Document:

exhibit2.htm

    

      COMMON
UNIT PURCHASE AGREEMENT

       

      

       

      among

       

      

       

      REGENCY
ENERGY PARTNERS LP

       

      and

       

      NEUBERGER
BERMAN, LLC

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Table
of Contents

       

       

      
        	
                ARTICLE
      I DEFINITIONS

              	
                1

              
	
                Section
      1.01

              	
                Definitions

              	
                1

              
	
                Section
      1.02

              	
                Accounting
      Procedures and Interpretation

              	
                5

              
	 	 
	
                ARTICLE
      II AGREEMENT TO SELL AND PURCHASE

              	
                5

              
	
                Section
      2.01

              	
                Sale
      and Purchase

              	
                5

              
	
                Section
      2.02

              	
                Closing

              	
                5

              
	
                Section
      2.03

              	
                Conditions
      to Closing.

              	
                5

              
	
                Section
      2.04

              	
                Regency
      Deliveries

              	
                6

              
	
                Section
      2.05

              	
                The
      Purchaser’s Deliveries

              	
                7

              
	 	
                 

              
	
                ARTICLE
      III REPRESENTATIONS AND WARRANTIES AND COVENANTS  RELATED TO
      REGENCY

              	
                7

              
	
                Section
      3.01

              	
                Partnership
      Existence

              	
                7

              
	
                Section
      3.02

              	
                Capitalization
      and Valid Issuance of Purchased Units

              	
                8

              
	
                Section
      3.03

              	
                Registration
      Statement and Prospectus.

              	
                9

              
	
                Section
      3.04

              	
                Regency
      SEC Documents

              	
                10

              
	
                Section
      3.05

              	
                No
      Material Adverse Change

              	
                10

              
	
                Section
      3.06

              	
                Litigation

              	
                11

              
	
                Section
      3.07

              	
                No
      Conflicts; Compliance with Laws

              	
                11

              
	
                Section
      3.08

              	
                Authority,
      Enforceability

              	
                11

              
	
                Section
      3.09

              	
                Approvals

              	
                12

              
	
                Section
      3.10

              	
                MLP
      Status

              	
                12

              
	
                Section
      3.11

              	
                Investment
      Company Status

              	
                12

              
	
                Section
      3.12

              	
                Certain
      Fees

              	
                12

              
	
                Section
      3.13

              	
                No
      Side Agreements

              	
                12

              
	
                Section
      3.14

              	
                Insurance

              	
                12

              
	
                Section
      3.15

              	
                Internal
      Accounting Controls

              	
                12

              
	
                Section
      3.16

              	
                Listing
      and Maintenance Requirements

              	
                13

              
	
                Section
      3.17

              	
                Confidential
      Information

              	
                13

              
	
                Section
      3.18

              	
                Further
      Agreements of Regency

              	
                13

              
	 	 
	
                ARTICLE
      IV REPRESENTATIONS AND WARRANTIES AND COVENANTS  OF THE
      PURCHASER

              	
                13

              
	
                Section
      4.01

              	
                Existence

              	
                13

              
	
                Section
      4.02

              	
                Authorization,
      Enforceability

              	
                13

              
	
                Section
      4.03

              	
                No
      Breach

              	
                13

              
	
                Section
      4.04

              	
                Certain
      Fees

              	
                14

              
	
                Section
      4.05

              	
                No
      Side Agreements

              	
                14

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                Section
      4.06

              	
                Short
      Selling

              	
                14

              
	
                Section
      4.07

              	
                Regency
      Information

              	
                14

              
	 	 
	
                ARTICLE
      V INDEMNIFICATION, COSTS AND EXPENSES

              	
                14

              
	
                Section
      5.01

              	
                Indemnification
      by Regency

              	
                14

              
	
                Section
      5.02

              	
                Indemnification
      by the Purchasers

              	
                14

              
	
                Section
      5.03

              	
                Indemnification
      Procedure

              	
                15

              
	 	 
	
                ARTICLE
      VI MISCELLANEOUS

              	
                16

              
	
                Section
      6.01

              	
                Interpretation
      and Survival of Provisions

              	
                16

              
	
                Section
      6.02

              	
                Survival
      of Provisions

              	
                16

              
	
                Section
      6.03

              	
                No
      Waiver; Modifications in Writing

              	
                16

              
	
                Section
      6.04

              	
                Binding
      Effect; Assignment

              	
                17

              
	
                Section
      6.05

              	
                Non-Disclosure

              	
                17

              
	
                Section
      6.06

              	
                Communications

              	
                18

              
	
                Section
      6.07

              	
                Entire
      Agreement

              	
                18

              
	
                Section
      6.08

              	
                Governing
      Law

              	
                19

              
	
                Section
      6.09

              	
                Waiver
      of Jury Trial

              	
                19

              
	
                Section
      6.10

              	
                Execution
      in Counterparts

              	
                19

              

      

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      COMMON
UNIT PURCHASE AGREEMENT

       

      This
COMMON UNIT PURCHASE AGREEMENT, dated as of July 25, 2008 (this “Agreement”), is by
and between REGENCY ENERGY PARTNERS LP, a Delaware limited partnership (“Regency”), and
Neuberger Berman, LLC (“Neuberger”), acting
in its capacity as investment advisor for certain clients on behalf of those
clients for whom Neuberger is purchasing the Common Units (as defined below)
(the “Purchaser”).

       

      WHEREAS,
Regency has filed with the Commission (as defined below), pursuant to the
Securities Act (as defined below) and the rules and regulations adopted by the
Commission thereunder, the Registration Statement (as defined below) relating to
the offer and sale from time to time of up to $691,322,449 aggregate initial
offering price of common units representing limited partner interests in Regency
(“Common
Units”) and certain other Regency securities, and such Registration
Statement has become effective; and

       

      WHEREAS,
Regency desires to sell to the Purchaser, and the Purchaser desires to purchase
from Regency, certain of those Common Units, in accordance with the provisions
of this Agreement.

       

      NOW
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree as follows:

       

      ARTICLE
I

       

      DEFINITIONS

       

      Section
1.01    Definitions.  As
used in this Agreement, and unless the context requires a different meaning, the
following terms have the meanings indicated:

       

      “Affiliate” means,
with respect to a specified Person, any other Person, directly or indirectly
controlling, controlled by or under direct or indirect common control with such
specified Person.  For purposes of this definition, “control”
(including, with correlative meanings, “controlling,” “controlled by,” and
“under common control with”) means the power to direct or cause the direction of
the management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or
otherwise.

       

      “Basic Documents”
means, collectively, this Agreement, the Partnership Agreement and any and all
other agreements or instruments executed and delivered by the Parties to
evidence the execution, delivery and performance of this Agreement, and any
amendments, supplements, continuations or modifications thereto.

       

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

       

      “Class D Units” means
the Class D units representing limited partner interests in Regency and any
Common Units into which such Class D Units convert.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      “Closing” shall have
the meaning specified in Section 2.03.

       

      “Closing Date” shall
have the meaning specified in Section 2.03.

       

      “Commission” means the
United States Securities and Exchange Commission.

       

      “Common Units” has the
meaning set forth in the recitals.

       

      “Delaware LLC Act”
shall have the meaning specified in Section
3.02.

       

      “Delaware LP Act”
shall have the meaning specified in Section 3.02.

       

      “Effective Date” shall
have the meaning specified in Section
3.03.

       

      “Effective Time” shall
have the meaning specified in Section
3.03.

       

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

       

      “GAAP” means generally
accepted accounting principles in the United States of America in effect from
time to time.

       

      “General Partner”
means Regency GP LP, a Delaware limited partnership, and includes Regency GP
LLC, a Delaware limited liability company and the general partner of Regency GP
LP.

       

      “Governmental
Authority” means, with respect to a particular Person, any country,
state, county, city and political subdivision in which such Person or such
Person’s Property is located or which exercises valid jurisdiction over any such
Person or such Person’s Property, and any court, agency, department, commission,
board, bureau or instrumentality of any of them and any monetary authority which
exercises valid jurisdiction over any such Person or such Person’s
Property.  Unless otherwise specified, all references to Governmental
Authority herein with respect to Regency means a Governmental Authority having
jurisdiction over Regency, its Subsidiaries or any of their respective
Properties.

       

      “Indemnified Party”
shall have the meaning specified in Section 5.03.

       

      “Indemnifying Party”
shall have the meaning specified in Section 5.03.

       

      “Law” means any
federal, state, local or foreign order, writ, injunction, judgment, settlement,
award, decree, statute, law, rule or regulation.

       

      “Lien” means any
mortgage, claim, encumbrance, pledge, lien (statutory or otherwise), security
agreement, conditional sale or trust receipt or a lease, consignment or
bailment, preference or priority or other encumbrance upon or with respect to
any property of any kind.

       

      “LTIP” shall have the
meaning specified in Section 3.02(b).

       

      “NASDAQ” means the
NASDAQ Global Select Market.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      

      “Neuberger” means
Neuberger Berman, LLC, acting as investment advisor for certain clients on
behalf of those clients for whom Neuberger is purchasing the Common
Units.

       

      “Partnership
Agreement” means the Fourth Amended and Restated Agreement of Limited
Partnership of Regency, dated February 15, 2006, as amended from time to
time.

       

      “Partnership
Securities” means any class or series of equity interest in Regency (but
excluding any options, rights, warrants and appreciation rights relating to an
equity interest in Regency), including without limitation Common Units,
Subordinated Units, Class D Units and the Incentive Distribution Rights (as
defined in the Partnership Agreement).

       

      “Person” means any
individual, corporation, company, voluntary association, partnership, joint
venture, trust, limited liability company, unincorporated organization,
government or any agency, instrumentality or political subdivision thereof, or
any other form of entity.

       

      “Property” means any
interest in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible.

       

      “Prospectus” shall
have the meaning specified in Section
3.03.

       

      “Purchase Price” means
the $23,590,000 paid by the Purchaser for the Purchased Units; provided that if
the Closing occurs after the record date of the distribution to Regency
unitholders with respect to the quarter ended June 30, 2008, the Purchase Price
will be reduced by an amount per Purchased Unit equal to such
distribution.

       

      “Purchased Units”
means the 1,000,000 common units purchased by the Purchaser.

       

      “Purchaser Related
Parties” shall have the meaning specified in Section 5.01.

       

      “Purchaser” has the
meaning set forth in the introductory paragraph of this Agreement.

       

      “Regency” has the
meaning set forth in the introductory paragraph.

       

      “Regency Credit
Facility” means the Fourth Amended and Restated Credit Agreement, dated
as of August 15, 2006, as amended as of the date hereof and from time to time,
by and among Regency and the lenders named therein, as amended as of the date
hereof.

       

      “Regency Financial
Statements” shall have the meaning specified in Section 3.04.

       

      “Regency Material Adverse
Effect” means any material and adverse effect on (a) the assets,
liabilities, financial condition, business, operations, affairs or prospects of
Regency and its Subsidiaries taken as a whole; (b) the ability of Regency
and its Subsidiaries taken as a whole to carry on their business as such
business is conducted as of the date hereof or to meet their obligations under
the Basic Documents on a timely basis; or (c) the ability of Regency to
consummate the transactions under any Basic Document; provided, however, that a
Regency Material Adverse Effect shall not include any material and adverse
effect on the foregoing to the extent such material and adverse effect results
from, arises out of, or relates to (x) a general deterioration in the
economy or changes in the general state of the industries in which
the

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      

      Regency
Parties operate, except to the extent that the Regency Parties, taken as a
whole, are adversely affected in a disproportionate manner as compared to other
industry participants, (y) the outbreak or escalation of hostilities
involving the United States, the declaration by the United States of a national
emergency or war or the occurrence of any other calamity or crisis, including
acts of terrorism, or (z) any change in accounting requirements or
principles imposed upon Regency and its Subsidiaries or their respective
businesses or any change in applicable Law, or the interpretation
thereof.

