaser for any commission, fee or other compensation pursuant to any
      agreement, arrangement or understanding entered into by or on behalf of the
      Purchaser.

     

    (j) Independent
      Investment Decision.
      Such
      Purchaser has independently evaluated the merits of its decision to purchase
      Shares pursuant to the Transaction Documents, and such Purchaser confirms that
      it has not relied on the advice of any other Purchaser’s business and/or legal
      counsel in making such decision. Such Purchaser understands that nothing in
      this
      Agreement or any other materials presented by or on behalf of the Company to
      the
      Purchaser in connection with the purchase of the Shares constitutes legal,
      tax
      or investment advice. Such Purchaser has consulted such legal, tax and
      investment advisors as it, in its sole discretion, has deemed necessary or
      appropriate in connection with its purchase of the Shares. Such Purchaser
      understands that the Placement Agent has acted solely as the agent of the
      Company in this placement of the Shares and such Purchaser has not relied on
      the
      business or legal advice of the Placement Agent or any of its agents, counsel
      or
      Affiliates in making its investment decision hereunder, and confirms that none
      of such Persons has made any representations or warranties to such Purchaser
      in
      connection with the transactions contemplated by the Transaction
      Documents.

     

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

     

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

     

    (m) Regulation
      M.
      Such
      Purchaser is aware that the anti-manipulation rules of Regulation M under the
      Exchange Act may apply to sales of Common Stock and other activities with
      respect to the Common Stock by the Purchasers.

     

    (n) Private
      Placement.
      Purchaser acknowledges and agrees that (i) this placement has not been
      registered under the Securities Act and the Shares are "restricted securities"
      and may not be resold except as provided herein; (ii) the Purchaser, as a result
      of the private nature of this placement, does not have the protection of Section
      11 of the Securities Act; and (iii) the Company previously filed a registration
      statement with the Commission with respect to a proposed public offering of
      its
      Common Stock, which registration statement was withdrawn effective September
      12,
      2007.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (o) Beneficial
      Ownership.
      The
      purchase by such Purchaser of the Shares issuable to it at the Closing will
      not
      result in such Purchaser (individually or together with any other Person with
      whom such Purchaser has identified, or will have identified, itself as part
      of a
“group” in a public filing made with the Commission involving the Company’s
      securities) acquiring, or obtaining the right to acquire, in excess of 19.999%
      of the outstanding shares of Common Stock or the voting power of the Company
      on
      a post transaction basis that assumes that such Closing shall have occurred.
      Such Purchaser does not presently intend to, alone or together with others,
      make
      a public filing with the Commission to disclose that it has (or that it together
      with such other Persons have) acquired, or obtained the right to acquire, as
      a
      result of such Closing (when added to any other securities of the Company that
      it or they then own or have the right to acquire), in excess of 19.999% of
      the
      outstanding shares of Common Stock or the voting power of the Company on a
      post
      transaction basis that assumes that each Closing shall have occurred.


     

    (p) Selling
      Stockholder Questionnaire.
      Such
      Purchaser agrees that the information provided by such Purchaser in the Selling
      Stockholder Questionnaire, the form of which is attached as Annex B to the
      Registration Rights Agreement, shall be accurate, true and complete in all
      material respects.

     

    The
      Company and each of the Purchasers acknowledge and agree that no party to this
      Agreement has made or makes any representations or warranties with respect
      to
      the transactions contemplated hereby other than those specifically set forth
      in
      this Article III and the Transaction Documents.

     

    ARTICLE
      IV.

    OTHER
      AGREEMENTS OF THE PARTIES

     

    4.1 Transfer
      Restrictions.

     

    (a) Compliance
      with Laws.
      Notwithstanding any other provision of this Article IV, each Purchaser covenants
      that the Shares may be disposed of only pursuant to an effective registration
      statement under, and in compliance with the requirements of, the Securities
      Act,
      or pursuant to an available exemption from, or in a transaction not subject
      to,
      the registration requirements of the Securities Act, and in compliance with
      any
      applicable state and federal securities laws. In connection with any transfer
      of
      the Shares other than (i) pursuant to an effective registration statement,
      (ii)
      to the Company, (iii) pursuant to Rule 144 (provided
      that the
      Purchaser provides the Company with reasonable assurances (in the form of seller
      and broker representation letters) that the securities may be sold pursuant
      to
      such rule) or Rule 144A, (iv) pursuant to Rule 144(k) following the applicable
      holding period or (v) in connection with a bona fide pledge as contemplated
      in
      Section 4.1(b), the Company may require the transferor thereof to provide to
      the
      Company and the Transfer Agent an opinion of counsel selected by the transferor
      and reasonably acceptable to the Company and the Transfer Agent, the form and
      substance of which opinion shall be reasonably satisfactory to the Company
      and
      the Transfer Agent, to the effect that such transfer does not require
      registration of such transferred Shares under the Securities Act. As a condition
      of transfer, any such transferee shall agree in writing to be bound by the
      terms
      of this Agreement and shall have the rights of a Purchaser under this Agreement
      and the Registration Rights Agreement. 

     

    (b) Legends.
      Certificates evidencing the Shares shall bear any legend as required by the
      “blue sky” laws of any state and a restrictive legend in substantially the
      following form, until such time as they are not required under Section
      4.1(c):


    THESE
      SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
      NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF
      (A)
      AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
      ACT
      OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
      APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL
      OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER
      AGENT
      OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE
      FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
      ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.


     

    
      
        
        

      

      
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    The
      Company acknowledges and agrees that a Purchaser may from time to time pledge,
      and/or grant a security interest in, some or all of the legended Shares in
      connection with applicable securities laws, pursuant to a bona fide margin
      agreement in compliance with a bona fide margin loan. Such a pledge would not
      be
      subject to approval or consent of the Company and no legal opinion of legal
      counsel to the pledgee, secured party or pledgor shall be required in connection
      with the pledge, but such legal opinion shall be required in connection with
      a
      subsequent transfer or foreclosure following default by the Purchaser transferee
      of the pledge. No notice shall be required of such pledge, but Purchaser’s
      transferee shall promptly notify the Company of any such subsequent transfer
      or
      foreclosure. Each Purchaser acknowledges that the Company shall not be
      responsible for any pledges relating to, or the grant of any security interest
      in, any of the Shares or for any agreement, understanding or arrangement between
      any Purchaser and its pledgee or secured party. At the appropriate Purchaser’s
      expense, the Company will execute and deliver such reasonable documentation
      as a
      pledgee or secured party of Shares may reasonably request in connection with
      a
      pledge or transfer of the Shares, including the preparation and filing of any
      required prospectus supplement under Rule 424(b)(3) of the Securities Act or
      other applicable provision of the Securities Act to appropriately amend the
      list
      of “Selling Stockholders” thereunder. Each Purchaser acknowledges and agrees
      that, except as otherwise provided in Section 4.1(c), any Shares subject to
      a
      pledge or security interest as contemplated by this Section 4.1(b) shall
      continue to bear the legend set forth in this Section 4.1(b) and be subject
      to
      the restrictions on transfer set forth in Section 4.1(a).

     

    (c) Removal
      of Legends.
      The
      legend set forth in Section 4.1(b) above shall be removed and the Company shall
      issue a certificate without such legend or any other legend to the holder of
      the
      applicable Shares upon which it is stamped or issue to such holder by electronic
      delivery at the applicable balance account at the Depository Trust Company
      (“DTC”),
      if
      (i) such Shares are registered for resale under the Securities Act (provided
      that, if the Purchaser is selling pursuant to the effective registration
      statement registering the Shares for resale, the Purchaser agrees to only sell
      such Shares during such time that such registration statement is effective
      and
      not withdrawn or suspended, and only as permitted by such registration
      statement), (ii) such holder provides the Company with assurance, reasonably
      acceptable to the Company, that the Shares are eligible to be sold or
      transferred pursuant to Rule 144 (if the transferor is not an Affiliate of
      the
      Company), or (iii) such holder provides the Company assurance, reasonably
      acceptable to the Company, that the Shares are eligible for sale under Rule
      144(k). The Company shall cause Company Counsel to issue the legal opinion
      referred to in the Irrevocable Transfer Agent Instructions to the Company’s
      Transfer Agent on the Effective Date. Any fees (with respect to the Transfer
      Agent, Company Counsel or otherwise) associated with the issuance of such
      opinion or the removal of such legend shall be borne by the Company. Following
      the Effective Date, or at such earlier time as a legend is no longer required
      for certain Shares, the Company will no later than three (3) Trading Days
      following the delivery by a Purchaser to the Company or the Transfer Agent
      (with
      notice to the Company) of a legended certificate representing such Shares
      (endorsed or with stock powers attached, signatures guaranteed, and otherwise
      in
      form necessary to affect the reissuance and/or transfer) and an opinion of
      counsel to the extent required by Section 4.1(a) (such third Trading Day, the
      “Legend
      Removal Date”),
      deliver or cause to be delivered to such 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 the Transfer Agent
      that enlarge the restrictions on transfer set forth in this Section.
      Certificates for Shares subject to legend removal hereunder may be transmitted
      by the Transfer Agent to the Purchasers by crediting the account of the
      Purchaser’s prime broker with DTC.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    


