Document:

ex101.htm

    SECURITIES
      PURCHASE AGREEMENT

     

    SECURITIES
      PURCHASE AGREEMENT (the "Agreement"), dated as of
      November __, 2007, by and among Maple Mountain Explorations Inc., a Nevada
      corporation having its offices at 507-1313 East Maple Street, Bellingham,
      Washington 98225 (the "Company") and the investors listed on
      the Schedule of Buyers attached hereto (individually, a "Buyer"
      and collectively, the "Buyers").

     

    WHEREAS:

     

    ·  The
      Company and each Buyer 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 "1933 Act"), and Rule
      506 of Regulation D ("Regulation D") as promulgated by the
      United States Securities and Exchange Commission (the "SEC")
      under the 1933 Act.

     

    ·  Each
      Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
      conditions stated in this Agreement, that aggregate number of Units set forth
      opposite such Buyer's name in column (3) on the Schedule of Buyers attached
      hereto  (which aggregate number for all Buyers shall be not less than
      8,333,333 Units and not more than 16,666,667 Units).  As used herein,
      a "Unit" shall consist of (i) one share (the shares of the Common Stock to
      be
      issued hereunder, the "Common Shares") of the Company's common
      stock, par value $.001 per share (the "Common Stock") and
      (ii) a warrant, in the form attached hereto as Exhibit A (the
      "Warrants"), to acquire up to one-half (1/2) additional share
      of Common Stock (as exercised, collectively, the "Warrant
      Shares").

     

    ·  Pursuant
      to a Share Exchange Agreement (the "Share Exchange Agreement"),
      dated as of November __, 2007, by and among the Company, Pegasi Energy Resources
      Corporation, a Texas corporation ("OpCo") and each of the
      individuals parties thereto, contemporaneously with the Closing, all of the
      issued and outstanding capital stock of the OpCo will be exchanged for shares
      of
      the Company's Common Stock and OpCo will become a wholly-owned subsidiary of
      the
      Company (such share exchange, the "Share
      Exchange").

     

    ·  Contemporaneously
      with the Closing, the Buyers and the Company will execute and deliver a
      Registration Rights Agreement, in the form attached hereto as Exhibit B
      (as amended or modified from time to time, the "Registration Rights
      Agreement"), pursuant to which the Company agrees to provide certain
      registration rights with respect to Common Shares and the Warrant Shares under
      the 1933 Act and the rules and regulations promulgated thereunder, and
      applicable state securities laws.

     

    ·  The
      Units, the Common Shares, the Warrants and the Warrant Shares collectively
      are
      referred to herein as the "Securities".

     

    ·  The
      Company, the Agents (as defined below) and Signature Bank (the “Escrow
      Agent”) have entered into an Escrow Agreement in the form attached
      hereto as Exhibit C (the “Escrow Agreement”) to provide
      for the safekeeping of funds received (the "Escrow Funds") in
      connection with the transactions contemplated by this Agreement.  Such
      funds shall be held in escrow until the Closing and delivered by the Escrow
      Agent on behalf of the Buyers to the Company upon the satisfaction of the
      conditions to the Buyers' obligations to purchase.

     

    NOW,
      THEREFORE, the Company and each Buyer hereby agree as
      follows:

     

    A.  PURCHASE
      AND SALE OF UNITS.

     

    a.  Purchase
      of Units.  Subject to the satisfaction (or waiver) of the
      conditions set forth in Sections 6 and 7 below, the Company shall issue and
      sell
      to each Buyer, and each Buyer severally, but not jointly, agrees to purchase
      from the Company on the Closing Date (as defined below), a number of Units
      as is
      set forth opposite such Buyer's name in column (3) on the Schedule of Buyers
      (the "Closing").

     

    b.  Closing.  The
      date and time of the Closing shall be 10:00 a.m., New York City time, on the
      Closing Date (or such later date as is mutually agreed to by the Company and
      each Buyer) after notification of satisfaction (or waiver) of the conditions
      to
      the Closing set forth in Sections 6 and 7 below, at the offices of Schulte
      Roth
& Zabel LLP, 919 Third Avenue, New York, New York 10022.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    c.  Purchase
      Price.  The aggregate purchase price for the Units to be purchased
      by each Buyer at the Closing (the "Purchase Price") shall be
      the amount set forth opposite such Buyer's name in column (4) of the Schedule
      of
      Buyers.  Each Buyer shall pay $1.20 for each Unit to be purchased by
      such Buyer at the Closing.

     

    d.  Form
      of Payment.  No later than five (5) Business Days prior to the
      Closing Date, each Buyer shall deposit with the Escrow Agent its Purchase Price
      for the Units to be sold by the Company to such Buyer, by wire transfer of
      immediately available funds in accordance with the Escrow Agent's written wire
      instructions.  On the Closing Date, (i) the Escrow Agent shall release
      the Escrow Funds to the Company in accordance with the terms of the Escrow
      Agreement and (ii) the Company shall deliver to each Buyer the Common
      Shares and Warrants comprising the Units (allocated in the numbers as such
      Buyer
      shall request) which such Buyer is then purchasing hereunder duly executed
      on
      behalf of the Company and registered in the name of such Buyer or its
      designee.

     

    B.  BUYER'S
      REPRESENTATIONS AND WARRANTIES.

     

    Each
      Buyer, severally and not jointly, represents and warrants with respect to only
      itself that:

     

    a.  No
      Public Sale or Distribution.  Such Buyer is acquiring the Units
      and the Common Shares and Warrants comprising the Units, and upon exercise
      of
      the Warrants (other than pursuant to a Cashless Exercise (as defined in the
      Warrants)) will acquire the Warrant Shares issuable upon exercise of the
      Warrants, for its own account and not with a view towards, or for resale in
      connection with, the public sale or distribution thereof, except pursuant to
      sales registered or exempted under the 1933 Act; provided,
however, that by making the representations herein, such Buyer does
      not
      agree to hold any of the Securities for any minimum or other specific term
      and
      reserves the right to dispose of the Securities at any time in accordance with
      or pursuant to a registration statement or an exemption under the 1933
      Act.  Such Buyer is acquiring the Securities hereunder in the ordinary
      course of its business.  Such Buyer does not presently have any
      agreement or understanding, directly or indirectly, with any Person to
      distribute any of the Securities.

     

    b.  Accredited
      Investor Status.  Such Buyer is an "accredited investor" as that
      term is defined in Rule 501(a) of Regulation D.

     

    c.  Reliance
      on Exemptions.  Such Buyer understands that the Securities are
      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
      Buyer's compliance with, the representations, warranties, agreements,
      acknowledgments and understandings of such Buyer set forth herein in order
      to
      determine the availability of such exemptions and the eligibility of such Buyer
      to acquire the Securities.

     

    d.  Information.  Such
      Buyer and its advisors, if any, have been furnished with all materials relating
      to the business, finances and operations of the Company and its Subsidiaries
      and
      materials relating to the offer and sale of the Securities that have been
      requested by such Buyer.  Such Buyer and its advisors, if any, have
      been afforded the opportunity to ask questions of the
      Company.  Neither such inquiries nor any other due diligence
      investigations conducted by such Buyer or its advisors, if any, or its
      representatives shall modify, amend or affect such Buyer's right to rely on
      the
      Company's representations and warranties contained herein.  Such Buyer
      understands that its investment in the Securities involves a high degree of
      risk.  Such Buyer has sought such accounting, legal and tax advice as
      it has considered necessary to make an informed investment decision with respect
      to its acquisition of the Securities.

     

    e.  No
      Governmental Review.  Such Buyer understands that no United States
      federal or state agency or any other government or governmental agency has
      passed on or made any recommendation or endorsement of the 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.

     

    
      
         

      

      
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    f.  Transfer
      or Resale.  Such Buyer understands that except as will be provided
      in the Registration Rights Agreement: (I) the Securities have not been and
      are
      not being registered under the 1933 Act or any state securities laws, and may
      not be offered for sale, sold, assigned or transferred unless (A) subsequently
      registered thereunder, (B) such Buyer shall have delivered to the Company an
      opinion, in generally acceptable form, of counsel selected by the Buyer and
      reasonably satisfactory to the Company, to the effect that such Securities
      to be
      sold, assigned or transferred may be sold, assigned or transferred pursuant
      to
      an exemption from such registration, or (C) such Buyer provides the Company
      with
      reasonable assurance that such Securities can be sold, assigned or transferred
      pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor
      rule thereto) (collectively, "Rule 144"); (II) any sale of the
      Securities made in reliance on Rule 144 may be made only in accordance with
      the
      terms of Rule 144 and further, if Rule 144 is not applicable, any resale of
      the
      Securities under circumstances in which the seller (or the Person (as defined
      in
      Section 3(o)) through whom the sale is made) may be deemed to be an underwriter
      (as that term is defined in the 1933 Act) may require compliance with some
      other
      exemption under the 1933 Act or the rules and regulations of the SEC thereunder;
      and (III) neither the Company nor any other Person is under any obligation
      to
      register the securities under the 1933 Act or any state securities laws or
      to
      comply with the terms and conditions of any exemption thereunder.  The
      Securities may be pledged in connection with a bona fide margin account or
      other
      loan or financing arrangement secured by the Securities and such pledge of
      Securities shall not be deemed to be a transfer, sale or assignment of the
      Securities hereunder, and no Buyer effecting a pledge of Securities shall be
      required to provide the Company with any notice thereof or otherwise make any
      delivery to the Company pursuant to this Agreement or any other Transaction
      Document (as defined in Section 3(b)), including, without limitation, this
      Section 2(f).

     

    g.  Legends.  Such
      Buyer understands that the certificates or other instruments representing the
      Common Shares and the Warrants and, until such time as the resale of the Warrant
      Shares have been registered under the 1933 Act as contemplated by the
      Registration Rights Agreement, the stock certificates representing the Warrant
      Shares, except as set forth below, shall bear any legend as required by the
      "blue sky" laws of any state and a restrictive legend in substantially the
      following form (and a stop-transfer order may be placed against transfer of
      such
      stock certificates):

     

    [NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
      THE
      SECURITIES INTO WHICH THESE SECURITIES ARE [EXERCISABLE] HAVE BEEN][THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER
      THE
      SECURITIES ACT OF 1933, AS AMENDED, 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 OF 1933, AS AMENDED, OR (B) AN OPINION
      OF COUNSEL SELECTED BY THE HOLDER AND REASONABLY ACCEPTABLE TO THE ISSUER,
      IN A
      GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
      OR
      (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
      ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
      CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
      ARRANGEMENT SECURED BY THE SECURITIES.

     

    The
      legend set forth above shall be removed and the Company shall issue a
      certificate without such legend to the holder of the Securities upon which
      it is
      stamped, if, unless otherwise required by state securities laws, (i) such
      Securities are registered for resale under the 1933 Act, (ii) in connection
      with
      a sale, assignment or other transfer, such holder provides the Company with
      an
      opinion of counsel reasonably acceptable to the Company, in a generally
      acceptable form, to the effect that such sale, assignment or transfer of the
      Securities may be made without registration under the applicable requirements
      of
      the 1933 Act, or (iii) such holder provides the Company with reasonable
      assurances of the holder's belief that the Securities can be sold, assigned
      or
      transferred pursuant to Rule 144 or Rule 144A.  If the Company shall
      fail for any reason or for no reason to issue to the holder of the Securities
      within three (3) Trading Days (as defined below) (after the occurrence of any
      of
      (i) through (iii) above, a certificate without such legend to the holder or
      to
      issue such Securities to such holder by electronic delivery at the applicable
      balance account at DTC or if the Company fails to deliver unlegended Securities
      within 3 Trading Days of the Buyer's election to receive such unlegended
      Securities pursuant to clause (ii) below, and if on or after such Trading Day
      the holder purchases (in an open market transaction or otherwise) shares of
      Common Stock to deliver in satisfaction of a sale by the holder of such
      Securities that the holder anticipated receiving without legend from the Company
      (a "Buy-In"), then the Company shall, within three (3) Business
      Days after the holder's request and in the holder's discretion, either (i)
      pay
      cash to the holder in an amount equal to the holder'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 unlegended Securities shall terminate, or (ii)
      promptly honor its obligation to deliver to the holder such unlegended
      Securities as provided above and pay cash to the holder 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 (as defined in the
      Warrants) on the date of exercise.

     

    
      
         

      

      
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    h.  Validity;
      Enforcement.  This Agreement has been, and when the other
      Transaction Documents (as defined below) to which such Buyer is a party are
      executed and delivered in accordance with the terms and conditions contemplated
      hereby and thereby, such documents shall have been, duly and validly authorized,
      executed and delivered on behalf of such Buyer and shall constitute the legal,
      valid and binding obligations of such Buyer enforceable against such Buyer
      in
      accordance with their respective terms, except as such enforceability may be
      limited by general principles of equity or to applicable bankruptcy, insolvency,
      reorganization, fraudulent conveyance, moratorium, liquidation and other similar
      laws relating to, or affecting generally, the enforcement of applicable
      creditors' rights and remedies.

     

    i.  Residency.  Such
      Buyer is a resident of the jurisdiction specified below its address on the
      Schedule of Buyers.

     

    The
      Buyer’s representations and
      warranties made in this Section 2 are made solely for the purpose of permitting
      the Company to make a determination that the offer and sale of the Securities
      pursuant to this Agreement complies with applicable U.S. federal and state
      securities laws and not for any other purpose.  Accordingly, the
      Company shall not rely on such representations and warranties for any other
      purpose. 

     

    C.  REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY.

     

    The
      Company represents and warrants to each of the Buyers that, as of the date
      hereof and as of the Closing date as follows (which representations and
      warranties shall be deemed to apply, as appropriate, to each Subsidiary of
      the
      Company, including without limitation, OpCo assuming that the Share Exchange
      has
      been consummated as of the date hereof):

     

    a.   Organization
      and Qualification.  The Company and its
      "Subsidiaries" (which for purposes of this Agreement means any
      entity in which the Company, directly or indirectly, owns capital stock or
      holds
      an equity or similar interest) are entities duly organized and validly existing
      in good standing under the laws of the jurisdiction in which they are formed,
      and have the requisite power and authority to own their properties and to carry
      on their business as now being conducted.  Each of the Company and its
      Subsidiaries is duly qualified as a foreign entity to do business and is in
      good
      standing in every jurisdiction in which its ownership of property or the nature
      of the business conducted by it makes such qualification necessary, except
      to
      the extent that the failure to be so qualified or be in good standing would
      not
      reasonably be expected to have a Material Adverse Effect.  As used in
      this Agreement, "Material Adverse Effect" means any material
      adverse effect on the business, properties, assets, operations, results of
      operations or condition (financial or otherwise) of the Company and its
      Subsidiaries, taken as a whole, or on the transactions contemplated hereby
      and
      the other Transaction Documents (as defined below) or by the agreements and
      instruments to be entered into in connection herewith or therewith, or on the
      authority or ability of the Company to perform its obligations under the
      Transaction Documents to which it is a party.  The Company has no
      Subsidiaries except as set forth on Schedule 3(a).

     

    b.  Authorization;
      Enforcement; Validity.  The Company has the requisite power and
      authority to enter into and perform its obligations under this Agreement, the
      Registration Rights Agreement, Escrow Agreement, the Share Exchange Agreement,
      the Irrevocable Transfer Agent Instructions (as defined in Section 5(b)), the
      Warrants and each of the other agreements entered into by the parties hereto
      in
      connection with the transactions contemplated by this Agreement to which the
      Company is a party (collectively, the "Transaction
      Documents.")  The execution and delivery of the Transaction
      Documents to which the Company is a party and the consummation by the Company
      of
      the transactions contemplated hereby and thereby, including, without limitation,
      the issuance of the Units and the Common Share and the Warrants comprising
      the
      Units, the reservation for issuance and the issuance of the Common Shares and
      the reservation for issuance and issuance of Warrant Shares issuable upon
      exercise of the Warrants, have been duly authorized by the Company's Board
      of
      Directors and no further filing, consent, or authorization is required by the
      Company, its Board of Directors or its stockholders.  This Agreement
      and the other Transaction Documents to which the Company is a party have been
      duly executed and delivered by the Company, and constitute the legal, valid
      and
      binding obligations of the Company, enforceable against the Company in
      accordance with their respective terms, except as such enforceability may be
      limited by general principles of equity or applicable bankruptcy, insolvency,
      reorganization, moratorium, fraudulent conveyance, liquidation or similar laws
      relating to, or affecting generally, the enforcement of applicable creditors'
      rights and remedies.

     

    
      
         

      

      
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    c.  Issuance
      of Securities.  The issuance of the Units and the Common Shares
      and Warrants comprising the Units, are duly authorized and upon issuance in
      accordance with the terms of the Transaction Documents shall be free from all
      taxes, liens and charges with respect to the issue thereof.  As of the
      Closing, a number of shares of Common Stock shall have been duly authorized
      and
      reserved for issuance which equals or exceeds the sum of (i) 100% of the number
      of Common Shares issued hereunder and (ii) 120% of the maximum number of shares
      of Common Stock issuable upon exercise of the Warrants.  Upon exercise
      in accordance with the Warrants, the Warrant Shares will be validly issued,
      fully paid and nonassessable and free from all preemptive or similar rights,
      taxes, liens and charges with respect to the issue thereof, with the holders
      being entitled to all rights accorded to a holder of Common
      Stock.  Assuming the accuracy of each of the representations and
      warranties set forth in Section 2 of this Agreement, the offer and issuance
      by
      the Company of the Securities is exempt from registration under the 1933
      Act.

     

    d.  No
      Conflicts.  The execution, delivery and performance of the
      Transaction Documents by the Company (and the Share Exchange Agreement by OpCo)
      and the consummation by the Company (and OpCo) of the transactions contemplated
      hereby and thereby (including, without limitation, the Share Exchange, the
      issuance of the Units and the Common Shares and Warrants which comprise such
      Units and reservation for issuance and issuance of the Warrant Shares) will
      not
      (i) result in a violation of any certificate of incorporation, certificate
      of
      formation, any certificate of designations or other constituent documents of
      the
      Company or any of its Subsidiaries, any capital stock of the Company or any
      of
      its Subsidiaries or bylaws of the Company or any of its Subsidiaries or (ii)
      conflict with, or constitute a default (or an event which with notice or lapse
      of time or both would become a default) in any respect under, or give to others
      any rights of termination, amendment, acceleration or cancellation of, any
      agreement, indenture or instrument to which the Company or any of its
      Subsidiaries is a party, or (iii) result in a violation of any law, rule,
      regulation, order, judgment or decree (including foreign, federal and state
      securities laws and regulations and the rules and regulations of the National
      Association of Securities Dealer's OTC Bulletin Board (the "Principal
      Market")) applicable to the Company or any of its Subsidiaries or by
      which any property or asset of the Company or any of its Subsidiaries is bound
      or affected, except in the case of clauses (ii) and (iii) above, to the extent
      that such violations conflict, default or right would not reasonably be expected
      to have a Material Adverse Effect.

     

    e.  Consents.  Neither
      the Company nor any of its Subsidiaries is required to obtain any consent,
      authorization or order of, or make any filing or registration with, any court,
      governmental agency or any regulatory or self-regulatory agency or any other
      Person in order for it to execute, deliver or perform any of its obligations
      under or contemplated by the Transaction Documents, in each case in accordance
      with the terms hereof or thereof, except for the filing with the SEC of one
      or
      more Registration Statements in accordance with the requirements of the
      Registration Rights Agreement (which is not required to be filed before the
      Closing).  The Company and its Subsidiaries are unaware of any facts
      or circumstances that might prevent the Company from obtaining or effecting
      any
      of the registration, application or filings pursuant to the preceding
      sentence.  The Company is not in violation of the listing requirements
      of the Principal Market and has no knowledge of any facts that would reasonably
      lead to delisting or suspension of the Common Stock in the foreseeable
      future.  

     

    f.  Acknowledgment
      Regarding Buyer's Purchase of Securities.  The Company
      acknowledges and agrees that each Buyer 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 and that no Buyer is (i) an officer
      or director of the Company, (ii) an "affiliate" of the Company or any of its
      Subsidiaries (as defined in Rule 144 of the 1933 Act) or (iii) to the knowledge
      of the Company, a "beneficial owner" of more than 10% of the shares of Common
      Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act
      of
      1934, as amended (the "1934 Act")).  The Company
      further acknowledges that no Buyer is acting as a financial advisor or fiduciary
      of the Company or any of its Subsidiaries (or in any similar capacity) with
      respect to the Transaction Documents and the transactions contemplated hereby
      and thereby, and any advice given by a Buyer or any of its representatives
      or
      agents in connection with the Transaction Documents and the transactions
      contemplated hereby and thereby is merely incidental to such Buyer's purchase
      of
      the Securities.  The Company further represents to each Buyer that the
      Company's decision to enter into the Transaction Documents has been based solely
      on the independent evaluation by the Company and its
      representatives.

