Exhibit 10.1
	 

	 
		EXECUTION
		COPY
	 

	 
		SECURITIES
		PURCHASE AGREEMENT
	 

	 
		                This Securities Purchase
		Agreement (this “Agreement”) is dated as of April 18, 2007, by
		and among Castle Brands Inc., a Delaware 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, (i)
		that aggregate number of shares of the common stock, par value $0.01 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 3,520,035 shares of Common Stock
		and shall be collectively referred to herein as the “Shares”)
		and (ii) warrants, in substantially the form attached hereto as Exhibit
		A (the “Warrants”), to acquire up to that number of
		additional shares of Common Stock equal to 40% of the number of Shares
		purchased by such Purchaser (rounded up to the nearest whole share) (the shares
		of Common Stock issuable upon exercise of or otherwise pursuant to the Warrants
		collectively are referred to herein as the “Warrant
		Shares”).
	 

	 
		                                C.
		           The Shares,
		the Warrants and the Warrant Shares collectively are referred to herein as the
		“Securities”.
	 

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

	 
		                                E.
		            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 B (the “Registration Rights
		Agreement”), pursuant to which, among other things, the Company will
		agree to provide certain registration rights with respect to the Shares and the
		Warrant 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.
		In addition to the terms defined elsewhere in this Agreement, 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 (or otherwise) against the
		Company, any Subsidiary or any of their respective 
	 

	 
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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).
	 

	 
		                                “Cash Placement Agent
		Fee” means the cash fee to be paid to the Placement Agent for services
		rendered to the Company in connection with the offering of the
		Securities.
	 

	 
		                                “Closing” means
		the closing of the purchase and sale of the Shares and the Warrants 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
		such dispute shall be resolved pursuant to Section 10 of the Warrants. 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 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. 
	 

	 
		2
	 

	 

	 
	 

	 
	 
	 

	 

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

	 
		                                “Company
		Counsel” means Patterson Belknap Webb & Tyler 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
		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.
	 

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

	 
		                                “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.
	 

	 
		                                “Effectiveness
		Deadline” means the date on which the initial Registration Statement
		is required to be declared effective by the Commission under the terms of the
		Registration Rights Agreement.
	 

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

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

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

	 
		                                “Inactive
		Subsidiaries” means the Company’s Subsidiaries that do not
		conduct any business.
	 

	 
		                                “Indemnified
		Person” has the meaning set forth in Section 4.11(b).
	 

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

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

	 
		                                “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.
	 

	 
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                                 “Material
		Contract” means any contract of the Company that was filed (or should
		have been filed) as an exhibit to the SEC Reports pursuant to Item 601(b)(4) or
		Item 601(b)(10) of Regulation S-K.
	 

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

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

	 
		                                “Outside Date”
		means May 4, 2007.
	 

	 
		                                “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.
	 

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

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

	 
		                                “Purchase Price”
		means $5.97.
	 

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

	 
		                                “Purchaser
		Party” has the meaning set forth in Section 4.11(a).
	 

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

	 
		                                “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).
	 

	 
		                                “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)(vii).
	 

	 
		                                “Securities Act”
		means the Securities Act of 1933, as amended.
	 

	 
		                                “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.
	 

	 
		4
	 

	 

	 
	 

	 
		 
                                “Subscription
		Amount” means with respect to each Purchaser, the aggregate amount to
		be paid for the Shares and the related Warrants 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.
	 

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

	 
		                                “Transfer Agent”
		means Continental Stock Transfer & Trust Company or any successor transfer
		agent for the Company.
	 

	 
		                                “Warrants” has
		the meaning set forth in the Recitals to this Agreement. The Placement Agent
		and/or its designees are also receiving placement agent warrants as
		compensation for services rendered in connection with the transactions set
		forth herein, which warrants shall also constitute “Warrants”
		for all purposes hereunder.
	 

	 
		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 of Common Stock equal to the quotient resulting from dividing (i) the
		aggregate purchase price for such Purchaser, as indicated below such
		Purchaser’s name on the signature page of this Agreement (the
		“Subscription Amount”) by (ii) the Purchase Price, rounded to
		the nearest whole Share. In addition, each Purchaser shall receive a Warrant to
		purchase a number of Warrant Shares equal to 40% of the number of Shares
		purchased by such Purchaser, as indicated below such Purchaser’s name on
		the signature page to this Agreement. The Warrants shall have an exercise price
		equal to $6.57 per Warrant Share.
	 