    (d) Irrevocable
      Transfer Agent Instructions. 
      The
      Company shall issue irrevocable instructions consistent with Section 4.1(c)
      hereof to its Transfer Agent, and any subsequent transfer agent, to issue
      certificates registered in the name of each Purchaser or its respective
      nominee(s), for the Shares in such amounts as specified from time to time by
      each Purchaser to the Company in the form of Exhibit
      D
      attached
      hereto (the “Irrevocable
      Transfer Agent Instructions”).
      The
      Company represents and warrants that no instruction other than the Irrevocable
      Transfer Agent Instructions referred to in this Section 4.1(d) will be given
      by
      the Company to its transfer agent in connection with this Agreement, and that
      the Shares shall otherwise be freely transferable on the books and records
      of
      the Company as and to the extent provided in this Agreement and the other
      Transaction Documents and applicable law. The Company acknowledges that a breach
      by it of its obligations under this Section 4.1(d) will cause irreparable harm
      to a Purchaser. Accordingly, the Company acknowledges that the remedy at law
      for
      a breach of its obligations under this Section 4.1(d) will be inadequate and
      agrees, in the event of a breach or threatened breach by the Company of the
      provisions of this Section 4.1(d), that a Purchaser shall be entitled, in
      addition to all other available remedies, to an order and/or injunction
      restraining any breach and requiring immediate issuance and transfer, without
      the necessity of showing economic loss and without any bond or other security
      being required.

    


    (e) Acknowledgement.
      Each
      Purchaser hereunder acknowledges its primary responsibilities under the
      Securities Act and accordingly will not sell or otherwise transfer the Shares
      or
      any interest therein without complying with the requirements of the Securities
      Act. While the above-referenced registration statement remains effective, each
      Purchaser hereunder may sell the Shares in accordance with the plan of
      distribution contained in the registration statement and if it does so it will
      comply therewith and with the related prospectus delivery requirements unless
      an
      exemption therefrom is available. Each Purchaser, severally and not jointly
      with
      the other Purchasers, agrees that if it is notified by the Company in writing
      at
      any time after the date any legend is removed pursuant to Section 4.1(c) hereof
      that the registration statement registering the resale of the Shares is not
      effective or that the prospectus included in such registration statement no
      longer complies with the requirements of Section 10 of the Securities Act,
      the
      Purchaser will refrain from selling such Shares until such time as the Purchaser
      is notified by the Company that such registration statement is effective or
      such
      prospectus is compliant with Section 10 of the Exchange Act, unless such
      Purchaser is able to, and does, sell such Shares pursuant to an available
      exemption from the registration requirements of Section 5 of the Securities
      Act.
      Both the Company and its Transfer Agent, and their respective directors,
      officers, employees and agents, may rely on this subsection (e) and each
      Purchaser hereunder will indemnify and hold harmless each of such persons from
      any breaches or violations of this paragraph.

    


    (f) Buy-In.
      If the
      Company shall fail for any reason or for no reason to issue to a Purchaser
      unlegended certificates within three (3) Business Days of receipt of all
      documents necessary for the removal of the legend set forth above (the
“Deadline
      Date”),
      then,
      in addition to all other remedies available to such Purchaser, if on or after
      the Business Day immediately following such three (3) Business Day period,
      such
      Purchaser purchases (in an open market transaction or otherwise) shares of
      Common Stock to deliver in satisfaction of a sale by the holder of shares of
      Common Stock that such Purchaser anticipated receiving from the Company without
      any restrictive legend (a “Buy-In”),
      then
      the Company shall, within three (3) Business Days after such Purchaser’s request
      and in such Purchaser’s sole discretion, either (i) pay cash to the Purchaser in
      an amount equal to such Purchaser’s total purchase price (including brokerage
      commissions, if any) for the shares of Common Stock so purchased (the
“Buy-In
      Price”),
      at
      which point the Company’s obligation to deliver such certificate (and to issue
      such shares of Common Stock) shall terminate, or (ii) promptly honor its
      obligation to deliver to such Purchaser a certificate or certificates
      representing such shares of Common Stock and pay cash to the Purchaser in an
      amount equal to the excess (if any) of the Buy-In Price over the product of
      (a)
      such number of shares of Common Stock, times (b) the Closing Bid Price on the
      Deadline Date.



    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    


    4.2 [Intentionally
      Omitted.]

     

    4.3
      Furnishing
      of Information.
      In
      order to enable the Purchasers to sell the Shares under Rule 144 of the
      Securities Act, for a period of two years from the Closing, the Company shall
      use its commercially reasonable efforts 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. During such two year period, if the Company is not required to
      file reports pursuant to such laws, it will prepare and furnish to the
      Purchasers and make publicly available in accordance with Rule 144(c) such
      information as is required for the Purchasers to sell the Shares under Rule
      144.


     

    4.4
      Reporting
      Status.
      Other
      than in connection with a Fundamental Transaction, during the two year period
      from and after the Effective Date, the Company shall not terminate its status
      as
      an issuer required to file reports under the Exchange Act even if the Exchange
      Act or the rules and regulations thereunder would otherwise permit such
      termination.

     

    4.5
      Form
      D
      and Blue Sky.
      The
      Company agrees to timely file a Form D with respect to the Shares as required
      under Regulation D. The Company, on or before the Closing Date, shall take
      such
      action as the Company shall reasonably determine is necessary in order to obtain
      an exemption for or to qualify the Shares for sale to the Purchasers at the
      Closing pursuant to this Agreement under applicable securities or “Blue Sky”
laws of the states of the United States (or to obtain an exemption from such
      qualification). The Company shall make all filings and reports relating to
      the
      offer and sale of the Shares required under applicable securities or “Blue Sky”
laws of the states of the United States following the Closing Date.

     

    4.6 No
      Integration.
      The
      Company shall not, and shall use its commercially reasonable efforts to ensure
      that no Affiliate of the Company shall, sell, offer for sale or solicit offers
      to buy or otherwise negotiate in respect of any security (as defined in Section
      2 of the Securities Act) that will be integrated with the offer or sale of
      the
      Shares in a manner that would require the registration under the Securities
      Act
      of the sale of the Shares to the Purchasers, or that will be integrated with
      the
      offer or sale of the Shares for purposes of the rules and regulations of any
      Trading Market such that it would require stockholder approval prior to the
      closing of such other transaction unless stockholder approval is obtained before
      the closing of such subsequent transaction.

     

    4.7 Securities
      Laws Disclosure; Publicity.
      By 9:00
      a.m., New York City time, on the Trading Day immediately following the execution
      of this Agreement, the Company shall issue a press release (the “Press
      Release”)
      reasonably acceptable to the Placement Agent disclosing all material terms
      of
      the transactions contemplated hereby. On or before 9:00 a.m., New York City
      time, on the second Trading Day immediately following the execution of this
      Agreement, the Company will file a Current Report on Form 8-K with the
      Commission describing the terms of the Transaction Documents (and including
      as
      exhibits to such Current Report on Form 8-K the material Transaction Documents
      (including, without limitation, this Agreement and the Registration Rights
      Agreement)). Notwithstanding the foregoing, the Company shall not publicly
      disclose the name of any Purchaser or an Affiliate of any Purchaser, or include
      the name of any Purchaser or an Affiliate of any Purchaser in any press release
      or filing with the Commission (other than the Registration Statement) or any
      regulatory agency or Trading Market, without the prior written consent of such
      Purchaser, except (i) as required by federal securities law in connection with
      (A) any registration statement contemplated by the Registration Rights Agreement
      and (B) the filing of final Transaction Documents (including signature pages
      thereto) with the Commission and (ii) to the extent such disclosure is required
      by law, request of the Staff of the Commission or Trading Market regulations,
      in
      which case the Company shall provide the Purchasers with prior written notice
      of
      such disclosure permitted under this subclause (ii). From and after the issuance
      of the Press Release, no Purchaser shall be in possession of any material,
      non-public information received from the Company, any Subsidiary or any of
      their
      respective officers, directors, employees or agents, that is not disclosed
      in
      the Press Release unless a Purchaser shall have executed a written agreement
      regarding the confidentiality and use of such information. Each Purchaser,
      severally and not jointly with the other Purchasers, covenants that until such
      time as the transactions contemplated by this Agreement are publicly disclosed
      by the Company as described in this Section 4.7, such Purchaser will maintain
      the confidentiality of all disclosures made to it in connection with this
      transaction (including the existence and terms of this transaction).



