Document:

January 28,
2011

    

    Chardan
Capital Markets, LLC

    17 State
Street

    Suite
1600

    New York,
NY 10004

    

    Re:  Registered
Direct Financing

    

    Ladies
and Gentlemen:

        

    This
letter agreement (this “Agreement”) confirms our understanding and the terms and
conditions under which Chardan Capital Markets, LLC (“Chardan”) shall introduce
Adeona Pharmaceuticals, Inc., (the “Company”) to one or more investors (each an
“Investor” and together the “Investors”).  This Agreement relates
exclusively to the proposed offering of up to 2 million shares of common stock
securities of the Company (the “Securities”) pursuant to one or more
subscription or purchase agreements to the extent entered into by the Company on
or before the two week anniversary hereof (the “Offering”). The terms of such
Offering and the Securities shall be mutually agreed upon by the Company and the
Investors.

     

    The term
of this engagement shall begin on the date hereof and shall continue for two (2)
weeks or until earlier terminated by the final closing of the
Offering.

     

    As
exclusive consideration of the services rendered by Chardan under this
Agreement, the Company agrees to pay Chardan, upon the successful completion of
the initial closing of the Offering (the “Initial Closing”) and out of the
closing escrow (or other means acceptable to Chardan and Company) the following
fees and other compensation:

    

    
      	
              (A)

            	
              a
      cash fee equal to 6.0% of the gross proceeds raised in the Offering,
      payable immediately upon such closing. All such fees will be contingent
      upon the successful completion and closing of the
  Offering.

            

    

    

    
      	
              (B)

            	
              Chardan
      will be responsible for its own expenses, except for the reimbursement of
      $5,000 for legal fees.

            

    

    

    Except as
contemplated by the terms hereof, or as required by applicable law or pursuant
to an order entered or subpoena issued by a court of competent jurisdiction,
Chardan shall keep confidential all material non-public information provided to
it by the Company, and shall not disclose such information to any third party,
other than such of its employees and advisors as Chardan determines to have a
need to know.  Chardan shall use its reasonable best efforts to ensure
that its employees and advisors adhere to these confidentiality provisions as if
such persons were original parties hereto.

    

    This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard to conflicts of law principles. Any dispute
arising out of this Agreement shall be adjudicated in the courts of the State of
New York or in the federal courts sitting in the Southern District of New York,
and each of the parties hereto agrees that service of process upon it by
registered or certified mail at its address set forth herein shall be deemed
adequate and lawful.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Chardan
Capital Markets, LLC

    January
28, 2011

    Page 2 of
2

    

    Chardan
shall be a third party beneficiary to the Common Stock Purchase Agreement, dated
January 28, 2011, by and among the Company and the Investors with respect to the
opinion delivered in Section 3 and Section 7(ii) and may rely on such provisions
as if Chardan were a party thereto. Except as otherwise set forth in this
Agreement, this Agreement constitutes the entire understanding and agreement
between the parties hereto with respect to its subject matter and there are no
agreements or understandings with respect to the subject matter hereof which are
not contained in this Agreement. This Agreement may be modified only in writing
signed by the party to be charged hereunder.

    

     If
the foregoing correctly sets forth our agreement, please confirm this by signing
and returning to us the duplicate copy of this letter.

    

    
      
        	
                Very
      truly yours,

              
	 
      
	
                Adeona
      Pharmaceuticals, Inc.

              
	 
      
	
                By:  

              	
                      

              
	 
      	
                Name:  James
      S. Kuo, M.D., M.B.A.

              
	 
      	
                Title:    Chairman
      and CEO

              
	 
      
	
                Chardan
      Capital Markets, LLC

              
	 
      
	
                By:

              	
                      

              
	 
      	
                Name:

              
	 
      	
                Title:EXECUTION
VERSION

      

    SECURITIES
PURCHASE AGREEMENT

     

    SECURITIES PURCHASE AGREEMENT
(the "Agreement"), dated
as of January 28, 2011, by and among Adeona Pharmaceuticals, Inc., a Nevada
corporation, with headquarters located at 3930 Varsity Drive, Ann Arbor,
Michigan 48108 (the "Company"), and the investors
listed on the Schedule of Buyers attached hereto (individually, a "Buyer" and collectively, the
"Buyers").

     

    WHEREAS:

     

    A.           The
Company and the Buyers desire to enter into this transaction to purchase the
Common Shares (as defined below) and Warrants (as defined below) pursuant to a
currently effective shelf registration statement on Form S-3, which has at least
$4,000,000 of initial offering price of unallocated securities available for
sale as of the date hereof (Registration Number 333-166750) (the "Registration Statement"),
which Registration Statement has been declared effective in accordance with the
Securities Act of 1933, as amended (the "1933 Act"), by the United
States Securities and Exchange Commission (the "SEC").

     

    B.           Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement, (i) that aggregate number of shares of
common stock, par value $0.001 per share, of the Company (the "Common Stock") 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 2,000,000 and shall
collectively be referred to herein as the "Common Shares"), (ii)
warrants, in substantially the form attached hereto as Exhibit A (the "Warrants"), to acquire up to
that number of shares of Common Stock set forth opposite such Buyer's name in
column (4) of the Schedule of Buyers (as exercised, collectively, the " Warrant Shares"), which
Warrant Shares shall be issued pursuant to the Registration Statement or, if
such Registration Statement is not available at the time of issuance of such
Warrant Shares, shall be issued solely pursuant to the cashless exercise
provisions of the Warrant as securities exempt from registration pursuant to
Section 3(a)(9) of the 1933 Act.

     

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

     

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

     

    1.           PURCHASE AND SALE OF COMMON
SHARES AND WARRANTS.

     

    (a)           Purchase of Common Shares
and Warrants.

     

    (i)           Common Shares and
Warrants. 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, shall purchase from the Company on the Closing Date (as defined
below), (x) the number of Common Shares as is set forth opposite such
Buyer's name in column (3) on the Schedule of Buyers, and (y) Warrants to
acquire up to that number of Warrant Shares as is set forth opposite such
Buyer's name in column (4) on the Schedule of Buyers (the "Closing").

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    (ii)           Closing.  The
date and time of the Closing (the "Closing Date") shall be 10:00
a.m., New York City time, on the third (3rd) Trading Day after the date hereof
(or such earlier 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.  The timing of the
Closing shall be in accordance with Rule 15c6-1 promulgated under the 1934
Act.

     

    (iii)           Purchase
Price.  The aggregate purchase price for the Common Shares and
the Warrants to be purchased by such Buyer at the Closing (the "Purchase Price") shall be the
amount set forth opposite such Buyer's name in column (5) of the Schedule of
Buyers.