       

      “Regency Parties”
means Regency, the General Partner and all of Regency’s
Subsidiaries.

       

      “Regency Related
Parties” shall have the meaning specified in Section 5.02.

       

      “Regency SEC
Documents” shall have the meaning specified in Section 3.04.

       

      “Registration
Statement” shall have the meaning specified in Section
3.03.

       

      “Representatives” of
any Person means the officers, directors, managers, employees, agents, counsel,
accountants, investment bankers and other representatives of such
Person.

       

      “Rules and
Regulations” shall have the meaning specified in Section
3.03.

       

      “Securities Act” means
the Securities Act of 1933, as amended from time to time, and the rules and
regulations of the Commission promulgated thereunder.

       

      “Subsidiary” means, as
to any Person, any corporation or other entity of which: (i) such Person or
a Subsidiary of such Person is a general partner or manager; (ii) at least
a majority of the outstanding equity interest having by the terms thereof
ordinary voting power to elect a majority of the board of directors or similar
governing body of such corporation or other entity (irrespective of whether or
not at the time any equity interest of any other class or classes of such
corporation or other entity shall have or might have voting power by reason of
the happening of any contingency) is at the time directly or indirectly owned or
controlled by such Person or one or more of its Subsidiaries; or (iii) any
corporation or other entity as to which such Person consolidates for accounting
purposes.

       

      “Transfer” shall have
the meaning specified in Section
4.06.

       

      Section
1.02                                 Accounting Procedures and
Interpretation.  Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all Regency Financial
Statements and certificates and reports as to financial matters required to be
furnished to the Purchaser hereunder shall be prepared, in accordance with GAAP
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q promulgated by the Commission) and in compliance as
to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the Commission with respect
thereto.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      

       

      ARTICLE
II

       

      AGREEMENT
TO SELL AND PURCHASE 

       

      Section
2.01                                 Sale and
Purchase.  Subject to the terms and conditions hereof, Regency
hereby agrees to issue and sell to the Purchaser, free and clear of any and all
Liens, and the Purchaser hereby agrees to purchase from Regency, the Purchased
Units, and the Purchaser agrees to pay Regency the Purchase Price.

       

      Section
2.02                                 Closing.  Subject
to the terms and conditions hereof, the consummation of the purchase and sale of
the Purchased Units hereunder (the “Closing”) shall take place at
9:00 a.m., Central Daylight Time, on August 1, 2008 at the offices of
Vinson & Elkins L.L.P., First City Tower, 1001 Fannin Street,
Houston, Texas 77002, or at such other time and date not later than five (5)
full Business Days thereafter as Regency and the Purchaser may agree (the
“Closing Date”).  The parties agree that the Closing may occur via
delivery of facsimiles of this Agreement and cross-receipts; provided, that
originals of such documents are sent via overnight delivery to be received by
the other party (or designee of such other party) on the first business day
immediately following the Closing Date.

       

      Section
2.03                                 Conditions to
Closing.

       

      (a)           Mutual
Conditions.  The respective obligations of each party to
consummate the purchase and issuance and sale of the Purchased Units shall be
subject to the satisfaction on or prior to the Closing Date of each of the
following conditions (any or all of which may be waived by a particular party on
behalf of itself in writing, in whole or in part, to the extent permitted by
applicable Law):

       

      (i)                 no
statute, rule, order, decree or regulation shall have been enacted or
promulgated, and no action shall have been taken, by any Governmental Authority
which temporarily, preliminarily or permanently restrains, precludes, enjoins or
otherwise prohibits the consummation of the transactions contemplated hereby or
makes the transactions contemplated hereby illegal; and

       

      (ii)                 there
shall not be pending any suit, action or proceeding by any Governmental
Authority seeking to restrain, preclude, enjoin or prohibit the transactions
contemplated by this Agreement.

       

      (b)The Purchaser’s
Conditions.  The respective obligation of the Purchaser to
consummate the purchase of the Purchased Units shall be subject to the
satisfaction on or prior to the Closing Date of each of the following conditions
(any or all of which may be waived by the Purchaser in writing, in whole or in
part with respect to its Purchased Units, to the extent permitted by applicable
Law):

       

      (i)                 since
the date of this Agreement, no Regency Material Adverse Effect shall have
occurred and be continuing;

       

      (ii)                 no
notice of delisting shall have been received by Regency;

       
                (iii)                the
representations and warranties of Regency contained in this Agreement that are
qualified by materiality or Regency Material Adverse Effect shall be true and
correct as of the Closing Date as if made on and as of the Closing Date and all
other representations and warranties shall be true and correct in all material
respects as of 

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      

      the
Closing Date as if made on and as of the Closing Date (except that
representations made as of a specific date shall be required to be true and
correct as of such date only); and

       

      (iv)                 Regency
shall have delivered, or caused to be delivered, to the Purchaser at the
Closing, Regency’s closing deliveries described in Section
2.04.

       

      (c)    Regency’s
Conditions.  The obligation of Regency to consummate the sale
of the Purchased Units to the Purchaser shall be subject to the satisfaction on
or prior to the Closing Date of the following condition (which may be waived by
Regency in writing, in whole or in part, to the extent permitted by applicable
Law): the representations and warranties of the Purchaser contained in this
Agreement shall be true and correct in all material respects at and as of the
Closing Date as if made on and as of the Closing Date (except that
representations made as of a specific date shall be required to be true and
correct as of such date only).

       

      Section
2.04    Regency
Deliveries.  At the
Closing, subject to the terms and conditions hereof, Regency will deliver, or
cause to be delivered, to the Purchaser:

       

      (a)           The
Purchased Units by electronic delivery to The Depository Trust Company on
Purchaser’s behalf, registered in such name(s) as Purchaser has
designated;

       

      (b)           Copies
of (i) the Certificate of Limited Partnership of Regency, (ii) the Certificate
of Limited Partnership of Regency GP LP and (iii) the Certificate of Formation
of Regency GP LLC, each certified by the Secretary of State of the jurisdiction
of its formation as of a recent date;

       

      (c)           A
certificate of the Secretary of State of the State of Delaware, dated a recent
date, that Regency is in good standing;

       

      (d)           A
cross-receipt executed by Regency and delivered to the Purchaser certifying that
it has received the Purchase Price as of the Closing Date;

       

      (e)           An
opinion addressed to the Purchaser from legal counsel to Regency , dated as of
the Closing Date, in the form and substance attached hereto as Exhibit
A;

       

      (f)           A
copy of the final prospectus supplement relating to the Purchased Units and the
offering thereof, including the accompanying base prospectus, substantially in
the form that will be filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations after the date and time this Agreement is
executed;

       

      (g)           A
certificate of the Secretary or Assistant Secretary of Regency GP, LLC, on
behalf of Regency, certifying as to and attaching (1) the Partnership Agreement,
(2) board resolutions authorizing the execution and delivery of the Basic
Documents and the consummation of the transactions contemplated thereby,
including the issuance of the Purchased Units and (3) its incumbent officers
authorized to execute the Basic Documents, setting forth the name and title and
bearing the signatures of such officers; and

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

          

      (h)           A
certificate, dated the Closing Date and signed by (x) the Chief Executive
Officer and (y) the Chief Financial Officer of Regency GP, LLC, in their
capacities as such, stating that:

       

      (i)                 Regency
has performed and complied with the covenants and agreements contained in this
Agreement that are required to be performed and complied with by Regency on or
prior to the Closing Date;

       

      (ii)                 The
representations and warranties of Regency contained in this Agreement that are
qualified by materiality or Regency Material Adverse Effect were true and
correct when made and as of the Closing Date and all other representations and
warranties were true and correct in all material respects when made and are true
and correct in all material respects as of the Closing Date, in each case as
though made at and as of the Closing Date (except that representations made as
of a specific date shall be required to be true and correct as of such date
only).

       

      Section
2.05    The Purchaser’s
Deliveries.  At the
Closing, subject to the terms and conditions hereof, the Purchaser will deliver,
or cause to be delivered, to Regency:

       

      (a)           Payment
to Regency of the Purchase Price by wire transfer of immediately available funds
to an account designated by Regency in writing at least two Business Days prior
to the Closing Date; and

       

      (b)           A
cross-receipt executed by the Purchaser and delivered to Regency certifying that
it has received its respective Purchased Units as of the Closing
Date.

       

      ARTICLE
III

       

      REPRESENTATIONS
AND WARRANTIES AND COVENANTS

       

      RELATED
TO REGENCY

       

      Regency
represents and warrants to and covenants to the Purchaser as
follows:

       

      Section
3.01    Partnership
Existence.  Regency (a) is a limited partnership duly
formed, validly existing and in good standing under the laws of the State of
Delaware; and (b) has all requisite power and authority, and has all
governmental licenses, authorizations, consents and approvals necessary, to own,
lease, use and operate its Properties and carry on its business as its business
is now being conducted, except where the failure to obtain such licenses,
authorizations, consents and approvals would not be reasonably likely to have a
Regency Material Adverse Effect.  Each of Regency’s Subsidiaries has
been duly incorporated or formed, as the case may be, and is validly existing
and in good standing under the laws of the State or other jurisdiction of its
incorporation or organization, as the case may be, and has all requisite power
and authority, and has all governmental licenses, authorizations, consents and
approvals necessary, to own, lease, use or operate its respective Properties and
carry on its business as now being conducted, except where the failure to obtain
such licenses, authorizations, consents and approvals would not be reasonably
likely to have a Regency Material Adverse Effect.  None of Regency nor
any of its Subsidiaries are in default in the performance, observance or
fulfillment of any provision of, in the case of Regency, the Partnership
Agreement or its Certificate of Limited Partnership or, in the case of any
Subsidiary of Regency, its respective certificate of incorporation,
certification of 

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      formation,
bylaws, limited liability company agreement or other similar organizational
documents.  Each of Regency and its Subsidiaries is duly qualified or
licensed and in good standing as a foreign limited partnership, limited
liability company or corporation, as applicable, and is authorized to do
business in each jurisdiction in which the ownership or leasing of its
respective Properties or the character of its respective operations makes such
qualification necessary, except where the failure to obtain such qualification,
license, authorization or good standing would not be reasonably likely to have a
Regency Material Adverse Effect.

       

      Section
3.02    Capitalization and Valid
Issuance of Purchased Units

       

      (a)           As
of the date of this Agreement, prior to the issuance and sale of the Purchased
Units, as contemplated hereby, the issued and outstanding limited partner
interests of Regency consist of 45,724,516 Common
Units, 19,103,896 Subordinated
Units, 7,276,506 Class D Units and the Incentive Distribution Rights (as defined
in the Partnership Agreement).  The only issued and outstanding
general partner interests of Regency are the interests of the General Partner
described in the Partnership Agreement.  All outstanding Common Units,
Subordinated Units, Class D Units and Incentive Distribution Rights and the
limited partner interests represented thereby have been duly authorized and
validly issued in accordance with the Partnership Agreement and are fully paid
(to the extent required under the Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by matters described in
Section 17-607 of the Delaware Revised Uniform Limited Partnership Act (the
“Delaware LP
Act”)).