    
      
        
        

      

      
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    4.8 Non-Public
      Information.
      Except
      with respect to the material terms and conditions of the transactions
      contemplated by the Transaction Documents, the Company shall not, and shall
      cause each Subsidiary and each of their respective officers, directors,
      employees and agents, not to, provide any Purchaser with any material,
      non-public information regarding the Company or any of its Subsidiaries from
      and
      after the filing of the Press Release without the express written consent of
      such Purchaser and unless prior thereto such Purchaser shall have executed
      a
      written agreement regarding the confidentiality and use of such information.
      In
      the event of a breach of the foregoing covenant by the Company, and provided
      that the Company shall have failed (following proper written request therefor)
      to make an appropriate public disclosure promptly following such written request
      consistent with the requirements of Regulation FD, any Subsidiary, or each
      of
      their respective officers, directors, employees and agents, in addition to
      any
      other remedy provided herein or in the Transaction Documents, a Purchaser shall
      have the right to make a public disclosure, in the form of a press release,
      public advertisement or otherwise, of such material non-public information
      without the prior approval by the Company, its Subsidiaries, or any of its
      or
      their respective officers, directors, employees or agents. No Purchaser shall
      have any liability to the Company, its Subsidiaries, or any of their respective
      officers, directors, employees or agents for any such disclosure. 

     

    4.9 Indemnification.

     

    (a) Indemnification
      of Purchasers.
      In
      addition to the indemnity provided in the Registration Rights Agreement, the
      Company will indemnify and hold each Purchaser and its directors, officers,
      stockholders, 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), each Person who
      controls such Purchaser (within the meaning of Section 15 of the Securities
      Act
      and Section 20 of the Exchange Act), and the directors, officers, stockholders,
      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 person (each, 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
      any breach of any of the representations, warranties, covenants or agreements
      made by the Company in this Agreement or in the other Transaction
      Documents.  The Company will not be liable to any Purchaser Party under
      this Agreement to the extent, but only to the extent that a loss, claim, damage
      or liability is attributable to any Purchaser Party’s breach of any of the
      representations, warranties, covenants or agreements made by such Purchaser
      Party in this Agreement or in the other Transaction Documents.


    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    


    (b) Conduct
      of Indemnification Proceedings.
      Promptly
      after receipt by any Person (the “Indemnified
      Person”)
      of
      notice of any demand, claim or circumstances which would or might give rise
      to a
      claim or the commencement of any action, proceeding or investigation in respect
      of which indemnity may be sought pursuant to Section 4.9(a), such Indemnified
      Person shall promptly notify the Company in writing and the Company shall assume
      the defense thereof, including the employment of counsel reasonably satisfactory
      to such Indemnified Person, and shall assume the payment of all fees and
      expenses; provided,
      however, that
      the
      failure of any Indemnified Person so to notify the Company shall not relieve
      the
      Company of its obligations hereunder except to the extent that the Company
      is
      actually and materially prejudiced by such failure to notify. In any such
      proceeding, any Indemnified Person shall have the right to retain its own
      counsel, but the fees and expenses of such counsel shall be at the expense
      of
      such Indemnified Person unless: (i) the Company and the Indemnified Person
      shall
      have mutually agreed to the retention of such counsel; (ii) the Company shall
      have failed promptly to assume the defense of such proceeding and to employ
      counsel reasonably satisfactory to such Indemnified Person in such proceeding;
      or (iii) in the reasonable judgment of counsel to such Indemnified Person,
      representation of both parties by the same counsel would be inappropriate due
      to
      actual or potential differing interests between them. The Company shall not
      be
      liable for any settlement of any proceeding effected without its written
      consent, which consent shall not be unreasonably withheld, delayed or
      conditioned. Without the prior written consent of the Indemnified Person, which
      consent shall not be unreasonably withheld, delayed or conditioned, the Company
      shall not effect any settlement of any pending or threatened proceeding in
      respect of which any Indemnified Person is or could have been a party and
      indemnity could have been sought hereunder by such Indemnified Party, unless
      such settlement includes an unconditional release of such Indemnified Person
      from all liability arising out of such proceeding.

     

    4.10 Listing
      of Shares.
      Prior
      to the execution of this Agreement or promptly following the date hereof, the
      Company shall have taken or shall take all necessary action to cause the Shares
      to be listed upon the Principal Trading Market, if any, upon which shares of
      Common Stock are then listed (subject to official notice of issuance) and shall
      maintain, so long as any other shares of Common Stock shall be so listed, such
      listing. Further, if the Company applies to have its Common Stock or other
      securities listed on any other Trading Market, it shall include in such
      application the Shares and will take such other action as is necessary to cause
      the Shares to be listed on such other Trading Market as promptly as practicable.
      

     

    4.11 Use
      of
      Proceeds.
      The
      Company intends to use the net proceeds from the sale of the Shares hereunder
      for working capital and general corporate purposes. 

     

    4.12 Short
      Sales After The Date Hereof.
      Such
      Purchaser shall not, and shall cause its Trading Affiliates not to, engage,
      directly or indirectly, in any transactions in the Company’s securities
      (including, without limitation, any Short Sales involving the Company’s
      securities) during the period from the date hereof until the earlier of such
      time as (i) the transactions contemplated by this Agreement are first publicly
      announced as described in Section 4.7 or (ii) this Agreement is terminated
      in
      full pursuant to Section 6.18. Notwithstanding the foregoing, in the case of
      a
      Purchaser that is a multi-managed investment vehicle whereby separate portfolio
      managers manage separate portions of such Purchaser's assets and the portfolio
      managers have no direct knowledge of the investment decisions made by the
      portfolio managers managing other portions of such Purchaser's assets, the
      representation set forth above shall apply only with respect to the portion
      of
      assets managed by the portfolio manager that have knowledge about the financing
      transaction contemplated by this Agreement. Each
      Purchaser understands
      and acknowledges, severally and not jointly with any other Purchaser, that
      the
      Commission currently takes the position that covering a short position
      established prior to effectiveness of a resale registration statement with
      shares included in such registration statement would be a violation of Section
      5
      of the Securities Act, as set forth in Item 65, Section 5 under Section A,
      of
      the Manual of Publicly Available Telephone Interpretations, dated July 1997,
      compiled by the Office of Chief Counsel, Division of Corporation Finance.



    
      
        
        

      

      
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    ARTICLE
      V.

    CONDITIONS
      PRECEDENT TO CLOSING

    


    5.1 Conditions
      Precedent to the Obligations of the Purchasers to Purchase
      Shares.
      The
      obligation of each Purchaser to acquire Shares at the Closing is subject to
      the
      fulfillment to such Purchaser’s satisfaction, on or prior to the Closing Date,
      of each of the following conditions, any of which may be waived by such
      Purchaser (as to itself only):

     

    (a) Representations
      and Warranties.
      The
      representations and warranties of the Company contained herein shall be true
      and
      correct in all material respects (except for those representations and
      warranties which are qualified as to materiality, in which case such
      representations and warranties shall be true and correct in all respects) as
      of
      the date when made and as of the Closing Date, as though made on and as of
      such
      date, except for such representations and warranties that speak as of a specific
      date. 

     

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

     

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

     

    (d) Consents.
      The
      Company shall have obtained in a timely fashion any and all consents, permits,
      approvals, registrations and waivers necessary for consummation of the purchase
      and sale of the Shares at the Closing (including all Required Approvals), all
      of
      which shall be and remain so long as necessary in full force and
      effect.