     

    (b)           Form of
Payment.  On the Closing Date, (i) each Buyer shall pay its
Purchase Price to the Company for the Common Shares and the Warrants to be
issued and sold to such Buyer at the Closing, by wire transfer of immediately
available funds in accordance with the Company's written wire instructions
(less, in the case of [Buyer1 ], the amount withheld pursuant to Section 4(f))
and (ii) the Company shall (A) cause Corporate Stock Transfer Inc.
(together with any subsequent transfer agent, the "Transfer Agent") through the
Depository Trust Company ("DTC") Fast Automated
Securities Transfer Program, to credit such aggregate number of Common Shares
that such Buyer is purchasing as is set forth opposite such Buyer's name in
column (3) of the Schedule of Buyers to such Buyer's or its designee's balance
account with DTC through its Deposit/Withdrawal at Custodian system and (B)
deliver to each Buyer the Warrants (allocated in the amounts as such Buyer shall
request) which such Buyer is purchasing, in each case duly executed on behalf of
the Company and registered in the name of such Buyer or its
designee.

     

    2.           BUYER'S REPRESENTATIONS AND
WARRANTIES.  Each Buyer, severally and not jointly, represents
and warrants with respect to only itself that:

     

    (a)           Organization;
Authority.  Such Buyer is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with the requisite power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents (as
defined below) to which it is a party and otherwise to carry out its obligations
hereunder and thereunder. The execution, delivery and performance by such Buyer
of the transactions contemplated by this Agreement has been duly authorized by
all necessary action on the part of such Buyer.  This Agreement has
been duly executed by such Buyer, and when delivered by such Buyer in accordance
with the terms hereof, will constitute the valid and legally binding obligation
of such Buyer, enforceable against it in accordance with its terms, except as
such enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of applicable creditors'
rights and remedies.

     

    
      
         

      

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

     

    (c)           Residency.  Such
Buyer is a resident of that jurisdiction specified below its address on the
Schedule of Buyers.

     

    The
Company acknowledges and agrees that each Buyer does not make or has not made
any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 2.

    

    3.           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
(which representations and warranties shall be deemed to apply, where
appropriate, to each Subsidiary (as defined below) of the Company):

     

    (a)           Shelf Registration
Statement.  A "shelf" registration statement on Form S-3 (File
No. 333-166750) with respect to the Securities has been prepared by the Company
in conformity in all material respects with the requirements of the 1933 Act,
and the rules and regulations (the "Rules and Regulations") of the
SEC thereunder and has been filed with the SEC. The Company and the transactions
contemplated by this Agreement meet the requirements and comply with the
conditions for the use of Form S-3.  The Registration Statement (as
defined below) meets the requirements of Rule 415(a)(1)(x) under the 1933 Act
and complies in all material respects with said rule.  Copies of such
registration statement, including any amendments thereto, the base prospectus
(meeting in all material respects the requirements of the Rules and Regulations)
contained therein (the "Base
Prospectus") and the exhibits, financial statements and schedules, as
finally amended and revised, have heretofore been delivered by the Company to
the Buyers.  Such registration statement, together with any
registration statement filed by the Company pursuant to Rule 462(b) under the
1933 Act, is herein referred to as the "Registration Statement", which
shall be deemed to include all information omitted therefrom in reliance upon
Rules 430A, 430B or 430C under the 1933 Act and contained in the Prospectus
referred to below. The Registration Statement has become effective under the
1933 Act and no post-effective amendment to the Registration Statement has been
filed as of the date of this Agreement.   The term "Prospectus" as used in this
Agreement means the Base Prospectus together with the final prospectus
supplement relating to the Securities (the "Prospectus Supplement") first
filed with the SEC pursuant to and within the time limits described in Rule
424(b) under the 1933 Act.  Any reference herein to the Registration
Statement, or the Prospectus or to any amendment or supplement to any of the
foregoing documents shall be deemed to refer to and include any documents
incorporated by reference therein, and, in the case of any reference herein to
the Prospectus, also shall be deemed to include any documents incorporated by
reference therein, and any supplements or amendments thereto, filed with the SEC
after the date of filing of the Prospectus Supplement under Rule 424(b) under
the 1933 Act and prior to the termination of the offering of the
Securities.  As used herein, "Subsidiary" means any entity
in which the Company, directly or indirectly, owns capital stock or holds an
equity or similar interest.

     

    
      
         

      

      
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    (b)           Prospectus.  As
of the Applicable Time (as defined below) and as of the Closing Date (as defined
below), neither (x) the General Use Free Writing Prospectus(es) (as defined
below) issued at or prior to the Applicable Time, the Statutory Prospectus (as
defined below), all considered together (collectively, the "General Disclosure Package"),
nor (y) any individual Limited Use Free Writing Prospectus (as defined below),
when considered together with the General Disclosure Package, included or will
include any untrue statement of a material fact or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.  As used in
this subsection and elsewhere in this Agreement:

     

    (i)           "Applicable Time" means 5:30
p.m. (New York time) on the date of this Agreement or such other time as agreed
to by the Company and the Buyers.

     

    (ii)           "Statutory Prospectus" as of
any time means the Base Prospectus included in the Registration Statement
immediately prior to that time.

     

    (iii)           "Issuer Free Writing
Prospectus" means any "issuer free writing prospectus," as defined in
Rule 433 under the 1933 Act, relating to the Securities in the form filed or
required to be filed with the SEC or, if not required to be filed, in the form
retained in the Company's records pursuant to Rule 433(g) under the 1933
Act.

     

    (iv)           "General Use Free Writing
Prospectus" means any Issuer Free Writing Prospectus that is identified
on Schedule I to this Agreement.

     

    (v)           "Limited Use Free Writing
Prospectus" means any Issuer Free Writing Prospectus that is not a
General Use Free Writing Prospectus.

     

    (c)           Organization. The
Company has been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Nevada, with corporate power and
authority to own or lease its properties and conduct its business as described
in the Registration Statement, the General Disclosure Package and the
Prospectus.  The Company has no significant subsidiaries (as such term
is defined in Rule 1-02 of Regulation S-X promulgated by the SEC) other than as
set forth in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2009 (the "Annual
Report") and otherwise has no direct or indirect
subsidiaries.  The Company is duly qualified to transact business in
all jurisdictions in which the conduct of its business requires such
qualification, except where the failure to be so qualified would not reasonably
be expected to result in any material adverse effect on the business,
properties, assets, operations, results of operations, condition (financial or
otherwise) or prospects of the Company, or on the transactions contemplated
hereby and the other Transaction Documents 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 (as defined below) (collectively a "Material Adverse
Effect").

     

    
      
         

      

      
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    (d)           Authorization; Enforcement;
Validity.  The Company has the requisite corporate power and
authority to enter into and perform its obligations under this 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 (collectively,
the "Transaction
Documents") and to issue the Securities in accordance with the terms
hereof and thereof.  The execution and delivery of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby, including, without limitation, the issuance of
the Common Shares, the issuance of the Warrants and the reservation for issuance
and the issuance of the 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's Board of
Directors or its stockholders.  This Agreement and the other
Transaction Documents of even date herewith 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, liquidation or similar laws relating to, or affecting generally, the
enforcement of applicable creditors' rights and remedies.