     

    g.  No
      General Solicitation; Placement Agent's Fees.  None of the
      Company, any of its affiliates, or any Person acting on its or their behalf,
      has
      engaged in any form of general solicitation or general advertising (within
      the
      meaning of Regulation D) in connection with the offer or sale of the
      Securities.  The Company shall be responsible for the payment of any
      placement agent's fees, financial advisory fees, or brokers' commissions (other
      than for persons engaged by any Buyer or its investment advisor) relating to
      or
      arising out of the transactions contemplated hereby.  The Company
      shall pay, and hold each Buyer harmless against, any liability, loss or expense
      (including, without limitation, attorney's fees and out-of-pocket expenses)
      arising in connection with any such claim.  The Company acknowledges
      that it has engaged SMH Capital and Clarion Finanz AG as placement agents (the
      "Agents") in connection with the sale of the
      Securities.  Other than the Agents, the Company has not engaged any
      placement agent or other agent in connection with the sale of the
      Securities.

     

    
      
         

      

      
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    h.  No
      Integrated Offering.  None of the Company, its Subsidiaries, any
      of their affiliates, or any Person acting on their behalf has, directly or
      indirectly, made any offers or sales of any security or solicited any offers
      to
      buy any security, under circumstances that would require registration of any
      of
      the Securities under the 1933 Act or cause this offering of the Securities
      to be
      integrated with prior offerings by the Company for purposes of the 1933 Act
      or
      any applicable stockholder approval provisions, including, without limitation,
      under the rules and regulations of any exchange or automated quotation system
      on
      which any of the securities of the Company are listed or
      designated.  None of the Company, its Subsidiaries, their affiliates
      and any Person acting on their behalf will take any action or steps referred
      to
      in the preceding sentence that would require registration of any of the
      Securities under the 1933 Act or cause the offering of the Securities to be
      integrated with other offerings.

     

    i.  Dilutive
      Effect.  The Company understands and acknowledges that the number
      of Warrant Shares issuable upon exercise of the Warrants will increase in
      certain circumstances.  The Company further acknowledges that its
      obligation to issue the Warrant Shares upon exercise of the Warrants in
      accordance with this Agreement and the Warrants is, in each case, absolute
      and
      unconditional regardless of the dilutive effect that such issuance may have
      on
      the ownership interests of other stockholders of the Company.

     

    j.  Application
      of Takeover Protections; Rights Agreement.  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 Certificate of Incorporation (as defined
      in
      Section 3(r)) or the laws of the state of its incorporation which is or could
      become applicable to any Buyer as a result of the transactions contemplated
      by
      this Agreement, including, without limitation, the Company's issuance of the
      Securities and any Buyer's ownership of the Securities.  The Company
      and its board of directors have taken all necessary action, if any, in order
      to
      render inapplicable any stockholder rights plan or similar arrangement relating
      to accumulations of beneficial ownership of Common Stock or a change in control
      of the Company.

     

    k.  SEC
      Documents; Financial Statements.  During the 12 months prior to
      the date hereof, the Company has filed all reports, schedules, forms, statements
      and other documents required to be filed by it with the SEC pursuant to the
      reporting requirements of the Exchange Act (all of the foregoing filed prior
      to
      the date hereof and all exhibits included therein and financial statements,
      notes and schedules thereto and documents incorporated by reference therein
      being hereinafter referred to as the "SEC Documents").  As of
      their respective filing dates, the SEC Documents complied in all material
      respects with the requirements of the Exchange Act and the rules and regulations
      of the SEC promulgated thereunder applicable to the SEC Documents, and none
      of
      the SEC Documents, at the time they were filed with the SEC, contained any
      untrue statement of a material fact or omitted to state a material fact required
      to be stated therein or necessary in order to make the statements therein,
      in
      the light of the circumstances under which they were made, not
      misleading.

     

    l.  Absence
      of Certain Changes.  Since July 31, 2007, there has been no change
      or development in the business, properties, operations, condition (financial
      or
      otherwise) or results of operations of the Company or its Subsidiaries that
      has
      had or could reasonably be expected to have a Material Adverse
      Effect.  Since July 31, 2007, the Company has not (i) declared or paid
      any dividends, (ii) sold any assets, individually or in the aggregate, in excess
      of $100,000 outside of the ordinary course of business, (iii) had capital
      expenditures, individually or in the aggregate, in excess of $250,000 or (iv)
      waived any material rights with respect to any Indebtedness or other rights
      in
      excess of $100,000 owed to it.  The Company has not taken any steps to
      seek protection pursuant to any bankruptcy law nor does the Company have any
      knowledge or reason to believe that its creditors intend to initiate involuntary
      bankruptcy proceedings or any actual knowledge of any fact which would
      reasonably lead a creditor to do so.  The Company and its
      Subsidiaries, taken as a whole, is not as of the date hereof, and after giving
      effect to the transactions contemplated hereby to occur at the Closing will
      not
      be, Insolvent (as defined below).  For purposes of this Section 3(m),
      "Insolvent" means (i) the present fair saleable value of the
      assets of the Company and its Subsidiaries is less than the amount required
      to
      pay the total Indebtedness (as defined in Section 3(r)) of the Company and
      its
      Subsidiaries, (ii) the Company or any of its Subsidiaries is unable to pay
      its
      debts and liabilities, subordinated, contingent or otherwise, as such debts
      and
      liabilities become absolute and matured, (iii) the Company or any of its
      Subsidiaries intends to incur or believes that it will incur debts that would
      be
      beyond its ability to pay as such debts mature or (iv) the Company and its
      Subsidiaries, taken as a whole, has unreasonably small capital with which to
      conduct the business in which it is engaged as such business is now conducted
      and is proposed to be conducted.

     

    m.  No
      Undisclosed Events, Liabilities, Developments or
      Circumstances.  No event, liability, development or circumstance
      has occurred or exists with respect to the Company, 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
      on a
      registration statement on Form S-1 filed with the SEC relating to an issuance
      and sale by the Company of its Common Stock and which has not been publicly
      announced.

     

    
      
         

      

      
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    n.  Conduct
      of Business; Regulatory Permits.  Neither the Company nor any of
      its Subsidiaries is in violation of any term of or in default under its
      Certificate of Incorporation, any certificate of designations of any outstanding
      series of preferred stock of the Company or the Bylaws or their organizational
      charter or bylaws, respectively.  Neither the Company nor any of its
      Subsidiaries is in violation of any judgment, decree or order or any statute,
      ordinance, rule or regulation applicable to the Company or its Subsidiaries,
      and
      neither the Company nor any of its Subsidiaries will conduct its business in
      violation of any of the foregoing, except for possible violations which could
      not, individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect.  Without limiting the generality of the foregoing, the
      Company is not in violation of any of the rules, regulations or requirements
      of
      the Principal Market and has no knowledge of any facts or circumstances that
      would reasonably lead to delisting or suspension of the Common Stock by the
      Principal Market in the foreseeable future.  Since September 5, 2006,
      (i) the Common Stock has been designated for quotation on the Principal Market,
      (ii) trading in the Common Stock has not been suspended by the SEC or the
      Principal Market and (iii) the Company has received no communication, written
      or
      oral, from the SEC or the Principal Market regarding the suspension or delisting
      of the Common Stock from the Principal Market.  The Company and its
      Subsidiaries possess all certificates, authorizations and permits issued by
      the
      appropriate regulatory authorities necessary to conduct their respective
      businesses, except where the failure to possess such certificates,
      authorizations or permits would not have, individually or in the aggregate,
      a
      Material Adverse Effect, and neither the Company nor any such Subsidiary has
      received any notice of proceedings relating to the revocation or modification
      of
      any such certificate, authorization or permit.

     

    o.  Foreign
      Corrupt Practices.  Neither the Company nor any of its
      Subsidiaries nor any director, officer, agent, employee or other Person 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 or any of its Subsidiaries (i) used
      any corporate funds for any unlawful contribution, gift, entertainment or other
      unlawful expenses relating to political activity; (ii) made any direct or
      indirect unlawful payment to any foreign or domestic government official or
      employee from corporate funds; (iii) violated or is in violation of any
      provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or
      (iv)
      made any unlawful bribe, rebate, payoff, influence payment, kickback or other
      unlawful payment to any foreign or domestic government official or
      employee.

     

    p.  Sarbanes-Oxley
      Act.  The Company is in compliance with any and all applicable
      requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the
      date
      hereof, and any and all applicable rules and regulations promulgated by the
      SEC
      thereunder that are effective as of the date hereof.

     

    q.    Transactions
      With Affiliates.  Other than the grant of restricted stock or
      stock options disclosed on Schedule 3(r), none of the officers, directors
      or employees of the Company or any of its Subsidiaries is presently a party
      to
      any transaction with the Company or any of its Subsidiaries (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 knowledge of the Company or OpCo, 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.

     

    r.  Equity
      Capitalization.  As of the date hereof, the authorized capital
      stock of the Company consists of (i) 75,000,000 shares of common stock, $.001
      par value, of which as of the date hereof, 21,000,000 are issued and
      outstanding, 1,170,000 shares of which are reserved for issuance pursuant to
      the
      Company's stock option and purchase plans and no other shares are reserved
      for
      issuance pursuant to securities (other than the Common Shares and the Warrants)
      exercisable or exchangeable for, or convertible into, shares of Common
      Stock.  All of such outstanding shares have been, or upon issuance
      will be, validly issued and are fully paid and nonassessable.  Except
      as disclosed in Schedule 3(r): (i) none of the Company's capital stock is
      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 capital stock of the Company or any of
      its
      Subsidiaries, or contracts, commitments, understandings or arrangements by
      which
      the Company or any of its Subsidiaries is or may become bound to issue
      additional capital stock of the Company or any of its Subsidiaries 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 capital stock of the Company or any of its
      Subsidiaries; (iii) there are no outstanding debt securities, notes, credit
      agreements, credit facilities or other agreements, documents or instruments
      evidencing Indebtedness of the Company or any of its Subsidiaries or by which
      the Company or any of its Subsidiaries is or may become bound; (iv) there are
      no
      financing statements securing obligations in any material amounts, either singly
      or in the aggregate, filed in connection with the Company or any of its
      Subsidiaries; (v) there are no agreements or arrangements under which the
      Company or any of its Subsidiaries is obligated to register the sale of any
      of
      their securities under the 1933 Act (except pursuant to the Registration Rights
      Agreement); (vi) there are no outstanding securities or instruments of the
      Company or any of its Subsidiaries which contain any redemption or similar
      provisions, and there are no contracts, commitments, understandings or
      arrangements by which the Company or any of its Subsidiaries is or may become
      bound to redeem a security of the Company or any of its Subsidiaries; (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 and its
      Subsidiaries have no liabilities or obligations required to be disclosed in
      the
      SEC Documents but not so disclosed in the SEC Documents, other than those
      incurred in the ordinary course of the Company's or its Subsidiaries' respective
      businesses and which, individually or in the aggregate, do not or would not
      have
      a Material Adverse Effect.  The Company has furnished to the Buyers
      true, correct and complete copies of the Company's Certificate of Incorporation,
      as amended and as in effect on the date hereof (the "Certificate of
      Incorporation"), and the Company's Bylaws, as amended and as in effect
      on the date hereof (the "Bylaws"), and the terms of all
      securities convertible into, or exercisable or exchangeable for, shares of
      Common Stock and the material rights of the holders thereof in respect
      thereto.

     

    
      
         

      

      
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    s.  Share
      Exchange.  OpCo has the requisite power and authority to enter
      into and perform its obligations under the Share Exchange
      Agreement.  The execution and delivery of the Share Exchange Agreement
      and the consummation by OpCo of the transactions contemplated by the Share
      Exchange Agreement has been duly authorized by OpCo's Board of Directors and
      no
      further filing, consent, or authorization is required by OpCo, its Board of
      Directors or its stockholders.  The Share Exchange Agreement has been
      duly executed and delivered by OpCo, and constitute the legal, valid and binding
      obligations of OpCo, enforceable against OpCo in accordance with their
      respective terms, except as such enforceability may be limited by general
      principles of equity or applicable bankruptcy, insolvency, reorganization,
      moratorium, fraudulent conveyance, liquidation or similar laws relating to,
      or
      affecting generally, the enforcement of applicable creditors' rights and
      remedies.  Immediately after giving effect to the Share Exchange, (i)
      all of the OpCo's issued and outstanding capital stock shall be owned by the
      Company and (ii) all other securities issued by OpCo shall have been exchanged
      for shares of the Company.

     

    t.  Indebtedness
      and Other Contracts.  Except as disclosed in Schedule 3(s),
      neither the Company nor any of its Subsidiaries (i) has any outstanding
      Indebtedness (as defined below), (ii) is a party to any contract, agreement
      or
      instrument, the violation of which, or default under which, by the other
      party(ies) to such contract, agreement or instrument could reasonably be
      expected to result in a Material Adverse Effect, (iii) is in violation of any
      term of or in default under any contract, agreement or instrument relating
      to
      any Indebtedness, except where such violations and defaults would not result,
      individually or in the aggregate, in a Material Adverse Effect, or (iv) is
      a
      party to any contract, agreement or instrument relating to any Indebtedness,
      the
      performance of which, in the judgment of the Company's officers, has or is
      expected to have a Material Adverse Effect.  Schedule 3(s)
      provides a detailed description of the material terms of any such outstanding
      Indebtedness.  For purposes of this Agreement:  (x)
      "Indebtedness" of any Person means, without duplication (A) all
      indebtedness for borrowed money, (B) all obligations issued, undertaken or
      assumed as the deferred purchase price of property or services, including
      (without limitation) "capital leases" in accordance with generally accepted
      accounting principles (other than trade payables entered into in the ordinary
      course of business), (C) all reimbursement or payment obligations with respect
      to letters of credit, surety bonds and other similar instruments, (D) all
      obligations evidenced by notes, bonds, debentures or similar instruments,
      including obligations so evidenced incurred in connection with the acquisition
      of property, assets or businesses, (E) all indebtedness created or arising
      under
      any conditional sale or other title retention agreement, or incurred as
      financing, in either case with respect to any property or assets acquired with
      the proceeds of such indebtedness (even though the rights and remedies of the
      seller or bank under such agreement in the event of default are limited to
      repossession or sale of such property), (F) all monetary obligations under
      any
      leasing or similar arrangement which, in connection with generally accepted
      accounting principles, consistently applied for the periods covered thereby,
      is
      classified as a capital lease, (G) all indebtedness referred to in clauses
      (A)
      through (F) above secured by (or for which the holder of such Indebtedness
      has
      an existing right, contingent or otherwise, to be secured by) any mortgage,
      lien, pledge, charge, security interest or other encumbrance upon or in any
      property or assets (including accounts and contract rights) owned by any Person,
      even though the Person which owns such assets or property has not assumed or
      become liable for the payment of such indebtedness, and (H) all Contingent
      Obligations in respect of indebtedness or obligations of others of the kinds
      referred to in clauses (A) through (G) above; (y) "Contingent
      Obligation" means, as to any Person, any direct or indirect liability,
      contingent or otherwise, of that Person with respect to any indebtedness, lease,
      dividend or other obligation of another Person if the primary purpose or intent
      of the Person incurring such liability, or the primary effect thereof, is to
      provide assurance to the obligee of such liability that such liability will
      be
      paid or discharged, or that any agreements relating thereto will be complied
      with, or that the holders of such liability will be protected (in whole or
      in
      part) against loss with respect thereto; and (z) "Person" means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization and a government or any
      department or agency thereof.

     

    u.  Absence
      of Litigation.  .  Except as set forth in Schedule
      3(t), there is no action, suit, proceeding, inquiry or investigation before
      or by the Principal Market, any court, public board, government agency,
      self-regulatory organization or body pending or, to the knowledge of the Company
      or OpCo, threatened against or affecting the Company or any of its Subsidiaries,
      the Common Stock or any of the Company's or its Subsidiaries' officers or
      directors.

     

    v.  Insurance.  The
      Company and each of its Subsidiaries are insured by insurers of recognized
      financial responsibility against such losses and risks and in such amounts
      as
      management of the Company believes to be prudent and customary in the businesses
      in which the Company and its Subsidiaries are engaged.  Neither the
      Company nor any such Subsidiary has been refused any insurance coverage sought
      or applied for and neither the Company nor any such Subsidiary has any reason
      to
      believe that it will not be able to renew its existing insurance coverage as
      and
      when such coverage expires or to obtain similar coverage from similar insurers
      as may be necessary to continue its business at a cost that would not have
      a
      Material Adverse Effect.

     

    w.  Employee
      Relations.

     

    i.  Neither
      the Company nor any of its Subsidiaries is a party to any collective bargaining
      agreement or employs any member of a union.  The Company and its
      Subsidiaries believe that their relations with their employees are
      good.  No executive officer of the Company or any of its Subsidiaries
      (as defined in Rule 501(f) of the 1933 Act) has notified the Company that such
      officer intends to leave the Company or otherwise terminate such officer's
      employment with the Company.  No executive officer of the Company or
      any of its Subsidiaries, is, or is now expected to be, in violation of any
      material term of any employment contract, confidentiality, disclosure or
      proprietary information agreement, non-competition agreement, or any other
      contract or agreement or any restrictive covenant, and the continued employment
      of each such executive officer does not subject the Company or any of its
      Subsidiaries to any liability with respect to any of the foregoing
      matters.

     

    
      
         

      

      
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    ii.  The
      Company and its Subsidiaries are in compliance with all federal, state, local
      and foreign laws and regulations respecting labor, employment and employment
      practices and benefits, terms and conditions of employment and wages and hours,
      except where failure to be in compliance would not, either individually or
      in
      the aggregate, reasonably be expected to result in a Material Adverse
      Effect.

     

    x.  Title.  The
      Company and its Subsidiaries have good and marketable title in fee simple to
      all
      real property and good and marketable title to all personal property owned
      by
      them which is material to the business of the Company and its Subsidiaries,
      in
      each case free and clear of all liens, encumbrances and defects or 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.

     

    y.  Intellectual
      Property Rights.  The Company and its Subsidiaries own or possess
      adequate rights or licenses to use all trademarks, service marks, and all
      applications and registrations therefor, trade names, patents, patent rights,
      copyrights, original works of authorship, inventions, licenses, approvals,
      governmental authorizations, trade secrets and other intellectual property
      rights ("Intellectual Property Rights") necessary to conduct
      their respective businesses as now conducted.  None of the Company's
      Intellectual Property Rights have expired or terminated, or are expected to
      expire or terminate, within three years from the date of this
      Agreement.  The Company does not have any knowledge of any
      infringement by the Company or its Subsidiaries of Intellectual Property Rights
      of others.  There is no claim, action or proceeding being made or
      brought, or to the knowledge of the Company or OpCo, being threatened, against
      the Company or its Subsidiaries regarding its Intellectual Property
      Rights.  The Company is unaware of any facts or circumstances which
      might give rise to any of the foregoing infringements or claims, actions or
      proceedings.  The Company and its Subsidiaries have taken reasonable
      security measures to protect the secrecy, confidentiality and value of all
      of
      their Intellectual Property Rights.

     

    z.  Environmental
      Laws.  The Company and its Subsidiaries (i) are in compliance with
      any and all applicable Environmental Laws (as hereinafter defined), (ii) have
      received all permits, licenses or other approvals required of them under
      applicable Environmental Laws to conduct their respective businesses and (iii)
      are in compliance with all terms and conditions of any such permit, license
      or
      approval where, in each of the foregoing clauses (i), (ii) and (iii), the
      failure to so comply could be reasonably expected to have, individually or
      in
      the aggregate, a Material Adverse Effect.  The term
      "Environmental Laws" means all federal, state, local or foreign
      laws relating to pollution or protection of human health or the environment
      (including, without limitation, ambient air, surface water, groundwater, land
      surface or subsurface strata), including, without limitation, laws relating
      to
      emissions, discharges, releases or threatened releases of chemicals, pollutants,
      contaminants, or toxic or hazardous substances or wastes (collectively,
      "Hazardous Materials") into the
      environment, or otherwise relating to the manufacture, processing, distribution,
      use, treatment, storage, disposal, transport or handling of Hazardous Materials,
      as well as all authorizations, codes, decrees, demands or demand letters,
      injunctions, judgments, licenses, notices or notice letters, orders, permits,
      plans or regulations issued, entered, promulgated or approved
      thereunder.

     

    aa.  Subsidiary
      Rights.  The Company or one of its Subsidiaries has the
      unrestricted right to vote, and (subject to limitations imposed by applicable
      law) to receive dividends and distributions on, all capital securities of its
      Subsidiaries as owned by the Company or each Subsidiary.

     

    bb.  Tax
      Status.  The Company and each of its Subsidiaries (i) has made or
      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 and (iii) has set
      aside
      on its books provision reasonably adequate for the payment of all taxes for
      periods subsequent to the periods to which such returns, reports or declarations
      apply.  There are no unpaid taxes in any material amount claimed to be
      due by the taxing authority of any jurisdiction, and the officers of the Company
      know of no basis for any such claim.