	 
		                                (b)           Closing.
		The Closing of the purchase and sale of the Shares and Warrants shall take
		place at the offices of Lowenstein Sandler PC, 1251 Avenue of the Americas, New
		York, New York on the 
	 

	 
		5
	 

	 

	 
	 

	 
		 
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) each Purchaser shall pay its
		respective Subscription Amount to the Company for the Shares and the Warrants
		to be issued and sold to such Purchaser at the Closing, by wire transfer of
		immediately available funds in accordance with the Company’s written wire
		instructions as set forth on Exhibit H hereto, (ii) the Company
		shall irrevocably instruct the Transfer Agent to deliver to each Purchaser by
		either electronic delivery to such Purchaser’s balance account at the
		Depository Trust Company (“DTC”) or a similar organization or
		by delivery of, 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) calendar
		days after the Closing and (iii) the Company shall issue to each Purchaser
		a Warrant pursuant to which such Purchaser shall have the right to acquire such
		number of Warrant Shares as is set forth on such Purchaser’s signature
		page to this Agreement next to the heading “Underlying Shares Subject to
		Warrant”, in the case of clauses (ii) and (iii), duly executed on behalf
		of the Company and registered in the name of such Purchaser. 
	 

	 
		                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)           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
		C-2 hereto or otherwise deliver such Shares by electronic delivery to
		such Purchaser’s balance account at DTC or a similar organization;
	 

	 
		                                                (iii)          a
		Warrant, executed by the Company and registered in the name of such Purchaser
		as set forth on the Stock Certificate Questionnaire included as Exhibit
		C-2 hereto, pursuant to which such Purchaser shall have the right to
		acquire such number of Warrant Shares equal to 40% of the number of Shares
		issuable to such Purchaser pursuant to Section 2.2(a)(ii), rounded up to the
		nearest whole share, on the terms set forth therein;
	 

	 
		                                                (iv)          a
		legal opinion of Company Counsel, in the form attached hereto as Exhibit
		D, executed by such counsel and addressed to the Purchasers and the
		Placement Agent; 
	 

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

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

	 
		                                                (vii)         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 approving the
		transactions contemplated by this Agreement and the other Transaction Documents
		and the issuance of the Securities, (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 F; 
	 

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

	 
		                                                (ix)           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 three (3) days of
		the Closing Date; 
	 

	 
		                                                (x)            a
		certificate evidencing the Company’s qualification as a foreign
		corporation and good standing issued by the Secretary of State (or comparable
		office) of each jurisdiction in which the Company is qualified to do business
		as a foreign corporation, as of a date within ten (10) days of the Closing
		Date; and
	 

	 
		                                                (xi)           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.
	 

	 
		                                (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 by
		wire transfer to an account designated in writing by the Company for such
		purpose, as set forth on Exhibit H 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
		C-1 and C-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 to the Placement Agent that, except
		as set forth in the Schedules delivered herewith:
	 

	 
		                                (a)           Subsidiaries.
		The Company has no direct or indirect Subsidiaries other than those listed in
		Schedule 3.1(a) hereto. Except as disclosed in Schedule 3.1(a)
		hereto, 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. Except as disclosed in Schedule 3.1(b) hereto,
		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), 
	 

	 
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with the
		requisite power and authority to own or lease and use its properties and assets
		and to carry on its business as currently conducted. Except as disclosed in
		Schedule 3.1(b) hereto, 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, is threatened in any such jurisdiction revoking, limiting or
		curtailing or seeking to revoke, limit or curtail such power and authority or
		qualification. 
	 

	 
		                                (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 and the
		Warrants and the reservation for issuance and the subsequent issuance of
		the Warrant Shares upon exercise of the Warrants) 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
		shareholders 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 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. Except as set forth on Schedule 3.1(c) hereto, there are no
		shareholder 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
		shareholders.
	 

	 
		                                (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 and Warrants and the reservation for
		issuance and issuance of the Warrant Shares) do not and will not (i) conflict
		with or violate any provision of the Company’s or any Subsidiary’s
		certificate or articles of incorporation, bylaws or other organizational or
		charter documents, (ii) conflict with, or constitute a default (or an event
		that with notice or lapse of time or both would become a default) under, result
		in the creation of any Lien upon any of the properties or assets of the Company
		or any Subsidiary or give to others any rights of termination, amendment,
		acceleration or cancellation (with or without notice, lapse of time or both)
		of, any agreement, credit facility, debt or other instrument (evidencing a
		Company or Subsidiary debt or otherwise) or other understanding to which the
		Company or any Subsidiary is a party or by which any property or asset of 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 affected, except in the case of clauses (ii) and (iii) such as would
		not, individually or in the aggregate, have a Material Adverse Effect.
	 