     

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

     

    (f) No
      Suspensions of Trading in Common Stock; Listing.
      The
      Common Stock (i) shall be designated for quotation or listed on the Principal
      Trading Market and (ii) shall not have been suspended, as of the Closing Date,
      by the Commission or the Principal Trading Market from trading on the Principal
      Trading Market nor shall suspension by the Commission or the Principal Trading
      Market have been threatened, as of the Closing Date, either (A) in writing
      by
      the Commission or the Principal Trading Market or (B) by falling below the
      minimum listing maintenance requirements of the Principal Trading
      Market.

     

    (g) Company
      Deliverables.
      The
      Company shall have delivered the Company Deliverables in accordance with Section
      2.2(a). 

     

    (h) Compliance
      Certificate.
      The
      Company shall have delivered to each Purchaser a certificate, dated as of the
      Closing Date and signed by its Chief Executive Officer or its Chief Financial
      Officer, dated as of the Closing Date, certifying to the fulfillment of the
      conditions specified in Sections 5.1(a) and (b) in the form attached hereto
      as
Exhibit
      F.

     

    (i) Termination. This
      Agreement shall not have been terminated as to such Purchaser in accordance
      with
      Section 6.18 herein.


    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    


    5.2 Conditions
      Precedent to the Obligations of the Company to sell Shares.
      The
      Company's obligation to sell and issue the Shares at the Closing is subject
      to
      the fulfillment to the satisfaction of the Company on or prior to the Closing
      Date of the following conditions, any of which may be waived by the
      Company:

     

    (a) Representations
      and Warranties.
      The
      representations and warranties made by the Purchaser in Section 3.2 hereof
      shall
      be true and correct in all material respects as of the date when made, and
      as of
      the Closing Date as though made on and as of such date, except for
      representations and warranties that speak as of a specific date.

     

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

     

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

     

    (d) Consents.
      The
      Company shall have obtained in a timely fashion any and all consents, permits,
      approvals, registrations and waivers necessary for consummation of the purchase
      and sale of the Shares, all of which shall be and remain so long as necessary
      in
      full force and effect. 

     

    (e) Purchasers
      Deliverables.
      Such
      Purchaser shall have delivered its Purchaser Deliverables in accordance with
      Section 2.2(b).

     

    (f) Termination. This
      Agreement shall not have been terminated as to such Purchaser in accordance
      with
      Section 6.18 herein.

    


    ARTICLE
      VI.

    MISCELLANEOUS

     

    6.1 Fees
      and Expenses.
      Except
      as otherwise expressly set forth in the Company’s engagement letter with the
      Placement Agent, the Company and the Purchasers shall each pay the fees and
      expenses of their respective advisers, counsel, accountants and other experts,
      if any, and all other expenses incurred by such party in connection with 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 sale and issuance of the Shares to the
      Purchasers. Each party acknowledges that Lowenstein Sandler PC has rendered
      legal advice to the Placement Agent and not to such party in connection with
      the
      transactions contemplated hereby, and that such party has relied for such
      matters on the advice of its own respective counsel.

     

    6.2 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, understandings, discussions and
      representations, oral or written, with respect to such matters, which the
      parties acknowledge have been merged into such documents, exhibits and
      schedules. At or after the Closing, and without further consideration, the
      Company and the Purchasers will execute and deliver to the other such further
      documents as may be reasonably requested in order to give practical effect
      to
      the intention of the parties under the Transaction Documents.


    
      
        
        

      

      
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    6.3 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 (provided the sender receives a machine-generated
      confirmation of successful transmission) at the facsimile number specified
      in
      this Section prior to 5:00 p.m., New York City time, on a Trading Day, (b)
      the
      next Trading Day after the date of transmission, if such notice or communication
      is delivered via facsimile at the facsimile number specified in this Section
      on
      a day that is not a Trading Day or later than 5:00 p.m., New York City time,
      on
      any Trading Day, (c) the Trading Day following the
      date
      of mailing, if sent by U.S. nationally recognized overnight courier service
      with
      next day delivery specified, 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 follows:

     

    
      	 	
              If
                to the Company:

            	
              Wonder
                Auto Technology, Inc.

            
	 	 	
              No.
                16 Yulu Street

            
	 	 	
              Taihe
                District, Jinzhou City, Liaoning Province

            
	 	 	
              People’s
                Republic of China, 121013

            
	 	 	
              Telephone
                No.: (86) 416-2661186

            
	 	 	
              Facsimile
                No.: (86) 416-5180163

            
	 	 	
              Attention:
                Qingjie Zhao

            
	 	 	
              E-mail:
                qjzhao@watg.cn

            
	 	 	 
	 	
              With
                a copy to:

            	
              Thelen
                Reid Brown Raysman & Steiner LLP

            
	 	 	
              701
                8th Street, N.W.

            
	 	 	
              Washington,
                D.C. 20001

            
	 	 	
              Telephone
                No.: (202) 508-4281

            
	 	 	
              Facsimile
                No.: (202) 654-1804

            
	 	 	
              Attention:
                Joseph R. Tiano, Jr., Esq.

            
	 	 	
              E-mail:
                jtiano@thelen.com

            
	 	 	 
	 	
              If
                to a Purchaser:

            	
              To
                the address set forth under such Purchaser’s name on the signature
                page

            
	 	
              hereof;

            	 


    

    


    or
      such
      other address as may be designated in writing hereafter, in the same manner,
      by
      such Person.

    


    6.4 Amendments;
      Waivers; No Additional Consideration.
      No
      provision of this Agreement may be waived or amended except in a written
      instrument signed, in the case of an amendment, by the Company and each of
      the
      Purchasers holding or having the right to acquire a majority of the Shares
      on a
      fully-diluted basis at the time of such amendment or, in the case of a waiver,
      by the party against whom enforcement of any such waiver is sought. No waiver
      of
      any default with respect to any provision, condition or requirement of this
      Agreement shall be deemed to be a continuing waiver in the future or a waiver
      of
      any subsequent default or a waiver of any other provision, condition or
      requirement hereof, nor shall any delay or omission of either party to exercise
      any right hereunder in any manner impair the exercise of any such right. No
      consideration shall be offered or paid to any Purchaser to amend or consent
      to a
      waiver or modification of any provision of any Transaction Document unless
      the
      same consideration is also offered to all Purchasers who then hold
      Shares.

     

    6.5 Construction.
      The
      headings herein are for convenience only, do not constitute a part of this
      Agreement and shall not be deemed to limit or affect any of the provisions
      hereof. The language used in this Agreement will be deemed to be the language
      chosen by the parties to express their mutual intent, and no rules of strict
      construction will be applied against any party. This Agreement shall be
      construed as if drafted jointly by the parties, and no presumption or burden
      of
      proof shall arise favoring or disfavoring any party by virtue of the authorship
      of any provisions of this Agreement or any of the Transaction
      Documents.


    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    


    6.6 Successors
      and Assigns.
      The
      provisions of this Agreement shall inure to the benefit of and be binding upon
      the parties and their successors and permitted assigns. This Agreement, or
      any
      rights or obligations hereunder, may not be assigned by the Company without
      the
      prior written consent of the Purchasers. Any Purchaser may assign its rights
      hereunder in whole or in part to any Person to whom such Purchaser assigns
      or
      transfers any Shares in compliance with the Transaction Documents and applicable
      law, provided such transferee shall agree in writing to be bound, with respect
      to the transferred Shares, by the terms and conditions of this Agreement that
      apply to the “Purchasers”.

     

    6.7 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 (i) the Placement
      Agent is an intended third party beneficiary of Article III hereof and (ii)
      the
      Escrow Agent is an intended third party beneficiary of Section 2.1(d), and
      the
      Placement Agent or the Escrow Agent, as the case may be, may enforce the
      provisions of such Section directly against the parties with obligations
      thereunder.

     

    6.8 Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by and construed and enforced in accordance
      with the internal laws of the State of New York, without regard to the
      principles of conflicts of law thereof. Each party agrees that all 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, employees or
      agents) shall be commenced exclusively in the New York Courts. Each party hereto
      hereby irrevocably submits to the exclusive jurisdiction of the New York Courts
      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 Proceeding, any claim that it is not
      personally subject to the jurisdiction of any such New York Court, or that
      such
      Proceeding has been commenced in an improper or inconvenient forum. Each party
      hereto hereby irrevocably waives personal service of process and consents to
      process being served in any such Proceeding by mailing a copy thereof via
      registered or certified mail or overnight delivery (with evidence of delivery)
      to such party at the address in effect for notices to it under this Agreement
      and agrees that such service shall constitute good and sufficient service of
      process and notice thereof. Nothing contained herein shall be deemed to limit
      in
      any way any right to serve process in any manner permitted by law. EACH
      PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
      APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
      ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
      HEREBY. 