     

    cc.  Internal
      Accounting and Disclosure Controls.  The Company and each of its
      Subsidiaries maintain a system of internal accounting controls sufficient to
      provide reasonable assurance that (i) transactions are executed in accordance
      with management's general or specific authorizations, (ii) transactions are
      recorded as necessary to permit preparation of financial statements in
      conformity with generally accepted accounting principles and to maintain asset
      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
      difference.  The Company maintains disclosure controls and procedures
      (as such term is defined in Rule 13a-14 under the 1934 Act) that are effective
      in ensuring that information required to be disclosed by the Company in the
      reports that it files or submits under the 1934 Act is recorded, processed,
      summarized and reported, within the time periods specified in the rules and
      forms of the SEC, including, without limitation, controls and procedures
      designed in to ensure that information required to be disclosed by the Company
      in the reports that it files or submits under the 1934 Act is accumulated and
      communicated to the Company's management, including its principal executive
      officer or officers and its principal financial officer or officers, as
      appropriate, to allow timely decisions regarding required
      disclosure.  During the twelve months prior to the date hereof neither
      the Company nor any of its Subsidiaries have received any notice or
      correspondence from any accountant relating to any potential material weakness
      in any part of the system of internal accounting controls of the Company or
      any
      of its Subsidiaries.

     

    
      
         

      

      
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    dd.  Transfer
      Taxes.  On the Closing Date, all stock transfer or other taxes
      (other than income or similar taxes) which are required to be paid in connection
      with the sale and transfer of the Securities to be sold to each Buyer hereunder
      will be, or will have been, fully paid or provided for by the Company, and
      all
      laws imposing such taxes will be or will have been complied with.

     

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

     

    ff.  Off
      Balance Sheet Arrangements.  There is no transaction, arrangement,
      or other relationship between the Company and an unconsolidated or other off
      balance sheet entity that is required to be disclosed by the Company in its
      1934
      Act filings and is not so disclosed or that otherwise would be reasonably likely
      to have a Material Adverse Effect.

     

    gg.  Investment
      Company Status.  The Company is not, and upon consummation of the
      sale of the Securities will not be, an "investment company," a company
      controlled by an "investment company" or an "affiliated person" of, or
      "promoter" or "principal underwriter" for, an "investment company" as such
      terms
      are defined in the Investment Company Act of 1940, as amended.

     

    hh.  Bank
      Holding Company Act.  Neither the Company nor any of its
      affiliates is subject to the Bank Holding Company Act of 1956, as amended (the
      "BHCA") and to regulation by the Board of Governors of the
      Federal Reserve System (the "Federal
      Reserve").  Neither the Company nor any of its affiliates
      owns or controls, directly or indirectly, five percent (5%) or more of the
      outstanding shares of any class of voting securities or twenty-five percent
      or
      more of the total equity of a bank or any entity that is subject to the BHCA
      and
      to regulation by the Federal Reserve.  Neither the Company affiliates
      exercises a controlling influence over the management or policies of a bank
      or
      any entity that is subject to the BHCA and to regulation by the Federal
      Reserve.

     

    ii.  Acknowledgement
      Regarding Buyers' Trading Activity.  Anything in this Agreement or
      elsewhere herein to the contrary notwithstanding, but subject to compliance
      by
      the Buyers with applicable law, it is understood and acknowledged by the Company
      (i) that none of the Buyers have been asked by the Company or its Subsidiaries
      to agree, nor has any Buyer agreed with the Company or its Subsidiaries, 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 Buyer, including, without limitation, short sales
      or
      "derivative" transactions, before or after the closing of this or future private
      placement transactions, may negatively impact the market price of the Company's
      publicly-traded securities; (iii) that any Buyer, and counter parties in
      "derivative" transactions to which any such Buyer is a party, directly or
      indirectly, presently may have a "short" position in the Common Stock, and
      (iv)
      that each Buyer 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 Buyers may
      engage in hedging and/or trading activities at various times during the period
      that the Securities are outstanding, including, without limitation, during
      the
      periods that the value of the Warrant Shares deliverable with respect to
      Securities are being determined and (b) such hedging and/or trading activities
      (if any) could reduce the value of the existing stockholders' equity interests
      in the Company at and after the time that the hedging and/or trading activities
      are being conducted.

     

    jj.  Share
      Exchange Agreement.  The Share Exchange Agreement has not been
      amended in any way and no provisions thereof have been waived.

     

    kk.  Disclosure.  The
      Company confirms that neither it nor any other Person acting on its behalf
      has
      provided any of the Buyers or their agents or counsel with any information
      that
      constitutes or could reasonably be expected to constitute material, nonpublic
      information.  The Company understands and confirms that each of the
      Buyers will rely on the foregoing representations in effecting transactions
      in
      securities of the Company.  All disclosure provided to the Buyers
      regarding the Company or any of its Subsidiaries, their business and the
      transactions contemplated hereby, including the Schedules to this Agreement,
      furnished by or on behalf of the Company is true and correct and does not
      contain any untrue statement of a material fact or omit to state any material
      fact necessary in order to make the statements made therein, in the light of
      the
      circumstances under which they were made, not misleading.  Each press
      release issued by the Company or any of its Subsidiaries during the twelve
      (12)
      months preceding the date of this Agreement did not at the time of release
      contain any untrue statement of a material fact or omit to state a material
      fact
      required to be stated therein or necessary in order to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading.  No event or circumstance has occurred or information
      exists with respect to the Company or any of its Subsidiaries or its or their
      business, properties, 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.

     

    
      
         

      

      
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    D.  COVENANTS.

     

    a.  Best
      Efforts.  Each party shall use its best efforts timely to satisfy
      each of the conditions to be satisfied by it as provided in Sections 6 and
      7 of
      this Agreement.

     

    Form
      D and Blue
      Sky.  The Company agrees to file a Form D with respect to the
      Securities as required under Regulation D and to provide a copy thereof to
      each
      Buyer promptly after such filing.  The Company shall, on or before the
      Closing Date, 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 Buyers 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 Buyers 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.

     

    b.  Reporting
      Status.  Until the date on which the Investors (as defined in the
      Registration Rights Agreement) shall have sold all the Common Shares and Warrant
      Shares and none of the Warrants is outstanding, (the
      "Reporting Period"), the Company shall timely file all reports
      required to be filed with the SEC pursuant to the 1934 Act, and the Company
      shall not terminate its status as an issuer required to file reports under
      the
      1934 Act even if the 1934 Act or the rules and regulations thereunder would
      permit such termination.

     

    c.  Use
      of
      Proceeds.  The Company will use the proceeds from the sale of the
      Securities as set forth on Schedule 4(d), and not for any other
      purposes.

     

    d.  Financial
      Information.  The Company agrees to send the following to each
      Investor (as defined in the Registration Rights Agreement) during the Reporting
      Period (i) unless the following are filed with the SEC through EDGAR and are
      available to the public through the EDGAR system, within one (1) Business Day
      after the filing thereof with the SEC, a copy of its Annual Reports and
      Quarterly Reports on Form 10-K, 10-KSB, 10-Q or 10-QSB, any interim reports
      or
      any consolidated balance sheets, income statements, stockholders' equity
      statements and/or cash flow statements for any period other than annual, any
      Current Reports on Form 8-K and any registration statements (other than on
      Form
      S-8) or amendments filed pursuant to the 1933 Act, (ii) on the same day as
      the
      release thereof, facsimile or e-mailed copies of all press releases issued
      by
      the Company or any of its Subsidiaries, and (iii) copies of any notices and
      other information made available or given to the stockholders of the Company
      generally, contemporaneously with the making available or giving thereof to
      the
      stockholders.  As used herein, "Business Day" means
      any day other than Saturday, Sunday or other day on which commercial banks
      in
      The City of New York are authorized or required by law to remain
      closed.

     

    e.  Listing.  The
      Company shall promptly secure the listing of all of the Registrable Securities
      (as defined in the Registration Rights Agreement) upon each national securities
      exchange and automated quotation system, if any, upon which the Common Stock
      is
      then listed (subject to official notice of issuance) and shall maintain, in
      accordance with the Warrants, such listing of all Registrable Securities from
      time to time issuable under the terms of the Transaction
      Documents.  The Company shall maintain the Common Stocks'
      authorization for quotation on the Principal Market.  Neither the
      Company nor any of its Subsidiaries shall take any action which would be
      reasonably expected to result in the delisting or suspension of the Common
      Stock
      on the Principal Market.  The Company shall pay all fees and expenses
      in connection with satisfying its obligations under this Section
      4(f).

     

    f.  Fees.  The
      Company shall reimburse Investcorp Interlachen Multi-Strategy Master Fund (a
      Buyer) or its designee(s) for all reasonable costs and expenses (in addition
      to
      any amounts previously paid) incurred in connection with the transactions
      contemplated by the Transaction Documents (including all reasonable and
      documented legal fees and disbursements in connection therewith, documentation
      and implementation of the transactions contemplated by the Transaction Documents
      and due diligence in connection therewith), which amount shall not exceed
      $50,000 in the aggregate and may be, at the sole option of Investcorp
      Interlachen Multi-Strategy Master Fund, withheld by such Buyer from its Purchase
      Price at the Closing.  The Company shall be responsible for the
      payment of any placement agent's fees, financial advisory fees, or broker's
      commissions (other than for Persons engaged by any Buyer) relating to or arising
      out of the transactions contemplated hereby, including, without limitation,
      any
      fees or commissions payable to the Agents.  The Company shall pay and
      hold each Buyer harmless against, any liability, loss or expense (including,
      without limitation, reasonable attorney's fees and out-of-pocket expenses)
      arising in connection with any claim relating to any such
      payment.  Except as otherwise set forth in the Transaction Documents,
      each party to this Agreement shall bear its own expenses in connection with
      the
      sale of the Securities to the Buyers.

     

    
      
         

      

      
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    g.  Pledge
      of Securities.  The Company acknowledges and agrees that the
      Securities may be pledged by an Investor (as defined in the Registration Rights
      Agreement) in connection with a bona fide margin agreement or other loan or
      financing arrangement that is secured by the Securities.  The pledge
      of Securities shall not be deemed to be a transfer, sale or assignment of the
      Securities hereunder, and no Investor effecting a pledge of Securities shall
      be
      required to provide the Company with any notice thereof or otherwise make any
      delivery to the Company pursuant to this Agreement or any other Transaction
      Document, including, without limitation, Section 2(f) hereof; provided that
      an
      Investor and its pledgee shall be required to comply with the provisions of
      Section 2(f) hereof in order to effect a sale, transfer or assignment of
      Securities to such pledgee.  The Company hereby agrees to execute and
      deliver such documentation as a pledgee of the Securities may reasonably request
      in connection with a pledge of the Securities to such pledgee by an
      Investor.

     

    h.  Disclosure
      of Transactions and Other Material Information.  On or before 8:30
      a.m., New York City time, on the first Business Day following the Closing Date,
      the Company shall issue a press release and file a Current Report on Form 8-K
      within four Business Days following the Closing Date describing the terms of
      the
      transactions contemplated by the Transaction Documents and the Exchange
      Agreement in the form required by the 1934 Act and attaching the material
      Transaction Documents (including, without limitation, this Agreement, the form
      of Warrant, the form of Escrow Agreement and the form of the Registration Rights
      Agreement and such financial statements and other information as required in
      connection with the Exchange Agreement) as exhibits to such filing (including
      all attachments, the "8-K Filing").  From and after
      the filing of the 8-K Filing with the SEC, no Buyer shall be in possession
      of
      any material, nonpublic information received from the Company, any of its
      Subsidiaries or any of their respective officers, directors, employees or agents
      that is not disclosed in the 8-K Filing.  The Company shall not, and
      shall cause each of its Subsidiaries and its and each of their respective
      officers, directors, employees and agents, not to, provide any Buyer with any
      material, nonpublic information regarding the Company or any of its Subsidiaries
      from and after the filing of the 8-K Filing with the SEC without the express
      written consent of such Buyer.  If a Buyer has, or believes it has,
      received any such material, nonpublic information regarding the Company or
      any
      of its Subsidiaries, it shall provide the Company with written notice
      thereof.  The Company shall, within five (5) Trading Days (as defined
      in the Warrants) of receipt of such notice, make public disclosure of such
      material, nonpublic information.  In the event of a breach of the
      foregoing covenant by the Company, any of its Subsidiaries, or any of its or
      their respective officers, directors, employees and agents, in addition to
      any
      other remedy provided herein or in the Transaction Documents, a Buyer shall
      have
      the right to make a public disclosure, in the form of a press release, public
      advertisement or otherwise, of such material, nonpublic information without
      the
      prior approval by the Company, its Subsidiaries, or any of its or their
      respective officers, directors, employees or agents.  No Buyer shall
      have any liability to the Company, its Subsidiaries, or any of its or their
      respective officers, directors, employees, stockholders or agents for any such
      disclosure.  Subject to the foregoing, neither the Company, its
      Subsidiaries nor any Buyer shall issue any press releases or any other public
      statements with respect to the transactions contemplated hereby; provided,
      however, that the Company shall be entitled, without the prior approval of
      any
      Buyer, to make any press release or other public disclosure with respect to
      such
      transactions (i) in substantial conformity with the 8-K Filing and
      contemporaneously therewith and (ii) as is required by applicable law and
      regulations (provided that in the case of clause (i) each Buyer shall be
      consulted by the Company in connection with any such press release or other
      public disclosure prior to its release).  Without the prior written
      consent of any applicable Buyer, neither the Company nor any of its Subsidiaries
      or affiliates shall disclose the name of such Buyer in any filing, announcement,
      release or otherwise, unless required by law.

     

    i.  Variable
      Securities; Dilutive Issuances.  So long as any Buyer beneficially
      owns any Warrants, the Company will not issue any other securities that would
      cause a breach or default under the Warrants.  For so long as any
      Warrants remain outstanding, the Company shall not, in any manner, issue or
      sell
      any rights, warrants or options to subscribe for or purchase Common Stock or
      directly or indirectly convertible into or exchangeable or exercisable for
      Common Stock at a price which varies or may vary with the market price of the
      Common Stock, including by way of one or more reset(s) to any fixed price unless
      the conversion, exchange or exercise price of any such security cannot be less
      than the then applicable Exercise Price (as defined in the Warrants) with
      respect to the Common Stock into which any Warrant is
      exercisable.  For so long as any Warrants remain outstanding, the
      Company shall not, in any manner, enter into or affect any Dilutive Issuances
      (as defined in the Warrants) if the effect of such Dilutive Issuance is to
      cause
      the Company to be required to issue upon exercise of any Warrant any shares
      of
      Common Stock in excess of that number of shares of Common Stock which the
      Company may issue upon exercise of the Warrants without breaching the Company's
      obligations under the rules or regulations of the Principal Market.

     

    j.  Corporate
      Existence.  So long as any Buyer beneficially owns any Securities,
      the Company shall not to be party to any Fundamental Transaction (as defined
      in
      the Warrants) unless the Company is in compliance with the applicable provisions
      governing Fundamental Transactions set forth in the Warrants.

     

    k.  Reservation
      of Shares.  The Company shall take all action necessary to at all
      times have authorized, and reserved for the purpose of issuance, no less than
      (i) 100% of the number of Common Shares issuable hereunder and (ii) 120% of
      the
      maximum number of shares of Common Stock issuable upon exercise of the Warrants
      issued at the Closing (without taking into account any limitations on the
      exercise of the Warrants set forth in the Warrants).

     

    l.  Conduct
      of Business.  The business of the Company and its Subsidiaries
      shall not be conducted in violation of any law, ordinance or regulation of
      any
      governmental entity, except where such violations would not result, either
      individually or in the aggregate, in a Material Adverse Effect.

     

    
      
         

      

      
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    m.  Additional
      Issuances of Securities.

     

    i.  For
      purposes of this Section 4(n), the following definitions shall
      apply.

     

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

     

    b.  "Options"
      means any rights, warrants or options to subscribe for or purchase shares of
      Common Stock or Convertible Securities.

     

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

     

    ii.  From
      the
      date hereof until the date that is the earlier of (i) one hundred and eighty
      (180) Trading Days (as defined in the Warrants) following the Initial Effective
      Date (as defined in the Registration Rights Agreement) and (ii) thirty (30)
      months following the Closing Date (the "Trigger Date"), the
      Company will not, directly or indirectly, file any registration statement (other
      than on Form S-8) with the SEC other than the Registration Statement (as defined
      in the Registration Rights Agreement).  From the date hereof until the
      Trigger Date, the Company will not, directly or indirectly, offer, sell, grant
      any option to purchase, or otherwise dispose of (or announce any offer, sale,
      grant or any option to purchase or other disposition of) any of its or its
      Subsidiaries' equity or equity equivalent securities, including without
      limitation any debt, preferred stock or other instrument or security that is,
      at
      any time during its life and under any circumstances, convertible into or
      exchangeable or exercisable for shares of Common Stock or Common Stock
      Equivalents (any such offer, sale, grant, disposition or announcement being
      referred to as a "Subsequent Placement").

     

    iii.  From
      the
      Trigger Date until the second anniversary of the Closing Date, the Company
      will
      not, directly or indirectly, effect any Subsequent Placement unless the Company
      shall have first complied with this Section 4(n)(iii).

     

    a.  The
      Company shall deliver to each Buyer an irrevocable  written notice
      (the "Offer Notice") of any proposed or intended issuance
      or sale or exchange (the "Offer") of the securities being
      offered (the "Offered Securities") in a Subsequent Placement,
      which Offer Notice shall (w) identify and describe the Offered Securities,
      (x) describe the price and other terms upon which they are to be issued,
      sold or exchanged, and the number or amount of the Offered Securities to be
      issued, sold or exchanged, (y) identify the persons or entities (if known)
      to which or with which the Offered Securities are to be offered, issued, sold
      or
      exchanged and (z) offer to issue and sell to or exchange with such Buyers the
      Offered Securities, allocated among such Buyers (a) based on such Buyer's pro
      rata portion of the number of Common Shares purchased hereunder (the
      "Basic Amount"), and (b) with respect to each Buyer that elects
      to purchase its Basic Amount, any additional portion of the Offered Securities
      attributable to the Basic Amounts of other Buyers as such Buyer shall indicate
      it will purchase or acquire should the other Buyers subscribe for less than
      their Basic Amounts (the "Undersubscription Amount"), which
      process shall be repeated until the Buyers shall have an opportunity to
      subscribe for any remaining Undersubscription Amount.

     

    b.  To
      accept
      an Offer, in whole or in part, such Buyer must deliver a written notice to
      the
      Company prior to the end of the tenth (10th) Business
      Day
      after such Buyer's receipt of the Offer Notice (the "Offer
      Period"), setting forth the portion of such Buyer's Basic Amount that
      such Buyer elects to purchase and, if such Buyer shall elect to purchase all
      of
      its Basic Amount, the Undersubscription Amount, if any, that such Buyer elects
      to purchase (in either case, the "Notice of
      Acceptance").  If the Basic Amounts subscribed for by all
      Buyers are less than the total of all of the Basic Amounts, then each Buyer
      who
      has set forth an Undersubscription Amount in its Notice of Acceptance shall
      be
      entitled to purchase, in addition to the Basic Amounts subscribed for, the
      Undersubscription Amount it has subscribed for; provided, however,
      that if the Undersubscription Amounts subscribed for exceed the difference
      between the total of all the Basic Amounts and the Basic Amounts subscribed
      for
      (the "Available Undersubscription Amount"), each Buyer who has
      subscribed for any Undersubscription Amount shall be entitled to purchase only
      that portion of the Available Undersubscription Amount as the Basic Amount
      of
      such Buyer bears to the total Basic Amounts of all Buyers that have subscribed
      for Undersubscription Amounts, subject to rounding by the Company to the extent
      its deems reasonably necessary.

     

    
      
         

      

      
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    c.  The
      Company shall have fifteen (15) Business Days from the expiration of the Offer
      Period above to offer, issue, sell or exchange all or any part of such Offered
      Securities as to which a Notice of Acceptance has not been given by the Buyers
      (the "Refused Securities"), but only to the offerees described
      in the Offer Notice (if so described therein) and only upon terms and conditions
      (including, without limitation, unit prices and interest rates) that are not
      more favorable to the acquiring person or persons or less favorable to the
      Company than those set forth in the Offer Notice and (ii) to publicly announce
      (a) the execution of such Subsequent Placement Agreement, and (b) either (x)
      the
      consummation of the transactions contemplated by such Subsequent Placement
      Agreement or (y) the termination of such Subsequent Placement Agreement, which
      shall be filed with the SEC on a Current Report on Form 8-K with such Subsequent
      Placement Agreement and any documents contemplated therein filed as exhibits
      thereto.

     

    d.  In
      the
      event the Company shall propose to sell less than all the Refused Securities
      (any such sale to be in the manner and on the terms specified in Section
      4(n)(iii)(3) above), then each Buyer may, at its sole option and in its sole
      discretion, reduce the number or amount of the Offered Securities specified
      in
      its Notice of Acceptance to an amount that shall be not less than the number
      or
      amount of the Offered Securities that such Buyer elected to purchase pursuant
      to
      Section 4(n)(iii)(2) above multiplied by a fraction, (i) the numerator of which
      shall be the number or amount of Offered Securities the Company actually
      proposes to issue, sell or exchange (including Offered Securities to be issued
      or sold to Buyers pursuant to Section 4(n)(iii)(3) above prior to such
      reduction) and (ii) the denominator of which shall be the original amount of
      the
      Offered Securities.  In the event that any Buyer so elects to reduce
      the number or amount of Offered Securities specified in its Notice of
      Acceptance, the Company may not issue, sell or exchange more than the reduced
      number or amount of the Offered Securities unless and until such securities
      have
      again been offered to the Buyers in accordance with Section 4(n)(iii)(1)
      above.