	 
		8
	 

	 

	 
	 

	 
		 
                                (e)           Filings,
		Consents and Approvals. Neither the Company nor any of its Subsidiaries is
		required to obtain any consent, waiver, authorization or order of, give any
		notice to, or make any filing or registration with, any court or other federal,
		state, local or other governmental authority or other Person in connection with
		the execution, delivery and performance by the Company of the Transaction
		Documents (including the issuance of the Securities), 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
		Warrants and the listing of the Common Stock for trading or quotation, as the
		case may be, thereon in the time and manner required thereby, (v) the filings
		required in accordance with Section 4.9 of this Agreement and (vi) those that
		have been made or obtained prior to the date of this Agreement (collectively,
		the “Required Approvals”). 
	 

	 
		                                (f)            Issuance
		of the Securities. 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. The Warrants 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, 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 of shareholders. The Warrant Shares issuable upon exercise of
		the Warrants have been duly authorized and, when issued and paid for in
		accordance with the terms of the Transaction Documents and the Warrants will be
		duly and validly issued, fully paid and nonassessable, 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 of shareholders. Assuming the accuracy of the
		representations and warranties of the Purchasers in this Agreement, the Shares
		and the Warrant Shares will be issued in compliance with all applicable federal
		and state securities laws. As of the Closing Date, the Company shall have
		reserved from its duly authorized capital stock all of the shares of Common
		Stock issuable upon exercise of the Warrants. The Company shall, so long as any
		of the Warrants are outstanding, take all action necessary to reserve and keep
		available out of its authorized and unissued capital stock, solely for the
		purpose of effecting the exercise of the Warrants, all of the shares of Common
		Stock issuable upon exercise of the Warrants.
	 

	 
		                                (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 Schedule 3.1(g). 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
		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 Schedule 3.1(g): (i) no shares of the
		Company’s capital stock are subject to preemptive rights or any other
		similar rights or any liens or encumbrances suffered or permitted by the
		Company; (ii) there are no outstanding options, warrants, scrip, rights to
		subscribe to, calls or commitments of any character whatsoever relating to, or
		securities or rights convertible into, or exercisable or exchangeable for, any
		shares of capital stock of the Company, or 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 
	 

	 
		9
	 

	 

	 
	 

	 
	 
		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; (vii) there are no securities or instruments containing
		anti-dilution or similar provisions that will be triggered by the issuance of
		the Securities; (viii) the Company does not have any stock appreciation rights
		or “phantom stock” plans or agreements or any similar plan or
		agreement; and (ix) the Company has no liabilities or obligations required to
		be disclosed in the SEC Reports (as defined herein) but not so disclosed in the
		SEC Reports. 
	 

	 
		                                (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 the date hereof, the Company is
		not aware of any event occurring on or prior to the Closing Date (other than
		the transactions contemplated by the Transaction Documents) that requires the
		filing of a Form 8-K after the Closing. As of their respective 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.
	 

	 
		                                (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. 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.
	 

	 
		                                (j)            Tax
		Matters. The Company and each of its Subsidiaries (i) has accurately and
		timely prepared and filed 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 
	 

	 
		10
	 

	 

	 
	 

	 
	 

	  

	 
		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 audited financial statements included
		within the SEC Reports, except as specifically disclosed in the SEC Reports or
		as set forth in Schedule 3.1(k) hereto, (i) there have been no events,
		occurrences or developments that have had or would have, either individually or
		in the aggregate, a Material Adverse Effect, (ii) the Company has not incurred
		any 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 shareholders 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), (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 and (vi) there has not been
		any material change or amendment to, or any waiver of any material right under,
		any material contract under which the Company, any of its Subsidiaries, or any
		of their respective assets is bound or subject. Except for the issuance of the
		Securities contemplated by this Agreement or as set forth in Schedule
		3.1(k) hereto, no event, liability or development has occurred or exists
		with respect to the Company or its Subsidiaries or their respective business,
		properties, operations or financial condition that would be required to be
		disclosed by the Company under applicable securities laws at the time this
		representation is made that has not been publicly disclosed at least one
		Trading Day prior to the date that this representation is made.
	 