     

    6.9 Survival.
      Subject
      to applicable statute of limitations, the representations, warranties,
      agreements and covenants contained herein shall survive the Closing and the
      delivery of the Shares.

     

    6.10 Execution.
      This
      Agreement may be executed in two or more counterparts, all of which when taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission, 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 signature page were an original thereof.

     

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


    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    


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

     

    6.13 Replacement
      of Shares.
      If any
      certificate or instrument evidencing any Shares is mutilated, lost, stolen
      or
      destroyed, the Company shall issue or cause to be issued in exchange and
      substitution for and upon cancellation thereof, or in lieu of and substitution
      therefor, a new certificate or instrument, but only upon receipt of evidence
      reasonably satisfactory to the Company and the Transfer Agent of such loss,
      theft or destruction and the execution by the holder thereof of a customary
      lost
      certificate affidavit of that fact and an agreement to indemnify and hold
      harmless the Company and the Transfer Agent for any losses in connection
      therewith or, if required by the Transfer Agent, a bond in such form and amount
      as is required by the Transfer Agent. The applicants for a new certificate
      or
      instrument under such circumstances shall also pay any reasonable third-party
      costs associated with the issuance of such replacement Shares. If a replacement
      certificate or instrument evidencing any Shares is requested due to a mutilation
      thereof, the Company may require delivery of such mutilated certificate or
      instrument as a condition precedent to any issuance of a
      replacement.

     

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

     

    6.15 Payment
      Set Aside.
      To the
      extent that the Company makes a payment or payments to any Purchaser pursuant
      to
      any Transaction Document or a 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. 

     

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


    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    


    6.17 Independent
      Nature of Purchasers' Obligations and Rights.
      The
      obligations of each Purchaser under any Transaction Document are several and
      not
      joint with the obligations of any other Purchaser, and no Purchaser shall be
      responsible in any way for the performance of the obligations of any other
      Purchaser under any Transaction Document. The decision of each Purchaser to
      purchase Shares pursuant to the Transaction Documents has been made by such
      Purchaser independently of any other Purchaser and independently of any
      information, materials, statements or opinions as to the business, affairs,
      operations, assets, properties, liabilities, results of operations, condition
      (financial or otherwise) or prospects of the Company or any Subsidiary which
      may
      have been made or given by any other Purchaser or by any agent or employee
      of
      any other Purchaser, and no Purchaser and any of its agents or employees shall
      have any liability to any other Purchaser (or any other Person) relating to
      or
      arising from any such information, materials, statement or opinions. Nothing
      contained herein or in any Transaction Document, and no action taken by any
      Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as
      a
      partnership, an association, a joint venture or any other kind of entity, or
      create a presumption that the Purchasers are in any way acting in concert or
      as
      a group with respect to such obligations or the transactions contemplated by
      the
      Transaction Documents. Each Purchaser acknowledges that no other Purchaser
      has
      acted as agent for such Purchaser in connection with making its investment
      hereunder and that no Purchaser will be acting as agent of such Purchaser in
      connection with monitoring its investment in the Shares or enforcing its rights
      under the Transaction Documents. Each Purchaser shall be entitled to
      independently protect and enforce its rights, including without limitation
      the
      rights arising out of this Agreement or out of the other Transaction Documents,
      and it shall not be necessary for any other Purchaser to be joined as an
      additional party in any proceeding for such purpose. The Company acknowledges
      that each of the Purchasers has been provided with the same Transaction
      Documents for the purpose of closing a transaction with multiple Purchasers
      and
      not because it was required or requested to do so by any Purchaser. The
      Company’s obligations to each Purchaser under this Agreement are identical to
      its obligations to each other Purchaser other than such differences resulting
      solely from the number of Shares purchased by such Purchaser, but regardless
      of
      whether such obligations are memorialized herein or in another agreement between
      the Company and a Purchaser.

     

    6.18 Termination.
      This
      Agreement may be terminated and the sale and purchase of the Shares abandoned
      at
      any time prior to the Closing by either the Company or any Purchaser (with
      respect to itself only) upon written notice to the other, if the Closing has
      not
      been consummated on or prior to 5:00 p.m., New York City time, on the Outside
      Date; provided,
      however,
      that
      the right to terminate this Agreement under this Section 6.18 shall not be
      available to any Person whose failure to comply with its obligations under
      this
      Agreement has been the cause of or resulted in the failure of the Closing to
      occur on or before such time. Nothing in this Section 6.18 shall be deemed
      to
      release any party from any liability for any breach by such party of the terms
      and provisions of this Agreement or the other Transaction Documents or to impair
      the right of any party to compel specific performance by any other party of
      its
      obligations under this Agreement or the other Transaction Documents. In the
      event of a termination pursuant to this Section, the Company shall promptly
      notify all non-terminating Purchasers and the Escrow Agent. Upon a termination
      in accordance with this Section, the Company and the terminating Purchaser(s)
      shall not have any further obligation or liability (including arising from
      such
      termination) to the other, and no Purchaser will have any liability to any
      other
      Purchaser under the Transaction Documents as a result therefrom.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    


    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.

     

    
      	 	
              WONDER
                AUTO TECHNOLOGY, INC.

            
	 	 
	 	 
	 	
              By:

            	 	 
	 	 	
              Name:

            
	 	 	
              Title:

            


    

    


     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    [SIGNATURE
      PAGES FOR PURCHASERS FOLLOW]



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              NAME
                OF PURCHASER: ____________________________

            
	 	 
	 	 
	 	
              By:
                ____________________________

            
	 	
              Name:

            
	 	
              Title:

            
	 	 
	 	
              Aggregate
                Purchase Price (Subscription Amount): $_____________

            
	 	 
	 	
              Number
                of Shares to be Acquired: ______________________

            
	 	 
	 	
              Tax
                ID No.: ____________________

            
	 	 
	 	
              Address
                for Notice:

            
	 	 
	 	
              __________________________________

            
	 	
              __________________________________

            
	 	
              __________________________________

            
	 	 
	 	
              Telephone
                No.: _______________________

            
	 	 
	 	
              Facsimile
                No.: ________________________

            
	 	 
	 	
              E-mail
                Address: ________________________

            
	 	 
	 	
              Attention:
                _______________________

            


    

     

    Delivery
      Instructions:

    (if
      different than above)

    


    c/o
      _______________________________

    


    Street:
      ____________________________

    


    City/State/Zip:
      ______________________

    


    Attention:
      __________________________

    


    Telephone
      No.: ____________________________


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBITS:

     

    
      	
              A:

            	
              Form
                of Registration Rights Agreement

            
	
              B-1:

            	
              Accredited
                Investor Questionnaire

            
	
              B-2:

            	
              Stock
                Certificate Questionnaire

            
	
              C:

            	
              Form
                of Opinion of Company Counsel

            
	
              D:

            	
              Irrevocable
                Transfer
                Agent Instructions

            
	
              E:

            	
              Form
                of Secretary’s Certificate

            
	
              F:

            	
              Form
                of Officer’s Certificate

            
	
              G:

            	
              Wire
                Instructions

            


    

     

    SCHEDULES:

     

    3.1(y)
      Registration Rights 


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    Form
      of
      Registration Rights Agreement

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Instruction
      Sheet

    (to
      be
      read in conjunction with the entire Securities Purchase Agreement and
      Registration Rights Agreement) 

    


    
      	A.	
              Complete
                the following items in the Securities Purchase Agreement and/or
                Registration Rights Agreement: 

            


    

    


    
      	 	
              1.

            	
              Provide
                the information regarding the Purchaser requested on the signature
                page.
                The Securities Purchase Agreement and the Registration Rights Agreement
                must be executed by an individual authorized to bind the
                Purchaser.

            
	 	 	 
	 	
              2.

            	
              Exhibit
                B-1 –
                Accredited Investor Questionnaire:

            
	 	 	 
	 	 	
              Provide
                the information requested by the Accredited Investor
                Questionnaire

            
	 	 	 
	 	
              3.

            	
              Exhibit
                B-2
                Stock Certificate Questionnaire:

            
	 	 	 
	 	 	
              Provide
                the information requested by the Stock Certificate
                Questionnaire

            
	 	 	 
	 	
              4.