     

    (e)           Issuance of
Securities.  The outstanding shares of Common Stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; the Securities to be issued and sold by the Company have been
duly authorized and when issued and paid for as contemplated herein will be free
from all taxes, liens and charges with respect to the issue thereof, validly
issued, fully paid and non-assessable, and no preemptive rights of stockholders
exist with respect to any of the Securities or the issue and sale
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
maximum number of Warrant Shares issuable upon exercise of the Warrants
(assuming for purposes hereof, that the Warrants are exercisable at the
applicable Exercise Price and without taking into account any limitations on the
Warrant Shares set forth in the Warrants).  Neither the filing of the
Registration Statement nor the offering or sale of the Securities as
contemplated by this Agreement gives rise to any rights, other than those which
have been waived or satisfied, for or relating to the registration of any shares
of Common Stock.  Upon issuance or 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.  There are no
securities or instruments issued by the Company containing anti-dilution or
similar provisions that will be triggered by the issuance of the
Securities

     

    (f)           Equity
Capitalization.  As of the date hereof and as of the Closing
Date, the Company has or will have, as the case may be, an authorized, issued
and outstanding capitalization as is set forth in the Registration Statement and
the Prospectus (subject, in each case, to the issuance of shares of Common Stock
upon exercise of stock options and warrants disclosed as outstanding in the
Registration Statement and the Prospectus and the grant or issuance of options
or shares under existing equity compensation plans or stock purchase plans
described in the Registration Statement or the Prospectus), and such authorized
capital stock conforms to the description thereof set forth in the Registration
Statement and the Prospectus.  All of the Securities conform to the
description thereof contained in the Registration Statement and the
Prospectus.  The form of certificates for the Warrant Shares will
conform to the corporate law of the jurisdiction of the Company's
incorporation.

     

    
      
         

      

      
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    (g)           Disclosure.

     

    (i)           The
SEC has not issued an order preventing or suspending the use of any Issuer Free
Writing Prospectus or the Prospectus relating to the offering of the Securities,
and no proceeding for that purpose or pursuant to Section 8A of the 1933 Act has
been instituted or, to the Company's knowledge, threatened by the SEC. The
Registration Statement conforms, and the Prospectus and any amendments or
supplements thereto will conform, to the requirements of the 1933 Act and the
Rules and Regulations.  The documents incorporated, or to be
incorporated, by reference in the Prospectus, at the time filed with the SEC
conformed in all material respects, or will conform in all respects, to the
requirements of the Securities Exchange Act of 1934, as amended (the "1934 Act") or the 1933 Act, as
applicable, and the Rules and Regulations.  The Registration Statement
and any amendments and supplements thereto do not contain, and on the Closing
Date will not contain, any untrue statement of a material fact and do not omit,
and on the Closing Date will not omit, to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading.  The Prospectus and any amendments and supplements thereto
do not contain, and on the Closing Date will not contain, any untrue statement
of a material fact; and do not omit, and on the Closing Date will not omit, to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.

     

    (ii)           Each
Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Securities or until
any earlier date that the Company notified or notifies the Buyers as described
in the next sentence, did not, does not and will not include any information
that conflicted, conflicts or will conflict with the information contained in
the Registration Statement or the Prospectus, including any document
incorporated by reference therein that has not been superseded or
modified.  If at any time following issuance of an Issuer Free Writing
Prospectus, there occurred or occurs an event or development as a result of
which such Issuer Free Writing Prospectus included or would include an untrue
statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances, not misleading, the Company has notified or will notify promptly
the Buyers so that any use of such Issuer Free Writing Prospectus may cease
until it is amended or supplemented.

     

    (iii)           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, its business and the transactions contemplated hereby,
including the Schedules to this Agreement, furnished by or on behalf of the
Company 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 during the
twelve (12) months preceding the date hereof did not at the time of release
contain any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary in order to make such statements
therein, in the light of the circumstances in which they were made, not
misleading.  No event or circumstance has occurred or information
exists with respect to the Company or its business, properties, prospects,
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.  For the purpose of
this Agreement, "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.

     

    
      
         

      

      
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    (h)           Offering
Materials.  The Company has not, directly or indirectly,
distributed and will not distribute any offering material in connection with the
offering and sale of the Securities other than the Prospectus, any Issuer Free
Writing Prospectus and other materials, if any, permitted under the 1933
Act.  The Company will file with the SEC all Issuer Free Writing
Prospectuses in the time required under Rule 433(d) under the 1933
Act.  The Company has satisfied or will satisfy the conditions in Rule
433 under the 1933 Act to avoid a requirement to file with the SEC any
electronic road show.

     

    (i)           Ineligible Issuer
Status.  At the time of filing the Registration Statement and
(ii) as of the date hereof (with such date being used as the determination date
for purposes of this clause (ii)), the Company was not and is not an "ineligible
issuer" (as defined in Rule 405 under the 1933 Act, without taking into account
any determination by the SEC pursuant to Rule 405 under the 1933 Act that it is
not necessary that the Company be considered an ineligible issuer), including,
without limitation, for purposes of Rules 164 and 433 under the 1933 Act with
respect to the offering of the Securities as contemplated by the Registration
Statement.

     

    (j)           Financial
Statements.  The consolidated financial statements of the
Company, together with related notes and schedules as set forth or incorporated
by reference in the Registration Statement, the General Disclosure Package and
the Prospectus, present fairly in all material respects the financial position
and the results of operations and cash flows of the Company, at the indicated
dates and for the indicated periods.  Such consolidated financial
statements and related schedules have been prepared in accordance with United
States generally accepted principles of accounting ("GAAP"), consistently applied
throughout the periods involved, except as disclosed therein, and all
adjustments necessary for a fair presentation of results for such periods have
been made.  The summary and selected consolidated financial and
statistical data included or incorporated by reference in the Registration
Statement, the General Disclosure Package and the Prospectus present fairly in
all material respects the information shown therein, at the indicated dates and
for the indicated periods, and such data has been compiled on a basis consistent
with the financial statements presented therein and the books and records of the
Company.  All disclosures, if any, contained in the Registration
Statement, the General Disclosure Package and the Prospectus regarding "non-GAAP
financial measures" (as such term is defined by the Rules and Regulations)
comply in all material respects with Regulation G of the 1934 Act and Item 10 of
Regulation S-K under the 1933 Act, to the extent applicable.  The
Company does not have any material liabilities or obligations, direct or
contingent (including any off-balance sheet obligations or any "variable
interest entities" within the meaning of Financial Accounting Standards Board
Interpretation No. 46), not disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus.  There are no financial
statements (historical or pro forma) that are required to be included in the
Registration Statement, the General Disclosure Package or the Prospectus that
are not included as required.

     

    
      
         

      

      
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    (k)           Accountants.   Berman
& Company, P.A., who have certified certain of the financial statements
filed with the SEC as part of, or incorporated by reference in, the Registration
Statement, the General Disclosure Package and the Prospectus is an independent
registered public accounting firm with respect to the Company within the meaning
of the 1933 Act and the applicable Rules and Regulations and the Public Company
Accounting Oversight Board (United States) (the "PCAOB").