	 
		                                (l)            Environmental
		Matters. To the Company’s Knowledge, neither the Company nor any of
		its Subsidiaries (i) 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”), (ii) owns or operates any real property contaminated with any
		substance that is in violation of any Environmental Laws, (iii) is liable for
		any off-site disposal or contamination pursuant to any Environmental Laws, or
		(iv) is subject to any claim relating to any Environmental Laws; which
		violation, contamination, liability or claim has had or would have,
		individually or in the aggregate, a Material Adverse Effect; and there is no
		pending or, to the Company’s Knowledge, threatened investigation 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
		Securities or (ii) except as specifically disclosed in the SEC Reports, would,
		if there were an unfavorable decision, individually or in the aggregate, have a
		Material Adverse Effect. Neither the Company nor any of its Subsidiaries, nor,
		to the Company’s Knowledge, any current director or officer thereof (in
		his or her capacity thereof), is or has been during the five-year period prior
		to the Closing Date the subject of any Action involving a claim of violation of
		or liability under federal or state securities laws or a claim of breach of
		fiduciary duty. There has not been, there is not pending or, to the
		Company’s Knowledge, there is not contemplated, any investigation by the
		Commission involving the Company or, to the Company’s Knowledge, any
		current or former director or officer of the Company (in his or her capacity as
		such). 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.
	 

	 
		11
	 

	 

	 
	 

	 
	 

	  

	 
		                                (n)           Employment
		Matters. No labor dispute exists or, to the Company’s Knowledge, is
		imminent with respect to any of the employees of the Company which would have a
		Material Adverse Effect. None of the Company’s or any Subsidiary’s
		employees is a member of a union that relates to such employee’s
		relationship with the Company, and neither the Company nor any of its
		Subsidiaries is a party to a collective bargaining agreement, and the Company
		and each Subsidiary believes that its relationship with its employees is good.
		No executive officer of the Company (as defined in Rule 501(f) of the 1933 Act)
		has notified the Company or any Subsidiary that such officer intends to leave
		the Company or any such Subsidiary or otherwise terminate such officer’s
		employment with the Company or any such Subsidiary. No executive officer, to
		the Company’s Knowledge, is in violation of any term of any employment
		contract, confidentiality, disclosure or proprietary information agreement or
		non-competition agreement, or any other contract or agreement or any
		restrictive covenant which would have a Material Adverse Effect, and the
		continued employment of each such executive officer does not subject the
		Company or any Subsidiary to any liability with respect to any of the foregoing
		matters. The Company and its Subsidiaries are in compliance with all U.S.
		federal, state, local and foreign laws and regulations relating to employment
		and employment practices, terms and conditions of employment and wages and
		hours, except where the failure to be in compliance would not, individually or
		in the aggregate, 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 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 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
		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 Permits.
	 

	 
		                                (q)           Title
		to Assets. Except as set forth on Schedule 3.1(q) and 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.
		Except as set forth on Schedule 3.1(q), 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, encumbrances and defects except such
		as do not materially affect the value of such property and do not interfere
		with the use made and proposed to be made of such property by the Company and
		any of its Subsidiaries. Any real property and facilities held under lease by
		the Company and any of its Subsidiaries are held by them under valid,
		subsisting and enforceable leases with such exceptions as are not material and
		do not interfere with the use made and proposed to be made of such property and
		buildings by the Company and its Subsidiaries. 
	 

	 
		                                (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 
	 

	 
		12
	 

	 

	 
	 

	 
	 
		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. 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; (b) to the Company’s Knowledge, there is no infringement by
		third parties of any such Intellectual Property; (c) there is no pending or, to
		the Company’s Knowledge, threatened action, suit, proceeding or claim by
		others challenging the Company’s and its Subsidiaries’ rights in or
		to any such Intellectual Property, and the Company is unaware of any facts
		which would form a reasonable basis for any such claim; (d) there is no pending
		or, to the Company’s Knowledge, threatened action, suit, proceeding or
		claim by others challenging the validity or scope of any such Intellectual
		Property; and (e) there is no pending or, to the Company’s Knowledge,
		threatened action, suit, proceeding or claim by others that the Company and/or
		any Subsidiary infringes or otherwise violates any patent, trademark,
		copyright, trade secret or other proprietary rights of others, and the Company
		is unaware of any other fact which would form a reasonable basis for any such
		claim.
	 

	 
		                                (s)           Insurance.
		The Company and each of the Subsidiaries (other than the Inactive Subsidiaries)
		are insured by insurers of recognized financial responsibility against such
		losses and risks and in such amounts as the Company believes to be prudent and
		customary in the businesses and locations in which the Company and such
		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 such 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 and
		other than the grant of stock options disclosed on Schedule 3(t), none
		of the officers, directors or employees of the Company is presently a party to
		any transaction with the Company (other than for ordinary course services as
		employees, officers or directors), including any contract, agreement or other
		arrangement providing for the furnishing of services to or by, providing for
		rental of real or personal property to or from, or otherwise requiring payments
		to or from any such officer, director or employee or, to the Company’s
		Knowledge, any corporation, partnership, trust or other entity in which any
		such officer, director, or employee has a substantial interest or is an
		officer, director, trustee or partner.
	 