       

      (b)           Other
than the Regency GP LLC Long-Term Incentive Plan (the “LTIP”), Regency has
no equity compensation plans that contemplate the issuance of partnership
interests of Regency (or securities convertible into or exchangeable for
partnership interests of Regency).  No indebtedness having the right
to vote (or convertible into or exchangeable for securities having the right to
vote) on any matters on which Regency unitholders may vote are issued or
outstanding.  Except as set forth in the first sentence of this Section 3.02(b),
as contemplated by this Agreement or as are provided in the Partnership
Agreement, there are no outstanding or authorized (i) options, warrants,
preemptive rights, subscriptions, calls, or other rights, convertible or
exchangeable securities, agreements, claims or commitments of any character
obligating Regency or any of its Subsidiaries to issue, transfer or sell any
partnership interests or other equity interest in, Regency or any of its
Subsidiaries or securities convertible into or exchangeable for such partnership
interests, (ii) obligations of Regency or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any partnership interests or equity
interests of Regency or any of its Subsidiaries or any such securities or
agreements listed in clause (i) of this sentence or (iii) voting
trusts or similar agreements to which Regency or any of its Subsidiaries is a
party with respect to the voting of the equity interests of Regency or any of
its Subsidiaries.

       

      (c)           (i) All
of the issued and outstanding equity interests of each of Regency’s Subsidiaries
(except for Edwards Lime Gathering LLC, of which Regency owns approximately 60%
of the member interests) are owned, directly or indirectly, by Regency free and
clear of any Liens (except for such restrictions as may exist under applicable
Law and except for such Liens as may be imposed under the Regency Credit
Facility), and all such ownership interests have been duly authorized, validly
issued and are fully paid (to the extent required in the organizational
documents of Regency’s Subsidiaries, as applicable) and non-assessable (except
as such nonassessability may be affected by matters described in
Sections 17-303, 17-607 and 17-804 of the Delaware LP Act,
Sections 18-607 and 18-804 of the Delaware Limited Liability 

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      Company
Act (the “Delaware LLC
Act”) and Article 5.09 of the Texas Limited Liability Company Act) and
free of preemptive rights and (ii) except as disclosed in the Regency SEC
Documents, neither Regency nor any of its Subsidiaries owns any shares of
capital stock or other securities of, or interest in, any other Person, or is
obligated to make any capital contribution to or other investment in any other
Person.

       

      (d)           The
Purchased Units being purchased by the Purchaser acting as investment advisor
for certain clients on behalf of those clients for whom the Purchaser is
purchasing the Purchased Units hereunder and the limited partner interests
represented thereby will be duly authorized by Regency pursuant to the
Partnership Agreement prior to the Closing and, when issued and delivered to the
Purchaser against payment therefor in accordance with the terms of this
Agreement, will be validly issued, fully paid (to the extent required by the
Partnership Agreement) and nonassessable (except as such nonassessability may be
affected by matters described in Sections 17-303 and  17-607 of the
Delaware LP Act) and will be free of any and all Liens and restrictions on
transfer, other than (i) restrictions on transfer under the Partnership
Agreement or this Agreement and under applicable state and federal securities
laws and (ii) such Liens as are created by the Purchaser.

       

      (e)           The
Common Units are listed on the NASDAQ, and Regency has not received any notice
of delisting.  As of the date hereof, a “Notification Form: Listing of
Additional Shares” and supporting documentation, if required, related to the
Purchased Units has been filed with the NASDAQ.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      Section
3.03    Registration Statement and
Prospectus.  A registration statement on Form S-3 (File No.
333-141809) pursuant to which to the Purchased Units will be offered has
(i) been prepared by Regency in conformity with the requirements of the
Securities Act, and the rules and regulations (the “Rules and Regulations”) of
the Commission thereunder, (ii) been filed with the Commission under the
Securities Act, and (iii) become effective under the Securities
Act.  Copies of such registration statement and each of the amendments
thereto, if any, have been delivered by Regency to the Purchaser.  As
used in this Agreement, “Effective Time” means the date and the time as of which
such registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; “Effective Date”
means the date of the Effective Time; “Registration Statement” means the
registration statement referred to above, as amended at the Effective Time; and
“Prospectus” means the final prospectus supplement relating to the Purchased
Units and the offering thereof, including the accompanying base prospectus, as
first filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations after the date and time this Agreement is
executed.  Reference made herein to the Prospectus shall be deemed to
refer to and include any information incorporated by reference therein pursuant
to Item 12 of Form S-3 under the Securities Act, as of the date of such
Prospectus, and any reference to any amendment or supplement to the Prospectus
shall be deemed to refer to and include any document filed under the Exchange
Act after the date of such Prospectus,
and incorporated by reference in the Prospectus; and any reference to any
amendment to the Registration Statement shall be deemed to include any periodic
report of Regency filed with the Commission pursuant to Section 13(a) or
15(d) of the Exchange Act after the Effective Time that is incorporated by
reference in the Registration Statement.  The Commission has not
issued any order preventing or suspending the use of any
Prospectus.

       

      Section
3.04    Regency SEC
Documents.  Regency has timely filed with the Commission all
forms, registration statements, reports, schedules and statements required to be
filed by it under the Exchange Act or the Securities Act (all such documents
together with the Registration Statement, collectively the “Regency SEC
Documents”).  The Regency SEC Documents, including, without
limitation, any audited or unaudited financial statements and any notes thereto
or schedules included therein (the “Regency Financial Statements”), at the time
filed (in the case of registration statements, solely on the dates of
effectiveness) (except to the extent corrected by a subsequently filed Regency
SEC Document filed prior to the date hereof) (a) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein (in light of
the circumstances under which they were made in the case of any prospectus) not
misleading, (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as applicable,
(c) complied as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the Commission with
respect thereto, (d) in the case of the Regency Financial Statements, were
prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited statements, as permitted by Form 10-Q of the Commission),
and (e) in the case of the Regency Financial Statements, fairly present
(subject in the case of unaudited statements to normal, recurring and year-end
audit adjustments) in all material respects the consolidated financial position
of Regency and its Subsidiaries as of the dates thereof and the consolidated
results of its operations and cash flows for the periods then
ended.  KPMG LLP is an independent, registered public accounting firm
with respect to Regency and the General Partner and has not resigned or been
dismissed as independent public accountants of Regency or the General Partner as
a result of or in connection with any disagreement with Regency on a matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      Section
3.05    No Material Adverse
Change.  Except as set forth in or contemplated by the Regency
SEC Documents filed with the Commission on or prior to the date hereof, since
the date of Regency’s most recent Form 10-K filing with the Commission, Regency
and its Subsidiaries have conducted their respective businesses in the ordinary
course, consistent with past practice, and there has been no (a) change,
event, occurrence, effect, fact, circumstance or condition that has had or would
be reasonably likely to have a Regency Material Adverse Effect,
(b) acquisition or disposition of any material asset by Regency or any of
its Subsidiaries or any contract or arrangement therefor, otherwise than for
fair value in the ordinary course of business or as disclosed in the Regency SEC
Documents, or (c) material change in Regency’s accounting principles,
practices or methods.

       

      Section
3.06    Litigation.  Except
as set forth in the Regency SEC Documents, there is no action, suit, or
proceeding pending (including any investigation, litigation or inquiry) or, to
Regency’s
knowledge, contemplated or threatened against or affecting any of the Regency
Parties or any of their respective officers, directors, properties or assets,
which (a) questions the validity of this Agreement or the right of Regency to
enter into this Agreement or to consummate the transactions contemplated hereby
or (b) (individually or in the aggregate) would be reasonably likely to result
in a Regency Material Adverse Effect.

       

      Section
3.07    No Conflicts; Compliance
with Laws.  The execution, delivery and performance by Regency
of the Basic Documents and compliance by Regency with the terms and provisions
hereof and thereof, and the issuance and sale by Regency of the Purchased Units,
do not and will not (a) assuming the accuracy of the representations and
warranties of the Purchaser contained herein and their compliance with the
covenants contained herein, violate any provision of any Law or Permit having
applicability to Regency or any of its Subsidiaries or any of their respective
Properties, (b) conflict with or result in a violation or breach of any
provision of the certificate of limited partnership or other organizational
documents of Regency, or the Partnership Agreement, or any organizational
documents of any of Regency’s Subsidiaries, (c) require any consent,
approval or notice under or result in a violation or breach of or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under any contract,
agreement, instrument, obligation, note, bond, mortgage, license, loan or credit
agreement to which Regency or any of its Subsidiaries is a party or by which
Regency or any of its Subsidiaries or any of their respective Properties may be
bound, or (d) result in or require the creation or imposition of any Lien
upon or with respect to any of the Properties now owned or hereafter acquired by
Regency or any of its Subsidiaries, except in the case of clause (b) where any
such conflict, violation, default, breach, termination, cancellation, failure to
receive consent, approval or notice, or acceleration with respect to the
foregoing provisions of this Section 3.07 would not be, individually or in
the aggregate, reasonably likely to result in a Regency Material Adverse
Effect.

       

      Section
3.08    Authority,
Enforceability.  Regency has all necessary partnership power
and authority to execute, deliver and perform its obligations under the Basic
Documents, and the execution, delivery and performance by Regency of the Basic
Documents has been duly

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      authorized
by all necessary action on the part of the General Partner; and the Basic
Documents constitute the legal, valid and binding obligations of Regency,
enforceable in accordance with their terms, except as such enforceability may be
limited by bankruptcy, insolvency, fraudulent transfer and similar laws
affecting creditors’ rights generally or by general principles of equity and
except as the rights to indemnification may be limited by applicable
law.  No approval from the holders of the Common Units, Subordinated
Units or the Class D Units is required in connection with Regency’s issuance and
sale of the Purchased Units to the Purchaser.

       

      Section
3.09    Approvals.  Except
for the approvals that have already been obtained, no authorization, consent,
approval, waiver, license, qualification or written exemption from, nor any
filing, declaration, qualification or registration with, any Governmental
Authority or any other Person is required in connection with the execution,
delivery or performance by Regency of any of the Basic Documents, except where
the failure to receive such authorization, consent, approval, waiver, license,
qualification or written exemption from, or to make such filing, declaration,
qualification or registration would not, individually or in the aggregate, be
reasonably likely to have a Regency Material Adverse Effect.

      

      Section
3.10    MLP
Status.  Regency has, for each taxable year beginning after
December 31, 2005, during which Regency was in existence, met the gross
income requirements of Section 7704(c)(2) of the Internal Revenue Code of
1986, as amended.

       

      Section
3.11    Investment Company
Status.  Regency is not an “investment company” or a company
controlled by an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

       

      Section
3.12    Certain
Fees.  No fees or commissions are or will be payable by Regency
to brokers, finders, or investment bankers with respect to the sale of any of
the Purchased Units or the consummation of the transactions contemplated by this
Agreement.  Regency agrees that it will indemnify and hold harmless
each Purchaser from and against any and all claims, demands, or liabilities for
broker’s, finder’s, placement, or other similar fees or commissions incurred by
Regency or alleged to have been incurred by Regency in connection with the sale
of the Purchased Units or the consummation of the transactions contemplated by
this Agreement.

       

      Section
3.13    No Side
Agreements.  There are no agreements by, among or between
Regency or any of its Affiliates, on the one hand, and any Purchaser or any of
its Affiliates, on the other hand, with respect to the transactions contemplated
hereby other than the Basic Documents nor promises or inducements for future
transactions between or among any of such parties.