            	
              Annex
                B
                to
                the Registration Rights Agreement — Selling Securityholder Notice and
                Questionnaire

            
	 	 	 
	 	 	
              Provide
                the information requested by the Selling Securityholder Notice and
                Questionnaire

            
	 	 	 
	 	
              5.

            	
              Return
                the signed Securities Purchase Agreement and Registration Rights
                Agreement
                to:

            


    

     

    David
      W.
      Stadinski

    Piper
      Jaffray & Co. 

    150
      East
      42nd
      Street,
      35th
      Floor

    New
      York,
      New York 10017

    Tel:
      (212) 284-9572

    Fax:
      (212) 658-9604

    Email:
      david.w.stadinski@pjc.com

    


    
      	
              B.

            	
              Instructions
                regarding the transfer of funds for the purchase of Shares is set
                forth on
                Exhibit
                G
                to
                the Securities Purchase Agreement.

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B-1

    


    ACCREDITED
      INVESTOR QUESTIONNAIRE

    (ALL
      INFORMATION WILL BE TREATED CONFIDENTIALLY)

    


    To: Wonder
      Auto Technology, Inc.

    


    This
      Investor Questionnaire (“Questionnaire”)
      must
      be completed by each potential investor in connection with the offer and sale
      of
      the shares of the common stock, par value $0.0001 per share (the “Securities”),
      of
      Wonder Auto Technology, Inc., a Nevada corporation (the “Corporation”).
      The
      Securities are being offered and sold by the Corporation without registration
      under the Securities Act of 1933, as amended (the “Act”),
      and
      the securities laws of certain states, in reliance on the exemptions contained
      in Section 4(2) of the Act and on Regulation D promulgated thereunder and
      in reliance on similar exemptions under applicable state laws. The Corporation
      must determine that a potential investor meets certain suitability requirements
      before offering or selling Securities to such investor. The purpose of this
      Questionnaire is to assure the Corporation that each investor will meet the
      applicable suitability requirements. The information supplied by you will be
      used in determining whether you meet such criteria, and reliance upon the
      private offering exemptions from registration is based in part on the
      information herein supplied.

     

    This
      Questionnaire does not constitute an offer to sell or a solicitation of an
      offer
      to buy any security. Your answers will be kept strictly confidential. However,
      by signing this Questionnaire, you will be authorizing the Corporation to
      provide a completed copy of this Questionnaire to such parties as the
      Corporation deems appropriate in order to ensure that the offer and sale of
      the
      Securities will not result in a violation of the Act or the securities laws
      of
      any state and that you otherwise satisfy the suitability standards applicable
      to
      purchasers of the Securities. All potential investors must answer all applicable
      questions and complete, date and sign this Questionnaire. Please print or type
      your responses and attach additional sheets of paper if necessary to complete
      your answers to any item.

     

    
      PART
        A. BACKGROUND
        INFORMATION

      


      Name of Beneficial Owner of the Securities: _____________________________________________________________________________

       

      Business Address:__________________________________________________________________________________________________ 

      (Number
        and Street)

      _______________________________________________________________________________

      (City)                     (State)                          (Zip Code)

      


      Telephone Number: (___) ____________________________________________________________________________________________ 

       

      If
        a
        corporation, partnership, limited liability company, trust or other
        entity:

      Type
        of
        entity: _________________________________________________

      State
        of
        formation:______________________ Approximate
        Date of formation: ____________________

      


      Were
        you
        formed for the purpose of investing in the securities being
        offered?

      


      Yes
        ____        No
        ____

      


      If
        an individual:

      


      Residence Address: ________________________________________________________________________________________________

      (Number
        and Street)

      
        ________________________________________________________________________________________________________________

        (City)                                             (State)                                              (Zip Code)

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        Telephone Number: (___) ____________________________________________________________________________________________ 

      

       

      Age:
        __________         Citizenship:
        ____________         Where
        registered to vote: _______________ 

      


      Set
        forth
        in the space provided below the state(s), if any, in the United States in
        which
        you maintained your residence during the past two years and the dates during
        which you resided in each state:

      


      Are
        you a
        director or executive officer of the Corporation?

      


      Yes
        ____         No
        ____

      


      Social
        Security or Taxpayer Identification
        No. _________________________________________

       

    

    PART
      B. ACCREDITED
      INVESTOR QUESTIONNAIRE

     

    In
      order
      for the Company to offer and sell the Securities in conformance with state
      and
      federal securities laws, the following information must be obtained regarding
      your investor status. Please initial
      each category applicable
      to you as a Purchaser of Securities of the Company. 

     

    
      	
            	__
              (1)	
              A
                bank as defined in Section 3(a)(2) of the Securities Act, or any
                savings
                and loan  association
                or other institution as defined in Section 3(a)(5)(A) of the Securities
                Act  whether
                acting in its individual or fiduciary capacity;


            


    

    


    
      	
            	__
              (2)	
              A
                broker or dealer registered pursuant to Section 15 of the Securities
                Exchange Act  of
                1934; 

            


    

    


    
      	 	
              __
                (3) 

            	
              An
                insurance company as defined in Section 2(13) of the Securities Act;
                

            


    

    


    
      	 	
              __
                (4) 

            	
              An
                investment company registered under the Investment Company Act of
                1940 or
                a business development company as defined in Section 2(a)(48) of
                that Act;
                

            


    

    


    
      	 	
              __
                (5) 

            	
              A
                Small Business Investment Company licensed by the U.S. Small Business
                Administration under Section 301(c) or (d) of the Small Business
                Investment Act of 1958; 

            


    

    


    
      	 	
              __
                (6)

            	
              A
                plan established and maintained by a state, its political subdivisions,
                or
                any agency or instrumentality of a state or its political subdivisions,
                for the benefit of its employees, if such plan has total assets in
                excess
                of $5,000,000; 

            


    

    


    
      	 	
              __
                (7) 

            	
              An
                employee benefit plan within the meaning of the Employee Retirement
                Income
                Security Act of 1974, if the investment decision is made by a plan
                fiduciary, as defined in Section 3(21) of such act, which is either
                a
                bank, savings and loan association, insurance company, or registered
                investment adviser, or if the employee benefit plan has total assets
                in
                excess of $5,000,000 or, if a self-directed plan, with investment
                decisions made solely by persons that are accredited investors;
                

            


    

    


    
      	 	
              __
                (8) 

            	
              A
                private business development company as defined in Section 202(a)(22)
                of
                the Investment Advisers Act of
                1940;

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              __
                (9) 

            	
              An
                organization described in Section 501(c)(3) of the Internal Revenue
                Code,
                a corporation, Massachusetts or similar business trust, or partnership,
                not formed for the specific purpose of acquiring the Securities,
                with
                total assets in excess of $5,000,000;


            


    

    


    
      	
            	__
              (10)	
              A
                trust, with total assets in excess of $5,000,000, not formed for
                the
                specific purpose of acquiring the Securities, whose purchase is directed
                by a sophisticated person who has such knowledge and experience in
                financial and business matters that such person is capable of evaluating
                the merits and risks of investing in the
                Company;

            


    

     

    
      	
            	___(11)	
              A
                natural person whose individual net worth, or joint net worth with
                that
                person’s spouse,
                at the time of his purchase exceeds
                $1,000,000;

            


      	 	 	 


      	
            	___(12)	
              A
                natural person who had an individual income in excess of $200,000
                in each
                of the two
                most recent years, or joint income with that person’s spouse in excess of
                $300,000,
                in each of those years, and has a reasonable expectation of reaching
                the same
                income level in the current year;

            


    

     

    
      	 	
              ___(13)

            	
              An
                executive officer or director of the
                Company;

            


    

    


    
      	
            	___(14)	
              An
                entity in which all of the equity owners qualify under any of the
                above
                subparagraphs. 

            


    

    


    
      	
              A.

            	
              FOR
                EXECUTION BY AN INDIVIDUAL:

            
	 	 
	 	 	 	
              By

            	 	 
	 	
              Date

            	 	 	 
	 	 	 	
              Print Name:

            	
            	 
	 	 	 	 	 
	
              B.

            	
              FOR
                EXECUTION BY AN ENTITY:

            
	 	 	 	 	 
	 	 	
              Entity
                Name:

            	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
              By

            	 	 
	 	
              Date

            	 	 	 
	 	 	 	
              Print
                Name:

            	 	 
	 	 	 	
              Title:

            	 	 
	 	 	 	 	 
	
              C.