     

    e.  Upon
      the
      closing of the issuance, sale or exchange of all or less than all of the Refused
      Securities, the Buyers shall acquire from the Company, and the Company shall
      issue to the Buyers, the number or amount of Offered Securities specified in
      the
      Notices of Acceptance, as reduced pursuant to Section 4(n)(iii)(3) above if
      the
      Buyers have so elected, upon the terms and conditions specified in the
      Offer.  Notwithstanding anything to the contrary contained in this
      Agreement, if the Company does not consummate the closing of the issuance,
      sale
      or exchange of all or less than all of the Refused Securities within fifteen
      (15) Business Days of the expiration of the Offer Period, the Company shall
      issue to the Buyers the number or amount of Offered Securities specified in
      the
      Notices of Acceptance, as reduced pursuant to Section 4(n)(iii)(4) above if
      the
      Buyers have so elected, upon the terms and conditions specified in the
      Offer.  The purchase by the Buyers of any Offered Securities is
      subject in all cases to the preparation, execution and delivery by the Company
      and the Buyers of a purchase agreement relating to such Offered Securities
      reasonably satisfactory in form and substance to the Buyers and their respective
      counsel.

     

    f.  Any
      Offered Securities not acquired by the Buyers or other persons in accordance
      with Section 4(n)(iii)(3) above may not be issued, sold or exchanged until
      they
      are again offered to the Buyers under the procedures specified in this
      Agreement.

     

    g.  The
      Company and the Buyers agree that if any Buyer elects to participate in the
      Offer, (x) neither the Subsequent Placement Agreement with respect to such
      Offer
      nor any other transaction documents related thereto (collectively, the
      "Subsequent Placement Documents") shall include any term or
      provisions whereby any Buyer shall be required to agree to any restrictions
      in
      trading as to any securities of the Company owned by such Buyer prior to such
      Subsequent Placement, and (y) any registration rights set forth in such
      Subsequent Placement Documents shall be similar in all material respects to
      the
      registration rights contained in the Registration Rights Agreement.

     

    h.  Notwithstanding
      anything to the contrary in this Section 4(n) and unless otherwise agreed to
      by
      the Buyers, the Company shall either confirm in writing to the Buyers that
      the
      transaction with respect to the Subsequent Placement has been abandoned or
      shall
      publicly disclose its intention to issue the Offered Securities, in either
      case
      in such a manner such that the Buyers will not be in possession of material
      non-public information, by the fifteen (15th) Business
      Day
      following delivery of the Offer Notice.  If by the fifteen (15th) following
      delivery of the Offer Notice no public disclosure regarding a transaction with
      respect to the Offered Securities has been made, and no notice regarding the
      abandonment of such transaction has been received by the Buyers, such
      transaction shall be deemed to have been abandoned and the Buyers shall not
      be
      deemed to be in possession of any material, non-public information with respect
      to the Company.  Should the Company decide to pursue such transaction
      with respect to the Offered Securities, the Company shall provide each Buyer
      with another Offer Notice and each Buyer will again have the right of
      participation set forth in this Section 4(n)(iii).  The Company shall
      not be permitted to deliver more than one such Offer Notice to the Buyers in
      any
      60 day period.

     

    iv.  The
      restrictions contained in subsections (ii) and (iii) of this Section 4(n) shall
      not apply in connection with (i) the issuance of any Excluded Securities (as
      defined in the Warrants) and (ii) the issuance of the warrants to purchase
      shares of Common Stock to SMH Capital at the Closing.

     

    n.  Share
      Exchange Agreement.  Neither the Company nor OpCo may amend or
      waive any provision of the Share Exchange Agreement without the consent of
      the
      Buyers holding at least a majority of the number of Registrable Securities
      issued and issuable hereunder.

     

    
      
         

      

      
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    o.  D&O
      Insurance; Corporate Governance.  As soon as practicable, but in
      no event later than 90 days after the Closing Date, the Company shall (i) obtain
      directors and officers insurance coverage for its directors and officers in
      coverage and amounts determined reasonably sufficient by the Company's Board
      of
      Directors, consistent with other similarly situated companies in the same
      industry and (ii) institute corporate governance procedures necessary to effect
      the listing of the Company's Common Stock on The NASDAQ Capital
      Market.

     

    p.  Integration.  None
      of the Company, their Subsidiaries, their affiliates and any Person acting
      on
      their behalf will take any action or steps referred to in Section 3(h) that
      would require registration of any of the Securities under the 1933 Act or cause
      the offering of the Securities to be integrated with other
      offerings.

     

    q.  Lock-Up.  The
      Company shall not amend or waive any provision of any of the Lock-Up Agreements
      (as defined below).

     

    r.  Issued
      and Outstanding Shares.  For so long as any Purchaser holds any of the
      Securities, the Company shall not reduce the number of shares of Common Stock
      issued and outstanding or otherwise alter the capitalization of the Company
      in a
      manner that would cause any of the Purchasers to own more than 4.99% of the
      issued and outstanding Common Stock.

     

    E.  REGISTER;
      TRANSFER AGENT INSTRUCTIONS.

     

    a.  Register.  The
      Company shall maintain at its principal executive offices (or such other office
      or agency of the Company as it may designate by notice to each holder of
      Securities), a register for the Units and the Common Shares and the Warrants
      that comprise the Units in which the Company shall record the name and address
      of the Person in whose name the Units, Common Shares
      and Warrants have been issued (including the name and
      address of each transferee) and the number of Warrant Shares issuable upon
      exercise of the Warrants held by such Person.  The Company shall keep
      the register open and available at all times during business hours for
      inspection of any Buyer or its legal representatives.

     

    b.  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 The
      Depository Trust Company ("DTC"), registered in the name of
      each Buyer or its respective nominee(s), for the Warrant Shares issued upon
      exercise of the Warrants in such amounts as specified from time to time by
      each
      Buyer to the Company upon exercise of the Warrants in the form of Exhibit
      D attached hereto (the "Irrevocable Transfer Agent
      Instructions").  The Company warrants that no instruction
      other than the Irrevocable Transfer Agent Instructions referred to in this
      Section 5(b), and stop transfer instructions to give effect to Section 2(g)
      hereof, will be given by the Company to its transfer agent, 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.  If a Buyer effects a sale, assignment or
      transfer of the Securities in accordance with Section 2(f), the Company shall
      permit the transfer and shall promptly instruct its transfer agent to issue
      one
      or more certificates or credit shares to the applicable balance accounts at
      DTC
      in such name and in such denominations as specified by such Buyer to effect
      such
      sale, transfer or assignment.  In the event that such sale, assignment
      or transfer involves Warrant Shares sold, assigned or transferred pursuant
      to an
      effective registration statement or pursuant to Rule 144, the transfer agent
      shall issue such Securities to the Buyer, assignee or transferee, as the case
      may be, without any restrictive legend.

     

    c.  Breach.  The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to a Buyer.  Accordingly, the Company acknowledges
      that the remedy at law for a breach of its obligations under this Section 5
      will
      be inadequate and agrees, in the event of a breach or threatened breach by
      the
      Company of the provisions of this Section 5, that a Buyer 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.

     

    
      
         

      

      
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    F.  CONDITIONS
      TO THE COMPANY'S OBLIGATION TO SELL.

     

    The
      obligation of the Company hereunder to issue and sell the Units to each Buyer
      at
      the Closing is subject to the satisfaction, at or before the Closing Date,
      of
      each of the following conditions, provided that these conditions are for the
      Company's sole benefit and may be waived by the Company at any time in its
      sole
      discretion by providing each Buyer with prior written notice
      thereof:

     

    a.  Such
      Buyer shall have executed each of the Transaction Documents to which it is
      a
      party and delivered the same to the Company.

     

    b.  Such
      Buyer and each other Buyer shall have delivered to the Escrow Agent the Purchase
      Price (less, in the case of Investcorp Interlachen Multi-Strategy Master Fund,
      the amounts withheld pursuant to Section 4(g)) of the Units being purchased
      by
      such Buyer at the Closing by wire transfer of immediately available funds
      pursuant to the wire instructions provided by the Company.

     

    c.  The
      representations and warranties of such Buyer shall be true and correct in all
      material respects (except for those representations and warranties that are
      qualified by materiality or Material Adverse Effect, which shall be true and
      correct in all respects) as of the date when made and as of the Closing Date
      as
      though made at that time (except for representations and warranties that speak
      as of a specific date), and such Buyer shall have performed, satisfied and
      complied in all material respects with the covenants, agreements and conditions
      required by this Agreement to be performed, satisfied or complied with by such
      Buyer at or prior to the Closing Date.

     

    d.  Contemporaneously
      with the Closing, the transactions contemplated in the Share Exchange Agreement
      shall have been consummated.

     

    e.  Buyers
      shall have purchased Units representing not less than $10 million and not more
      than $20 million of the aggregate Purchase Price.

     

    G.  CONDITIONS
      TO EACH BUYER'S OBLIGATION TO PURCHASE.

     

    The
      obligation of each Buyer hereunder to purchase the Units at the Closing is
      subject to the satisfaction, at or before the Closing Date, of each of the
      following conditions, provided that these conditions are for each Buyer's sole
      benefit and may be waived by such Buyer at any time in its sole discretion
      by
      providing the Company with prior written notice thereof:

     

    a.  The
      Company shall have duly executed and delivered to such Buyer (i) each of the
      Transaction Documents and (ii) the Common Shares (allocated in such number
      as
      such Buyer shall request), being purchased by such Buyer at the Closing pursuant
      to this Agreement, and (iii) the related Warrants (allocated in such amounts
      as
      such Buyer shall request) being purchased by such Buyer at the Closing pursuant
      to this Agreement.

     

    b.  Such
      Buyer shall have received the opinion of Sichenzia Ross Friedman & Ference
      LLP, the Company's outside counsel, dated as of the Closing Date, in
      substantially the form of Exhibit E attached hereto.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    c.  The
      Company shall have delivered to such Buyer a copy of the Irrevocable Transfer
      Agent Instructions, in the form of Exhibit D attached hereto, which
      instructions shall have been delivered to and acknowledged in writing by the
      Company's transfer agent.

     

    d.  The
      Company shall have delivered to such Buyer a certificate evidencing the
      formation and good standing of the Company and each of its Subsidiaries
      (including OpCo) in such entity's jurisdiction of formation issued by the
      Secretary of State (or comparable office) of such jurisdiction, as of a date
      within 10 days of the Closing Date.

     

    e.  The
      Company shall have delivered to such Buyer a certificate evidencing the
      Company's and OpCo'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 and OpCo conducts business, as of a date within 10 days of
      the
      Closing Date.

     

    f.  The
      Company shall have delivered to such Buyer a certified copy of (i) the
      Certificate of Incorporation as certified by the Secretary of State of the
      State
      of Nevada within ten (10) days of the Closing Date and (ii) the certificate
      of
      incorporation of OpCo as certified by the Secretary of State of the State of
      Texas within ten (10) days of the Closing Date.

     

    g.  The
      Company shall have delivered to such Buyer a certificate, executed by the
      Secretary of the Company and dated as of the Closing Date, as to (i) the
      resolutions consistent with Section 3(b) as adopted by the Company's Board
      of
      Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate
      of
      Incorporation and (iii) the Bylaws, each as in effect at the Closing, in the
      form attached hereto as Exhibit F.

     

    h.  The
      representations and warranties of the Company shall be true and correct in
      all
      material respects (except for those representations and warranties that are
      qualified by materiality or Material Adverse Effect, which shall be true and
      correct in all respects) as of the date when made and as of the Closing Date
      (after giving effect to the transactions contemplated hereby to occur at the
      Closing, including without limitation, the Share Exchange) as though made at
      that time (except for representations and warranties that speak as of a specific
      date, which shall be true and correct as of such specified date) and the Company
      shall have performed, satisfied and complied in all material respects with
      the
      covenants, agreements and conditions required by the Transaction Documents
      to be
      performed, satisfied or complied with by the Company at or prior to the Closing
      Date.  Such Buyer shall have received a certificate, executed by the
      Chief Executive Officer of the Company, dated as of the Closing Date, to the
      foregoing effect and as to such other matters as may be reasonably requested
      by
      such Buyer in the form attached hereto as Exhibit G.

     

    i.  The
      Company shall have delivered to such Buyer a letter from the Company's transfer
      agent certifying the number of shares of Common Stock outstanding as of a date
      within five days of the Closing Date.

     

    j.  The
      Common Stock (I) shall be designated for quotation or listed on the Principal
      Market and (II) shall not have been suspended, as of the Closing Date, by the
      SEC or the Principal Market from trading on the Principal Market nor shall
      suspension by the SEC or the Principal Market have been threatened, as of the
      Closing Date, either (A) in writing by the SEC or the Principal Market or (B)
      by
      falling below the minimum listing maintenance requirements of the Principal
      Market, if any.

     

    k.  The
      Company shall have obtained all governmental, regulatory or third party consents
      and approvals, if any, necessary for the sale of the Securities.

     

    l.  Each
      of
      Mike Neufeld, Richard Lindermanis, Bill Sudderith, David Moss and Alan Gelfand
      shall have entered into a Lock-Up Agreement in the form attached hereto as
      Exhibit H (the "Lock-Up Agreements").

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    m.  Contemporaneously
      with the Closing, the transactions contemplated by the Share Exchange Agreement
      shall have been consummated and none of the conditions to closing contained
      in
      the Share Exchange Agreement shall have been waived or amended unless the Buyers
      holding at least a majority of the number of Registrable Securities issued
      and
      issuable hereunder shall have approved such waiver or amendment.

     

    n.  Buyers
      shall have purchased Units representing not less than $10 million and not more
      than $20 million of the aggregate Purchase Price.

     

    o.  There
      shall not have developed, occurred, or come into effect or existence after
      the
      date hereof any change, or any development involving a prospective change,
      in or
      affecting the position of the Company or OpCo, financial or otherwise, that
      has
      had, or would be expected to have, a Material Adverse Effect on the Company's
      or
      OpCo’s general affairs, management, financial condition, shareholders’ equity or
      results of operations.

     

    p.  The
      financing documents securing a senior debt facility reasonably satisfactory
      to
      the Buyers and attached hereto as Exhibit I shall have been executed by
      Pegasi Energy Resources Corporation and the other parties thereto.

     

    q.  The
      Company shall have delivered to such Buyer such other customary documents
      relating to the transactions contemplated by this Agreement as such Buyer or
      its
      counsel may reasonably request.

     

    H.  TERMINATION.  In
      the event that the Closing shall not have occurred with respect to a Buyer
      on or
      before December 31, 2007 due to the Company's or such Buyer's failure to satisfy
      the conditions set forth in Sections 6 and 7 above (and the nonbreaching party's
      failure to waive such unsatisfied condition(s)), the nonbreaching party shall
      have the option to terminate this Agreement with respect to such breaching
      party
      at the close of business on such date without liability of any party to any
      other party, except as set forth below; provided, however, if this Agreement
      is
      terminated pursuant to this Section 8, the Company shall remain obligated to
      reimburse the non-breaching Buyers for the amounts described in Section 4(g)
      above.

     

    I.  MISCELLANEOUS.

     

    a.  Governing
      Law; Jurisdiction; Jury Trial.  All questions concerning the
      construction, validity, enforcement and interpretation of this Agreement shall
      be governed by the internal laws of the State of New York, without giving effect
      to any choice of law or conflict of law provision or rule (whether of the State
      of New York or any other jurisdictions) that would cause the application of
      the
      laws of any jurisdictions other than the State of New York.  Each
      party hereby irrevocably submits to the exclusive jurisdiction of the state
      and
      federal courts sitting in The City of New York, Borough of Manhattan, for the
      adjudication of any dispute hereunder or in connection herewith or with any
      transaction contemplated hereby or discussed herein, and hereby irrevocably
      waives, and agrees not to assert in any suit, action or proceeding, any claim
      that it is not personally subject to the jurisdiction of any such court, that
      such suit, action or proceeding is brought in an inconvenient forum or that
      the
      venue of such suit, action or proceeding is improper.  Each party
      hereby irrevocably waives personal service of process and consents to process
      being served in any such suit, action or proceeding by mailing a copy thereof
      to
      such party at the address for such 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 HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
      HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
      DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR
      ANY
      TRANSACTION CONTEMPLATED HEREBY.

     

    b.  Counterparts.  This
      Agreement may be executed in two or more identical counterparts, all of which
      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;
      provided that a facsimile signature shall be considered due execution and shall
      be binding upon the signatory thereto with the same force and effect as if
      the
      signature were an original, not a facsimile signature.

     

    c.  Headings.  The
      headings of this Agreement are for convenience of reference and shall not form
      part of, or affect the interpretation of, this Agreement.

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    d.  Severability.
      If any provision of this Agreement is prohibited by law or otherwise determined
      to be invalid or unenforceable by a court of competent jurisdiction, the
      provision that would otherwise be prohibited, invalid or unenforceable shall
      be
      deemed amended to apply to the broadest extent that it would be valid and
      enforceable, and the invalidity or unenforceability of such provision shall
      not
      affect the validity of the remaining provisions of this Agreement so long as
      this Agreement as so modified continues to express, without material change,
      the
      original intentions of the parties as to the subject matter hereof and the
      prohibited nature, invalidity or unenforceability of the provision(s) in
      question does not substantially impair the respective expectations or reciprocal
      obligations of the parties or the practical realization of the benefits that
      would otherwise be conferred upon the parties.  The parties will
      endeavor in good faith negotiations to replace the prohibited, invalid or
      unenforceable provision(s) with a valid provision(s), the effect of which comes
      as close as possible to that of the prohibited, invalid or unenforceable
      provision(s).

     

    e.  Entire
      Agreement; Amendments.  This Agreement and the other Transaction
      Documents supersede all other prior oral or written agreements between the
      Buyers, the Company, their affiliates and Persons acting on their behalf with
      respect to the matters discussed herein, and this Agreement, the other
      Transaction Documents and the instruments referenced herein and therein contain
      the entire understanding of the parties with respect to the matters covered
      herein and therein and, except as specifically set forth herein or therein,
      neither the Company nor any Buyer makes any representation, warranty, covenant
      or undertaking with respect to such matters.  No provision of this
      Agreement may be amended other than by an instrument in writing signed by the
      Company and the holders of at least a majority of the aggregate number of
      Registrable Securities issued and issuable hereunder, and any amendment to
      this
      Agreement made in conformity with the provisions of this Section 9(e) shall
      be
      binding on all Buyers and holders of Securities as applicable.  No
      provision hereof may be waived other than by an instrument in writing signed
      by
      the holders of at least two thirds (2/3) of the aggregate number of Registrable
      Securities issued and issuable hereunder.  No such amendment shall be
      effective to the extent that it applies to less than all of the holders of
      the
      applicable Securities then outstanding.  No consideration shall be
      offered or paid to any Person to amend or consent to a waiver or modification
      of
      any provision of any of the Transaction Documents unless the same consideration
      also is offered to all of the parties to the Transaction Documents, and the
      holders of the Warrants.  The Company has not, directly or indirectly,
      made any agreements with any Buyers relating to the terms or conditions of
      the
      transactions contemplated by the Transaction Documents except as set forth
      in
      the Transaction Documents.  Without limiting the foregoing, the
      Company confirms that, except as set forth in this Agreement, no Buyer has
      made
      any commitment or promise or has any other obligation to provide any financing
      to the Company or otherwise.

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    f.  Notices.  Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Agreement must be in writing and will be deemed
      to
      have been delivered:  (i) upon receipt, when delivered personally;
      (ii) upon receipt, when sent by facsimile (provided confirmation of transmission
      is mechanically or electronically generated and kept on file by the sending
      party); or (iii) one Business Day after deposit with an overnight courier
      service, in each case properly addressed to the party to receive the
      same.  The addresses and facsimile numbers for such communications
      shall be:

     

    If
      to the
      Company:

     

    Maple
      Mountain Explorations Inc.

    #507,
      1313 East Maple Street, Suite #201

                   
      Bellingham, Washington 98225

                   
      Telephone:   (360) 824-6463

    Facsimile:      (360)
      824-6463

    Attention:  Marvin
      Wosk, President

    

    Copy
      to:

    

    Sichenzia
      Ross Friedman & Ference LLP

    61
      Broadway

    New
      York,
      NY 10006

    Telephone:
      212-981-6766

    Facsimile:
      212-930-9725

    Attention:
      Louis A. Brilleman

    

    If
      to the
      Transfer Agent:

    

    Holliday
      Stock Transfer, Inc.

    2939
      N
      67th
      Place

    Scottsdale,
      AZ, 85251

    Telephone:
      (480) 481-3940

    Facsimile:
      (480) 481-3941

    

    

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    If
      to a
      Buyer, to its address and facsimile number set forth on the Schedule of Buyers,
      with copies to such Buyer's representatives as set forth on the Schedule of
      Buyers,

     

    Copy
      (for
      informational purposes only) to:

     

    Schulte
      Roth & Zabel LLP

    919
      Third
      Avenue

    New
      York,
      New York  10022

    Telephone:     (212)
      756-2000

    Facsimile:        (212)
      593-5955

                                                   
      Attention: Eleazer N. Klein, Esq.