       

      Section
3.14    Insurance.  Regency
and its Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which they are engaged.  Regency
does not have any reason to believe that it or any Subsidiary will not be able
to renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      Section
3.15    Internal Accounting
Controls.  Regency and its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability, (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 the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.  Regency is not aware of any failures of such internal
accounting controls.

       

      Section
3.16    Listing
and Maintenance Requirements.  The issuance and sale of the
Purchased Units does not contravene NASDAQ rules and regulations.

       

      Section
3.17    Confidential
Information.  To the knowledge of Regency, none of its
employees or executive officers has disclosed material non-public information
(other than the fact that Regency was contemplating a private financing) to any
prospective investor who has not entered into a confidentiality or
non-disclosure agreement between such prospective investor and Regency relating
to such information.

       

      Section
3.18    Further Agreements of
Regency.  Regency shall prepare the final prospectus supplement
relating to the Purchased Units and the offering thereof in a form approved by
the Purchaser and file such final prospectus supplement and the accompanying
base prospectus, which together constitute the Prospectus, pursuant to Rule
424(b) under the Securities Act not later than the Commission’s close of
business on the second business day following the execution and delivery of this
Agreement.

       

      ARTICLE
IV

       

      REPRESENTATIONS
AND WARRANTIES AND COVENANTS

       

      OF
THE PURCHASER

       

      The
Purchaser hereby represents and warrants and covenants to Regency
that:

       

      Section
4.01    Existence.  The
Purchaser is duly organized and validly existing and in good standing under the
laws of its state of formation, with all necessary power and authority to own
properties and to conduct its business as currently conducted.

       

      Section
4.02    Authorization,
Enforceability.  The Purchaser has all necessary legal power
and authority to enter into, deliver and perform its obligations under this
Agreement. The execution, delivery and performance of this Agreement by the
Purchaser and the consummation by it of the transactions contemplated hereby
have been duly and validly authorized by all necessary legal action, and no
further consent or authorization of the Purchaser is required. This Agreement
has been duly executed and delivered by the Purchaser and constitutes legal,
valid and binding obligations of the Purchaser; provided that, the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws relating to or affecting
creditors’ rights generally and by general principles of equity and except as
the rights to indemnification may be limited by applicable law (regardless of
whether such enforceability is considered in a proceeding in equity or at
law).

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      Section
4.03    No
Breach.  The execution, delivery and performance of this
Agreement by the Purchaser and the consummation by the Purchaser of the
transactions contemplated hereby will not (a) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any material agreement to which the Purchaser is a party or by
which the Purchaser is bound or to which any of the property or assets of the
Purchaser is subject, (b) conflict with or result in any violation of the
provisions of the organizational documents of the Purchaser, or (c) violate any
statute, order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Purchaser or the property or assets of the
Purchaser, except in the case of clauses (a) and (c), for such conflicts,
breaches, violations or defaults as would not prevent the consummation of the
transactions contemplated by this Agreement.

       

      Section
4.04    Certain
Fees.  No fees or commissions are or will be payable by the
Purchaser to brokers, finders, or investment bankers with respect to the
purchase of any of the Purchased Units or the consummation of the transactions
contemplated by this Agreement.  The Purchaser agrees that it will
indemnify and hold harmless Regency from and against any and all claims, demands
or liabilities for broker’s, finder’s, placement, or other similar fees or
commissions incurred by the Purchaser or alleged to have been incurred by the
Purchaser in connection with the purchase of the Purchased Units or the
consummation of the transactions contemplated by this Agreement.

       

      Section
4.05    No Side
Agreements.  There are no other agreements by, among or between
the Purchaser and any of its Affiliates, on the one hand, and Regency or any of
its Affiliates, on the other hand, with respect to the transactions contemplated
hereby other than the Basic Documents, and there are no promises or inducements
for future transactions between or among any of such parties.

       

      Section
4.06    Short
Selling.  The Purchaser has not entered into any short sales of
the Common Units owned by it between the time it first began discussion with
Regency about the transactions contemplated by this Agreement and the date
hereof (it being understood that the entering into of a total return swap shall
not be considered a short sale of Common Units).

       

      Section
4.07    Regency Information.
The Purchaser acknowledges and agrees that Regency has provided or made
available to the Purchaser (through EDGAR, Regency’s web site or otherwise) the
Registration Statement and all other Regency SEC Documents, as well as all press
releases issued by Regency through the date of this Agreement.

       

      

       

      ARTICLE
V

       

      INDEMNIFICATION,
COSTS AND EXPENSES

       

      Section
5.01    Indemnification by
Regency.  Regency agrees to indemnify the Purchaser and its
Representatives (collectively, “Purchaser Related Parties”) from, and hold each
of them harmless against, any and all losses, actions, suits, proceedings
(including any investigations, litigation or inquiries), demands, and causes of
action, and, in connection therewith, and promptly upon demand, pay or reimburse
each of them for all reasonable costs, losses, liabilities, damages, or expenses
of any kind or nature whatsoever, including, without limitation, the

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      reasonable
fees and disbursements of counsel and all other reasonable expenses incurred in
connection with investigating, defending or preparing to defend any such matter
that may be incurred by them or asserted against or involve any of them as a
result of, arising out of, or in any way related to the breach of any of the
representations, warranties or covenants of Regency contained herein, provided
such claim for indemnification relating to a breach of any representation or
warranty is made prior to the expiration of such representation or
warranty.

       

      Section
5.02    Indemnification by the
Purchasers.  The Purchaser agrees to indemnify Regency, the
General Partners and their respective Representatives (collectively, “Regency
Related Parties”) from, and hold each of them harmless against, any and all
losses, actions, suits, proceedings (including any investigations, litigation or
inquiries), demands, and causes of action, and, in connection therewith, and
promptly upon demand, pay or reimburse each of them for all reasonable costs,
losses, liabilities, damages, or expenses of any kind or nature whatsoever,
including, without limitation, the reasonable fees and disbursements of counsel
and all other reasonable expenses incurred in connection with investigating,
defending or preparing to defend any such matter that may be incurred by them or
asserted against or involve any of them as a result of, arising out of, or in
any way related to the breach of any of the representations, warranties or
covenants of such Purchaser contained herein, provided such claim for
indemnification relating to a breach of any representation or warranty is made
prior to the expiration of such representation or warranty, provided, however,
that the liability of each Purchaser shall not be greater in amount than such
Purchaser’s Allocated Purchase Price.

       

      Section
5.03    Indemnification
Procedure.  Promptly after any Regency Related Party or
Purchaser Related Party (hereinafter, the “Indemnified Party”) has received
notice of any indemnifiable claim hereunder, or the commencement of any action,
suit or proceeding by a third person, which the Indemnified Party believes in
good faith is an indemnifiable claim under this Agreement, the Indemnified Party
shall give the indemnitor hereunder (the “Indemnifying Party”) written notice of
such claim or the commencement of such action, suit or proceeding, but failure
to so notify the Indemnifying Party will not relieve the Indemnifying Party from
any liability it may have to such Indemnified Party hereunder except to the
extent that the Indemnifying Party is materially prejudiced by such failure.
Such notice shall state the nature and the basis of such claim to the extent
then known.  The Indemnifying Party shall have the right to defend and
settle, at its own expense and by its own counsel, any such matter as long as
the Indemnifying Party pursues the same diligently and in good faith. If the
Indemnifying Party undertakes to defend or settle, it shall promptly notify the
Indemnified Party of its intention to do so, and the Indemnified Party shall
cooperate with the Indemnifying Party and its counsel in all commercially
reasonable respects in the defense thereof and the settlement thereof. Such
cooperation shall include, but shall not be limited to, furnishing the
Indemnifying Party with any books, records and other information reasonably
requested by the Indemnifying Party and in the Indemnified Party’s possession or
control.  Such cooperation of the Indemnified Party shall be at the
cost of the Indemnifying Party.  After the Indemnifying Party has
notified the Indemnified Party of its intention to undertake to defend or settle
any such asserted liability, and for so long as the Indemnifying Party
diligently pursues such defense, the Indemnifying Party shall not be liable for
any additional legal expenses incurred by the Indemnified Party in connection
with any defense or settlement of such asserted liability; provided, however,
that the Indemnified Party shall be entitled (i) at its expense, to participate
in the defense of such asserted liability and the negotiations of the settlement
thereof and (ii) if (A) the Indemnifying Party has failed to assume

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      the
defense and employ counsel or (B) if the defendants in any such action include
both the Indemnified Party and the Indemnifying Party and counsel to the
Indemnified Party shall have concluded that there may be reasonable defenses
available to the Indemnified Party that are different from or in addition to
those available to the Indemnifying Party or if the interests of the Indemnified
Party reasonably may be deemed to conflict with the interests of the
Indemnifying Party, then the Indemnified Party shall have the right to select a
separate counsel and to assume such legal defense and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by the
Indemnifying Party as incurred.  Notwithstanding any other provision
of this Agreement, the Indemnifying Party shall not settle any indemnified claim
without the consent of the Indemnified Party, unless the settlement thereof
imposes no liability or obligation on, and includes a complete release from
liability of, and does not contain any admission of wrong doing by, the
Indemnified Party.

       

      ARTICLE
VI

       

      MISCELLANEOUS

       

      Section
6.01    Interpretation and Survival
of Provisions.  Article, Section, Schedule, and Exhibit
references are to this Agreement, unless otherwise specified. All references to
instruments, documents, contracts, and agreements are references to such
instruments, documents, contracts, and agreements as the same may be amended,
supplemented, and otherwise modified from time to time, unless otherwise
specified. The word “including” shall mean “including but not limited to.”
Whenever Regency has an obligation under the Basic Documents, the expense of
complying with that obligation shall be an expense of Regency unless otherwise
specified. Whenever any determination, consent, or approval is to be made or
given by the Purchaser, such action shall be in the Purchaser’s sole discretion
unless otherwise specified in this Agreement.  If any provision in the
Basic Documents is held to be illegal, invalid, not binding, or unenforceable,
such provision shall be fully severable and the Basic Documents shall be
construed and enforced as if such illegal, invalid, not binding, or
unenforceable provision had never comprised a part of the Basic Documents, and
the remaining provisions shall remain in full force and effect.

       

      Section
6.02    Survival of
Provisions.  The representations and warranties set forth in
Sections 3.02, 3.08, 3.09, 3.11, 3.12, 4.02, 4.04 and 4.05 hereunder shall
survive the execution and delivery of this Agreement indefinitely, and the other
representations and warranties set forth herein shall survive for a period of
twelve (12) months following the Closing Date regardless of any investigation
made by or on behalf of Regency or the Purchaser.  The covenants made
in this Agreement or any other Basic Document shall survive the Closing of the
transactions described herein and remain operative and in full force and effect
regardless of acceptance of any of the Purchased Units and payment therefor and
repayment or repurchase thereof.  All indemnification obligations of
Regency and the Purchasers and the provisions of Article V shall remain
operative and in full force and effect unless such obligations are expressly
terminated in a writing referencing that individual Section, regardless of any
purported general termination of this Agreement.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      Section
6.03    No Waiver; Modifications in
Writing.

       

      (a)           Delay.  No
failure or delay on the part of any party in exercising any right, power, or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power, or remedy preclude any other or
further exercise thereof or the exercise of any other right, power, or remedy.
The remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to a party at law or in equity or
otherwise.