	 
		                                (u)           Internal
		Accounting Controls. The Company and each of its Subsidiaries (other than
		the Inactive Subsidiaries) maintain a system of internal accounting controls
		sufficient to provide reasonable assurance that (i) transactions are executed
		in accordance with management’s general or specific authorizations, (ii)
		transactions are recorded as necessary to permit preparation of financial
		statements in conformity with 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. 
	 

	 
		                                (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 Securities (which placement agent fees are being paid by the
		Company). The 
	 

	 
		13
	 

	 

	 
	 

	 
		 
Company
		shall indemnify, pay, and hold each Purchaser harmless against, any liability,
		loss or expense (including, without limitation, attorneys’ fees and
		out-of-pocket expenses) arising in connection with any such right, interest or
		claim.
	 

	 
		                                (x)            Private
		Placement. Assuming the accuracy of the Purchasers’ representations
		and warranties set forth in Section 3.2 of this Agreement, no registration
		under the Securities Act is required for the offer and sale of the Securities
		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
		Directed Selling Efforts or General Solicitation. Neither the Company, nor
		any of its Affiliates, nor any Person acting on its or their behalf has
		conducted any “general solicitation” or “general
		advertising” (as those terms are used in Regulation D) in connection with
		the offer or sale of any of the Securities.
	 

	 
		                                (aa)         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
		Securities as contemplated hereby or (ii) cause the offering of the Securities
		pursuant to the Transaction Documents to be integrated with prior offerings by
		the Company for purposes of any applicable law, regulation or shareholder
		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.
	 

	 
		                                (bb)         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 (or which would reasonably be expected to
		have the effect of terminating) 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. Except as specified in the SEC
		Reports, 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, and has no reason to believe that it will not in the
		foreseeable future continue to be, in compliance in all material respects with
		the listing and maintenance requirements for continued trading of the Common
		Stock on the Principal Trading Market. 
	 

	 
		                                (cc)         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.
	 

	 
		                                (dd)         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 
	 

	 
		14
	 

	 

	 
	 

	 
	 

	  

	 
		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) made any other unlawful bribe, rebate, payoff,
		influence payment, kickback or other unlawful payment to any foreign or
		domestic government official or employee.
	 

	 
		                                (ee)         Application
		of Takeover Protections; Rights Agreements. The Company and its board of
		directors have taken all necessary action, if any, in order to render
		inapplicable any control share acquisition, business combination, poison pill
		(including any distribution under a rights agreement) or other similar
		anti-takeover provision under the Company’s 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 Securities and the Purchasers’ ownership of the
		Securities. The Company has not adopted a stockholder rights plan or similar
		arrangement relating to accumulations of beneficial ownership of Common Stock
		or a change in control of the Company.
	 

	 
		                                (ff)           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 4.9 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.
	 

	 
		                                (gg)         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.
	 

	 
		                                (hh)         Acknowledgment
		Regarding Purchasers’ Purchase of Securities. The Company acknowledges
		and agrees that each of the Purchasers is acting solely in the capacity of an
		arm’s length purchaser with respect to 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 Securities. The Company
		further represents to each Purchaser that the Company’s decision to enter
		into this Agreement and the other Transaction Documents has been based solely
		on the independent evaluation of the transactions contemplated hereby by the
		Company and its representatives.
	 

	 
		                                (ii)           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 
	 

	 
		15
	 

	 

	 
	 

	 
	 

	  

	 
		result in the
		stabilization or manipulation of the price of any security of the Company to
		facilitate the sale or resale of any of the Securities, (ii) sold, bid for,
		purchased, or paid any compensation for soliciting purchases of, any of the
		securities of the Company or (iii) paid or agreed to pay to any Person any
		compensation for soliciting another to purchase any other securities of the
		Company, other than, in the case of clauses (ii) and (iii), compensation paid
		to the Placement Agent in connection with the placement of the
		Securities
	 

	 
		                                (jj)           Acknowledgment
		Regarding Purchasers Trading Activity. Anything in this Agreement or
		elsewhere herein to the contrary notwithstanding (except for Section 3.2(h) and
		4.14 hereof), it is understood and acknowledged by the Company (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 Securities 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 (a) one or more Purchasers may engage
		in hedging activities at various times during the period that the Securities
		are outstanding and (b) such hedging activities (if any) could reduce the value
		of the existing shareholders’ equity interests in the Company at and after
		the time that the hedging activities are being conducted. 
	 

	 
		                                (kk)         Form S-3
		Eligibility. As of May 1, 2007, the Company will meet the eligibility
		requirements contained in Section I.A. and in Section I.B.3 of the General
		Instructions to Form S-3 to register securities with the Commission on a
		registration statement on Form S-3 under the Securities Act.
	 