     

    or
      to
      such other address and/or facsimile number and/or to the attention of such
      other
      Person as the recipient party has specified by written notice given to each
      other party five days prior to the effectiveness of such
      change.  Written confirmation of receipt (A) given by the recipient of
      such notice, consent, waiver or other communication, (B) mechanically or
      electronically generated by the sender's facsimile machine containing the time,
      date, recipient facsimile number and an image of the first page of such
      transmission (C) provided by an overnight courier service shall be rebuttable
      evidence of personal service, receipt by facsimile or receipt from an overnight
      courier service in accordance with clause (i), (ii) or (iii) above,
      respectively; provided however that the foregoing clause (B) shall only be
      valid
      if such communication contained in the facsimile is delivered by an overnight
      courier service within 24 hours of the transmission of facsimile.

     

    g.  Successors
      and Assigns.  This Agreement shall be binding upon and inure to
      the benefit of the parties and their respective successors and assigns,
      including any purchasers of the Common Shares or the Warrants.  The
      Company shall not assign this Agreement or any rights or obligations hereunder
      without the prior written consent of the holders of at least a majority of
      the
      aggregate number of Registrable Securities issued and issuable hereunder,
      including by way of a Fundamental Transaction (unless the Company is in
      compliance with the applicable provisions governing Fundamental Transactions
      set
      forth in the Warrants).  A Buyer may assign some or all of its rights
      hereunder without the consent of the Company, in which event such assignee
      shall
      be deemed to be a Buyer hereunder with respect to such assigned
      rights

     

    h.  No
      Third Party Beneficiaries.  This Agreement is intended for the
      benefit of the parties hereto and their respective permitted successors and
      assigns, and is not for the benefit of, nor may any provision hereof be enforced
      by, any other Person.

     

    i.  Survival.  Unless
      this Agreement is terminated under Section 8, the representations and warranties
      of the Company and the Buyers contained in Sections 2 and 3 and the agreements
      and covenants set forth in Sections 4, 5, 8 and 9 shall survive the
      Closing.  Each Buyer shall be responsible only for its own
      representations, warranties, agreements and covenants hereunder.

     

    j.  Further
      Assurances.  Each party shall do and perform, or cause to be done
      and performed, all such further acts and things, and shall execute and deliver
      all such other agreements, certificates, instruments and documents, as any
      other
      party may reasonably request in order to carry out the intent and accomplish
      the
      purposes of this Agreement and the consummation of the transactions contemplated
      hereby.

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    k.  Indemnification.  In
      consideration of each Buyer's execution and delivery of the Transaction
      Documents and acquiring the Securities thereunder and in addition to all of
      the
      Company's other obligations under the Transaction Documents, the Company shall
      defend, protect, indemnify and hold harmless each Buyer and each other holder
      of
      the Securities and all of their stockholders, partners, members, officers,
      directors, employees and direct or indirect investors and any of the foregoing
      Persons' agents or other representatives (including, without limitation, those
      retained in connection with the transactions contemplated by this Agreement)
      (collectively, the "Indemnitees") from and against any and all
      actions, causes of action, suits, claims, losses, costs, penalties, fees,
      liabilities and damages, and expenses in connection therewith (irrespective
      of
      whether any such Indemnitee is a party to the action for which indemnification
      hereunder is sought), and including reasonable attorneys' fees and disbursements
      (the "Indemnified Liabilities"), incurred by any Indemnitee as
      a result of, or arising out of, or relating to (a) any misrepresentation or
      breach of any representation or warranty made by the Company in the Transaction
      Documents or any other certificate, instrument or document contemplated hereby
      or thereby, (b) any breach of any covenant, agreement or obligation of the
      Company contained in the Transaction Documents or any other certificate,
      instrument or document contemplated hereby or thereby or (c) any cause of
      action, suit or claim brought or made against such Indemnitee by a third party
      (including for these purposes a derivative action brought on behalf of the
      Company) and arising out of or resulting from (i) the execution, delivery,
      performance or enforcement of the Transaction Documents or any other
      certificate, instrument or document contemplated hereby or thereby, (ii) any
      transaction financed or to be financed in whole or in part, directly or
      indirectly, with the proceeds of the issuance of the Securities, (iii) any
      disclosure made by such Buyer pursuant to Section 4(i), or (iv) the status
      of
      such Buyer or holder of the Securities as an investor in the Company pursuant
      to
      the transactions contemplated by the Transaction Documents.  To the
      extent that the foregoing undertaking by the Company may be unenforceable for
      any reason, the Company shall make the maximum contribution to the payment
      and
      satisfaction of each of the Indemnified Liabilities that is permissible under
      applicable law.  Except as otherwise set forth herein, the mechanics
      and procedures with respect to the rights and obligations under this Section
      9(k) shall be the same as those set forth in Section 6 of the Registration
      Rights Agreement.

     

    l.  No
      Strict Construction.  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.

     

    m.  Remedies.  Each
      Buyer and each holder of the Securities shall have all rights and remedies
      set
      forth in the Transaction Documents and all rights and remedies which such
      holders have been granted at any time under any other agreement or contract
      and
      all of the rights which such holders have under any law.  Any Person
      having any rights under any provision of this Agreement shall be entitled to
      enforce such rights specifically (without posting a bond or other security),
      to
      recover damages by reason of any breach of any provision of this Agreement
      and
      to exercise all other rights granted by law.  Furthermore, the Company
      recognizes that in the event that it fails to perform, observe, or discharge
      any
      or all of its obligations under the Transaction Documents, any remedy at law
      may
      prove to be inadequate relief to the Buyers.  The Company therefore
      agrees that the Buyers shall be entitled to seek temporary and permanent
      injunctive relief in any such case without the necessity of proving actual
      damages and without posting a bond or other security.

     

    n.  Rescission
      and Withdrawal Right.  Notwithstanding anything to the contrary
      contained in (and without limiting any similar provisions of) the Transaction
      Documents, whenever any Buyer 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 Buyer 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.

     

    o.  Payment
      Set Aside.  To the extent that the Company makes a payment or
      payments to the Buyers hereunder or pursuant to any of the other Transaction
      Documents or the Buyers enforce or exercise their rights hereunder or
      thereunder, and such payment or payments or the proceeds of such enforcement
      or
      exercise or any part thereof are subsequently invalidated, declared to be
      fraudulent or preferential, set aside, recovered from, disgorged by or are
      required to be refunded, repaid or otherwise restored to the Company, a trustee,
      receiver or any other Person under any law (including, without limitation,
      any
      bankruptcy law, foreign, 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.

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    p.  Independent
      Nature of Buyers' Obligations and Rights.  The obligations of each
      Buyer under any Transaction Document are several and not joint with the
      obligations of any other Buyer, and no Buyer shall be responsible in any way
      for
      the performance of the obligations of any other Buyer under any Transaction
      Document.  Nothing contained herein or in any other Transaction
      Document, and no action taken by any Buyer pursuant hereto or thereto, shall
      be
      deemed to constitute the Buyers as, and the Company acknowledges that the Buyers
      do not so constitute, a partnership, an association, a joint venture or any
      other kind of entity, or create a presumption that the Buyers are in any way
      acting in concert or as a group, and the Company will not assert any such claim
      with respect to such obligations or the transactions contemplated by the
      Transaction Documents and the Company acknowledges that the Buyers are not
      acting in concert or as a group with respect to such obligations or the
      transactions contemplated by the Transaction Documents.  The Company
      acknowledges and each Buyer confirms that it has independently participated
      in
      the negotiation of the transaction contemplated hereby with the advice of its
      own counsel and advisors.  Each Buyer shall be entitled to
      independently protect and enforce its rights, including, without limitation,
      the
      rights arising out of this Agreement or out of any other Transaction Documents,
      and it shall not be necessary for any other Buyer to be joined as an additional
      party in any proceeding for such purpose.

     

     [Signature
      Page Follows]

     

    
      
                               

                  
      
    

         

      

      
        23

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, each Buyer and the Company have caused their
      respective signature page to this Securities Purchase Agreement to be duly
      executed as of the date first written above.

     

    

     

    
      	
              COMPANY:

               

            
	
              MAPLE
                MOUNTAIN EXPLORATIONS INC.

              By:

              Name:

              Title:

            
	 

    

    
      
              
        

          
            	                

                                                     
              	 	 

          
      
      

                  [Signature
            Page to Securities Purchase Agreement]      
    

         

      

      
        24

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, each Buyer and the Company have caused their
      respective signature page to this Securities Purchase Agreement to be duly
      executed as of the date first written above.

     

    

     

    
      	
              BUYERS:

               

            
	
              INVESTCORP
                INTERLACHEN MULTI-STRATEGY MASTER FUND

              By:

              Name:

              Title:

            
	 

    

    
      
              
        

          
            	                

                                                       
              	 	 

          
      
      

                  [Signature
            Page to Securities Purchase Agreement]      
    

         

      

      
        25

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, each Buyer and the Company have caused their
      respective signature page to this Securities Purchase Agreement to be duly
      executed as of the date first written above.

     

    

     

    
      	
              OTHER
                BUYERS:

               

            
	
               

              By:

              Name:

              Title:

            
	 

    

    
      
              
        

          
            	                

                                      10524331.9                
              	 	 

          
      
      

                  [Signature
            Page to Securities Purchase Agreement]      
    

         

      

      
        26

        
          

        

      

      
         

      

    

    SCHEDULE
      OF BUYERS

     

    

    
      	
              (1)

            	
              (2)

            	
              (3)

            	
              (4)

            	
              (5)

            
	
              Buyer

            	
               

               

              Address
                and

              Facsimile
                Number

            	
              Number
                of Units

            	
              Purchase
                Price

            	
               

               

               

               

               

               

              Legal
                Representative's Address and Facsimile Number

            
	 	 	 	 	 
	
              Investcorp
                Interlachen Multi-Strategy Master Fund

               

            	
               

              c/o
                Interlachen Capital Group LP

              800
                Nicollet Mall, Suite 2500

              Minneapolis,
                MN 55402-2034

              Attention:  Gregg
                T. Colburn

              Facsimile:  (612)
                659-4457

              Telephone:
                (612) 659-4407

              Residency:
                Cayman Islands

               

            	 	 	
              Schulte
                Roth & Zabel LLP

              919
                Third Avenue

              New
                York, New York  10022

              Attention:  Eleazer
                Klein, Esq.

              Facsimile:  (212)
                593-5955

              Telephone:  (212)
                756-2000

            
	
              [Other
                Buyers]

            	 	 	 	 

    

    

    
      
              
        

          
            	                

                                      10524331.9                
              	 	 

          
      
      

                  
      
    

         

      

      
        27

        
          

        

      

      
         

      

    

    

    EXHIBITS

     

    
      
        	Exhibit
                A	Form
                of Warrants	 
	Exhibit
                B	Form
                of Registration Rights Agreement	 
	Exhibit
                C	Form
                of Escrow Agreement	 
	Exhibit
                D	Irrevocable
                Transfer Agent Instructions	 
	Exhibit
                E 	Form
                of Company Counsel Opinion	 
	Exhibit
                F	Form
                of Secretary's Certificate	 
	Exhibit
                G	Form
                of Officer's Certificate	 
	Exhibit
                H	Form
                of Lock-Up Agreement	 
	Exhibit
                I	Financing
                Agreement	 
	 	 	 

      

    

     

                          

                          

                          

                          

                         

                          

                          

                          

                           

    

    
      
              
        

          
            	                

                                           
              	 	 

          
      
      

                  
      
    

         

      

      
        28ex102.htm

     

    REGISTRATION
      RIGHTS AGREEMENT

     

     

    REGISTRATION
      RIGHTS AGREEMENT (this "Agreement"), dated as of
      November [  ], 2007, by and among Maple Mountain Explorations Inc., a
      Nevada corporation, with headquarters located at #507, 1313 East Maple Street,
      Suite 201, Bellingham, WA 98225 (the "Company"), and the
      investors listed on the Schedule of Buyers attached hereto (each, a
      "Buyer" and collectively, the
      "Buyers").

     

    WHEREAS:

     

    A.           In
      connection with the Securities Purchase Agreement by and among the parties
      hereto of even date herewith (the "Securities Purchase
      Agreement"), the Company has agreed, upon the terms and subject to the
      conditions of the Securities Purchase Agreement, to issue and sell to each
      Buyer
      (i) shares (the "Common Shares") of the Company's common stock,
      par value $0.001 per share (the "Common Stock"), and (ii)
      warrants (the "Warrants") which will be exercisable to purchase
      shares of Common Stock (as exercised, the "Warrant Shares") in
      accordance with the terms of the Warrants.

     

    B.           In
      accordance with the terms of the Securities Purchase Agreement, the Company
      has
      agreed to provide certain registration rights under the Securities Act of 1933,
      as amended, and the rules and regulations thereunder, or any similar successor
      statute (collectively, the "1933 Act"), and applicable state
      securities laws.

     

    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants
      contained herein and other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the Company and each of the Buyers
      hereby agree as follows:

     

    1.           Definitions.

     

    Capitalized
      terms used herein and not otherwise defined herein shall have the respective
      meanings set forth in the Securities Purchase Agreement. As used in this
      Agreement, the following terms shall have the following meanings:

     

    (a)           "Additional
      Effectiveness Date" means the date the Additional Registration
      Statement is declared effective by the SEC.

     

    (b)           "Additional
      Effectiveness Deadline" means the earlier of (I) the date which is (i)
      in the event that the Additional Registration Statement is not subject to a
      full
      review by the SEC, thirty (30) calendar days after the earlier of the Additional
      Filing Date and the Additional Filing Deadline or (ii) in the event that the
      Additional Registration Statement is subject to a full review by the SEC, sixty
      (60) calendar days after the earlier of the Additional Filing Date and the
      Additional Filing Deadline and (II) the date which is five (5) Business Days
      after the Company learns that no review of the Additional Registration Statement
      will be made by the staff of the SEC or that the staff of the SEC has no further
      comments on the Additional Registration Statement.

     

    (c)           "Additional
      Filing Date" means the date on which the Additional Registration
      Statement is filed with the SEC.

     

    (d)           "Additional
      Filing Deadline" means if Cutback Shares are required to be included in
      the Additional Registration Statement, the later of (i) the date sixty (60)
      days
      after the date substantially all of the Registrable Securities registered under
      the immediately preceding Registration Statement are sold and (ii) the date
      six
      (6) months from the Initial Effectiveness Date or the last Additional
      Effectiveness Date, as applicable.

     

    (e)           "Additional
      Registrable Securities" means, (i) any Cutback Shares not previously
      included on a Registration Statement and (ii) any capital stock of the Company
      issued or issuable with respect to the Cutback Shares as a result of any stock
      split, stock dividend, recapitalization, exchange or similar event or
      otherwise.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (f)           "Additional
      Registration Statement" means a registration statement or registration
      statements of the Company filed under the 1933 Act covering any Additional
      Registrable Securities.

     

    (g)           "Additional
      Required Registration Amount" means (I) (i) any Cutback Shares not
      previously included on a Registration Statement or (II) such other amount as
      may
      be required by the staff of the SEC pursuant to Rule 415.

     

    (h)           "Business
      Day" means any day other than Saturday, Sunday or any other day on
      which commercial banks in The City of New York are authorized or required by
      law
      to remain closed.

     

    (i)           "Closing
      Date" shall have the meaning set forth in the Securities Purchase
      Agreement.

     

     

    (j)           "Cutback
      Shares" means any of the Initial Required Registration Amount or the
      Additional Required Registration Amount (without regard to clause (II) in the
      definitions thereof) of Registrable Securities not included in all Registration
      Statements previously declared effective hereunder as a result of a limitation
      on the maximum number of shares of Common Stock of the Company permitted to
      be
      registered by the staff of the SEC pursuant to Rule 415.

     

     

    (k)           "Effective
      Date" means the Initial Effective Date and the Additional Effective
      Date, as applicable.

     

     

    (l)           "Effectiveness
      Deadline" means the Initial Effectiveness Deadline and the Additional
      Effectiveness Deadline, as applicable.

     

     

    (m)           "Filing
      Deadline" means the Initial Filing Deadline and the Additional Filing
      Deadline, as applicable.

     

     

    (n)           "Initial
      Effectiveness Date" means the date that the Registration Statement has
      been declared effective by the SEC.

     

     

    (o)           "Initial
      Effectiveness Deadline" means the earlier of (I) the date which is (i)
      in the event that the Initial Registration Statement is not subject to a full
      review by the SEC, ninety (90) calendar days after the Closing Date or (ii)
      in
      the event that the Registration Statement is subject to a full review by the
      SEC, one-hundred and fifty (150) calendar days after the Closing Date and (II)
      the date which is five (5) Business Days after the Company learns that no review
      of the Registration Statement will be made by the staff of the SEC or that
      the
      staff of the SEC has no further comments on the Registration
      Statement.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (p)           "Initial
      Filing Deadline" means sixty (60) calendar days after the Closing
      Date.

     

     

    (q)           "Initial
      Registrable Securities" means (i) the Common Shares, (ii) the Warrant
      Shares issued or issuable upon exercise of the Warrants, and (iii) any capital
      stock of the Company issued or issuable, with respect to the Common Shares,
      the
      Warrant Shares and the Warrants as a result of any stock split, stock dividend,
      recapitalization, exchange or similar event or otherwise, without regard to
      any
      limitations on exercise of the Warrants.

     

     

    (r)           "Initial
      Required Registration Amount" (I) the sum of (i) the number of Common
      Shares issued and (ii) 100% of the number of Warrant Shares issued and issuable
      pursuant to the Warrants as of the trading day immediately preceding the
      applicable date of determination, all subject to adjustment as provided in
      Section 2(f), or (II) such other amount as may be required by the staff of
      the
      SEC pursuant to Rule 415 with any cutback applied on a pro rata basis and,
      unless otherwise requested by an Investor, the Warrant Shares included on such
      Registration Statement shall be decreased first, except to the extent prohibited
      by the SEC.

     

     

    (s)           "Initial
      Registration Statement" means a registration statement or registration
      statements of the Company filed under the 1933 Act covering the Initial
      Registrable Securities.

     

     

    (t)           "Investor"
      means a Buyer, any transferee or assignee thereof to whom a Buyer assigns its
      rights under this Agreement and who agrees to become bound by the provisions
      of
      this Agreement in accordance with Section 9 and any transferee or assignee
      thereof to whom a transferee or assignee assigns its rights under this Agreement
      and who agrees to become bound by the provisions of this Agreement in accordance
      with Section 9.

     

    (u)           "Person"
      means an individual, a limited liability company, a partnership, a joint
      venture, a corporation, a trust, an unincorporated organization and a government
      or any department or agency thereof.

     

    (v)           "register,"
      "registered," and "registration" refer to a
      registration effected by preparing and filing one or more Registration
      Statements (as defined below) in compliance with the 1933 Act and pursuant
      to
      Rule 415, and the declaration or ordering of effectiveness of such Registration
      Statement(s) by the SEC.

     

    (w)           "Registrable
      Securities" means the Initial Registrable Securities and the Additional
      Registrable Securities, as the case may be.

     

    (x)           "Registration
      Statement" means a registration statement or registration statements of
      the Company filed under the 1933 Act covering the Registrable
      Securities.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (y)           "Required
      Holders" means the holders of at least two-thirds of the Registrable
      Securities.

     

    (z)           "Required
      Registration Amount" means either the Initial Required Registration
      Amount or the Additional Required Registration Amount, as
      applicable.

     

     

    (aa)           "Rule
      415" means Rule 415 under the 1933 Act or any successor rule providing
      for offering securities on a continuous or delayed basis.

     

    (bb)           "SEC"
      means the United States Securities and Exchange Commission.