     

    (l)           Weaknesses or Changes in
Internal Accounting Controls.  The Company is not aware of (i)
any material weakness in its internal control over financial reporting or (ii)
change in internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.

     

    (m)           Sarbanes-Oxley.  Solely
to the extent that the Sarbanes-Oxley Act of 2002, as amended, and the rules and
regulations promulgated by the SEC and The NYSE Amex Equities (the "Principal Market") thereunder
(collectively, the "Sarbanes-Oxley Act") has been
applicable to the Company, there is, and has been, no failure on the part of the
Company to comply in all respects with any provision of the Sarbanes-Oxley
Act.  The Company has taken all necessary actions to ensure that it is
in compliance in all respects with all provisions of the Sarbanes-Oxley Act that
are in effect with respect to which the Company is required to comply and is
actively taking steps to ensure that it will be in compliance with the other
provisions of the Sarbanes-Oxley Act which will become applicable to the
Company.

     

    (n)           Litigation.  There
is no action, suit, claim or proceeding pending or, to the knowledge of the
Company, threatened against the Company before any court or administrative
agency or otherwise which if determined adversely to the Company would have,
individually or in the aggregate, a Material Adverse Effect, except as set forth
in the Registration Statement, the General Disclosure Package and the
Prospectus.

     

    (o)           Title.  The
Company has good and marketable title to all of the material properties and
assets reflected in the consolidated financial statements hereinabove described
or described in the Registration Statement, the General Disclosure Package and
the Prospectus, subject to no lien, mortgage, pledge, charge or encumbrance of
any kind except those reflected in such financial statements or described in the
Registration Statement, the General Disclosure Package and the Prospectus or
which are not material in amount or would not materially interfere with the use
to be made of such properties or assets. The Company occupies its leased
properties under valid and binding leases conforming in all material respects to
the description thereof set forth in the Registration Statement, the General
Disclosure Package and the Prospectus.

     

    (p)           Taxes.  The
Company has filed all federal, state, local and foreign tax returns which have
been required to be filed and have paid all taxes indicated by such returns and
all assessments received by it to the extent that such taxes have become due and
are not being contested in good faith and for which an adequate reserve for
accrual has been established in accordance with GAAP.  All tax
liabilities have been adequately provided for in the consolidated financial
statements of the Company in accordance with GAAP, and the Company does not know
of any actual or proposed additional material tax assessments.

     

    
      
         

      

      
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    (q)           Absence of Certain
Changes.  Since the respective dates as of which information is
given in the Registration Statement, the General Disclosure Package and the
Prospectus, as each may be amended or supplemented, there has not been any
Material Adverse Effect, and there has not been any material transaction entered
into by the Company, other than transactions in the ordinary course of business
and transactions described in the Registration Statement, the General Disclosure
Package and the Prospectus, as each may be amended or
supplemented.  The Company has no material contingent obligations
which are not disclosed in the Company's consolidated financial statements which
are included in the Registration Statement, the General Disclosure Package and
the Prospectus.

     

    (r)           No
Conflicts.  The Company is not, or with the giving of notice or
lapse of time or both, will not be after giving effect to the execution,
delivery and performance of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the Common Shares, the Warrants,
and the reservation for issuance and the issuance of the Warrant Shares), (i) in
violation of its articles of organization, by-laws, any certificate of
designations or other organizational documents or (ii) in violation of or in
default under any agreement, lease, contract, indenture or other instrument or
obligation to which it is a party or by which it, or any of its properties, is
bound and, solely with respect to this clause (ii), which violation or default
would have a Material Adverse Effect.  The execution and delivery of
this Agreement and the consummation of the transactions herein contemplated and
the fulfillment of the terms hereof will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or other agreement or instrument to which the
Company is a party or by which the Company or any of its respective properties
is bound, or of the articles of organization or by-laws of the Company or any
law, order, rule or regulation judgment, order, writ or decree applicable to the
Company of any court or of any government, regulatory body or administrative
agency or other governmental body having jurisdiction, except to the extent that
such conflict, breach or default would not have a Material Adverse
Effect.

     

    (s)           Contracts.  There
is no document, contract or other agreement required to be described in the
Registration Statement or Prospectus or to be filed as an exhibit to the
Registration Statement which is not described or filed as required by the 1933
Act or the Rules and Regulations. Each description of a contract, document or
other agreement in the Registration Statement and the Prospectus accurately
reflects in all material respects the terms of the underlying contract, document
or other agreement. Each contract, document or other agreement described in the
Registration Statement and Prospectus or listed in the exhibits to the
Registration Statement or incorporated by reference is in full force and effect
and is valid and enforceable by and against the Company in accordance with its
terms (except as rights to indemnity and contribution thereunder may be limited
by federal or state securities laws and matter of public policy and except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable
principle).  Neither the Company nor, to the Company's knowledge, any
other party is in default in the observance or performance of any term or
obligation to be performed by it under any such agreement or any other agreement
or instrument to which the Company is a party or by which the Company or its
respective properties or businesses may be bound, and no event has occurred
which with notice or lapse of time or both would constitute such a default, in
any such case in which the default or event, individually or in the aggregate,
would have a Material Adverse Effect.

     

    
      
         

      

      
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    (t)           Regulatory
Approvals.  Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and delivery
by the Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the SEC, the
NYSE Amex, LLC ,the Financial Industry Regulatory Authority, Inc. (the "FINRA") or such additional
steps as may be required under state securities or Blue Sky laws) has been
obtained or made and is in full force and effect.

     

    (u)           Conduct of
Business.  The Company is not in violation of any judgment,
decree or order or any statute, ordinance, rule or regulation applicable to the
Company and the Company will not conduct its business in violation of any of the
foregoing, except in all cases 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 other than the stockholder’s equity requirement which
it will be in compliance with upon receipt of the funds to be received pursuant
to this Agreement 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.

     

    (v)           Intellectual
Property.  Except as described in the Registration Statement or
in any document incorporated by reference therein, the Company holds all
material licenses, certificates and permits from governmental authorities which
are necessary to the conduct of their businesses in the manner in which they are
being conducted; the Company owns or possesses the right to use all patents,
patent rights, trademarks, trade names, service marks, service names,
copyrights, license rights, know-how (including trade secrets and other
unpatented and unpatentable proprietary or confidential information, systems or
procedures) and other intellectual property rights ("Intellectual Property")
necessary to carry on their business in all material respects in the manner in
which it is being conducted; the Company has not infringed, and the Company has
not received notice of conflict with, any Intellectual Property of any other
person or entity.  The Company has taken all steps reasonably
necessary to secure ownership interests in Intellectual Property created for it
by any contractors.  There are no outstanding options, licenses or
agreements of any kind relating to the Intellectual Property of the Company that
are required to be described in the Registration Statement, the General
Disclosure Package and the Prospectus and are not described therein in all
material respects.  The Company is not a party to or bound by any
options, licenses or agreements with respect to the Intellectual Property of any
other person or entity that are required to be set forth in the Prospectus and
are not described therein in all material respects.  None of the
technology employed by the Company and material to the Company's business has
been obtained or is being used by the Company in violation of any contractual
obligation binding on the Company or, to the Company's knowledge, any of its
officers, directors or employees or, to the Company's knowledge, otherwise in
violation of the rights of any persons; the Company has not received any written
or oral communications alleging that the Company has violated, infringed or
conflicted with, or, by conducting its business as set forth in the Registration
Statement, the General Disclosure Package and the Prospectus, would violate,
infringe or conflict with, any of the Intellectual Property of any other person
or entity.  The Company knows of no infringement by others of
Intellectual Property owned by or licensed to the Company.