	 
		                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 
	 

	 
		16
	 

	 

	 
	 

	 
	 

	 
	 
		
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.
	 

	 
		                                (c)           Investment
		Intent. Such Purchaser understands that the Securities are “restricted
		securities” and have not been registered under the Securities Act or any
		applicable state securities law and is acquiring the Securities and, upon
		exercise of the Warrants, will acquire the Warrant Shares issuable upon
		exercise thereof as principal for its own account and not with a view to, or
		for distributing or reselling such Securities or any part thereof in violation
		of the Securities Act or any applicable state securities laws, provided,
		however, that by making the representations herein, such Purchaser does not
		agree to hold any of the Securities 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 Securities or Warrant 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 Securities 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 Securities (or any securities which are
		derivatives thereof) to or through any person or entity; such Purchaser is not
		a registered broker-dealer under Section 15 of the Exchange Act or an entity
		engaged in a business that would require it to be so registered as a
		broker-dealer.
	 

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

	 
		                                (e)           General
		Solicitation. Such Purchaser is not purchasing the Securities as a result
		of any advertisement, article, notice or other communication regarding the
		Securities 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 Securities, and has so evaluated the merits
		and risks of such investment. Such Purchaser is able to bear the economic risk
		of an investment in the Securities and, at the present time, is able to afford
		a complete loss of such investment.
	 

	 
		                                (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 Securities and the merits and risks of investing in the
		Securities; (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
		Securities.
	 

	 
		17
	 

	 

	 
	 

	 
	 

	 
	 
		
                                (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 Securities, 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 transactions in 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 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 4.9.
	 

	 
		                                (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 Securities 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 Securities 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 Securities. Such Purchaser understands that the Placement Agent
		has acted solely as the agent of the Company in this placement of the
		Securities 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 Securities 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 Securities.
	 

	 
		                                (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 
	 

	 
		18
	 

	 

	 
	 

	 
	 
		recommendation or
		endorsement of the Securities or the fairness or suitability of the investment
		in the Securities nor have such authorities passed upon or endorsed the merits
		of the offering of the Securities.
	 

	 
		                                (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.
	 

	 
		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 Securities 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 Securities other than (i) pursuant to an
		effective registration statement, (ii) to the Company, (iii) to an Affiliate of
		a Purchaser, (iv) 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, (v) pursuant to Rule 144(k) following the applicable
		holding period or (vi) 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 an opinion of counsel selected by the transferor and reasonably
		acceptable to the Company, the form and substance of which opinion shall be
		reasonably satisfactory to the Company, to the effect that such transfer does
		not require registration of such transferred Securities 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 Securities 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):
	 

	 	 	
			 [NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF
				THESE SECURITIES HAVE BEEN REGISTERED] [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 
	
			 



	 
		19
	 

	 

	 
	 

	 
	 	 	
			 COMPANY OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER
				THE SECURITIES ACT. 
	 


	 
		                                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 Securities 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 Securities 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 423(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 Securities upon which it is stamped or
		issue to such holder by electronic delivery at the applicable balance account
		at DTC, if (i) such Securities are registered for resale under the Securities
		Act, (ii) such Securities are sold or transferred pursuant to Rule 144
		(assuming the transferor is not an Affiliate of the Company) or Rule 144A, or
		(iii) such Securities 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. If any portion of the
		Warrant is exercised at a time when there is an effective registration
		statement to cover the resale of the Warrant Shares, or if such Warrant Shares
		may be sold under Rule 144(k), then such Warrant Shares shall be issued free of
		all legends. Following the Effective Date, or at such earlier time as a legend
		is no longer required for certain Securities, 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 (i) a legended certificate
		representing such Shares or Warrant Shares (endorsed or with stock powers
		attached, signatures guaranteed, and otherwise in form necessary to affect the
		reissuance and/or transfer or (ii) an Exercise Notice in the manner stated in
		the Warrants to effect the exercise of such Warrant in accordance with its
		terms 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 Securities
		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 or Warrant Shares subject to legend removal hereunder shall be
		transmitted by the Transfer Agent to the Purchasers by crediting the account of
		the Purchaser’s prime broker with DTC.
	 

	 
		                                (d)           Irrevocable
		Transfer Agent Instructions. The Company shall issue irrevocable
		instructions to its transfer agent, and any subsequent transfer agent, to issue
		certificates or credit shares to the applicable balance accounts at DTC,
		registered in the name of each Purchaser or its respective nominee(s), for the
		Shares and the Warrant Shares in such amounts as specified from time to time by
		each Purchaser to 
	 

	 
		20
	 

	 

	 
	 

	 
	 

	 
	 
		
the Company in
		the form of Exhibit E 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 Securities shall otherwise be
		freely transferable on the books and records of the Company as and to the
		extent provided in this Agreement and the other Transaction Documents. 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 the Shares, the Warrant 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 or the Warrant 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 and Warrant 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 or Warrant 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
		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.
	 