     

    2.           Registration.

     

    (a)           Initial
      Mandatory Registration.  The Company shall prepare, and, as soon
      as practicable but in no event later than the Initial Filing Deadline, file
      with
      the SEC the Initial Registration Statement on Form S-3 covering the resale
      of
      all of the Initial Registrable Securities.  In the event that Form S-3
      is unavailable for such a registration, the Company shall use such other form
      as
      is available for such a registration on another appropriate form reasonably
      acceptable to the Required Holders, subject to the provisions of Section
      2(d).  The Initial Registration Statement prepared pursuant hereto
      shall register for resale at least the number of shares of Common Stock equal
      to
      the Initial Required Registration Amount determined as of the date the Initial
      Registration Statement is initially filed with the SEC, subject to adjustment
      as
      provided in Section 2(f).  The Initial Registration Statement shall
      contain the "Selling Stockholders" section and "Plan of Distribution" attached
      hereto as Annex I. The Company shall use its best efforts to have the
      Initial Registration Statement declared effective by the SEC as soon as
      practicable, but in no event later than the Initial Effectiveness
      Deadline.  By 9:30 a.m. New York time on the Business Day following
      the Initial Effective Date, the Company shall file with the SEC in accordance
      with Rule 424 under the 1933 Act the final prospectus to be used in connection
      with sales pursuant to such Registration Statement.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (b)           Additional
      Mandatory Registrations.  The Company shall prepare, and, as soon
      as practicable but in no event later than the Additional Filing Deadline, file
      with the SEC an Additional Registration Statement on Form S-3 covering the
      resale of all of the Additional Registrable Securities not previously registered
      on an Additional Registration Statement hereunder.  To the extent the
      staff of the SEC does not permit the Additional Required Registration Amount
      to
      be registered on an Additional Registration Statement, the Company shall file
      Additional Registration Statements successively trying to register on each
      such
      Additional Registration Statement the maximum number of remaining Additional
      Registrable Securities until the Additional Required Registration Amount has
      been registered with the SEC.  In the event that Form S-3 is
      unavailable for such a registration, the Company shall use such other form
      as is
      available for such a registration on another appropriate form reasonably
      acceptable to the Required Holders, subject to the provisions of Section
      2(e).  Each Additional Registration Statement prepared pursuant hereto
      shall register for resale at least that number of shares of Common Stock equal
      to the Additional Required Registration Amount as of date the Registration
      Statement is initially filed with the SEC.  Each Additional
      Registration Statement shall contain (except if otherwise directed by the
      Required Holders) the "Selling Stockholders" and "Plan of Distribution" sections
      in substantially the form attached hereto as Annex I.  The
      Company shall use its best efforts to have each Additional Registration
      Statement declared effective by the SEC as soon as practicable, but in no event
      later than the Additional Effectiveness Deadline.  By 9:30 a.m. New
      York time on the Business Day following the Additional Effective Date, the
      Company shall file with the SEC in accordance with Rule 424 under the 1933
      Act
      the final prospectus to be used in connection with sales pursuant to such
      Registration Statement.

     

    (c)           Allocation
      of Registrable Securities.  The initial number of Registrable
      Securities included in any Registration Statement and each increase or decrease
      in the number of Registrable Securities included therein shall be allocated
      pro
      rata among the Investors based on the number of Registrable Securities held
      by
      each Investor at the time the Registration Statement covering such initial
      number of Registrable Securities or increase or decrease thereof is declared
      effective by the SEC.  In the event that an Investor sells or
      otherwise transfers any of such Investor's Registrable Securities, each
      transferee shall be allocated a pro rata portion of the then remaining number
      of
      Registrable Securities included in such Registration Statement for such
      transferor.  Any shares of Common Stock included in a Registration
      Statement and which remain allocated to any Person which ceases to hold any
      Registrable Securities covered by such Registration Statement shall be allocated
      to the remaining Investors, pro rata based on the number of Registrable
      Securities then held by such Investors which are covered by such Registration
      Statement.  In no event shall the Company include any securities other
      than Registrable Securities on any Registration Statement without the prior
      written consent of the Required Holders.

     

    (d)           Legal
      Counsel.  Subject to Section 5 hereof, the Required Holders shall
      have the right to select one legal counsel to review and oversee any
      registration pursuant to this Section 2 ("Legal Counsel"),
      which shall be Schulte Roth & Zabel LLP or such other counsel as thereafter
      designated by the Required Holders.  The Company and Legal Counsel
      shall reasonably cooperate with each other in performing the Company's
      obligations under this Agreement.

     

    (e)           Ineligibility
      for Form S-3.  In the event that Form S-3 is not available for the
      registration of the resale of Registrable Securities hereunder, the Company
      shall (i) register the resale of the Registrable Securities on another
      appropriate form reasonably acceptable to the Required Holders and (ii)
      undertake to register the Registrable Securities on Form S-3 as soon as such
      form is available, provided that the Company shall maintain the effectiveness
      of
      the Registration Statement then in effect until such time as a Registration
      Statement on Form S-3 covering the Registrable Securities has been declared
      effective by the SEC.

     

    (f)           Sufficient
      Number of Shares Registered.  In the event the number of shares
      available under a Registration Statement filed pursuant to Section 2(a) is
      insufficient to cover all of the Registrable Securities required to be covered
      by such Registration Statement or an Investor's allocated portion of the
      Registrable Securities pursuant to Section 2(b), the Company shall amend the
      applicable Registration Statement, or file a new Registration Statement (on
      the
      short form available therefor, if applicable), or both, so as to cover at least
      the Required Registration Amount as of the trading day immediately preceding
      the
      date of the filing of such amendment or new Registration Statement, in each
      case, as soon as practicable, but in any event not later than fifteen (15)
      days
      after the necessity therefore arises.  The Company shall use its best
      efforts to cause such amendment and/or new Registration Statement to become
      effective as soon as practicable following the filing thereof.  For
      purposes of the foregoing provision, the number of shares available under a
      Registration Statement shall be deemed "insufficient to cover all of the
      Registrable Securities" if at any time the number of shares of Common Stock
      available for resale under such Registration Statement is less than the number
      of Registrable Securities.  The calculation set forth in the foregoing
      sentence shall be made without regard to any limitations on the exercise of
      the
      Warrants and such calculation shall assume that the Warrants are then
      exercisable into shares of Common Stock.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (g)           Effect
      of Failure to File and Obtain and Maintain Effectiveness of Registration
      Statement.  If (i) a Registration Statement covering all the
      Required Registration Amount required to be covered thereby and required to
      be
      filed by the Company pursuant to this Agreement is (A) not filed with the SEC
      on
      or before the respective Filing Deadline (a "Filing Failure")
      or (B) not declared effective by the SEC on or before the respective
      Effectiveness Deadline (an "Effectiveness Failure") or (ii) on
      any day after the respective Effective Date sales of all the Registrable
      Securities included on such Registration Statement cannot be made (other than
      during an Allowable Grace Period (as defined in Section 3(r)) pursuant to such
      Registration Statement or otherwise (including, without limitation, because
      of a
      failure to keep such Registration Statement effective, to disclose such
      information as is necessary for sales to be made pursuant to such Registration
      Statement, to register a sufficient number of shares of Common Stock or to
      maintain the listing of the Common Stock) (a "Maintenance
      Failure") then, as partial relief for the damages to any holder by
      reason of any such delay in or reduction of its ability to sell the underlying
      shares of Common Stock (which remedy shall not be exclusive of any other
      remedies available at law or in equity), (A) the Company shall pay to each
      holder of Registrable Securities relating to such Registration Statement an
      amount in cash equal to one percent (1.0%) of the aggregate Purchase Price
      (as
      such term is defined in the Securities Purchase Agreement) of such Investor's
      Registrable Securities included in such Registration Statement on each of the
      following dates: (i) the day of a Filing Failure and on every thirtieth day
      (pro
      rated for periods totaling less than thirty (30) days) thereafter until such
      Filing Failure is cured; (ii) the day of an Effectiveness Failure and on every
      thirtieth day (pro rated for periods totaling less than thirty (30) days)
      thereafter until such Effectiveness Failure is cured; and (iii) the initial
      day
      of a Maintenance Failure and on every thirtieth day (pro rated for periods
      totaling less than thirty (30) days) thereafter until such Maintenance Failure
      is cured.  The payments to which a holder shall be entitled pursuant
      to this Section 2(g) are referred to herein as "Registration Delay
      Payments."  Registration Delay Payments shall be paid on the
      earlier of (I) the dates set forth above and (II) the third Business Day after
      the event or failure giving rise to the Registration Delay Payments is
      cured.  In the event the Company fails to make Registration Delay
      Payments in a timely manner, such Registration Delay Payments shall bear
      interest at the rate of one and one-half percent (1.5%) per month (prorated
      for
      partial months) until paid in full.  Notwithstanding anything herein
      or in the Securities Purchase Agreement to the contrary, in no event shall
      the
      aggregate amount of Registration Delay Payments exceed, in the aggregate,
      eighteen percent (18%) of the aggregate Purchase Price of the Common
      Shares.

     

    3.           Related
      Obligations.

     

     

    At
      such
      time as the Company is obligated to file a Registration Statement with the
      SEC
      pursuant to Section 2(a), 2(b), 2(e) or 2(f), the Company will use its best
      efforts to effect the registration of the Registrable Securities in accordance
      with the intended method of disposition thereof and, pursuant thereto, the
      Company shall have the following obligations:

     

    (a)           The
      Company shall submit to the SEC, within three (3) Business Days after the
      Company learns that no review of a particular Registration Statement will be
      made by the staff of the SEC or that the staff of the SEC has no further
      comments on a particular Registration Statement, as the case may be, a request
      for acceleration of effectiveness of such Registration Statement to a time
      and
      date not later than 48 hours after the submission of such
      request.  The Company shall keep each Registration Statement effective
      pursuant to Rule 415 at all times until earlier of (i) the date as of which
      the
      Investors may sell all of the Registrable Securities covered by such
      Registration Statement without restriction pursuant to Rule 144(k) (or any
      successor thereto) promulgated under the 1933 Act or (ii) the date on which
      the
      Investors shall have sold all the Registrable Securities covered by such
      Registration Statement (the "Registration Period"). The Company
      shall ensure that each Registration Statement (including any amendments or
      supplements thereto and prospectuses contained therein) shall not contain any
      untrue statement of a material fact or omit to state a material fact required
      to
      be stated therein, or necessary to make the statements therein (in the case
      of
      prospectuses, in the light of the circumstances in which they were made) not
      misleading.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    (b)           The
      Company shall prepare and file with the SEC such amendments (including
      post-effective amendments) and supplements to a Registration Statement and
      the
      prospectus used in connection with such Registration Statement, which prospectus
      is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may
      be
      necessary to keep such Registration Statement effective at all times during
      the
      Registration Period, and, during such period, comply with the provisions of
      the
      1933 Act with respect to the disposition of all Registrable Securities of the
      Company covered by such Registration Statement until such time as all of such
      Registrable Securities shall have been disposed of in accordance with the
      intended methods of disposition by the seller or sellers thereof as set forth
      in
      such Registration Statement.  In the case of amendments and
      supplements to a Registration Statement which are required to be filed pursuant
      to this Agreement (including pursuant to this Section 3(b)) by reason of the
      Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous
      report under the Securities Exchange Act of 1934, as amended (the "1934
      Act"), the Company shall have incorporated such report by reference
      into such Registration Statement, if applicable, or shall file such amendments
      or supplements with the SEC on the same day on which the 1934 Act report is
      filed which created the requirement for the Company to amend or supplement
      such
      Registration Statement.

     

    (c)           The
      Company shall (A) permit Legal Counsel to review and comment upon (i) a
      Registration Statement at least five (5) Business Days prior to its filing
      with
      the SEC and (ii) all amendments and supplements to all Registration Statements
      (except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
      Reports on Form 8-K and any similar or successor reports) within a reasonable
      number of days prior to their filing with the SEC, and (B) not file any
      Registration Statement or amendment or supplement thereto in a form to which
      Legal Counsel reasonably objects.  The Company shall not submit a
      request for acceleration of the effectiveness of a Registration Statement or
      any
      amendment or supplement thereto without the prior approval of Legal Counsel,
      which consent shall not be unreasonably withheld.  The Company shall
      furnish to Legal Counsel, without charge, (i) copies of any correspondence
      from
      the SEC or the staff of the SEC to the Company or its representatives relating
      to any Registration Statement, (ii) promptly after the same is prepared and
      filed with the SEC, one copy of any Registration Statement and any amendment(s)
      thereto, including financial statements and schedules, all documents
      incorporated therein by reference, if requested by an Investor and not otherwise
      available on the EDGAR system, and all exhibits and (iii) upon the effectiveness
      of any Registration Statement, one copy of the prospectus included in such
      Registration Statement and all amendments and supplements
      thereto.  The Company shall reasonably cooperate with Legal Counsel in
      performing the Company's obligations pursuant to this Section 3.

     

    (d)           The
      Company shall furnish to each Investor whose Registrable Securities are included
      in any Registration Statement, without charge,  (i) promptly after the
      same is prepared and filed with the SEC, at least one copy of such Registration
      Statement and any amendment(s) thereto, including financial statements and
      schedules, all documents incorporated therein by reference, if requested by
      an
      Investor and not otherwise available on the EDGAR system, all exhibits and
      each
      preliminary prospectus, (ii) upon the effectiveness of any Registration
      Statement, ten (10) copies of the prospectus included in such Registration
      Statement and all amendments and supplements thereto (or such other number
      of
      copies as such Investor may reasonably request) and (iii) such other documents,
      including copies of any preliminary or final prospectus, as such Investor may
      reasonably request from time to time in order to facilitate the disposition
      of
      the Registrable Securities owned by such Investor.

     

    (e)           The
      Company shall use its best efforts to (i) register and qualify, unless an
      exemption from registration and qualification applies, the resale by Investors
      of the Registrable Securities covered by a Registration Statement under such
      other securities or "blue sky" laws of all applicable jurisdictions in the
      United States, (ii) prepare and file in those jurisdictions such amendments
      (including post-effective amendments) and supplements to such registrations
      and
      qualifications as may be necessary to maintain the effectiveness thereof during
      the Registration Period, (iii) take such other actions as may be necessary
      to
      maintain such registrations and qualifications in effect at all times during
      the
      Registration Period, and (iv) take all other actions reasonably necessary or
      advisable to qualify the Registrable Securities for sale in such jurisdictions;
      provided, however, that the Company shall not be required in connection
      therewith or as a condition thereto to (x) qualify to do business in any
      jurisdiction where it would not otherwise be required to qualify but for this
      Section 3(e), (y) subject itself to general taxation in any such jurisdiction,
      or (z) file a general consent to service of process in any such
      jurisdiction.  The Company shall promptly notify Legal Counsel and
      each Investor who holds Registrable Securities of the receipt by the Company
      of
      any notification with respect to the suspension of the registration or
      qualification of any of the Registrable Securities for sale under the securities
      or "blue sky" laws of any jurisdiction in the United States or its receipt
      of
      actual notice of the initiation or threatening of any proceeding for such
      purpose.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (f)           The
      Company shall notify Legal Counsel and each Investor in writing of the happening
      of any event, as promptly as practicable after becoming aware of such event,
      as
      a result of which the prospectus included in a Registration Statement, as then
      in effect, includes an untrue statement of a material fact or omission to state
      a material fact required to be stated therein or necessary to make the
      statements therein, in the light of the circumstances under which they were
      made, not misleading (provided that in no event shall such notice contain any
      material, nonpublic information), and, subject to Section 3(r), promptly prepare
      a supplement or amendment to such Registration Statement to correct such untrue
      statement or omission, and deliver ten (10) copies of such supplement or
      amendment to Legal Counsel and each Investor (or such other number of copies
      as
      Legal Counsel or such Investor may reasonably request).  The Company
      shall also promptly notify Legal Counsel and each Investor in writing (i) when
      a
      prospectus or any prospectus supplement or post-effective amendment has been
      filed, and when a Registration Statement or any post-effective amendment has
      become effective (notification of such effectiveness shall be delivered to
      Legal
      Counsel and each Investor by facsimile on the same day of such effectiveness
      and
      by overnight mail), (ii) of any request by the SEC for amendments or supplements
      to a Registration Statement or related prospectus or related information, and
      (iii) of the Company's reasonable determination that a post-effective amendment
      to a Registration Statement would be appropriate.  By 9:30 a.m. New
      York City time on the date following the date any post-effective amendment
      has
      become effective, the Company shall file with the SEC in accordance with Rule
      424 under the 1933 Act the final prospectus to be used in connection with sales
      pursuant to such Registration Statement.

     

    (g)           The
      Company shall use its best efforts to prevent the issuance of any stop order
      or
      other suspension of effectiveness of a Registration Statement, or the suspension
      of the qualification of any of the Registrable Securities for sale in any
      jurisdiction and, if such an order or suspension is issued, to obtain the
      withdrawal of such order or suspension at the earliest possible moment and
      to
      notify Legal Counsel and each Investor who holds Registrable Securities being
      sold of the issuance of such order and the resolution thereof or its receipt
      of
      actual notice of the initiation or threat of any proceeding for such
      purpose.

     

    (h)           If
      any Investor is required under applicable securities laws to be described in
      the
      Registration Statement as an underwriter, at the reasonable request of such
      Investor, the Company shall furnish to such Investor, on the date of the
      effectiveness of the Registration Statement and thereafter from time to time
      on
      such dates as an Investor may reasonably request (i) a letter, dated such date,
      from the Company's independent certified public accountants in form and
      substance as is customarily given by independent certified public accountants
      to
      underwriters in an underwritten public offering, addressed to the Investors,
      and
      (ii) an opinion, dated as of such date, of counsel representing the Company
      for
      purposes of such Registration Statement, in form, scope and substance as is
      customarily given in an underwritten public offering, addressed to the
      Investors.

     

    (i)           If
      any Investor is required under applicable securities laws to be described in
      the
      Registration Statement as an underwriter, the Company shall make available
      for
      inspection by (i) such Investor, (ii) Legal Counsel and (iii) one firm of
      accountants or other agents retained by the Investors (collectively, the
      "Inspectors"), all pertinent financial and other records, and
      pertinent corporate documents and properties of the Company (collectively,
      the
      "Records"), as shall be reasonably deemed necessary by each
      Inspector, and cause the Company's officers, directors and employees to supply
      all information which any Inspector may reasonably request; provided, however,
      that each Inspector shall agree to hold in strict confidence and shall not
      make
      any disclosure (except to an Investor) or use of any Record or other information
      which the Company determines in good faith to be confidential, and of which
      determination the Inspectors are so notified, unless (a) the disclosure of
      such
      Records is necessary to avoid or correct a misstatement or omission in any
      Registration Statement or is otherwise required under the 1933 Act, (b) the
      release of such Records is ordered pursuant to a final, non-appealable subpoena
      or order from a court or government body of competent jurisdiction, or (c)
      the
      information in such Records has been made generally available to the public
      other than by disclosure in violation of this Agreement.  Each
      Investor agrees that it shall, upon learning that disclosure of such Records
      is
      sought in or by a court or governmental body of competent jurisdiction or
      through other means, give prompt notice to the Company and allow the Company,
      at
      its expense, to undertake appropriate action to prevent disclosure of, or to
      obtain a protective order for, the Records deemed
      confidential.  Nothing herein (or in any other confidentiality
      agreement between the Company and any Investor) shall be deemed to limit the
      Investors' ability to sell Registrable Securities in a manner which is otherwise
      consistent with applicable laws and regulations.

     

    (j)           The
      Company shall hold in confidence and not make any disclosure of information
      concerning an Investor provided to the Company unless (i) disclosure of such
      information is necessary to comply with federal or state securities laws, (ii)
      the disclosure of such information is necessary to avoid or correct a
      misstatement or omission in any Registration Statement, (iii) the release of
      such information is ordered pursuant to a subpoena or other final,
      non-appealable order from a court or governmental body of competent
      jurisdiction, or (iv) such information has been made generally available to
      the
      public other than by disclosure in violation of this Agreement or any other
      agreement.  The Company agrees that it shall, upon learning that
      disclosure of such information concerning an Investor is sought in or by a
      court
      or governmental body of competent jurisdiction or through other means, give
      prompt written notice to such Investor and allow such Investor, at the
      Investor's expense, to undertake appropriate action to prevent disclosure of,
      or
      to obtain a protective order for, such information.

     

    (k)           The
      Company shall use its best efforts either to (i) cause all the Registrable
      Securities covered by a Registration Statement to be listed on each securities
      exchange on which securities of the same class or series issued by the Company
      are then listed, if any, if the listing of such Registrable Securities is then
      permitted under the rules of such exchange, or (ii) secure designation and
      quotation of all the Registrable Securities covered by a Registration Statement
      on The NASDAQ Capital Market and, without limiting the generality of the
      foregoing, to use its best efforts to arrange for at least two market makers
      to
      register with the Financial Industry Regulatory Authority
      ("FINRA") as such with respect to such Registrable
      Securities.  The Company shall pay all fees and expenses in connection
      with satisfying its obligation under this Section 3(k).

     

    (l)           The
      Company shall cooperate with the Investors who hold Registrable Securities
      being
      offered and, to the extent applicable, facilitate the timely preparation and
      delivery of certificates (not bearing any restrictive legend) representing
      the
      Registrable Securities to be offered pursuant to a Registration Statement and
      enable such certificates to be in such denominations or amounts, as the case
      may
      be, as the Investors may reasonably request and registered in such names as
      the
      Investors may request.

     

    
      
         

      

      
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    (m)           If
      requested by an Investor, the Company shall as soon as practicable (i)
      incorporate in a prospectus supplement or post-effective amendment such
      information as an Investor reasonably requests to be included therein relating
      to the sale and distribution of Registrable Securities, including, without
      limitation, information with respect to the number of Registrable Securities
      being offered or sold, the purchase price being paid therefor and any other
      terms of the offering of the Registrable Securities to be sold in such offering;
      (ii) make all required filings of such prospectus supplement or post-effective
      amendment after being notified of the matters to be incorporated in such
      prospectus supplement or post-effective amendment; and (iii) supplement or
      make
      amendments to any Registration Statement if reasonably requested by an Investor
      holding any Registrable Securities.

     

    (n)           The
      Company shall use its best efforts to cause the Registrable Securities covered
      by a Registration Statement to be registered with or approved by such other
      governmental agencies or authorities as may be necessary to consummate the
      disposition of such Registrable Securities.