     

    
      
         

      

      
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    (w)           Manipulation of
Prices.  Neither the Company, nor to the Company's knowledge,
any of its affiliates, has taken or may take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the shares of Common Stock to facilitate the sale or resale of the
Securities.

     

    (x)           Investment Company
Act.  The Company is not, and after giving effect to the
offering and sale of the Securities contemplated hereunder and the application
of the net proceeds from such sale as described in the Prospectus, and for so
long any Buyer holds any Securities, will not be an "investment company" within
the meaning of such term under the Investment Company Act of 1940 as amended
(the "1940 Act"), and
the rules and regulations of the SEC thereunder.

     

    (y)           Internal Accounting
Controls.

     

    (i)           The
Company maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

     

    (ii)           The
Company has established and maintains "disclosure controls and procedures" (as
defined in Rules 13a-15(e) and 15d-15(e) under the 1934 Act); the Company's
"disclosure controls and procedures" are reasonably designed to ensure that all
information (both financial and non-financial) 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 regulations of the 1934 Act, and that all such information is
accumulated and communicated to the Company's management as appropriate to allow
timely decisions regarding required disclosure and to make the certifications of
the Chief Executive Officer and Chief Financial Officer of the Company required
under the 1934 Act with respect to such reports.

     

    (z)           Industry and Market
Data.  The statistical, industry-related and market-related
data included in the Registration Statement, the General Disclosure Package and
the Prospectus are based on or derived from sources which the Company reasonably
and in good faith believes are reliable and accurate, and such data agree in all
material respects with the sources from which they are derived.

     

    
      
         

      

      
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    (aa)           Money Laundering
Laws.  The operations of the Company is and have been conducted
at all times in compliance with applicable financial record-keeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, applicable money laundering statutes and applicable rules and
regulations thereunder (collectively, the "Money Laundering Laws"), and
no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any or its
subsidiaries with respect to the Money Laundering Laws is pending or, to the
Company's knowledge, threatened.

     

    (bb)           Office of Foreign Assets
Control.  Neither the Company nor, to the Company's knowledge,
any director, officer, agent, employee or affiliate of the Company is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department ("OFAC"); and the Company will
not directly or indirectly use the proceeds of the offering, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by
OFAC.

     

    (cc)           Insurance.  The
Company carries or is covered by, insurance in such amounts and covering such
risks as is adequate for the conduct of its business and the value of its
properties and as is customary for companies of similar sizes engaged in similar
businesses.

     

    (dd)           Employee
Benefits.  The Company is in compliance in all material
respects with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA");  no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company would have any
material liability; the Company has not incurred and does not expect to incur
material liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension
plan" for which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.

     

    (ee)           Employee
Relations.  (i)  The Company is not a party to any
collective bargaining agreement or employs any member of a union.  The
Company believes that its relations with its employees are good.  No
executive officer of the Company (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 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 to any liability
with respect to any of the foregoing matters, except where such violation would
not, either individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.

     

    
      
         

      

      
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    (ii)           The
Company is 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.

     

    (ff)           Transactions with
Affiliates.  To the Company's knowledge, there are no
affiliations or associations between any member of the FINRA and any of the
Company's officers, directors or 5% or greater securityholders, except as set
forth in the Registration Statement.  There are no relationships or
related-party transactions involving the Company and to the knowledge of the
Company, any other person required to be described in the Prospectus which have
not been described as required.

     

    (gg)           Environmental
Laws.  The Company is not in violation of any statute, rule,
regulation, decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of hazardous or
toxic substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively, "environmental laws"), does not
own or operate any real property contaminated with any substance that is subject
to environmental laws, is not liable for any off-site disposal or contamination
pursuant to any environmental laws, and is not subject to any claim relating to
any environmental laws, which violation, contamination, liability or claim
would, individually or in the aggregate, have a Material Adverse Effect; and the
Company is not aware of any pending investigation which would reasonably be
expected to lead to such a claim.

     

    (hh)           Listing; 1934 Act
Registration.  The Common Stock is listed for trading on the
Principal Market and the Common Shares have been approved for listing subject to
notice of issuance on the Principal Market.  The Company has taken no
action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the 1934 Act or the quotation of the
Common Stock or the Common Shares on the Principal Market, nor, has the Company
received any notification that the SEC or the Principal Market is currently
contemplating terminating such registration or quotation other than notice by
the Principal Market that the stockholder’s equity requirement is problematic,
which the Company it will be in compliance with upon receipt of the funds to be
received pursuant to this Agreement.

     

    (ii)           Contributions; Foreign
Corrupt Practices.  The Company has not made any contribution
or other payment to any official of, or candidate for, any federal, state or
foreign office in violation of any law which violation is required to be
disclosed in the Prospectus.

     

    (jj)           No Integrated
Offering.  The Company has not sold or issued any securities
that would be integrated with the offering of the Securities contemplated by
this Agreement pursuant to the 1933 Act, the Rules and Regulations or the
interpretations thereof by the SEC.   None of the Company, any of
its affiliates, and 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 cause this offering of the
Securities to require approval of stockholders of the Company for purposes of
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 affiliates and any Person acting
on their behalf will take any action or steps referred to in the preceding
sentence that would cause the offering of the Securities to be integrated with
other offerings for purposes of any such applicable stockholder approval
provisions.

     

    
      
         

      

      
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    (kk)           Consents.  Other
than as described in Section 3(t) hereof, or as have been previously obtained,
filed or made, the Company is not 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, including the issuance of the
Securities, in each case in accordance with the terms hereof or
thereof.  The Company is 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
other than the stockholder’s equity requirement which it will be in compliance
with upon receipt of the funds to be received pursuant to this Agreement and has
no knowledge of any facts that would reasonably lead to delisting or suspension
of the Common Stock in the foreseeable future.

     

    (ll)           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) to the knowledge of the Company, an "affiliate" of the
Company (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 used in this Agreement, the term "affiliate" shall have the meaning set
forth in Rule 405 of the 1933 Act).  The Company further acknowledges
that no Buyer is acting as a financial advisor or fiduciary of the Company (or
in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated 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.