            	
              ADDITIONAL
                SIGNATURES (if required by partnership, corporation or trust
                document):

            
	 	 	 	 	 
	 	 	
              Entity
                Name:

            	 	 	 
	 	 	 	 	 
	 	 	 	
              By

            	 	 
	 	
              Date

            	 	 	 
	 	 	 	
              Print
                Name:

            	 	 
	 	 	 	
              Title:

            	 	 
	 	 	 	 	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	 	
              Entity
                Name:

            	 	 	 


    

     

    
      	 	 	 	
              By

            	 	 
	 	
              Date

            	 	 	 
	 	 	 	
              Print
                Name:

            	 	 
	 	 	 	
              Title:

            	 	 
	 	 	 	 	 


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    EXHIBIT
      B-2

     

    Stock
      Certificate Questionnaire

     

    Pursuant
      to Section 2.2(b) of the Agreement, please provide us with the following
      information:

     

    
      	
              1.

               

            	
              The
                exact name that the Shares are to be registered in (this is the name
                that
                will appear on the stock certificate(s)). You may use a nominee name
                if
                appropriate:

            	 	 
	 	 	 	 
	
              2.

               

            	
              The
                relationship between the Purchaser of the Shares and the Registered
                Holder
                listed in response to Item 1 above:

            	 	 
	 	 	 	 
	
              3.

               

            	
              The
                mailing address, telephone and telecopy number of the Registered
                Holder
                listed in response to Item 1 above:

            	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
              4.

               

            	
              The
                Tax Identification Number (or, if an individual, the Social Security
                Number) of the Registered Holder listed in response to Item 1
                above:

            	 	 


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C

     

    Form
      of
      Opinion of Company Counsel

     

    1. The
      Company is a corporation duly incorporated, validly existing and in good
      standing under the laws of the state of Nevada with the requisite corporate
      power and authority to own, lease and operate its properties and assets, and
      to
      conduct its business as described in the SEC Reports, to execute and deliver
      the
      Transaction Documents and to perform its obligations thereunder, including,
      without limitation, to issue, sell and deliver the Shares under the
      Agreement.

     

    2. As
      of the
      date of the Agreement, the Company has an authorized capitalization as set
      forth
      in the SEC Reports.

     

    3. When
      issued against payment therefore in accordance with the terms of the Agreement,
      the Shares will be duly authorized, validly issued, fully paid and
      nonassessable, and free of any and all liens and charges and preemptive right
      or
      similar rights contained in the Articles of Incorporation or Bylaws or any
      agreement, note, lease, publicly filed mortgage deed or other instrument to
      which the Company is a party or by which the Company is bound that has been
      filed as an exhibit to the SEC Reports.

     

    4. All
      corporate action on the part of the Company necessary for the authorization,
      execution and delivery by the Company of the Transaction Documents by the
      Company, the authorization, sale, issuance and delivery of the Shares, and
      the
      performance by the Company of its obligations under the Transaction Documents
      has been taken. The Transaction Documents have been duly and validly executed
      and delivered by the Company and each of them constitutes a valid and binding
      obligation of the Company, enforceable against the Company in accordance with
      their respective terms.

     

    5. The
      execution and delivery by the Company of the Transaction Documents, the
      performance by the Company of its obligations under the Transaction Documents,
      and the issuance of the Shares do not and will not, as the case may be, violate
      or constitute a default by the Company (or an event which, with the giving
      of
      notice or lapse of time or both, constitutes or would constitute a default)
      under, give rise to any right of termination, cancellation or acceleration
      under
      (i) the Articles of Incorporation or Bylaws, (ii) any indenture, mortgage,
      deed
      of trust, bank loan or credit agreement or other evidence of indebtedness,
      or
      any license, lease, contract or other agreement or instrument to which the
      Company is a party or by which any of its properties may be bound or affected,
      and in each case which has been filed as an exhibit to the SEC Reports, (iii)
      any provision of any applicable federal or state law, rule or regulation known
      to us to be customarily applicable to transactions of this nature, or (iv)
      any
      decree, judgment or order known to us to be applicable to the Company or its
      properties.

     

    6. No
      consent, approval or authorization of designation, declaration or filing with
      any federal governmental authority is required in connection with the valid
      execution and delivery of the Transaction Documents, the offer, sale or issuance
      of the Shares, or the consummation by the Company of any other transaction(s)
      contemplated by the Transaction Documents, except the filing with the SEC of
      a
      Form D pursuant to Regulation D under the Securities Act. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7. Assuming
      the accuracy of the Purchasers’ representations contained in Section 3.2 of the
      Agreement, registration of the offer, sale and issuance of the Shares in
      conformity with the terms of the Agreement and the Securities Act is not
      required.

     

    8. The
      Company is not, and, immediately after giving effect to the offering and sale
      of
      the Shares, will not be an “investment company” or an entity “controlled” by an
“investment company,” as such terms are defined in the Investment Company Act of
      1940, as amended.

     

    9. To
      such
      counsel’s knowledge, there are no written contracts, agreements or
      understandings between the Company and any Person granting such person the
      right
      (other than rights which have been waived in writing or otherwise satisfied)
      to
      require the Company to include any securities of the Company in any registration
      statement contemplated by Section 2 of the Registration Rights
      Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      D

     

    Form
      of
      Irrevocable Transfer Agent Instructions

     

    As
      of
      _________, ____

     

    Securities
      Transfer Corporation

    2591
      Dallas Parkway, Suite 102

    Frisco,
      Texas 75034

    Attn:
      _________________

     

     

    Ladies
      and Gentlemen: 

     

        Reference
      is made to that certain Securities Purchase Agreement, dated as of December
      __,
      2007 (the “Agreement”),
      by
      and among Wonder
      Auto Technology, Inc.,
      a
      Nevada corporation (the “Company”),
      and
      the purchasers named on the signature pages thereto (collectively, and including
      permitted transferees, the “Holders”),
      pursuant to which the Company is issuing to the Holders shares (the
“Shares”)
      of
      Common Stock of the Company, par value $0.0001 per share (the “Common
      Stock”).
      

     

        This
      letter shall serve as our irrevocable authorization and direction to you
      (provided that you are the transfer agent of the Company at such time and the
      conditions set forth in this letter are satisfied), subject to any stop transfer
      instructions that we may issue to you from time to time, if any, to issue
      certificates representing shares of Common Stock upon transfer or resale of
      the
      Shares.

     

    You
      acknowledge and agree that so long as you have received (a) written
      confirmation from the Company’s legal counsel that either (1) a
      registration statement covering resales of the Shares has been declared
      effective by the Securities and Exchange Commission (the “Commission”)
      under
      the Securities Act of 1933, as amended (the “Securities
      Act”)
      and
      remains effective, having not been withdrawn or suspended at such time, or
      (2) the Shares have been sold in conformity with Rule 144 under the
      Securities Act (“Rule 144”)
      or are
      eligible for sale under Rule 144(k) and (b) if applicable, a copy of such
      registration statement, then, unless otherwise required by law, within three
      (3) business days of your receipt of a notice of transfer, you shall issue
      the certificates representing the Shares registered in the names of such Holders
      or transferees, as the case may be, and such certificates shall not bear any
      legend restricting transfer of the Shares thereby and should not be subject
      to
      any stop-transfer restriction; provided,
      however,
      that if
      such Shares are not registered for resale under the Securities Act because
      the
      related registration statement has been withdrawn or suspended or otherwise
      is
      not in effect at the time of such request or able to be sold under Rule 144,
      then the certificates for such Shares shall bear the following
      legend:

     

    THESE
      SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
      NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF
      (A)
      AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
      ACT
      OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
      APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL
      OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER
      AGENT
      OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE
      FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
      ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
      SECURITIES.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

        A
      form of
      written confirmation from the Company’s outside legal counsel that a
      registration statement covering resales of the Shares has been declared
      effective by the Commission under the Securities Act is attached hereto as
      Annex I.
      

     

        Please
      be
      advised that the Holders are relying upon this letter as an inducement to enter
      into the Agreement and, accordingly, each Holder is a third party beneficiary
      to
      these instructions. 

     

        Please
      execute this letter in the space indicated to acknowledge your agreement to
      act
      in accordance with these instructions. 

     

    
      	 	
              Very
                truly yours,

            
	 	 
	 	
              
                WONDER
                  AUTO TECHNOLOGY, INC.