     

    (o)           The
      Company shall make generally available to its security holders as soon as
      practical, but not later than ninety (90) days after the close of the period
      covered thereby, an earnings statement (in form complying with, and in the
      manner provided by, the provisions of Rule 158 under the 1933 Act) covering
      a
      twelve-month period beginning not later than the first day of the Company's
      fiscal quarter next following the Effective Date of a Registration
      Statement.

     

    (p)           The
      Company shall otherwise use its best efforts to comply with all applicable
      rules
      and regulations of the SEC in connection with any registration
      hereunder.

     

    (q)           Within
      two (2) Business Days after a Registration Statement which covers Registrable
      Securities is ordered effective by the SEC, the Company shall deliver, and
      shall
      cause legal counsel for the Company to deliver, to the transfer agent for such
      Registrable Securities (with copies to the Investors whose Registrable
      Securities are included in such Registration Statement) confirmation that such
      Registration Statement has been declared effective by the SEC in the form
      attached hereto as Exhibit A.

     

    (r)           Notwithstanding
      anything to the contrary herein, at any time after the Effective Date, the
      Company may delay the disclosure of material, non-public information concerning
      the Company the disclosure of which at the time is not, in the good faith
      opinion of the Board of Directors of the Company and its counsel, in the best
      interest of the Company and, in the opinion of counsel to the Company, otherwise
      required (a "Grace Period"); provided, that the Company shall
      promptly (i) notify the Investors in writing of the existence of material,
      non-public information giving rise to a Grace Period in conformity with the
      provisions of this Section 3(r) (provided that in each notice the Company will
      not disclose the content of such material, non-public information to the
      Investors) and the date on which the Grace Period will begin, and (ii) notify
      the Investors in writing of the date on which the Grace Period ends; and,
      provided further, that no Grace Period shall exceed five (5) consecutive days
      and during any three hundred sixty five (365) day period such Grace Periods
      shall not exceed an aggregate of twenty (20) days and the first day of any
      Grace
      Period must be at least five (5) trading days after the last day of any prior
      Grace Period (each, an "Allowable Grace
      Period").  For purposes of determining the length of a Grace
      Period above, the Grace Period shall begin on and include the date the Investors
      receive the notice referred to in clause (i) and shall end on and include the
      later of the date the Investors receive the notice referred to in clause (ii)
      and the date referred to in such notice.  The provisions of Section
      3(g) hereof shall not be applicable during the period of any Allowable Grace
      Period.  Upon expiration of the Grace Period, the Company shall again
      be bound by the first sentence of Section 3(f) with respect to the information
      giving rise thereto unless such material, non-public information is no longer
      applicable.  Notwithstanding anything to the contrary, and to the
      extent permitted by law, the Company shall cause its transfer agent to deliver
      unlegended shares of Common Stock to a transferee of an Investor in accordance
      with the terms of the Securities Purchase Agreement in connection with any
      sale
      of Registrable Securities with respect to which an Investor has entered into
      a
      contract for sale, and delivered a copy of the prospectus included as part
      of
      the applicable Registration Statement, prior to the Investor's receipt of the
      notice of a Grace Period and for which the Investor has not yet
      settled.

     

    (s)           Neither
      the Company nor any Subsidiary or affiliate thereof shall identify any Investor
      as an underwriter in any public disclosure or filing with the SEC or any
      Principal Market (as defined in the Securities Purchase Agreement) or Eligible
      Market and any Investor being deemed an underwriter by the SEC shall not relieve
      the Company of any obligations it has under this Agreement or any other
      Transaction Document (as defined in the Securities Purchase Agreement);
provided, however, that the foregoing shall not prohibit the
      Company from including the disclosure found in the "Plan of Distribution"
      section attached hereto as Exhibit B in the Registration
      Statement.

     

    
      
         

      

      
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    4.           Obligations
      of the Investors.

     

    (a)           At
      least five (5) Business Days prior to the first anticipated filing date of
      a
      Registration Statement, the Company shall notify each Investor in writing of
      the
      information the Company requires from each such Investor if such Investor elects
      to have any of such Investor's Registrable Securities included in such
      Registration Statement.  It shall be a condition precedent to the
      obligations of the Company to complete any registration pursuant to this
      Agreement with respect to the Registrable Securities of a particular Investor
      that such Investor shall furnish to the Company such information regarding
      itself, the Registrable Securities held by it and the intended method of
      disposition of the Registrable Securities held by it as shall be reasonably
      required to effect the effectiveness of the registration of such Registrable
      Securities and shall execute such documents in connection with such registration
      as the Company may reasonably request.

     

    (b)           Each
      Investor, by such Investor's acceptance of the Registrable Securities, agrees
      to
      cooperate with the Company as reasonably requested by the Company in connection
      with the preparation and filing of any Registration Statement hereunder, unless
      such Investor has notified the Company in writing of such Investor's election
      to
      exclude all of such Investor's Registrable Securities from such Registration
      Statement.

     

    (c)           Each
      Investor agrees that, upon receipt of any notice from the Company of the
      happening of any event of the kind described in Section 3(g) or the first
      sentence of 3(f), such Investor will immediately discontinue disposition of
      Registrable Securities pursuant to any Registration Statement(s) covering such
      Registrable Securities until such Investor's receipt of copies of the
      supplemented or amended prospectus as contemplated by Section 3(g) or the first
      sentence of 3(f) or receipt of notice that no supplement or amendment is
      required.  Notwithstanding anything to the contrary, the Company shall
      cause its transfer agent to deliver unlegended shares of Common Stock to a
      transferee of an Investor in accordance with the terms of the Securities
      Purchase Agreement in connection with any sale of Registrable Securities with
      respect to which an Investor has entered into a contract for sale prior to
      the
      Investor's receipt of a notice from the Company of the happening of any event
      of
      the kind described in Section 3(g) or the first sentence of 3(f) and for which
      the Investor has not yet settled.

     

    (d)           Each
      Investor covenants and agrees that it will comply with the prospectus delivery
      requirements of the 1933 Act as applicable to it or an exemption therefrom
      in
      connection with sales of Registrable Securities pursuant to the Registration
      Statement.

     

    5.           Expenses
      of Registration.

     

    All
      reasonable expenses, other than underwriting discounts and commissions, incurred
      in connection with registrations, filings or qualifications pursuant to Sections
      2 and 3, including, without limitation, all registration, listing and
      qualifications fees, printers and accounting fees, and fees and disbursements
      of
      counsel for the Company shall be paid by the Company.  The Company
      shall also reimburse the Investors for the reasonable and documented fees and
      disbursements of Legal Counsel in connection with registration, filing or
      qualification pursuant to Sections 2 and 3 of this Agreement which amount shall
      be limited to $10,000 in the aggregate.

     

    
      
         

      

      
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    6.           Indemnification.

     

    In
      the
      event any Registrable Securities are included in a Registration Statement under
      this Agreement:

     

    (a)           To
      the fullest extent permitted by law, the Company will, and hereby does,
      indemnify, hold harmless and defend each Investor, the directors, officers,
      partners, members, employees, agents, representatives of, and each Person,
      if
      any, who controls any Investor within the meaning of the 1933 Act or the 1934
      Act (each, an "Indemnified Person"), against any losses,
      claims, damages, liabilities, judgments, fines, penalties, charges, costs,
      reasonable attorneys' fees, amounts paid in settlement or expenses, joint or
      several (collectively, "Claims"), incurred in investigating,
      preparing or defending any action, claim, suit, inquiry, proceeding,
      investigation or appeal taken from the foregoing by or before any court or
      governmental, administrative or other regulatory agency, body or the SEC,
      whether pending or threatened, whether or not an indemnified party is or may
      be
      a party thereto ("Indemnified Damages"), to which any of them
      may become subject insofar as such Claims (or actions or proceedings, whether
      commenced or threatened, in respect thereof) arise out of or are based
      upon:  (i) any untrue statement or alleged untrue statement of a
      material fact in a Registration Statement or any post-effective amendment
      thereto or in any filing made in connection with the qualification of the
      offering under the securities or other "blue sky" laws of any jurisdiction
      in
      which Registrable Securities are offered ("Blue Sky Filing"),
      or the omission or alleged omission to state a material fact required to be
      stated therein or necessary to make the statements therein not misleading,
      (ii)
      any untrue statement or alleged untrue statement of a material fact contained
      in
      any preliminary prospectus if used prior to the effective date of such
      Registration Statement, or contained in the final prospectus (as amended or
      supplemented, if the Company files any amendment thereof or supplement thereto
      with the SEC) or the omission or alleged omission to state therein any material
      fact necessary to make the statements made therein, in the light of the
      circumstances under which the statements therein were made, not misleading,
      (iii) any violation or alleged violation by the Company of the 1933 Act, the
      1934 Act, any other law, including, without limitation, any state securities
      law, or any rule or regulation thereunder relating to the offer or sale of
      the
      Registrable Securities pursuant to a Registration Statement or (iv) any
      violation of this Agreement (the matters in the foregoing clauses (i) through
      (iv) being, collectively, "Violations").  Subject to
      Section 6(c), the Company shall reimburse the Indemnified Persons, promptly
      as
      such expenses are incurred and are due and payable, for any legal fees or other
      reasonable expenses incurred by them in connection with investigating or
      defending any such Claim.  Notwithstanding anything to the contrary
      contained herein, the indemnification agreement contained in this Section
      6(a):  (i) shall not apply to a Claim by an Indemnified Person arising
      out of or based upon a Violation which occurs in reliance upon and in conformity
      with information furnished in writing to the Company by such Indemnified Person
      for such Indemnified Person expressly for use in connection with the preparation
      of the Registration Statement or any such amendment thereof or supplement
      thereto, if such prospectus was timely made available by the Company pursuant
      to
      Section 3(d); and (ii) shall not apply to amounts paid in settlement of any
      Claim if such settlement is effected without the prior written consent of the
      Company, which consent shall not be unreasonably withheld or
      delayed.  Such indemnity shall remain in full force and effect
      regardless of any investigation made by or on behalf of the Indemnified Person
      and shall survive the transfer of the Registrable Securities by the Investors
      pursuant to Section 9.

     

    (b)           In
      connection with any Registration Statement in which an Investor is
      participating, each such Investor agrees to severally and not jointly indemnify,
      hold harmless and defend, to the same extent and in the same manner as is set
      forth in Section 6(a), the Company, each of its directors, each of its officers
      who signs the Registration Statement and each Person, if any, who controls
      the
      Company within the meaning of the 1933 Act or the 1934 Act (each, an
      "Indemnified Party"), against any Claim or Indemnified Damages
      to which any of them may become subject, under the 1933 Act, the 1934 Act or
      otherwise, insofar as such Claim or Indemnified Damages arise out of or are
      based upon any Violation, in each case to the extent, and only to the extent,
      that such Violation occurs in reliance upon and in conformity with written
      information furnished to the Company by such Investor expressly for use in
      connection with such Registration Statement; and, subject to Section 6(c),
      such
      Investor will reimburse any legal or other expenses reasonably incurred by
      an
      Indemnified Party in connection with investigating or defending any such Claim;
      provided, however, that the indemnity agreement contained in this Section 6(b)
      and the agreement with respect to contribution contained in Section 7 shall
      not
      apply to amounts paid in settlement of any Claim if such settlement is effected
      without the prior written consent of such Investor, which consent shall not
      be
      unreasonably withheld or delayed; provided, further, however, that an Investor
      shall be liable under this Section 6(b) for only that amount of a Claim or
      Indemnified Damages as does not exceed the net proceeds to such Investor as
      a
      result of the sale of Registrable Securities pursuant to such Registration
      Statement.  Such indemnity shall remain in full force and effect
      regardless of any investigation made by or on behalf of such Indemnified Party
      and shall survive the transfer of the Registrable Securities by the Investors
      pursuant to Section 9.  Notwithstanding anything to the contrary
      contained herein, the indemnification agreement contained in this Section 6(b)
      with respect to any preliminary prospectus shall not inure to the benefit of
      any
      Indemnified Party if the untrue statement or omission of material fact contained
      in the preliminary prospectus was corrected on a timely basis in the prospectus,
      as then amended or supplemented.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (c)           Promptly
      after receipt by an Indemnified Person or Indemnified Party under this Section
      6
      of notice of the commencement of any action or proceeding (including any
      governmental action or proceeding) involving a Claim, such Indemnified Person
      or
      Indemnified Party shall, if a Claim in respect thereof is to be made against
      any
      indemnifying party under this Section 6, deliver to the indemnifying party
      a
      written notice of the commencement thereof, and the indemnifying party shall
      have the right to participate in, and, to the extent the indemnifying party
      so
      desires, jointly with any other indemnifying party similarly noticed, to assume
      control of the defense thereof with counsel mutually satisfactory to the
      indemnifying party and the Indemnified Person or the Indemnified Party, as
      the
      case may be; provided, however, that an Indemnified Person or Indemnified Party
      shall have the right to retain its own counsel with the fees and expenses of
      not
      more than one counsel for such Indemnified Person or Indemnified Party to be
      paid by the indemnifying party, if, in the reasonable opinion of the Indemnified
      Person or the Indemnified Party, as the case may be, the representation by
      such
      counsel of the Indemnified Person or Indemnified Party and the indemnifying
      party would be inappropriate due to actual or potential differing interests
      between such Indemnified Person or Indemnified Party and any other party
      represented by such counsel in such proceeding.  In the case of an
      Indemnified Person, legal counsel referred to in the immediately preceding
      sentence shall be selected by the Investors holding at least a majority in
      interest of the Registrable Securities included in the Registration Statement
      to
      which the Claim relates.  The Indemnified Party or Indemnified Person
      shall cooperate fully with the indemnifying party in connection with any
      negotiation or defense of any such action or Claim by the indemnifying party
      and
      shall furnish to the indemnifying party all information reasonably available
      to
      the Indemnified Party or Indemnified Person which relates to such action or
      Claim.  The indemnifying party shall keep the Indemnified Party or
      Indemnified Person fully apprised at all times as to the status of the defense
      or any settlement negotiations with respect thereto.  No indemnifying
      party shall be liable for any settlement of any action, claim or proceeding
      effected without its prior written consent, provided, however, that the
      indemnifying party shall not unreasonably withhold, delay or condition its
      consent.  No indemnifying party shall, without the prior written
      consent of the Indemnified Party or Indemnified Person, consent to entry of
      any
      judgment or enter into any settlement or other compromise which does not include
      as an unconditional term thereof the giving by the claimant or plaintiff to
      such
      Indemnified Party or Indemnified Person of a release from all liability in
      respect to such Claim or litigation and such settlement shall not include any
      admission as to fault on the part of the Indemnified Party.  Following
      indemnification as provided for hereunder, the indemnifying party shall be
      subrogated to all rights of the Indemnified Party or Indemnified Person with
      respect to all third parties, firms or corporations relating to the matter
      for
      which indemnification has been made.  The failure to deliver written
      notice to the indemnifying party within a reasonable time of the commencement
      of
      any such action shall not relieve such indemnifying party of any liability
      to
      the Indemnified Person or Indemnified Party under this Section 6, except to
      the
      extent that the indemnifying party is prejudiced in its ability to defend such
      action.

     

    (d)           The
      indemnification required by this Section 6 shall be made by periodic payments
      of
      the amount thereof during the course of the investigation or defense, as and
      when bills are received or Indemnified Damages are incurred.

     

    (e)           The
      indemnity agreements contained herein shall be in addition to (i) any cause
      of
      action or similar right of the Indemnified Party or Indemnified Person against
      the indemnifying party or others, and (ii) any liabilities the indemnifying
      party may be subject to pursuant to the law.

     

    7.           Contribution.

     

    To
      the
      extent any indemnification by an indemnifying party is prohibited or limited
      by
      law, the indemnifying party agrees to make the maximum contribution with respect
      to any amounts for which it would otherwise be liable under Section 6 to the
      fullest extent permitted by law; provided, however, that:  (i) no
      Person involved in the sale of Registrable Securities which Person is guilty
      of
      fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
      Act) in connection with such sale shall be entitled to contribution from any
      Person involved in such sale of Registrable Securities who was not guilty of
      fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
      Securities shall be limited in amount to the net amount of proceeds received
      by
      such seller from the sale of such Registrable Securities pursuant to such
      Registration Statement.

     

    8.           Reports
      Under the 1934 Act.

     

    With
      a
      view to making available to the Investors the benefits of Rule 144 promulgated
      under the 1933 Act or any other similar rule or regulation of the SEC that
      may
      at any time permit the Investors to sell securities of the Company to the public
      without registration ("Rule 144"), the Company agrees
      to:

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    (a)           make
      and keep public information available, as those terms are understood and defined
      in Rule 144;

     

    (b)           file
      with the SEC in a timely manner all reports and other documents required of
      the
      Company under the 1933 Act and the 1934 Act so long as the Company remains
      subject to such requirements and the filing of such reports and other documents
      is required for the applicable provisions of Rule 144; and

     

    (c)           furnish
      to each Investor so long as such Investor owns Registrable Securities, promptly
      upon request, (i) a written statement by the Company, if true, that it has
      complied with the reporting requirements of Rule 144, the 1933 Act and the
      1934
      Act, (ii) a copy of the most recent annual or quarterly report of the Company
      and such other reports and documents so filed by the Company, and (iii) such
      other information as may be reasonably requested to permit the Investors to
      sell
      such securities pursuant to Rule 144 without registration.

     

    9.           Assignment
      of Registration Rights.

     

    The
      rights under this Agreement shall be automatically assignable by the Investors
      to any transferee of all or any portion of such Investor's Registrable
      Securities if:  (i) the Investor agrees in writing with the transferee
      or assignee to assign such rights, and a copy of such agreement is furnished
      to
      the Company within a reasonable time after such assignment; (ii) the Company
      is,
      within a reasonable time after such transfer or assignment, furnished with
      written notice of (a) the name and address of such transferee or assignee,
      and
      (b) the securities with respect to which such registration rights are being
      transferred or assigned; (iii) immediately following such transfer or assignment
      the further disposition of such securities by the transferee or assignee is
      restricted under the 1933 Act and applicable state securities laws; (iv) at
      or
      before the time the Company receives the written notice contemplated by clause
      (ii) of this sentence the transferee or assignee agrees in writing with the
      Company to be bound by all of the provisions contained herein; and (v) such
      transfer shall have been made in accordance with the applicable requirements
      of
      the Securities Purchase Agreement.

     

    10.           Amendment
      of Registration Rights.

     

    Provisions
      of this Agreement may be amended and the observance thereof may be waived
      (either generally or in a particular instance and either retroactively or
      prospectively), only with the written consent of the Company and the Required
      Holders.  Any amendment or waiver effected in accordance with this
      Section 10 shall be binding upon each Investor and the Company.  No
      such amendment shall be effective to the extent that it applies to less than
      all
      of the holders of the Registrable Securities.  No consideration shall
      be offered or paid to any Person to amend or consent to a waiver or modification
      of any provision of this Agreement unless the same consideration also is offered
      to all of the parties to this Agreement.

     

    11.           Miscellaneous.

     

    (a)           A
      Person is deemed to be a holder of Registrable Securities whenever such Person
      owns or is deemed to own of record such Registrable Securities.  If
      the Company receives conflicting instructions, notices or elections from two
      or
      more Persons with respect to the same Registrable Securities, the Company shall
      act upon the basis of instructions, notice or election received from the record
      owner of such Registrable Securities.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    (b)           Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Agreement must be in writing and will be deemed
      to
      have been delivered:  (i) upon receipt, when delivered personally;
      (ii) upon receipt, when sent by facsimile (provided confirmation of transmission
      is mechanically or electronically generated and kept on file by the sending
      party); or (iii) one Business Day after deposit with a nationally recognized
      overnight delivery service, in each case properly addressed to the party to
      receive the same.  The addresses and facsimile numbers for such
      communications shall be:

     

    If
      to the
      Company:

    

    Maple
      Mountain Explorations Inc.

    #507,
      1313 East Maple Street, Suite 201

    Bellingham,
      WA 98225

    Telephone:     (360)
      824-6463

    Facsimile:        (360)
      824-6463

    Attention:       Marvin
      Wosk, President

    

     
      Copy to:

    

    Sichenzia
      Ross Friedman & Ference LLP

    61
      Broadway

    New
      York,
      NY 10006

    Telephone:
      212-981-6766

    Facsimile:
      212-930-9725

    Attention:
      Louis A. Brilleman

    

    
      	
               

            	
              If
                to Legal Counsel:

            

    

     

    Schulte
      Roth & Zabel LLP

    919
      Third
      Avenue

    New
      York,
      New York  10022

    Telephone:      (212)
      756-2000

    Facsimile:         (212)
      593-5955

    Attention:        Eleazer
      Klein, Esq.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    If
      to a
      Buyer, to its address and facsimile number set forth on the Schedule of Buyers
      attached hereto, with copies to such Buyer's representatives as set forth on
      the
      Schedule of Buyers, or to such other address and/or facsimile number and/or
      to
      the attention of such other Person as the recipient party has specified by
      written notice given to each other party five (5) days prior to the
      effectiveness of such change.  Written confirmation of receipt (A)
      given by the recipient of such notice, consent, waiver or other communication,
      (B) mechanically or electronically generated by the sender's facsimile machine
      containing the time, date, recipient facsimile number and an image of the first
      page of such transmission or (C) provided by a courier or overnight courier
      service shall be rebuttable evidence of personal service, receipt by facsimile
      or receipt from a nationally recognized overnight delivery service in accordance
      with clause (i), (ii) or (iii) above, respectively.