     

    (mm)         Dilutive
Effect.  The Company 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.

     

    (nn)           Application of Takeover
Protections; Rights Agreement.  The Company and its board of
directors have taken all necessary action, if any, in order to exempt the
Company's issuance of the Securities and each Buyer's ownership of the
Securities from the provisions of any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Articles of Incorporation of
the Company 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
Securities and each Buyer's ownership of the Securities).  The Company
does not have any stockholder rights plan or similar arrangement relating to
accumulations of beneficial ownership of Common Stock or a change in control of
the Company.

     

    
      
         

      

      
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    (oo)           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.

     

    (pp)           Transfer
Taxes.  On the Closing Date, all stock transfer or other
similar 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.

     

    (qq)           Acknowledgement Regarding
Buyers' Trading Activity.  Anything in this Agreement or
elsewhere herein to the contrary notwithstanding, it is understood and
acknowledged by the Company (i) none of the Buyers have been asked by the
Company to agree, nor has any Buyer agreed with the Company, 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 the transactions
contemplated by this Agreement 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
such Buyer is a party, directly or indirectly, presently may have a "short"
position in the Common Stock, and (iv) that such 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 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.  The Company acknowledges that such aforementioned hedging
and/or trading activities do not constitute a breach of this Agreement, the
Warrants or any of the documents executed in connection herewith.

     

    (rr)           U.S. Real Property Holding
Corporation.  The Company is not, has not ever been, nor, while
any Buyer holds any Securities, will not become, a U.S. real property holding
corporation within the meaning of Section 897 of the Code, and the Company shall
so certify upon any Buyer's request.

     

    (ss)           Shell Company Status.
The Company is not, and has not been in the last twelve (12) months, an issuer
identified in Rule 144(i)(1).

     

    
      
         

      

      
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    (tt)           Bank Holding
Company.  Neither the Company nor any of its affiliates is,
nor, while any Buyer holds any Securities, will become, 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, nor, while any Buyer holds any Securities, will own or control,
directly or indirectly, five percent 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 nor any of its affiliates
exercises, nor, while any Buyer holds any Securities, will exercise, 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.

     

    (uu)           Solvency.  The
Company and its Subsidiaries, individually and on a consolidated basis, are 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(l), "Insolvent" means, with respect
to any Person (as defined in Section 3(g)) (i) the present fair saleable value
of such Person's assets is less than the amount required to pay such Person's
total indebtedness, (ii) such Person is unable to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured, (iii) such Person intends to incur or believes that it
will incur debts that would be beyond its ability to pay as such debts mature or
(iv) such Person 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.

     

    (vv)           Exchange Act
Filings. The Company has fully and timely filed all annual,
quarterly and periodic reports required to be filed by it under the 1934 Act,
and is a fully-reporting company under Section 12(b) of the 1934
Act.

     

    (ww)         Placement Agent's
Fees. 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 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 such claim (other than for claims made by Persons engaged by the
Buyers).  The Company acknowledges that it has engaged Chardan Capital
Markets (the "Agent") as
placement agent in connection with the sale of Securities. Other than the Agent,
the Company has not engaged any placement agent or other agent in connection
with the sale of the Securities.

     

    (xx)           Placement Agent
Agreement. The Company has entered into a Placement Agent Agreement,
dated as of January __, 2011, with the Agent that contains certain
representations, warranties, covenants and agreements of the
Company.  Such representations, warranties, covenants and agreements
are for the benefit of and may be relied upon by the Buyers, each of which shall
be a third party beneficiary thereof.

     

    4.           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.

     

    
      
         

      

      
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    (b)           Maintenance of Registration
Statement.

     

    (i)           For
so long as any of the Common Shares or Warrants remain outstanding, the Company
shall use its reasonable best efforts to maintain the effectiveness of the
Registration Statement for the issuance thereunder of the Registrable Securities
(as defined below); provided that, if at any time while the Warrants are
outstanding the Company shall be ineligible to utilize Form S-3 (or any
successor form) for the purpose of issuance of the Registrable Securities the
Company shall use its reasonable best efforts to promptly amend the Registration
Statement on such other form as may be necessary to maintain the effectiveness
of the Registration Statement for this purpose.  For the purpose of
this Agreement, "Registrable
Securities" means (i) the Common Shares, (ii) the Warrant Shares
issued or issuable upon exercise of the Warrants, (iii) the Warrants and (iv)
any shares of capital stock of the Company issued or issuable with respect to
the Common Shares, the Warrants and/or the Warrant Shares 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.

     

    (c)           Prospectus Supplement and
Blue Sky.  In the manner required by law, the Company shall
have delivered to the Buyers, and as soon as practicable after the Closing the
Company shall file, the Prospectus Supplement with respect to the Securities as
required under and in conformity with the 1933 Act, including Rule 424(b)
thereunder.  If required, the Company, on or before the Closing Date,
shall take such action as the Company shall reasonably determine is necessary in
order to obtain an exemption for or to qualify the Securities for sale to the
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.

     

    (d)           Use of
Proceeds.  The Company will use the proceeds from the sale of
the Securities for general corporate purposes, including general and
administrative expenses and not for (i) the repayment of any outstanding
indebtedness of the Company or (ii) the redemption or repurchase of any of its
equity securities.

     

    (e)           Listing.  The
Company shall promptly secure the listing of all of the Common Shares and
Warrant Shares upon each securities exchange and automated quotation system, if
any, upon which the Common Stock is then listed, including the Principal Market
(subject to official notice of issuance) and shall use its reasonable best
efforts to maintain, in accordance with the Warrants, such listing of all
Warrant Shares from time to time issuable under the terms of the Transaction
Documents.  The Company shall use reasonable best efforts to maintain
the authorization for quotation of the Common Stock on the Principal Market or
if such authorization is not able to be maintained, on another Eligible Market
(as defined in the Warrants).  The Company shall not 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(e).

     

    
      
         

      

      
        - 17
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    (f)           Fees.  Subject
to Section 8 below, at Closing, the Company shall pay a nonaccountable expense
allowance to [Buyer 1] or its designee(s) of $25,000 for costs and expenses
incurred in connection with the transactions contemplated by the Transaction
Documents (including all reasonable 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 may be 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.  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.