              

            
	 	 
	 	 
	 	
              By:
                __________________________________

            
	 	
              Name:
                ________________________________

            
	 	
              Title:
                ________________________________

            
	 	 
	
              Acknowledged
                and Agreed:

            	 
	 	 
	
              
                SECURITIES
                  TRANSFER CORPORATION

              

            	 
	 	 
	
              By:
                __________________________________

            	 
	
              Name:
                ________________________________

            	 
	
              Title:
                ________________________________

            	 


    

    


    Date:
      _________________, ______

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Annex
      I 

     

    FORM
      OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT 

     

    
      	
              Securities
                Transfer Corporation

              2591
                Dallas Parkway, Suite 102

              Frisco,
                Texas 75034

              Attn:
                _________________

            
	
               

            	
               

            	
               

            
	
               
                

            	
               

            	
              Re:
                Wonder
                Auto Technology, Inc.

            


    

     

    Ladies
      and Gentlemen: 

     

             We
      are
      counsel to Wonder Auto Technology, Inc., a Nevada corporation (the “Company”),
      and
      have represented the Company in connection with that certain Securities Purchase
      Agreement, dated as of December ___, 2007, entered into by and among the Company
      and the buyers named therein (collectively, the “Purchasers”)
      pursuant to which the Company issued to the Purchasers shares of the Company’s
      common stock, $0.0001 par value per share (the “Common
      Stock”).
      Pursuant to that certain Registration Rights Agreement of even date, the Company
      agreed to register the resale of the Common Stock (the “Registrable
      Securities”),
      under
      the Securities Act of 1933, as amended (the “Securities
      Act”).
      In
      connection with the Company’s obligations under the Registration Rights
      Agreement, on                     ,
      ____,
      the Company filed a Registration Statement on Form S-3 (File
      No. 333-                    )
      (the
“Registration
      Statement”)
      with
      the Securities and Exchange Commission (the “Commission”)
      relating to the Registrable Securities which names each of the Purchasers as
      a
      selling stockholder thereunder. 

     

            In
      connection with the foregoing, we advise you that a member of the Commission’s
      staff has advised us by telephone that the Commission has entered an order
      declaring the Registration Statement effective under the Securities Act at
      ____
      [a.m.][p.m.] on __________, ____, and we have no knowledge, after telephonic
      inquiry of a member of the staff, that any stop order suspending its
      effectiveness has been issued or that any proceedings for that purpose are
      pending before, or threatened by, the Commission and the Registrable Securities
      are available for resale under the Securities Act pursuant to the Registration
      Statement. 

     

          This
      letter shall serve as our standing notice to you that the Common Stock may
      be
      freely transferred by the Purchasers pursuant to the Registration Statement.
      You
      need not require further letters from us to effect any future legend-free
      issuance or reissuance of shares of Common Stock to the Purchasers or the
      transferees of the Purchasers, as the case may be, as contemplated by the
      Company’s Irrevocable Transfer Agent Instructions dated __________, 2007,
      provided at the time of such reissuance, the Company has not otherwise notified
      you that the Registration Statement is unavailable for the resale of the
      Registrable Securities. This letter shall serve as our standing instructions
      with regard to this matter. 

    
      	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
              Very
                truly yours,

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
              [NAME
                OF COMPANY COUNSEL]

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               
                

            	
               

            	
              By:

            	
               

            	
               ___________________________________

            


    

     

    
      	
              CC:
                

            	
              Purchasers

            	 
	 	
              Piper
                Jaffray & Co.

            	 
	 	 	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      E

     

    Form
      of
      Secretary’s Certificate

    


    The
      undersigned hereby certifies that he is the duly elected, qualified and acting
      Secretary of Wonder Auto Technology, Inc., a Nevada corporation (the
      "Company"),
      and
      that as such he is authorized to execute and deliver this certificate in the
      name and on behalf of the Company and in connection with the Securities Purchase
      Agreement, dated as of December ___, 2007, by and among the Company and the
      investors party thereto (the "Securities
      Purchase Agreement"),
      and
      further certifies in his official capacity, in the name and on behalf of the
      Company, the items set forth below. Capitalized terms used but not otherwise
      defined herein shall have the meaning set forth in the Securities Purchase
      Agreement.

     

    
      	
              1.

            	
              Attached
                hereto as Exhibit
                A
                is
                a true, correct and complete copy of the resolutions duly adopted
                by the
                Board of Directors of the Company by unanimous written consent. Such
                resolutions have not in any way been amended, modified, revoked or
                rescinded, have been in full force and effect since their adoption
                to and
                including the date hereof and are now in full force and effect.
                

            


    

     

    
      	
              2.

            	
              Attached
                hereto as Exhibit
                B
                is
                a true, correct and complete copy of the Certificate of Incorporation
                of
                the Company, together with any and all amendments thereto currently
                in
                effect, and no action has been taken to further amend, modify or
                repeal
                such Certificate of Incorporation, the same being in full force and
                effect
                in the attached form as of the date hereof.


            


    

     

    
      	
              3.

            	
              Attached
                hereto as Exhibit
                C
                is
                a true, correct and complete copy of the Bylaws of the Company and
                any and
                all amendments thereto currently in effect, and no action has been
                taken
                to further amend, modify or repeal such Bylaws, the same being in
                full
                force and effect in the attached form as of the date
                hereof.

            


    

     

    
      	
              4.

            	
              Each
                person listed below has been duly elected or appointed to the position(s)
                indicated opposite his name and is duly authorized to sign the Securities
                Purchase Agreement and each of the Transaction Documents on behalf
                of the
                Company, and the signature appearing opposite such person’s name below is
                such person’s genuine signature.

            


    

     

    


    
      	
              Name

            	 	
              Position

            	 	
              Signature

            
	 	 	 	 	 
	 	 	 	 	
               

            
	 	 	 	 	
               

            


    

    


    


    IN
      WITNESS WHEREOF, the undersigned has hereunto set his hand as of this ___ day
      of
      December, 2007.

     

    


    
      	 	 	 	
            
	 	 	
              Name:

            	
            
	 	 	
              Title:
                Secretary

            	
            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    I,
      ______________, President and Chief Executive Officer, hereby certify that
      ________ is the duly elected, qualified and acting Secretary of the Company
      and
      that the signature set forth above is his true signature.

     

    


    
      	 	 	 	
            
	 	 	
              Name:

            	
            
	 	 	
              Title: 
                President and Chief Executive
                Officer

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      A

    Resolutions

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      B

     

    Certificate
      of Incorporation

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      C

     

    Bylaws

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      F

     

    Form
      of
      Officer’s Certificate

     

    


    The
      undersigned, the President and Chief Executive Officer of Wonder Auto
      Technology, Inc., a Nevada corporation (the "Company"),
      pursuant to Section 5.1(h) of the Securities Purchase Agreement, dated as of
      December ___, 2007, by and among the Company and the investors signatory thereto
      (the "Securities
      Purchase Agreement"),
      hereby represents, warrants and certifies as follows (capitalized terms used
      but
      not otherwise defined herein shall have the meaning set forth in the Securities
      Purchase Agreement):

    


    
      	 	
              1.

            	
              The
                representations and warranties of the Company contained in the Securities
                Purchase Agreement are true and correct in all material respects
                as of the
                date when made and as of the Closing Date, as though made on and
                as of
                such date, except for such representations and warranties that speak
                as of
                a specific date.

            


    

    


    
      	 	
              2.

            	
              The
                Company has performed, satisfied and complied in all material respects
                with all covenants, agreements and conditions required by the Transaction
                Documents to be performed, satisfied or complied with by it at or
                prior to
                the Closing.

            


    

    


    IN
      WITNESS WHEREOF,
      the
      undersigned has executed this certificate this ___ day of December,
      2007.

    


    


    
      	 	 	 	
            
	 	 	
              Name:

            	
            
	 	 	
              Title: 
                President and Chief Executive
                Officer

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      G

     

    Wire
      Instructions

     

    


    
      	
              Wire
                Room of:

            	
              PNC
                Bank New Jersey

            
	 	
              Caldwell,
                NJ

            
	
              ABA
                No.: 

            	
              031207607

            
	
              For
                credit to:

            	
              Lowenstein
                Sandler PC

            
	 	
              Special
                Trust Account I

            
	
              Account
                No.: 

            	
              8025720174

            


    

    


    For
      International wires please use SWIFT Code: PNCCUS33

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Schedule
      3.1(y)

    


    Registration
      Rights

     

    None.