     

    (c)           Failure
      of any party to exercise any right or remedy under this Agreement or otherwise,
      or delay by a party in exercising such right or remedy, shall not operate as
      a
      waiver thereof.

     

    (d)           All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by the internal laws of the State of New
      York, without giving effect to any choice of law or conflict of law provision
      or
      rule (whether of the State of New York or any other jurisdictions) that would
      cause the application of the laws of any jurisdictions other than the State
      of
      New York.  Each party hereby irrevocably submits to the exclusive
      jurisdiction of the state and federal courts sitting in The City of New York,
      Borough of Manhattan, for the adjudication of any dispute hereunder or in
      connection herewith or with any transaction contemplated hereby or discussed
      herein, and hereby irrevocably waives, and agrees not to assert in any suit,
      action or proceeding, any claim that it is not personally subject to the
      jurisdiction of any such court, that such suit, action or proceeding is brought
      in an inconvenient forum or that the venue of such suit, action or proceeding
      is
      improper.  Each party hereby irrevocably waives personal service of
      process and consents to process being served in any such suit, action or
      proceeding by mailing a copy thereof to such party at the address for such
      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 HEREBY IRREVOCABLY
      WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
      ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING
      OUT
      OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

     

    (e)           This
      Agreement, the other Transaction Documents (as defined in the Securities
      Purchase Agreement) and the instruments referenced herein and therein constitute
      the entire agreement among the parties hereto with respect to the subject matter
      hereof and thereof.  There are no restrictions, promises, warranties
      or undertakings, other than those set forth or referred to herein and
      therein.  This Agreement, the other Transaction Documents and the
      instruments referenced herein and therein supersede all prior agreements and
      understandings among the parties hereto with respect to the subject matter
      hereof and thereof.

     

    (f)           Subject
      to the requirements of Section 9, this Agreement shall inure to the benefit
      of
      and be binding upon the permitted successors and assigns of each of the parties
      hereto.

     

    (g)           The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof.

     

    (h)           This
      Agreement may be executed in identical counterparts, each of which shall be
      deemed an original but all of which shall constitute one and the same
      agreement.  This Agreement, once executed by a party, may be delivered
      to the other party hereto by facsimile transmission of a copy of this Agreement
      bearing the signature of the party so delivering this Agreement.

     

    (i)           Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments and documents, as any other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement and the consummation of the transactions contemplated
      hereby.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    (j)           All
      consents and other determinations required to be made by the Investors pursuant
      to this Agreement shall be made, unless otherwise specified in this Agreement,
      by the Required Holders, determined as if all of the Warrants held by Investors
      then outstanding have been exercised for Registrable Securities without regard
      to any limitations on exercise of the Warrants.

     

    (k)           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.

     

    (l)           This
      Agreement is intended for the benefit of the parties hereto and their respective
      permitted successors and assigns, and is not for the benefit of, nor may any
      provision hereof be enforced by, any other Person.

     

    (m)           If
      any provision of this Agreement is prohibited by law or otherwise determined
      to
      be invalid or unenforceable by a court of competent jurisdiction, the provision
      that would otherwise be prohibited, invalid or unenforceable shall be deemed
      amended to apply to the broadest extent that it would be valid and enforceable,
      and the invalidity or unenforceability of such provision shall not affect the
      validity of the remaining provisions of this Agreement so long as this Agreement
      as so modified continues to express, without material change, the original
      intentions of the parties as to the subject matter hereof and the prohibited
      nature, invalidity or unenforceability of the provision(s) in question does
      not
      substantially impair the respective expectations or reciprocal obligations
      of
      the parties or the practical realization of the benefits that would otherwise
      be
      conferred upon the parties.  The parties will endeavor in good faith
      negotiations to replace the prohibited, invalid or unenforceable provision(s)
      with a valid provision(s), the effect of which comes as close as possible to
      that of the prohibited, invalid or unenforceable provision(s).

     

    (n)           The
      obligations of each Buyer hereunder are several and not joint with the
      obligations of any other Buyer, and no provision of this Agreement is intended
      to confer any obligations on any Buyer vis-à-vis any other
      Buyer.  Nothing contained herein, and no action taken by any Buyer
      pursuant hereto, shall be deemed to constitute the Buyers as a partnership,
      an
      association, a joint venture or any other kind of entity, or create a
      presumption that the Buyers are in any way acting in concert or as a group
      with
      respect to such obligations or the transactions contemplated
      herein.

     

    *
      * * * *
      *

    
      
              
        

          
            	                

                                                     
              	 	 

          
      
      

                  
      
    

         

      

      
        16

        
          

        

      

      
         

      

    

    

     

    IN
      WITNESS WHEREOF, each Buyer and the Company have caused their
      respective signature page to this Registration Rights Agreement to be duly
      executed as of the date first written above.

    

    
      	
              COMPANY:

               

            
	
              MAPLE
                MOUNTAIN EXPLORATIONS INC.

              By:

              Name:Title:

            
	 

    

    

     

    
      
              
        

          
            	                

                                                      
              	 	 

          
      
      

                  
      
    

         

      

      
        17

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, each Buyer and the Company have caused their
      respective signature page to this Registration Rights Agreement to be duly
      executed as of the date first written above.

    

    
      	
              BUYERS:

               

            
	
              INVESTCORP
                INTERLACHEN MULTI-STRATEGY MASTER FUND

              By:

              Name:

              Title:

            
	 

    

    

     

    
      
              
        

          
            	                

                                      10524395.5                
              	 	 

          
      
      

                  [Signature
            Page to Registration Rights Agreement]      
    

         

      

      
        18

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, each Buyer and the Company have caused their
      respective signature page to this Registration Rights Agreement to be duly
      executed as of the date first written above.

    
      	
              BUYERS:

               

            
	
              [OTHER
                BUYERS]

              By:

              Name:

              Title:

            
	 

    

    

     

    

     

    
      
              
        

          
            	                

                                                      
              	 	 

          
      
      

                  [Signature
            Page to Registration Rights Agreement]      
    

         

      

      
        19

        
          

        

      

      
         

      

    

    

    SCHEDULE
      OF BUYERS

    

    
      	
               

              Buyer

            	
              Buyer
                Address

              and
                Facsimile Number

            	
              Buyer's
                Representative's Address

              and
                Facsimile Number

            
	 	 	 
	
              Investcorp
                Interlachen Multi-Strategy Master Fund

               

            	
              c/o
                Interlachen Capital Group LP

              800
                Nicollet Mall, Suite 2500

              Minneapolis,
                MN 55402-2034

              Attention:  Gregg
                T. Colburn

              Facsimile:  (612)
                659-4457

              Telephone:
                (612) 659-4407

               

               

            	
              Schulte
                Roth & Zabel LLP

              919
                Third Avenue

              New
                York, New York  10022

              Attention:  Eleazer
                Klein, Esq.

              Facsimile:  (212)
                593-5955

              Telephone:  (212)
                756-2000

            
	
              [Other
                Buyers]

            	 	 

    

    
      
              
        

          
            	                

                                                       
              	 	 

          
      
      

                  
      
    

         

      

      
        20

        
          

        

      

      
         

      

    

    EXHIBIT
      A

     

    FORM
      OF NOTICE OF EFFECTIVENESS

     

    OF
      REGISTRATION STATEMENT

    

    

    Holliday
      Stock Transfer, Inc.

    2939
      N
      67th
      Place

    Scottsdale,
      AZ, 85251

    Telephone:
      (480) 481-3940

    Facsimile:
      (480) 481-3941

    

    Re:           Pegasi
      Energy Resources Corporation

     

    Ladies
      and Gentlemen:

    

    [We
      are][I am] counsel to Pegasi Energy
      Resources Corporation, a Nevada corporation (the
      "Company"), and have represented the Company in connection with
      that certain Securities Purchase Agreement, dated as of November [  ],
      2007 (the "SecuritiesPurchase Agreement"),
      entered into by and among the Company and the buyers named therein
      (collectively, the "Holders") pursuant to which the Company
      issued to the Holders shares of the Company's Common Stock, par value $0.001
      per
      share (the "Common Stock") and warrants exercisable for shares
      of Common Stock (the "Warrants").  Pursuant to the
      Securities Purchase Agreement, the Company also has entered into a Registration
      Rights Agreement with the Holders (the "Registration Rights
      Agreement") pursuant to which the Company agreed, among other things,
      to register the resale of the Registrable Securities (as defined in the
      Registration Rights Agreement), including the shares of Common Stock issuable
      upon exercise of the Warrants under the Securities Act of 1933, as amended
      (the
      "1933 Act").  In connection with the Company's
      obligations under the Registration Rights Agreement, on ____________ ___, 2007,
      the Company filed a Registration Statement on Form
      S-3 (File No. 333-_____________) (the
      "Registration Statement") with the Securities and Exchange
      Commission (the "SEC") relating to the Registrable Securities
      which names each of the Holders as a selling stockholder
      thereunder.

     

    In
      connection with the foregoing,
      [we][I] advise you that a member of the SEC's staff has advised [us][me] by
      telephone that the SEC has entered an order declaring the Registration
      Statement effective under the 1933 Act at [ENTER TIME OF
      EFFECTIVENESS] on [ENTER DATE OF
      EFFECTIVENESS] and we have no knowledge, after telephonic
      inquiry of a member of the SEC's staff, that any stop order suspending its
      effectiveness has been issued or that any proceedings for that purpose are
      pending before, or threatened by, the SEC and the Registrable Securities are
      available for resale under the 1933 Act pursuant to the Registration
      Statement.

     

    This
      letter shall serve as our standing instruction to you that the shares of Common
      Stock are freely transferable by the Holders pursuant to the Registration
      Statement.  You need not require further letters from us to effect any
      future legend-free issuance or reissuance of shares of Common Stock to the
      Holders as contemplated by the Company's Irrevocable Transfer Agent Instructions
      dated November [__], 2007.

     

    Very
      truly yours,

     

    [ISSUER'S
      COUNSEL]

     

    By:_____________________

     

    CC:           [LIST
      NAMES OF HOLDERS]

    
      
              
        

          
            	                

                                                      
              	 	 

          
      
      

                  
      
    

         

      

      
        21

        
          

        

      

      
         

      

    

    ANNEX
      I

    SELLING
      STOCKHOLDERS

     

    The
      shares of common stock being offered by the selling stockholders are those
      previously issued to the Selling Stockholders and those issuable to the Selling
      Stockholders upon exercise of the warrants.  For additional
      information regarding the issuances of common stock and the warrants, see
      "Private Placement of Common Shares and Warrants" above.  We are
      registering the shares of common stock in order to permit the selling
      stockholders to offer the shares for resale from time to time.  Except
      for the ownership of the shares of common stock and the warrants, the selling
      stockholders have not had any material relationship with us within the past
      three years.

     

    The
      table
      below lists the selling stockholders and other information regarding the
      beneficial ownership of the shares of common stock by each of the selling
      stockholders.  The second column lists the number of shares of common
      stock beneficially owned by each selling shareholder, based on its ownership
      of
      the shares of common stock and the warrants, as of ________, 2007, assuming
      exercise of the warrants held by the selling stockholders on that date, without
      regard to any limitations on exercise.

     

    The
      third
      column lists the shares of common stock being offered by this prospectus by
      the
      selling stockholders.

     

    In
      accordance with the terms of registration rights agreements with the holders
      of
      the shares of common stock and the warrants, this prospectus generally covers
      the resale of at least the sum of (i) the number of shares of common stock
      issued and (ii) 100% of the shares of common stock issued and issuable upon
      exercise of the related warrants, determined as if the outstanding warrants
      were
      exercised, as applicable, in full, as of the trading day immediately preceding
      the date this registration statement was initially filed with the
      SEC.  The fourth column assumes the sale of all of the shares offered
      by the selling stockholders pursuant to this prospectus.

     

    Under
      the
      terms of the warrants, a selling stockholder may not exercise the warrants,
      to
      the extent such exercise would cause such selling stockholder, together with
      its
      affiliates, to beneficially own a number of shares of common stock which would
      exceed 4.99% of our then outstanding shares of common stock following such
      exercise, excluding for purposes of such determination shares of common stock
      issuable upon exercise of the warrants which have not been
      exercised.  The number of shares in the second column does not reflect
      this limitation.  The selling stockholders may sell all, some or none
      of their shares in this offering.  See "Plan of
      Distribution."

     

    
      
              
        

          
            	                

                                                       
              	 	 

          
      
      

                  
      
    

         

      

      
        22

        
          

        

      

      
         

      

    

    

     

    
      	
              Name
                of Selling Stockholder

            	
              Number
                of Shares of Common Stock Owned Prior to Offering

            	
              Maximum
                Number of Shares of Common Stock to be Sold Pursuant to this
                Prospectus

            	
              Number
                of Shares of Common Stock Owned After Offering

            
	
              Investcorp
                Interlachen Multi-Strategy Master Fund (1)

            	 	 	
              0

            
	
              [Other
                Buyers]

            	 	 	 

    

    

     

    (1)           Interlachen
      Capital Group LP is the trading manager of Investcorp Interlachen Multi-Strategy
      Master Fund Limited and has voting and investment discretion over securities
      held by Investcorp Interlachen Multi-Strategy Master Fund
      Limited.  Andrew Fraley, in his role as Chief Investment Officer of
      Interlachen Capital Group LP, has voting control and investment discretion
      over
      securities held by Investcorp Interlachen Multi-Strategy Master Fund
      Limited.  Andrew Fraley disclaims beneficial ownership of the
      securities held by Investcorp Interlachen Multi-Strategy Master Fund
      Limited.

    
      
              
        

          
            	                

                                                      
              	 	 

          
      
      

                  
      
    

         

      

      
        23

        
          

        

      

      
         

      

    

    PLAN
      OF DISTRIBUTION

     

    We
      are
      registering the shares of common stock previously issued and the shares of
      common stock issuable upon exercise of the warrants to permit the resale of
      these shares of common stock by the holders of the common stock and warrants
      from time to time after the date of this prospectus.  We will not
      receive any of the proceeds from the sale by the selling stockholders of the
      shares of common stock.  We will bear all fees and expenses incident
      to our obligation to register the shares of common stock.

     

    The
      selling stockholders may sell all or a portion of the shares of common stock
      beneficially owned by them and offered hereby from time to time directly or
      through one or more underwriters, broker-dealers or agents.  If the
      shares of common stock are sold through underwriters or broker-dealers, the
      selling stockholders will be responsible for underwriting discounts or
      commissions or agent's commissions.  The shares of common stock may be
      sold in one or more transactions at fixed prices, at prevailing market prices
      at
      the time of the sale, at varying prices determined at the time of sale, or
      at
      negotiated prices.  These sales may be effected in transactions, which
      may involve crosses or block transactions,

     

    
      	
              ·  

            	
              on
                any national securities exchange or quotation service on which the
                securities may be listed or quoted at the time of
                sale;

            

    

     

    
      	
              ·  

            	
              in
                the over-the-counter market;

            

    

     

    
      	
              ·  

            	
              in
                transactions otherwise than on these exchanges or systems or in the
                over-the-counter market;

            

    

     

    
      	
              ·  

            	
              through
                the writing of options, whether such options are listed on an options
                exchange or otherwise;

            

    

     

    
      	
              ·  

            	
              ordinary
                brokerage transactions and transactions in which the broker-dealer
                solicits purchasers;

            

    

     

    
      	
              ·  

            	
              block
                trades in which the broker-dealer will attempt to sell the shares
                as agent
                but may position and resell a portion of the block as principal to
                facilitate the transaction;

            

    

     

    
      	
              ·  

            	
              purchases
                by a broker-dealer as principal and resale by the broker-dealer for
                its
                account;

            

    

     

    
      	
              ·  

            	
              an
                exchange distribution in accordance with the rules of the applicable
                exchange;

            

    

     

    
      	
              ·  

            	
              privately
                negotiated transactions;

            

    

     

    
      	
              ·  

            	
              short
                sales;

            

    

     

    
      	
              ·  

            	
              sales
                pursuant to Rule 144;

            

    

     

    
      	
              ·  

            	
              broker-dealers
                may agree with the selling securityholders to sell a specified number
                of
                such shares at a stipulated price per
                share;

            

    

     

    
      	
              ·  

            	
              a
                combination of any such methods of sale;
                and

            

    

     

    
      	
              ·  

            	
              any
                other method permitted pursuant to applicable
                law.

            

    

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    If
      the
      selling stockholders effect such transactions by selling shares of common stock
      to or through underwriters, broker-dealers or agents, such underwriters,
      broker-dealers or agents may receive commissions in the form of discounts,
      concessions or commissions from the selling stockholders or commissions from
      purchasers of the shares of common stock for whom they may act as agent or
      to
      whom they may sell as principal (which discounts, concessions or commissions
      as
      to particular underwriters, broker-dealers or agents may be in excess of those
      customary in the types of transactions involved).  In connection with
      sales of the shares of common stock or otherwise, the selling stockholders
      may
      enter into hedging transactions with broker-dealers, which may in turn engage
      in
      short sales of the shares of common stock in the course of hedging in positions
      they assume.  The selling stockholders may also sell shares of common
      stock short and deliver shares of common stock covered by this prospectus to
      close out short positions and to return borrowed shares in connection with
      such
      short sales.  The selling stockholders may also loan or pledge shares
      of common stock to broker-dealers that in turn may sell such
      shares.

     

    The
      selling stockholders may pledge or grant a security interest in some or all
      of
      the warrants or shares of common stock owned by them and, if they default in
      the
      performance of their secured obligations, the pledgees or secured parties may
      offer and sell the shares of common stock from time to time pursuant to this
      prospectus or any amendment to this prospectus under Rule 424(b)(3) or other
      applicable provision of the Securities Act of 1933, as amended, amending, if
      necessary, the list of selling stockholders to include the pledgee, transferee
      or other successors in interest as selling stockholders under this
      prospectus.  The selling stockholders also may transfer and donate the
      shares of common stock in other circumstances in which case the transferees,
      donees, pledgees or other successors in interest will be the selling beneficial
      owners for purposes of this prospectus.

     

    The
      selling stockholders and any broker-dealer participating in the distribution
      of
      the shares of common stock may be deemed to be "underwriters" within the meaning
      of the Securities Act, and any commission paid, or any discounts or concessions
      allowed to, any such broker-dealer may be deemed to be underwriting commissions
      or discounts under the Securities Act.  At the time a particular
      offering of the shares of common stock is made, a prospectus supplement, if
      required, will be distributed which will set forth the aggregate amount of
      shares of common stock being offered and the terms of the offering, including
      the name or names of any broker-dealers or agents, any discounts, commissions
      and other terms constituting compensation from the selling stockholders and
      any
      discounts, commissions or concessions allowed or reallowed or paid to
      broker-dealers.

     

    Under
      the
      securities laws of some states, the shares of common stock may be sold in such
      states only through registered or licensed brokers or dealers.  In
      addition, in some states the shares of common stock may not be sold unless
      such
      shares have been registered or qualified for sale in such state or an exemption
      from registration or qualification is available and is complied
      with.

     

    There
      can
      be no assurance that any selling stockholder will sell any or all of the shares
      of common stock registered pursuant to the shelf registration statement, of
      which this prospectus forms a part.

     

    The
      selling stockholders and any other person participating in such distribution
      will be subject to applicable provisions of the Securities Exchange Act of
      1934,
      as amended, and the rules and regulations thereunder, including, without
      limitation, Regulation M of the Exchange Act, which may limit the timing of
      purchases and sales of any of the shares of common stock by the selling
      stockholders and any other participating person.  Regulation M may
      also restrict the ability of any person engaged in the distribution of the
      shares of common stock to engage in market-making activities with respect to
      the
      shares of common stock.  All of the foregoing may affect the
      marketability of the shares of common stock and the ability of any person or
      entity to engage in market-making activities with respect to the shares of
      common stock.

     

    We
      will
      pay all expenses of the registration of the shares of common stock pursuant
      to
      the registration rights agreement, estimated to be
      $[     ] in total, including, without limitation,
      Securities and Exchange Commission filing fees and expenses of compliance with
      state securities or "blue sky" laws; provided, however, that a selling
      stockholder will pay all underwriting discounts and selling commissions, if
      any.  We will indemnify the selling stockholders against liabilities,
      including some liabilities under the Securities Act, in accordance with the
      registration rights agreements, or the selling stockholders will be entitled
      to
      contribution.  We may be indemnified by the selling stockholders
      against civil liabilities, including liabilities under the Securities Act,
      that
      may arise from any written information furnished to us by the selling
      stockholder specifically for use in this prospectus, in accordance with the
      related registration rights agreements, or we may be entitled to
      contribution.

     

     

    Once
      sold
      under the shelf registration statement, of which this prospectus forms a part,
      the shares of common stock will be freely tradable in the hands of persons
      other
      than our affiliates.

    

    

    
      
              
        

          
            	                

                                      10524395.5                
              	 	 

          
      
      

                  
      
    

         

      

      
        25

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