       

      (b)           Specific
Waiver.  Except as otherwise provided herein, no amendment,
waiver, consent, modification, or termination of any provision of this Agreement
or any other Basic Document (except in the case of the Partnership Agreement for
amendments adopted pursuant to Section 13.1 thereof) shall be effective unless
signed by each of the parties hereto or thereto affected by such amendment,
waiver, consent, modification, or termination.  Any amendment,
supplement or modification of or to any provision of this Agreement or any other
Basic Document, any waiver of any provision of this Agreement or any other Basic
Document, and any consent to any departure by Regency from the terms of any
provision of this Agreement or any other Basic Document shall be effective only
in the specific instance and for the specific purpose for which made or given.
Except where notice is specifically required by this Agreement, no notice to or
demand on Regency in any case shall entitle Regency to any other or further
notice or demand in similar or other circumstances.

       

      Section
6.04    Binding Effect;
Assignment.

       

      (a)           Binding
Effect.  This Agreement shall be binding upon Regency, the
Purchaser, and their respective successors and permitted assigns. Except as
expressly provided in this Agreement, this Agreement shall not be construed so
as to confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and permitted assigns.

       

      (b)           Assignment of
Rights.  All or any portion of the rights and obligations of
the Purchaser under this Agreement may be transferred by the Purchaser to any
Affiliate of the Purchaser without the consent of Regency.  No portion
of the rights and obligations of the Purchaser under this Agreement may be
transferred by the Purchaser to a non-Affiliate without the written consent of
Regency.

       

      Section
6.05     Non-Disclosure.  Other
than the Form 8-Ks to be filed in connection with this Agreement, Regency, the
General Partner, their respective Subsidiaries and any of their respective
Representatives shall disclose the identity of, or any other information
concerning, the Purchaser, any Purchaser or any of their Affiliates only after
providing the Purchaser a reasonable opportunity to review and comment on such
disclosure; provided, however, that nothing in this Section 6.05 shall delay any
required filing or other disclosure with the Commission, NASDAQ or any
Governmental Authority or otherwise hinder Regency, the General Partner, their
respective Subsidiaries or their Representatives’ ability to timely comply with
all laws or rules and regulations of the Commission, NASDAQ or other
Governmental Authority.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      Section
6.06    Communications.  All
notices and demands provided for hereunder shall be in writing and shall be
given by registered or certified mail, return receipt requested, telecopy, air
courier guaranteeing overnight delivery or personal delivery to the following
addresses:

       

      (a)           If
to the Purchaser:

      

      Joseph
Herlihy

      Neuberger
Berman, LLC

      605 Third
Avenue

      New York,
NY 10158

      

      with a
copy to:

      Brad
Cetron, Senior Vice President

      Neuberger
Berman, LLC

      605 Third
Avenue

      New York,
NY 10158

      

      (b)           If
to Regency:

       

      Regency
Energy Partners LP

      1700
Pacific, Suite 1900

      Dallas,
Texas 75201

      Attention:
Dan Fleckman, Executive Vice President

      Facsimile:
(214) 750-1749

      

      with a
copy to:

       

      Vinson
& Elkins L.L.P.

      1001
Fannin, Suite 2500

      Houston,
Texas 77002

      Attention:  Doug
McWilliams

      Facsimile:  (713)
615-5725

      Internet
electronic mail:  dmcwilliams@velaw.com

      

       

      or to
such other address as Regency or the Purchaser may designate in
writing.  All notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; upon actual
receipt if sent by certified or registered mail, return receipt requested, or
regular mail, if mailed; upon actual receipt of the overnight courier copy, if
sent via facsimile; and upon actual receipt when delivered to an air courier
guaranteeing overnight delivery.

       

      Section
6.07    Entire
Agreement.  This Agreement, the other Basic Documents and the
other agreements and documents referred to herein are intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein or the other Basic Documents with respect to the rights

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      granted
by Regency or any of its Affiliates or the Purchaser or any of its Affiliates
set forth herein or therein.  This Agreement, the other Basic
Documents and the other agreements and documents referred to herein or therein
supersede all prior agreements and understandings between the parties with
respect to such subject matter.

       

      Section
6.08                                 Governing
Law.  This Agreement will be construed in accordance with and
governed by the laws of the State of New York without regard to principles of
conflicts of laws.

       

      Section
6.09                                 Waiver
of Jury Trial.  Each
party to this Agreement irrevocably waives the right to a trial by jury in
connection with any matter arising out of this Agreement to the fullest extent
permitted by applicable law.

       

      Section
6.10                                 Execution in
Counterparts.  This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one
and the same Agreement.

       

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of the
date first above written.

       

      REGENCY ENERGY PARTNERS
LP

      By:            Regency
GP LP, its general partner

      By:           Regency
GP LLC, its general partner

      

      

      By: /s/ Stephen L.
Arata

      Name:  Stephen L.
Arata

      Title:  Executive
Vice President and Chief Financial Officer

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      NEUBERGER
BERMAN, LLC,

      As
investment advisor for certain clients on behalf of whom Neuberger is purchasing
these securities

      

      

      By: /s/ Joseph
Herlihy

      Name:  Joseph
Herlihy

      Title:  Managing
Director

      

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Exhibit
A – Form of Opinion of Regency Counsel

       

      Capitalized
terms used but not defined herein have the meanings assigned to such terms in
the Common Unit Purchase Agreement, dated July 24, 2008 (the “Purchase Agreement”),
by and among Regency Energy Partners LP (“Regency”) and the
purchasers named therein (the “Purchasers”).  Regency
shall furnish to the Purchaser at the Closing an opinion of Vinson & Elkins
L.L.P., counsel for Regency, addressed to the Purchasers and dated the Closing
Date in form satisfactory to Baker Botts L.L.P., counsel for the Purchasers, and
the Purchasers, stating that:

       

      (i)           The
Purchase Agreement has been duly authorized, executed and delivered by the
Partnership.

       

      (ii)           The
Registration Statement has become effective under the Securities Act and, to
such counsel’s knowledge, no stop order suspending the effectiveness of the
Registration Statement and no proceedings for that purpose are pending or
threatened under the Securities Act; and the Common Units are registered under
Section 12 of the Exchange Act.

       

      (iii)           No
permit, consent, approval, authorization, order, registration, filing or
qualification (“consent”) under the Delaware LP Act, the Delaware LLC Act, the
federal law of the United States of America or the laws of the State of Texas is
required in connection with the offering, issuance and sale by Regency of the
Purchased Units, the execution, delivery and performance of the Purchase
Agreement by Regency or the consummation by Regency of the transactions
contemplated the Purchase Agreement, except for such consents (i) required under
the Securities Act, the Exchange Act and state securities or “Blue Sky” laws, as
to which we do not express any opinion, (ii) that have been obtained or made or
(iii) that, if not obtained, would not, individually or in the aggregate, have a
Material Adverse Effect.

       

      (iv)           The
Registration Statement, at the Effective Time, and the prospectus contained in
the Registration Statement, at the Effective Time, appear on their face to
comply as to form in all material respects with the requirements of the
Securities Act and the rules and regulations promulgated thereunder, except that
in each case we express no opinion with respect to the financial statements and
the notes and schedules thereto, and the financial and accounting data included
or incorporated by reference in or omitted from the Registration Statement or
the Prospectus.COMMON STOCK PURCHASE AGREEMENT

     COMMON  STOCK  PURCHASE  AGREEMENT  (the "Agreement"), dated as of July 22,
2008, by and between COMPETITIVE TECHNOLOGIES, INC., a Delaware corporation (the
"Company,"  as  further defined in Section 10), and FUSION CAPITAL FUND II, LLC,
an  Illinois  limited  liability  company (the "Buyer").  Capitalized terms used
herein  and  not  otherwise  defined  herein  are  defined in Section 10 hereof.

                                    WHEREAS:

     Subject  to  the  terms  and  conditions  set  forth in this Agreement, the
Company  wishes  to  sell  to  the  Buyer,  and the Buyer wishes to buy from the
Company,  up to Five Million Dollars ($5,000,000) of the Company's common stock,
par  value  $0.01 per share (the "Common Stock").  The shares of Common Stock to
be  purchased  hereunder  are  referred  to  herein  as  the  "Purchase Shares."

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

     1.     PURCHASE  OF  COMMON  STOCK.

     Subject  to  the  terms  and  conditions  set  forth in this Agreement, the
Company  has the right to sell to the Buyer, and the Buyer has the obligation to
purchase  from  the  Company,  Purchase  Shares  as  follows:

     (a)     Commencement  of  Purchases of Common Stock.  The purchase and sale
of  Purchase Shares hereunder shall occur from time to time upon written notices
by  the  Company  to  the  Buyer on the terms and conditions as set forth herein
following  the  satisfaction of the conditions (the "Commencement") as set forth
in  Sections  6  and  7 below  (the date of satisfaction of such conditions, the
"Commencement  Date").

     (b)     The Company's Right to Require Purchases.  Any time on or after the
Commencement  Date,  the  Company shall have the right but not the obligation to
direct the Buyer by its delivery to the Buyer of Base Purchase Notices from time
to  time  to  buy  Purchase Shares (each such purchase a "Base Purchase") in any
amount  up  to  Fifty  Thousand  Dollars ($50,000) per Base Purchase Notice (the
"Base Purchase Amount") at the Purchase Price on the Purchase Date.  The Company
may  deliver  multiple  Base  Purchase  Notices to the Buyer so long as at least
three  (3)  Business  Days  have  passed since the most recent Base Purchase was
completed.  Notwithstanding  the forgoing, any time on or after the Commencement
Date,  the  Company  shall  also  have  the  right but not the obligation by its
delivery  to the Buyer of Block Purchase Notices from time to time to direct the
Buyer  to  buy  Purchase  Shares  (each such purchase a "Block Purchase") in any
amount  up  to One Million Dollars ($1,000,000) per Block Purchase Notice at the
Block  Purchase  Price  on  the  Purchase  Date as provided herein.  For a Block
Purchase  Notice to be valid the following conditions must be met: (1) the Block
Purchase  Amount  shall  not  exceed One Hundred Thousand Dollars ($100,000) per
Block  Purchase  Notice, (2) the Company must deliver the Purchase Shares before
11:00  a.m.  eastern  time  on  the  Purchase Date and (3) the Sale Price of the
Common  Stock  must  not be below $3.00 (subject to equitable adjustment for any
reorganization,  recapitalization,  non-cash  dividend,  stock  split  or  other
similar  transaction)  during the Purchase Date, the date of the delivery of the
Block  Purchase  Notice and during the Business Day prior to the delivery of the
Block  Purchase Notice.  The Block Purchase Amount may be increased to up to Two
Hundred  Fifty Thousand Dollars ($250,000) per Block Purchase Notice if the Sale
Price  of  the  Common Stock is not below $6.00 (subject to equitable adjustment
for  any  reorganization,  recapitalization,  non-cash  dividend, stock split or
other similar transaction) during the Purchase Date, the date of the delivery of
the  Block

<PAGE>
Purchase  Notice  and during the Business Day prior to the delivery of the Block
Purchase  Notice.  The  Block  Purchase  Amount  may  be increased to up to Five
Hundred  Thousand Dollars ($500,000) per Block Purchase Notice if the Sale Price
of the Common Stock is not below $10.00 (subject to equitable adjustment for any
reorganization,  recapitalization,  non-cash  dividend,  stock  split  or  other
similar  transaction)  during the Purchase Date, the date of the delivery of the
Block  Purchase  Notice and during the Business Day prior to the delivery of the
Block  Purchase Notice.  The Block Purchase Amount may be increased to up to One
Million  Dollars ($1,000,000) per Block Purchase Notice if the Sale Price of the
Common  Stock  is  not  below  $15.00  (subject  to equitable adjustment for any
reorganization,  recapitalization,  non-cash  dividend,  stock  split  or  other
similar  transaction)  during the Purchase Date, the date of the delivery of the
Block  Purchase  Notice and during the Business Day prior to the delivery of the
Block  Purchase  Notice.  As  used herein, the term "Block Purchase Price" shall
mean the lesser of (i) the lowest Sale Price of the Common Stock on the Purchase
Date  or  (ii)  the  lowest Purchase Price during the previous ten (10) Business
Days  prior to the date that the valid Block Purchase Notice was received by the
Buyer.  However,  if  at  any  time  during  the  Purchase Date, the date of the
delivery  of  the  Block Purchase Notice or during the Business Day prior to the
delivery  of  the  Block  Purchase Notice, the Sale Price of the Common Stock is
below  the  applicable Block Purchase threshold price, such Block Purchase shall
be  void  and  the Buyer's obligations to buy Purchase Shares in respect of that
Block  Purchase Notice shall be terminated.  Thereafter, the Company shall again
have the right to submit a Block Purchase Notice as set forth herein by delivery
of  a  new  Block  Purchase Notice only if the Sale Price of the Common Stock is
above  the  applicable  Block  Purchase  threshold  price during the date of the
delivery  of  the Block Purchase Notice and during the Business Day prior to the
delivery  of  the Block Purchase Notice.  The Company may deliver multiple Block
Purchase  Notices  to  the  Buyer so long as at least two (2) Business Days have
passed  since  the  most  recent  Block  Purchase  was  completed.