	 
		21
	 

	 

	 
	 

	 
	 

	 
	 
		
                4.2          
		[Reserved]. 
	 

	 
		                4.3           Reservation
		of Common Stock. The Company shall take all action necessary to at all
		times have authorized, and reserved for the purpose of issuance from and after
		the Closing Date, no less than 100% of the maximum number of shares of Common
		Stock issuable upon exercise of the Warrants issued at the Closing.
	 

	 
		                4.4           Furnishing
		of Information. In order to enable the Purchasers to sell the Securities
		under Rule 144 of the Securities Act, the Company shall 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. 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 and Warrant Shares under Rule 144. The
		Company further covenants that it will take such further action as any holder
		of Securities may reasonably request, all to the extent required from time to
		time to enable such Person to sell the Shares and Warrant Shares without
		registration under the Securities Act within the limitation of the exemptions
		provided by Rule 144. 
	 

	 
		                4.5           Reporting
		Status. Other than in connection with a Fundamental Transaction (as such
		term is defined in the Warrant), 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.
	 

	 
		                4.6           Form
		D and Blue Sky. The Company agrees to timely file a Form D with respect to
		the Securities as required under Regulation D and to provide a copy thereof to
		each Purchaser promptly after such filing. 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 Securities
		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), and shall provide
		evidence of any such action so taken to the Purchasers on or prior to the
		Closing Date. The Company shall make all filings and reports relating to the
		offer and sale of the Securities required under applicable securities or
		“Blue Sky” laws of the states of the United States following the
		Closing Date.
	 

	 
		                4.7           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 Securities in a manner that would
		require the registration under the Securities Act of the sale of the Securities
		to the Purchasers, or that will be integrated with the offer or sale of the
		Securities for purposes of the rules and regulations of any Trading Market such
		that it would require shareholder approval prior to the closing of such other
		transaction unless shareholder approval is obtained before the closing of such
		subsequent transaction.
	 

	 
		                4.8           Subsequent
		Registrations. Other than pursuant to the Registration Statement, prior to
		the date that is 60 days after the Effective Date, the Company shall not file
		any registration statement (other than on Form S-8 or, in connection with an
		acquisition, on Form S-4) with the Commission with respect to any securities of
		the Company.
	 

	 
		                4.9           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 
	 

	 
		22
	 

	 

	 
	 

	 
	 

	 
	 
		
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, the form
		of Warrant 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. 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 4.9, 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). 
	 

	 
		                4.10         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, unless prior thereto such Purchaser shall
		have executed a written agreement regarding the confidentiality and use of such
		information. 
	 

	 
		                4.11        
		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, shareholders, members, partners, Affiliates, 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, shareholders, agents, members, partners or employees (and any other
		Persons with a functionally equivalent role of a Person holding such titles
		notwithstanding a lack of such title or any other title) of such controlling
		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 or relating to third party
		claims against such Purchaser relating to 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.
	 

	 
		                                (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 
	 

	 
		23
	 

	 

	 
	 

	 
	 

	 
	 
		
sought pursuant
		to Section 4.11(a), such Indemnified Person shall promptly notify the
		Company in writing and the Company shall assume the defense thereof, including
		the employment of counsel, 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 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. 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.
	 

	 
		                4.12         Listing
		of Securities. 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, the Warrant Shares and the shares of
		Common Stock issuable upon exercise of the warrants issued to the Placement
		Agent 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 the Warrant Shares (including the shares of Common
		Stock issuable upon exercise of the warrants issued to the Placement Agent) and
		will take such other action as is necessary to cause the Shares, and the
		Warrant Shares (including the shares of Common Stock issuable upon exercise of
		the warrants issued to the Placement Agent) to be listed on such other Trading
		Market as promptly as practicable. 
	 

	 
		                4.13         Use of
		Proceeds. The Company intends to use the net proceeds from the sale of the
		Securities hereunder for acquisitions of products, working capital and general
		corporate purposes and not for the satisfaction of any portion of the
		Company’s debt (other than payment of trade payables and accrued expenses
		in the ordinary course of the Company’s business and consistent with prior
		practices), or to redeem any Common Stock or Common Stock Equivalents or to
		settle any outstanding Action.
	 