     

    (g)           Pledge of
Securities.  The Company acknowledges and agrees that the
Securities may be pledged by any holder of Securities (an "Investor") 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.  The
Company hereby agrees, subject to applicable securities laws, 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 January 28, 2011, the Company shall issue a press release and
file a Current Report on Form 8-K describing the terms of the transactions
contemplated by the Transaction Documents in the form required by the 1934 Act
and attaching the material Transaction Documents (including, without limitation,
this Agreement (and all schedules of this Agreement) and the form of Warrants)
as exhibits to such filing (including all attachments, the "8-K Filing").  As of
immediately following 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 or any of its officers, directors, employees or agents, that is not
disclosed in the 8-K Filing or in prior filings with the SEC.  The
Company shall not, and shall cause each of its officers, directors, employees
and agents, not to, provide any Buyer with any material, nonpublic information
regarding the Company 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 provided in breach of the preceding sentence, it shall provide the
Company with written notice thereof in which case the Company shall, within two
(2) Trading Days (as defined in the Warrants) of receipt of such notice, make
public disclosure of any such material, nonpublic information provided in breach
of the preceding sentence.  In the event of a breach of the foregoing
covenant by the Company or any of its 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, or any of its officers,
directors, employees or agents.  No Buyer shall have any liability to
the Company or any of its officers, directors, employees, stockholders or agents
for any such disclosure.  To the extent that the Company or any of its
or their respective officers, directors, employees, stockholders or agents
deliver any material, non-public information to a Buyer without such Buyer's
consent, the Company hereby covenants and agrees that such Buyer shall not have
any duty of confidentiality with respect to, or a duty not to trade on the basis
of, such material, non-public information.  Subject to the foregoing,
neither the Company 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,
regulation or any Eligible Market on which the Company's securities are then
listed or quoted (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 affiliates
shall disclose the name of such Buyer in any filing, announcement, release or
otherwise other than in connection with the
Registration Statement unless such
disclosure is required by law, regulation or any Eligible Market on which the Company's securities
are then listed or quoted.

     

    
      
         

      

      
        - 18
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    (i)           Variable
Securities.  So long as any Buyer beneficially owns any
Warrants, the Company shall not issue any other securities that would cause a
breach or default under the Warrants.  For so long as any Securities
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 highest then applicable Exercise Price (as defined in the
Warrants) with respect to the Common Stock into which any Warrant is
exercisable.  

     

    (j)           Corporate
Existence.  For so long as any Buyer beneficially owns any
Warrants, the Company shall not 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) the maximum number of shares of Common Stock issuable upon exercise of the
Warrants (without taking into account any limitations on the exercise of the
Warrants set forth in the Warrants).

     

    (l)           Additional Issuances of
Securities.

     

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

     

    (1)           "Approved Stock Plan" means any
employee benefit plan which has been approved by the Board of Directors of the
Company, pursuant to which the Company's securities may be issued to any
employee, officer or director for services provided to the Company.

     

    
      
         

      

      
        - 19
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    (2)           "Common Stock Equivalents"
means, collectively, Options and Convertible Securities.

     

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

     

    (4)           "Excluded Securities" means any
Common Stock issued or issuable: (i) in connection with any Approved Stock Plan,
(ii) upon exercise of the Warrants; provided, that the terms of the Warrants are
not amended, modified or changed on or after the date hereof; and (iii) upon
exercise of any Options or Convertible Securities which are outstanding on the
day immediately preceding the date hereof, provided that the terms of such
Options or Convertible Securities are not amended, modified or changed on or
after the date hereof.

     

    (5)           "Options" means any rights,
warrants or options to subscribe for or purchase Common Stock or Convertible
Securities.

     

    (ii)           From
the date hereof until the ninetieth (90th) day after the Closing Date (the
"Trigger Date"), the
Company will not (A), directly or indirectly, file any registration statement,
amendment to a registration statement or prospectus with the SEC other than the
Prospectus Supplement, (B) 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 or (C) be
party to any solicitations, negotiations or discussions with regard to the
foregoing.  The restrictions contained in this subsection paragraph
shall not apply in connection with the issuance of any Excluded
Securities.

     

    (m)           Closing
Documents.  On or prior to fourteen (14) calendar days after
the Closing Date, the Company agrees to deliver, or cause to be delivered, to
each Buyer and Schulte Roth & Zabel LLP executed copies of the Transaction
Documents, Securities and other documents required to be delivered to any party
pursuant to Section 7 hereof.

     

    5.           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 Warrants in which the Company shall record the
name and address of the Person in whose name the Warrants have been issued
(including the name and address of each transferee)), 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.

     

    
      
         

      

      
        - 20
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    (b)           Transfer Agent
Instructions.  The Company shall issue irrevocable instructions
to the Transfer Agent, and any subsequent transfer agent, to issue certificates
or credit shares to the applicable balance accounts at DTC, registered in the
name of each Buyer or its respective nominee(s), for the Warrant Shares 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 B attached
hereto (the "Irrevocable
Transfer Agent Instructions").  The Company represents and
warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5 will be given by the Company to the
Transfer Agent, and any subsequent transfer agent with respect to the
Securities, and that the Securities shall otherwise be freely transferable on
the books and records of the Company as and to the extent provided in this
Agreement and the other Transaction Documents.  The Company
acknowledges that a breach by it of its obligations 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 the Buyers 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.

     

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

     

    The
obligation of the Company hereunder to issue and sell the Common Shares and the
related Warrants 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:

     

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

     

    (ii)           Such
Buyer and each other Buyer shall have delivered to the Company the Purchase
Price (less, in the case of [Buyer1], the amounts withheld pursuant to Section
4(f)) for the Common Shares and the related Warrants being purchased by such
Buyer at the Closing by wire transfer of immediately available funds pursuant to
the wire instructions provided by the Company.

     

    (iii)           The
representations and warranties of such Buyer shall be true and correct 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 which shall
be true and correct as of such specified 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.

     

    
      
         

      

      
        - 21
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    7.           CONDITIONS TO EACH BUYER'S
OBLIGATION TO PURCHASE.

     

    The
obligation of each Buyer hereunder to purchase the Common Shares and the related Warrants
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:

     

    (i)           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 amounts 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.

     

    (ii)           Such
Buyer shall have received the opinion of Gracin & Marlow, LLP, the Company's
counsel, dated as of the Closing Date, in substantially the form of Exhibit C attached
hereto.

     

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

     

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

     

    (v)           The
Company shall have delivered to such Buyer a certificate evidencing the
Company's qualification as a foreign corporation and good standing issued by the
Secretary of State (or comparable office of each jurisdiction in which the
Company conducts business and is required to so qualify, as of a date within ten
(10) days of the Closing Date.

     

    (vi)           The
Company shall have delivered to such Buyer a certified copy of the Articles of
Incorporation as certified by the Secretary of State of the State of Nevada (or
a fax or pdf copy of such certificate) within ten (10) days of the Closing
Date.

     

    (vii)           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(d) as adopted by the Company's Board of
Directors in a form reasonably acceptable to such Buyer, (ii) the Articles of
Incorporation and (iii) the Bylaws, each as in effect at the Closing, in the
form attached hereto as Exhibit
D.

     

    (viii)          The
representations and warranties of the Company shall be true and correct 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,
which shall be true and correct as of such specified date) and the Company shall
have performed, satisfied and complied in all 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 in the form attached hereto as Exhibit
E.

     

    
      
         

      

      
        - 22
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    (ix)           The
Company shall have delivered to such Buyer a letter from the Transfer Agent
certifying the number of shares of Common Stock outstanding as of a date within
five days of the Closing Date.