     (c)     Payment for Purchase Shares.  The Buyer shall pay to the Company an
amount equal to the Purchase Amount with respect to such Purchase Shares as full
payment  for  such  Purchase  Shares  via wire transfer of immediately available
funds  on  the same Business Day that the Buyer receives such Purchase Shares if
they  are received by the Buyer before 11:00 a.m. eastern time or if received by
the  Buyer  after  11:00  a.m. eastern time, the next Business Day.  The Company
shall  not  issue any fraction of a share of Common Stock upon any purchase.  If
the  issuance  would  result  in the issuance of a fraction of a share of Common
Stock,  the  Company  shall round such fraction of a share of Common Stock up or
down  to  the nearest whole share.  All payments made under this Agreement shall
be  made  in  lawful  money  of the United States of America or wire transfer of
immediately available funds to such account as the Company may from time to time
designate by written notice in accordance with the provisions of this Agreement.
Whenever any amount expressed to be due by the terms of this Agreement is due on
any  day  that  is not a Business Day, the same shall instead be due on the next
succeeding  day  that  is  a  Business  Day.

     (d)     Purchase  Price  Floor.  The Company and the Buyer shall not effect
any sales under this Agreement on any Purchase Date where the Purchase Price for
any  purchases  of  Purchase Shares would be less than the Floor Price.   "Floor
Price"  means  $1.00,  which  shall  be  appropriately  adjusted  for  any
reorganization,  recapitalization,  non-cash  dividend,  stock  split  or  other
similar  transaction.

     (e)     Records  of  Purchases.  The  Buyer  and  the  Company  shall  each
maintain records showing the remaining Available Amount at any give time and the
dates  and  Purchase  Amounts  for each purchase or shall use such other method,
reasonably  satisfactory  to  the  Buyer  and  the  Company.

     (f)     Taxes.  The  Company  shall  pay  any  and  all  transfer, stamp or
similar  taxes  that may be payable with respect to the issuance and delivery of
any  shares  of  Common  Stock  to  the  Buyer  made  under  this  Agreement.

<PAGE>

     (g)  Compliance  with  Principal Market Rules. The Company shall not effect
any  sale  under  this  Agreement  and the Buyer shall not have the right or the
obligation to purchase shares of Common Stock under this Agreement to the extent
that  after giving effect to such purchase the "Exchange Cap" shall be deemed to
be  reached.  The "Exchange Cap" shall be deemed to have been reached if, at any
time  prior  to  the  shareholders  of  the  Company  approving  the transaction
contemplated  by  this  Agreement,  upon  a  purchase  under this Agreement, the
Purchase  Shares and Commitment Shares issuable pursuant to such purchase would,
together  with all Purchase Shares and Commitment Shares previously issued under
this Agreement, exceed 1,635,156 shares of Common Stock (19.99% of the 8,179,872
outstanding  shares  of  Common  Stock  as  of  the date of this Agreement). The
Company  may,  but  shall be under no obligation to, request its shareholders to
approve the transaction contemplated by this Agreement. The Company shall not be
required  to  issue  any  shares  of  Common  Stock under this Agreement if such
issuance  would  breach the Company's obligations under the rules or regulations
of  the  Principal  Market.

     2.     BUYER'S  REPRESENTATIONS  AND  WARRANTIES.

     The Buyer represents and warrants to the Company that as of the date hereof
and  as  of  the  Commencement  Date:

     (a)     Investment  Purpose.  The Buyer is entering into this Agreement and
acquiring  the  Commitment  Shares,  (as defined in Section 4(e) hereof) and the
Purchase  Shares  (collectively referred to herein as the "Securities"), for its
own  account  for  investment only and not with a view towards, or for resale in
connection  with,  the public sale or distribution thereof; provided however, by
making  the  representations herein, the Buyer does not agree to hold any of the
Securities  for  any  minimum  or other specific term other than as set forth in
Section  4(e)  with  respect  to  the  Commitment  Shares.

     (b)     Accredited  Investor Status.  The Buyer is an "accredited investor"
as  that  term  is  defined  in  Rule  501(a)(3)  of  Regulation  D.

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

     (d)     Information.  The  Buyer  has  been  furnished  with  all materials
relating  to  the business, finances and operations of the Company and materials
relating  to  the  offer  and  sale  of the Securities that have been reasonably
requested  by  the  Buyer,  including, without limitation, the SEC Documents (as
defined  in  Section 3(f) hereof).  The Buyer understands that its investment in
the  Securities  involves  a high degree of risk.  The Buyer (i) is able to bear
the  economic  risk  of  an investment in the Securities including a total loss,
(ii) has such knowledge and experience in financial and business matters that it
is  capable of evaluating the merits and risks of the proposed investment in the
Securities  and  (iii)  has  had  an opportunity to ask questions of and receive
answers  from the officers of the Company concerning the financial condition and
business  of  the  Company  and  others  matters related to an investment in the
Securities.  Neither  such  inquiries nor any other due diligence investigations
conducted  by the Buyer or its representatives shall modify, amend or affect the
Buyer's  right to rely on the Company's representations and warranties contained
in  Section  3  below.  The  Buyer  has  sought  such  accounting,

<PAGE>
legal  and  tax  advice  as  it  has  considered  necessary  to make an informed
investment  decision  with  respect  to  its  acquisition  of  the  Securities.

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

     (f)     Transfer or Sale.  The Buyer understands that except as provided in
the  Registration  Rights Agreement (as defined in Section 4(a) hereof): (i) the
Securities  have not been and are not being registered under the 1933 Act or any
state  securities  laws,  and  may  not  be  offered for sale, sold, assigned or
transferred  unless  (A)  subsequently registered thereunder or (B) an exemption
exists  permitting  such  Securities to be sold, assigned or transferred without
such  registration; (ii) any sale of the Securities made in reliance on Rule 144
may  be  made only in accordance with the terms of Rule 144 and further, if Rule
144  is  not  applicable,  any  resale of the  Securities under circumstances in
which  the seller (or the person through whom the sale is made) may be deemed to
be  an  underwriter  (as  that  term  is  defined  in  the 1933 Act) may require
compliance  with  some  other  exemption  under  the  1933  Act or the rules and
regulations  of  the SEC thereunder; and (iii) neither the Company nor any other
person  is under any obligation to register the Securities under the 1933 Act or
any  state  securities  laws  or  to comply with the terms and conditions of any
exemption  thereunder.

     (g)     Validity;  Enforcement.  This  Agreement  has been duly and validly
authorized,  executed  and  delivered  on behalf of the Buyer and is a valid and
binding  agreement of the Buyer enforceable against the Buyer in accordance with
its  terms,  subject as to enforceability to general principles of equity and to
applicable  bankruptcy,  insolvency, reorganization, moratorium, liquidation and
other  similar  laws  relating  to,  or  affecting generally, the enforcement of
applicable  creditors'  rights  and  remedies.

     (h)     Residency.  The  Buyer  is  a  resident  of  the State of Illinois.

     (i)     No  Prior  Short Selling.  The Buyer represents and warrants to the
Company  that  at  no  time  prior  to the date of this Agreement has any of the
Buyer,  its agents, representatives or affiliates engaged in or effected, in any
manner whatsoever, directly or indirectly, any (i) "short sale" (as such term is
defined  in  Section 242.200 of Regulation SHO of the Securities Exchange Act of
1934,  as  amended  (the  "1934  Act"))  of  the  Common  Stock  or (ii) hedging
transaction,  which  establishes a net short position with respect to the Common
Stock.

     3.     REPRESENTATIONS  AND  WARRANTIES  OF  THE  COMPANY.

     The Company represents and warrants to the Buyer that as of the date hereof
and  as  of  the  Commencement  Date:

     (a)     Organization and Qualification.  The Company and its "Subsidiaries"
(which  for  purposes  of  this Agreement means any entity in which the Company,
directly or indirectly, owns 50% or more of the voting stock or capital stock or
other  similar  equity  interests)  are  corporations duly organized and validly
existing  in  good standing under the laws of the jurisdiction in which they are
incorporated,  and have the requisite corporate power and authority to own their
properties  and  to carry on their business as now being conducted.  Each of the
Company  and  its  Subsidiaries is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which its ownership of
property  or the nature of the business conducted by it makes such qualification
necessary,  except  to  the  extent  that

<PAGE>
the  failure  to  be so qualified or be in good standing could not reasonably be
expected  to  have  a  Material  Adverse  Effect.  As  used  in  this Agreement,
"Material  Adverse  Effect" means any material adverse effect on any of: (i) the
business,  properties,  assets,  operations,  results of operations or financial
condition of the Company and its Subsidiaries, if any, taken as a whole, or (ii)
the  authority  or  ability  of the Company to perform its obligations under the
Transaction  Documents  (as defined in Section 3(b) hereof).  The Company has no
Subsidiaries  except  as  set  forth  on  Schedule  3(a).

     (b)     Authorization;  Enforcement;  Validity.  (i)  The  Company  has the
requisite  corporate  power  and  authority  to  enter  into  and  perform  its
obligations under this Agreement, the Registration Rights Agreement  and each of
the  other  agreements  entered into by the parties on the Commencement Date and
attached  hereto  as  exhibits to this Agreement (collectively, the "Transaction
Documents"), and to issue the Securities in accordance with the terms hereof and
thereof,  (ii)  the  execution  and delivery of the Transaction Documents by the
Company  and  the consummation by it of the transactions contemplated hereby and
thereby, including without limitation, the issuance of the Commitment Shares and
the  reservation for issuance and the issuance of the Purchase Shares (up to the
Exchange  Cap)  issuable  under this Agreement, have been duly authorized by the
Company's Board of Directors and no further consent or authorization is required
by the Company, its Board of Directors or its shareholders, (iii) this Agreement
has been, and each other Transaction Document shall be on the Commencement Date,
duly  executed and delivered by the Company and (iv) this Agreement constitutes,
and each other Transaction Document upon its execution on behalf of the Company,
shall  constitute,  the valid and binding obligations of the Company enforceable
against  the  Company  in  accordance  with  their  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 creditors' rights and
remedies.  The  Board  of  Directors of the Company has approved the resolutions
(the  "Signing  Resolutions")  substantially in the form as set forth as Exhibit
C-1  attached  hereto  to  authorize  this  Agreement  and  the  transactions
contemplated  hereby.  The  Signing  Resolutions  are  valid,  in full force and
effect  and  have not been modified or supplemented in any respect other than by
the  resolutions  set  forth  in  Exhibit  C-2  attached  hereto  regarding  the
registration  statement  referred  to  in  Section  4  hereof.  The  Company has
delivered  to  the  Buyer a true and correct copy of a unanimous written consent
adopting  the Signing Resolutions executed by all of the members of the Board of
Directors of the Company.  No other approvals or consents of the Company's Board
of  Directors  and/or  shareholders  is  necessary under applicable laws and the
Company's  Certificate of Incorporation and/or Bylaws to authorize the execution
and  delivery  of this Agreement or any of the transactions contemplated hereby,
including,  but  not  limited  to, the issuance of the Commitment Shares and the
issuance  of  the  Purchase  Shares  up  to  the  Exchange  Cap.