	 
		                4.14         Short
		Sales and Confidentiality 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 securities of the Company (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 4.9 or (ii) this Agreement is terminated with respect to a
		Purchaser 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 
	 

	 
		24
	 

	 

	 
	 

	 
	 

	 
	 
		
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. 
	 

	 
		ARTICLE V.

		CONDITIONS PRECEDENT
		TO CLOSING
	 

	 
		                5.1           Conditions
		Precedent to the Obligations of the Purchasers to Purchase Securities. The
		obligation of each Purchaser to acquire Securities 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 or appropriate for
		consummation of the purchase and sale of the Securities 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 this Section 5.1
		as of the Closing Date, in the form attached hereto as Exhibit G.

	 

	 
		25
	 

	 

	 
	 

	 
	 

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

	 
		                5.2           Conditions
		Precedent to the Obligations of the Company to sell Securities. The
		Company’s obligation to sell and issue the Securities 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 Purchasers
		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.
		The Purchasers shall have performed, satisfied and complied in all material
		respects with all covenants, agreements and conditions required by the
		Transaction Documents to be performed, satisfied or complied with by the
		Purchasers at or prior to the Closing 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.
		Provided that the Company is in compliance with Section 4.12 of this Agreement,
		the Company shall have obtained in a timely fashion any and all consents,
		approvals, registrations and waivers required for the listing of the Shares and
		Warrant Shares on the American Stock Exchange.
	 

	 
		                                (e)           Purchasers
		Deliverables. Each 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. At Closing, the Company shall reimburse the Placement Agent
		for the reasonable fees and expenses in connection with the transactions
		contemplated by this Agreement pursuant to its obligations under its engagement
		letter with the Placement Agent (the “Engagement Letter”),
		which the Company agrees shall include the reasonable fees and expenses of
		counsel to the Placement Agent (which fees shall include, without limitation,
		the fees and expenses associated with the negotiation, preparation and
		execution and delivery of this Agreement and the other Transaction Documents
		and any amendments, modifications or waivers thereto), subject to a cap of
		$50,000 in accordance with the terms of the Engagement Letter. 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 Securities 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 

	 

	 
		26
	 

	 
		
	 

	 

	 
	 

	 
	 

	 
	 
		
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.
	 

	 
		                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:	Castle Brands Inc.
	 	 	570 Lexington Avenue
	 	 	29th Floor
	 	 	New York, New York 10022
	 	 	Telephone No.: (646) 356-0200
	 	 	Facsimile No.: (646) 356-0222
	 	 	Attention: Seth Weinberg
	 	 	 
	 	With a copy to:	Patterson Belknap Webb & Tyler LLP
	 	 	1133 Avenue of the Americas
	 	 	New York, New York 10036
	 	 	Telephone No.: (212) 336-2580
	 	 	Facsimile No.: (212) 336-7953
	 	 	Attention: John E. Schmeltzer, III
		 	 
	 	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 Purchasers holding or having the right to acquire
		a majority of the Shares and the Warrant 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
		
	 

	 
		27
	 

	 

	 
	 

	 
	 

	 
	 
		
any provision of
		any Transaction Document unless the same consideration is also offered to all
		Purchasers who then hold Securities.
	 

	 
		                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.

	 

	 
		                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 Securities in compliance with the
		Transaction Documents and applicable law, provided such transferee shall agree
		in writing to be bound, with respect to the transferred Securities, 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 each Purchaser Party is an intended third party beneficiary of
		Section 4.11, and each Purchaser Party 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.  If any party shall commence a
		Proceeding to enforce any provisions of a Transaction Document, then the
		prevailing party in such Proceeding shall be reimbursed by the other party for
		its reasonable attorneys’ fees and other costs and expenses incurred with
		the investigation, preparation and prosecution of such Proceeding.
	 

	 
		                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 Securities for a period of three years from Closing.
	 

	 
		28
	 

	 

	 
	 

	 
	 

	 
	 
		
                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.
	 

	 
		                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, 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 Securities. If any certificate or instrument evidencing any Securities
		is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
		issued in exchange and substitution for and upon cancellation thereof, or in
		lieu of and substitution therefor, a new certificate or instrument, but only
		upon receipt of evidence reasonably satisfactory to the Company 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, if
		reasonably requested by the Company, 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 reasonably 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
		Securities. If a replacement certificate or instrument evidencing any
		Securities 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. 
	 

	 
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                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, 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. 
	 

	 
		                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 Securities
		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 Securities 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 Securities 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 and
		the Warrants 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. 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.
	 

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

	 	 	CASTLE BRANDS INC. 
	 	 
	 	By:	/s/ Mark Andrews
	 	 	Name: Mark
			 Andrews
	 	 	Title: Chief
			 Executive Officer


	 
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