     

    (x)           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.

     

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

     

    (xii)          The
Registration Statement shall be effective and available for the issuance and
sale of the Securities hereunder and the Company shall have delivered to such
Buyer the Prospectus and the Prospectus Supplement as required
thereunder.

     

    (xiii)         No
litigation, statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or in
any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.

     

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

     

    8.           TERMINATION.  In
the event that the Closing shall not have occurred with respect to a Buyer on or
before three (3) Business Days from the date hereof 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; provided, however, that if this
Agreement is terminated pursuant to this Section 8, the Company shall remain
obligated to reimburse [Buyer1] for the expenses described in Section 4(f) above
as long as [Buyer1] is not the breaching party.

     

    
      
         

      

      
        - 23
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    9.           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.

     

    (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).

     

    
      
         

      

      
        - 24
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    (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 Buyers, and any amendment to this Agreement made in conformity
with the provisions of this Section 9(e) shall be binding upon the Buyers and
holders of Securities as applicable.  No provision hereof may be
waived other than by an instrument in writing signed by the party against whom
enforcement is sought.  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 this Agreement unless the same consideration also is offered to all
Buyers.  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.

     

    (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:

     

    Adeona
Pharmaceuticals, Inc.

    3930
Varsity Lane

    Ann
Arbor, Michigan 48108

    Telephone:  (734)
332-7800

    Facsimile:  (734)
332-7878

    Attention:  Dr.
James Kuo

     

    with a
copy (for informational purposes only) to:

     

    Gracin & Marlow, LLP

    405 Lexington Avenue, 26th Floor

    New York, New York 10174

    Telephone:  (212) 907-6457

    Facsimile:  (212) 208-4657

    Attention: Leslie Marlow, Esq.

    

    If to the
Transfer Agent:

     

    Corporate Stock Transfer, Inc.

    3200
Cherry Creek South Drive, Suite 430

    Denver,
Colorado  80209

    Telephone:  (303)
282-4800

    Facsimile:  (303)
282-5800

    Attention:  Daniel
Bell

     

    
      
         

      

      
        - 25
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    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,

     

    with a
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 (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 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.

     

    (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 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 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
are reasonably necessary in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

     

    
      
         

      

      
        - 26
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    (k)           Indemnification.  (i)  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"), as incurred,
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 that is not an affiliate of such Indemnitee (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(h) 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 which is permissible under applicable law.

     

    
      
         

      

      
        - 27
-

        
          

        

      

      
         

      

    

     

    (ii)           Promptly
after receipt by an Indemnitee under this Section 9(k) of notice of the
commencement of any action or proceeding (including any governmental action or
proceeding) involving an Indemnified Liability, such Indemnitee shall, if a
claim for indemnification in respect thereof is to be made against any
indemnifying party under this Section 9(k), 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 Indemnitee; provided, however, that an Indemnitee
shall have the right to retain its own counsel with the fees and expenses of not
more than one counsel for such Indemnitee to be paid by the indemnifying party,
if, in the reasonable opinion of the Indemnitee, the representation by such
counsel of the Indemnitee and the indemnifying party would be inappropriate due
to actual or potential differing interests between such Indemnitee and any other
party represented by such counsel in such proceeding.  Legal counsel
referred to in the immediately preceding sentence shall be selected by the
Investors holding at least a majority of the Registrable
Securities.  The Indemnitee shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
action or Indemnified Liabilities by the indemnifying party and shall furnish to
the indemnifying party all information reasonably available to the Indemnitee
that relates to such action or Indemnified Liabilities.  The
indemnifying party shall keep the Indemnitee 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 Indemnitee, 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
Indemnitee of a release from all liability in respect to such Indemnified
Liabilities or litigation.  Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnitee 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 Indemnitee under this Section 9(k), except to the extent that
the indemnifying party is prejudiced in its ability to defend such
action.

     

    (iii)           The
indemnification required by this Section 9(k) 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 Liabilities are incurred.

     

    (iv)           The
indemnity agreements contained herein shall be in addition to  (x) any
cause of action or similar right of the Indemnitee against the indemnifying
party or others, and (y) any liabilities the indemnifying party may be subject
to pursuant to the law.

    

    (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.

     

    
      
         

      

      
        - 28
-

        
          

        

      

      
         

      

       

    

    (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.

     

    (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, and each Buyer
confirms, 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, and each
Buyer confirms, 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]

     

    
      
         

      

      
        - 29
-

        
          

        

      

      
         

      

       

    

    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:

                
	 
      
	
                  ADEONA
      PHARMACEUTICALS, INC.

                
	 
      
	
                  By:

                	 
      
	 
      	
                  Name:

                
	 
      	
                  Title:

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    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:

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SCHEDULE
OF BUYERS

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    (1)

                                  	 	
                                    (2)

                                  	 	
                                    (3)

                                  	 	 	
                                    (4)

                                  	 	 	
                                    (5)

                                  	 	
                                    (6)

                                  
	
                                    Buyer

                                  	 	
                                    Address and

                                    Facsimile Number

                                  	 	
                                    Number

                                    of

                                    Common Shares

                                  	 	 	
                                    Maximum

                                    Number of

                                    Warrant Shares

                                  	 	 	
                                    Purchase 

                                    Price

                                  	 	
                                    Legal Representative's

                                    Address

                                    and Facsimile Number

                                  
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Buyer
      1

                                  	 	 
      	 	 	714,286	 	 	 	357,143	 	 	$	1,000,000	 	
                                    Schulte
      Roth & Zabel LLP

                                    919
      Third Avenue

                                    New
      York, New York  10022

                                    Attention:      
        Eleazer Klein, Esq.

                                    Facsimile:         212)
      593-5955

                                    Telephone:       (212)
      756-2376

                                  
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Buyer
      2

                                  	 	 
      	 	 	714,286	 	 	 	357,143	 	 	$	1,000,000	 	
                                    Schulte
      Roth & Zabel LLP

                                    919
      Third Avenue

                                    New
      York, New York  10022

                                    Attention:       
        Eleazer Klein, Esq.

                                    Facsimile:          212)
      593-5955

                                    Telephone:        (212)
      756-2376

                                  
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                    Buyer
      3

                                  	 	 
      	 	 	1,428,572	 	 	 	714,286	 	 	$	2,000,000	 	 
      

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    EXHIBITS

     

    
      
        
          	
                  Exhibit
      A

                	 
      	
                  Form
      of Warrant

                
	
                  Exhibit
      B

                	 
      	
                  Form
      of Irrevocable Transfer Agent Instructions

                
	
                  Exhibit
      C

                	 
      	
                  Form
      of Opinion of Company's Counsel

                
	
                  Exhibit
      D

                	 
      	
                  Form
      of Secretary's Certificate

                
	
                  Exhibit
      E

                	
                    

                	
                  Form
      of Officer's
Certificate

                

        

      

    

     

    SCHEDULES

     

    Schedule
I             List
of General Use Free Writing Prospectus

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