     (c)     Capitalization.  As  of  the  date  hereof,  the authorized capital
stock of the Company consists of (i) 20,000,000 shares of Common Stock, of which
as  of  the  date  hereof, 8,179,872 shares are issued and outstanding, none are
held  as  treasury shares,  806,325 shares are reserved for issuance pursuant to
the  Company's  stock  option  plans  of which only approximately 182,000 shares
remain available for future grants and no other shares are issuable and reserved
for issuance pursuant to securities (other than stock options issued pursuant to
the  Company's  stock  option  plans)  exercisable  or  exchangeable  for,  or
convertible  into,  shares  of Common Stock and (ii) 35,920  shares of Preferred
Stock,  $25.00  par  value  of  which  as  of the date hereof  2,427  shares are
issued  and  outstanding.  All  of  such  outstanding  shares have been, or upon
issuance  will  be, validly issued and are fully paid and nonassessable.  Except
as  disclosed in Schedule 3(c), (i) no shares of the Company's capital stock are
subject  to  preemptive  rights  or  any  other  similar  rights or any liens or
encumbrances suffered or permitted by the Company, (ii) there are no outstanding
debt securities, (iii) there are no outstanding options, warrants, scrip, rights
to  subscribe  to, calls or commitments of any character whatsoever relating to,
or  securities  or  rights  convertible into, any shares of capital stock of the
Company  or  any  of  its  Subsidiaries,

<PAGE>
or  contracts,  commitments, understandings or arrangements by which the Company
or  any of its Subsidiaries is or may become bound to issue additional shares of
capital  stock  of  the Company or any of its Subsidiaries or options, warrants,
scrip,  rights to subscribe to, calls or commitments of any character whatsoever
relating  to,  or  securities  or rights convertible into, any shares of capital
stock of the Company or any of its Subsidiaries, (iv) there are no agreements or
arrangements  under which the Company or any of its Subsidiaries is obligated to
register  the  sale  of  any  of their securities under the 1933 Act (except the
Registration  Rights  Agreement),  (v)  there  are  no outstanding securities or
instruments  of  the  Company  or  any  of  its  Subsidiaries  which contain any
redemption  or  similar  provisions,  and  there  are no contracts, commitments,
understandings  or  arrangements by which the Company or any of its Subsidiaries
is  or  may  become  bound  to  redeem  a  security of the Company or any of its
Subsidiaries,  (vi)  there  are  no  securities  or  instruments  containing
anti-dilution  or  similar  provisions that will be triggered by the issuance of
the  Securities  as  described  in this Agreement and (vii) the Company does not
have any stock appreciation rights or "phantom stock" plans or agreements or any
similar  plan  or  agreement.  The  Company  has furnished to the Buyer true and
correct  copies of the Company's Certificate of Incorporation, as amended and as
in  effect  on  the  date  hereof  (the "Certificate of Incorporation"), and the
Company's  By-laws,  as  amended  and  as  in  effect  on  the  date hereof (the
"By-laws"),  and  summaries  of  the terms of all securities convertible into or
exercisable for Common Stock, if any, and copies of any documents containing the
material  rights  of  the  holders  thereof  in  respect  thereto.

     (d)     Issuance  of  Securities.  The  Commitment  Shares  have  been duly
authorized  and,  upon  issuance  in  accordance  with  the  terms  hereof,  the
Commitment Shares shall be (i) validly issued, fully paid and non-assessable and
(ii)  free  from all taxes, liens and charges with respect to the issue thereof.
1,500,000  shares  of  Common  Stock  have been duly authorized and reserved for
issuance  upon  purchase  under  this  Agreement.  42,187 shares of Common Stock
(subject  to  equitable  adjustment  for  any  reorganization, recapitalization,
non-cash  dividend,  stock  split  or  other similar transaction) have been duly
authorized  and  reserved  for  issuance  as  Additional  Commitment  Shares  in
accordance  with Section 4(e) this Agreement. Upon issuance and payment therefor
in  accordance  with  the  terms  and conditions of this Agreement, the Purchase
Shares  shall  be validly issued, fully paid and nonassessable and free from all
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.

     (e)     No Conflicts.  Except as disclosed in Schedule 3(e), 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 reservation for issuance and issuance of the
Purchase  Shares  up  to the Exchange Cap) will not (i) result in a violation of
the  Certificate  of Incorporation, any Certificate of Designations, Preferences
and  Rights  of  any outstanding series of preferred stock of the Company or the
By-laws  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  the  Company  or  any  of  its
Subsidiaries  is a party, or result in a violation of any law, rule, regulation,
order,  judgment  or  decree  (including  federal  and state securities laws and
regulations  and the rules and regulations of the Principal Market applicable to
the Company or any of its Subsidiaries) or by which any property or asset of the
Company  or  any of its Subsidiaries is bound or affected, except in the case of
conflicts,  defaults, terminations, amendments, accelerations, cancellations and
violations  under  clause (ii), which could not reasonably be expected to result
in a Material Adverse Effect.  Except as disclosed in Schedule 3(e), neither the
Company  nor its Subsidiaries is in violation of any term of or in default under
its  Certificate  of  Incorporation, any Certificate of Designation, Preferences
and  Rights  of  any  outstanding  series  of  preferred stock of the Company or
By-laws  or  their  organizational  charter or by-laws, respectively.  Except as
disclosed  in  Schedule 3(e), neither the Company nor any of its Subsidiaries is
in  violation  of  any  term  of  or  is in default under any material contract,
agreement,  mortgage,

<PAGE>
indebtedness,  indenture,  instrument, judgment, decree or order or any statute,
rule  or  regulation  applicable  to the Company or its Subsidiaries, except for
possible  conflicts,  defaults,  terminations  or  amendments  which  could  not
reasonably  be  expected to have a Material Adverse Effect.  The business of the
Company and its Subsidiaries is not being conducted, and shall not be conducted,
in  violation  of  any  law,  ordinance,  regulation of any governmental entity,
except  for  possible violations, the sanctions for which either individually or
in  the  aggregate  could  not reasonably be expected to have a Material Adverse
Effect.  Except  as  specifically contemplated by this Agreement and as required
under  the  1933  Act  or  applicable  state securities laws, the Company is not
required to obtain any consent, authorization or order of, or make any filing or
registration  with,  any  court  or  governmental  agency  or  any regulatory or
self-regulatory agency in order for it to execute, deliver or perform any of its
obligations  under  or  contemplated  by the Transaction Documents in accordance
with  the  terms  hereof  or thereof.  Except as disclosed in Schedule 3(e), all
consents, authorizations, orders, filings and registrations which the Company is
required  to  obtain  pursuant  to  the  preceding sentence shall be obtained or
effected  on  or  prior  to the Commencement Date.  Except as listed in Schedule
3(e),  since  January  1,  2007,  the Company has not received nor delivered any
notices or correspondence from or to the Principal Market.  The Principal Market
has  not  commenced  any  delisting  proceedings  against  the  Company.

     (f)     SEC  Documents;  Financial  Statements.  Except  as  disclosed  in
Schedule  3(f), since January 1, 2007, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the  SEC  pursuant  to  the  reporting  requirements of the 1934 Act (all of the
foregoing  filed  prior to the date hereof and all exhibits included therein and
financial  statements  and  schedules  thereto  and  documents  incorporated  by
reference  therein being hereinafter referred to as the "SEC Documents").  As of
their  respective  dates  (except  as they have been correctly amended), the SEC
Documents  complied  in  all material respects with the requirements of the 1934
Act  and  the rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents, and none of the SEC Documents, at the time they were filed
with  the  SEC  (except  as  they may have been properly amended), contained any
untrue statement of a material fact or omitted to state a material fact required
to  be  stated  therein or necessary in order to make the statements therein, in
light  of  the  circumstances under which they were made, not misleading.  As of
their  respective  dates  (except  as  they  have  been  properly  amended), the
financial statements of the Company included in the SEC Documents complied as to
form  in  all  material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto.  Such financial
statements  have  been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto or (ii)
in  the  case  of  unaudited  interim statements, to the extent they may exclude
footnotes  or  may be condensed or summary statements) and fairly present in all
material  respects the financial position of the Company as of the dates thereof
and  the  results  of  its  operations and cash flows for the periods then ended
(subject,  in  the  case  of  unaudited  statements,  to  normal  year-end audit
adjustments).  Except  as  listed  in Schedule 3(f), the Company has received no
notices  or  correspondence from the SEC since January 1, 2007.  The SEC has not
commenced  any  enforcement  proceedings  against  the  Company  or  any  of its
subsidiaries.

     (g)     Absence  of Certain Changes.  Except as disclosed in Schedule 3(g),
since March 31, 2008, there has been no material adverse change in the business,
properties,  operations,  financial  condition  or  results of operations of the
Company  or its Subsidiaries.  The Company has not taken any steps, and does not
currently  expect  to  take  any  steps,  to  seek  protection  pursuant  to any
Bankruptcy  Law  nor  does  the  Company  or  any  of  its Subsidiaries have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy or insolvency proceedings.  The Company is financially solvent and is
generally  able  to  pay  its  debts  as  they  become  due.

<PAGE>
     (h)  Absence  of Litigation. Except as disclosed on Schedule 3(h), there is
no  action,  suit,  proceeding, inquiry or investigation before or by any court,
public  board,  government  agency, self-regulatory organization or body pending
or,  to  the  knowledge  of  the  Company or any of its Subsidiaries, threatened
against  or  affecting  the  Company,  the  Common Stock or any of the Company's
Subsidiaries  or any of the Company's or the Company's Subsidiaries' officers or
directors  in  their  capacities  as such, which could reasonably be expected to
have  a Material Adverse Effect. A description of each action, suit, proceeding,
inquiry  or  investigation  before  or  by  any  court, public board, government
agency,  self-regulatory  organization  or  body  which,  as of the date of this
Agreement, is pending or threatened in writing against or affecting the Company,
the Common Stock or any of the Company's Subsidiaries or any of the Company's or
the  Company's  Subsidiaries' officers or directors in their capacities as such,
is  set  forth  in  Schedule  3(h).

     (i)     Acknowledgment  Regarding Buyer's Status.  The Company acknowledges
and  agrees  that  the  Buyer  is  acting solely in the capacity of arm's length
purchaser  with  respect  to  the  Transaction  Documents  and  the transactions
contemplated  hereby  and  thereby.  The  Company  further acknowledges that the
Buyer  is  not  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 the 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  the  Buyer's  purchase  of  the Securities.  The Company further
represents  to  the  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  and  advisors.

     (j)     No  General  Solicitation.  Neither  the  Company,  nor  any of its
affiliates,  nor  any  person  acting on its or their behalf, has engaged in any
form  of  general  solicitation  or  general  advertising (within the meaning of
Regulation  D  under  the  1933 Act) in connection with the offer or sale of the
Securities.

     (k)  Intellectual  Property Rights. The Company and its Subsidiaries own or
possess adequate rights or licenses to use all material trademarks, trade names,
service  marks,  service  mark  registrations,  service  names,  patents, patent
rights,  copyrights,  inventions,  licenses,  approvals,  governmental
authorizations,  trade  secrets and rights necessary to conduct their respective
businesses  as  now conducted. Except as set forth on Schedule 3(k), none of the
Company's  material  trademarks,  trade  names,  service  marks,  service  mark
registrations,  service  names,  patents, patent rights, copyrights, inventions,
licenses,  approvals,  government  authorizations,  trade  secrets  or  other
intellectual  property  rights  have expired or terminated, or, by the terms and
conditions  thereof, could expire or terminate within two years from the date of
this  Agreement.  The  Company and its Subsidiaries do not have any knowledge of
any  infringement  by the Company or its Subsidiaries of any material trademark,
trade  name  rights,  patents,  patent rights, copyrights, inventions, licenses,
service  names, service marks, service mark registrations, trade secret or other
similar  rights  of  others,  or of any such development of similar or identical
trade  secrets  or  technical  information by others and, except as set forth on
Schedule  3(k),  there  is  no claim, action or proceeding being made or brought
against, or to the Company's knowledge, being threatened against, the Company or
its  Subsidiaries  regarding  trademark,  trade  name,  patents,  patent rights,
invention,  copyright,  license,  service  names,  service  marks,  service mark
registrations,  trade  secret  or  other infringement, which could reasonably be
expected  to  have  a  Material  Adverse  Effect.

     (l)     Environmental  Laws.  The  Company  and its Subsidiaries (i) are in
compliance  with  any  and all applicable foreign, federal, state and local laws
and  regulations  relating  to  the  protection  of human health and safety, the
environment  or  hazardous  or  toxic  substances  or  wastes,  pollutants  or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other  approvals required of them under applicable Environmental Laws to conduct
their  respective  businesses  and  (iii)  are  in  compliance  with  all

<PAGE>
terms  and  conditions of any such permit, license or approval, except where, in
each  of  the  three  foregoing  clauses,  the  failure  to  so comply could not
reasonably  be  expected  to  have, individually or in the aggregate, a Material
Adverse  Effect.

     (m)     Title.  The  Company  and its Subsidiaries have good and marketable
title  in  fee  simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its Subsidiaries, in each case free and clear of all liens, encumbrances and
defects  except  such  as  are  described  in  Schedule  3(m)  or such as do not
materially  affect  the value of such property and do not interfere with the use
made  and  proposed  to  be  made of such property by the Company and any of its
Subsidiaries.  Any  real property and facilities held under lease by the Company
and  any  of  its  Subsidiaries  are  held  by  them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with  the use made and proposed to be made of such property and buildings by the
Company  and  its  Subsidiaries.

     (n)     Insurance.  The Company and each of its Subsidiaries are insured by
insurers  of  recognized  financial responsibility against such losses and risks
and  in  such  amounts  as  management of the Company believes to be prudent and
customary  in  the  businesses  in  which  the  Company and its Subsidiaries are
engaged.  Neither  the  Company  nor  any  such  Subsidiary has been refused any
insurance  coverage  sought  or applied for and neither the Company nor any such
Subsidiary  has  any  reason  to  believe  that it will not be able to renew its
existing  insurance  coverage  as  and  when  such coverage expires or to obtain
similar  coverage  from  similar  insurers  as  may be necessary to continue its
business at a cost that would not materially and adversely affect the condition,
financial  or  otherwise, or the earnings, business or operations of the Company
and  its  Subsidiaries,  taken  as  a  whole.

     (o)     Regulatory  Permits.  The  Company and its Subsidiaries possess all
material  certificates,  authorizations  and  permits  issued by the appropriate
federal,  state  or  foreign  regulatory  authorities necessary to conduct their
respective  businesses,  and  neither  the  Company  nor any such Subsidiary has
received any notice of proceedings relating to the revocation or modification of
any  such  certificate,  authorization  or  permit.

     (p)     Tax  Status.  The  Company and each of its Subsidiaries has made or
filed  all  federal and state income and all other material tax returns, reports
and declarations required by any jurisdiction to which it is subject (unless and
only  to  the extent that the Company and each of its Subsidiaries has set aside
on  its  books  provisions reasonably adequate for the payment of all unpaid and
unreported  taxes) and has paid all taxes and other governmental assessments and
charges  that  are  material  in  amount,  shown or determined to be due on such
returns,  reports  and  declarations, except those being contested in good faith
and  has set aside on its books provision reasonably adequate for the payment of
all  taxes  for periods subsequent to the periods to which such returns, reports
or declarations apply.  There are no unpaid taxes in any material amount claimed
to  be  due by the taxing authority of any jurisdiction, and the officers of the
Company  know  of  no  basis  for  any  such  claim.

     (q)     Transactions With Affiliates.  Except as set forth on Schedule 3(q)
and  other  than  the  grant  or exercise of stock options disclosed on Schedule
3(c),  none of the officers, directors, or employees of the Company is presently
a  party  to  any transaction with the Company or any of its Subsidiaries (other
than for services as employees, officers and directors), including any contract,
agreement  or  other  arrangement providing for the furnishing of services to or
by,  providing  for rental of real or personal property to or from, or otherwise
requiring  payments to or from any officer, director or such employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which  any  officer,  director,  or  any  such employee has an interest or is an
officer,  director,  trustee  or  partner.

<PAGE>
     (r)  Application  of  Takeover  Protections.  The  Company and its board of
directors  have  taken or will take prior to the Commencement Date all necessary
action,  if  any, in order to render inapplicable any control share acquisition,
business  combination,  poison  pill  (including any distribution under a rights
agreement)  or  other  similar  anti-takeover provision under the Certificate of
Incorporation  or  the  laws of the state of its incorporation which is or could
become  applicable  to the Buyer as a result of the transactions contemplated by
this  Agreement,  including,  without  limitation, the Company's issuance of the
Securities  and  the  Buyer's  ownership  of  the  Securities.

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

     4.     COVENANTS.

     (a)     Filing  of Form 8-K and Registration Statement.  The Company agrees
that it shall, within the time required under the 1934 Act file a Report on Form
8-K  disclosing  this  Agreement  and  the transaction contemplated hereby.  The
Company shall also file within ten (10) Business Days from the date hereof a new
registration  statement  covering  the sale of the Securities in accordance with
the  terms  of  the  Registration  Rights  Agreement between the Company and the
Buyer,  dated  as  of  the  date  hereof  ("Registration  Rights  Agreement").

     (b)     Blue  Sky.  The  Company  shall  take  such  action,  if any, as is
reasonably  necessary  in order to obtain an exemption for or to qualify (i) the
initial sale of the Commitment Shares and any Purchase Shares to the Buyer under
this  Agreement  and  (ii)  any subsequent sale of the Commitment Shares and any
Purchase Shares by the Buyer, in each case, under applicable securities or "Blue
Sky"  laws  of  the  states of the United States in such states as is reasonably
requested by the Buyer from time to time, and shall provide evidence of any such
action  so  taken  to  the  Buyer.

     (c)     Listing.  The  Company  shall promptly secure the listing of all of
the Purchase Shares and Commitment Shares upon each national securities exchange
and  automated  quotation  system, if any, upon which shares of Common Stock are
then  listed  (subject to official notice of issuance) up to an amount that does
not  exceed  the Exchange Cap and shall maintain, so long as any other shares of
Common  Stock  shall be so listed, such listing of all such securities from time
to  time  issuable  under  the  terms of the Transaction Documents.  The Company
shall  maintain  the Common Stock's authorization for quotation on the Principal
Market.  Neither  the  Company nor any of its Subsidiaries shall take any action
that  would  be  reasonably expected to result in the delisting or suspension of
the Common Stock on the Principal Market.  The Company shall promptly, and in no
event  later than the following Business Day, provide to the Buyer copies of any
notices  it  receives  from  the  Principal  Market  regarding  the  continued
eligibility  of  the Common Stock for listing on such automated quotation system
or  securities  exchange.  The  Company  shall  pay  all  fees  and  expenses in
connection  with  satisfying  its  obligations  under  this  Section.

     (d)     Limitation  on  Short  Sales  and  Hedging Transactions.  The Buyer
agrees  that  beginning  on the date of this Agreement and ending on the date of
termination  of  this  Agreement as provided in Section 11(k), the Buyer and its
agents,  representatives  and  affiliates  shall  not  in  any manner whatsoever

<PAGE>
enter into or effect, directly or indirectly, any (i) "short sale" (as such term
is  defined  in Section 242.200 of Regulation SHO of the 1934 Act) of the Common
Stock  or  (ii) hedging transaction, which establishes a net short position with
respect  to  the  Common  Stock.

     (e)     Issuance  of  Commitment  Shares; Limitation on Sales of Commitment
Shares.  Immediately  upon  the  execution  of this Agreement, the Company shall
issue  to  the Buyer as consideration for the Buyer entering into this Agreement
63,280  shares of Common Stock (the "Initial Commitment Shares").  In connection
with  each purchase of Purchase Shares hereunder, the Company agrees to issue to
the Buyer a number of shares of Common Stock (the "Additional Commitment Shares"
and  together with the Initial Commitment Shares, the "Commitment Shares") equal
to  the  product  of  (x)  42,187  and  (y)  the  Purchase Amount Fraction.  The
"Purchase  Amount Fraction" shall mean a fraction, the numerator of which is the
Purchase Amount purchased by the Buyer with respect to such purchase of Purchase
Shares  and  the denominator of which is Five Million Dollars ($5,000,000).  The
Additional Commitment Shares shall be equitably adjusted for any reorganization,
recapitalization,  non-cash  dividend, stock split or other similar transaction.
The  Initial Commitment Shares shall be issued in certificated form and (subject
to  Section  5  hereof)  shall  bear  only  the  following  restrictive  legend:

THE  SECURITIES  REPRESENTED  BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES  HAVE  BEEN  ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD,  TRANSFERRED  OR  ASSIGNED  IN  THE  ABSENCE  OF AN EFFECTIVE REGISTRATION
STATEMENT  FOR  THE  SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE  STATE  SECURITIES  LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER
THE  SECURITIES  ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER'S COUNSEL,
IN  A  CUSTOMARY  FORM,  THAT  REGISTRATION  IS  NOT  REQUIRED UNDER SAID ACT OR
APPLICABLE  STATE  SECURITIES  LAWS.

       The Buyer agrees that the Buyer shall not transfer or sell the Commitment
Shares until the earlier of 480 Business Days (24 Monthly Periods) from the date
hereof  or  the  date  on  which  this  Agreement has been terminated, provided,
however,  that  such  restrictions  shall  not apply: (i) in connection with any
transfers to or among affiliates (as defined in the 1934 Act), (ii) in the event
that  the  Commencement  does not occur on or before October 1, 2008, due to the
failure of the Company to satisfy the conditions set forth in Section 7 or (iii)
if  an  Event  of  Default has occurred, or any event which, after notice and/or
lapse  of  time,  would become an Event of Default, including any failure by the
Company  to  timely issue Purchase Shares under this Agreement.  Notwithstanding
the forgoing, the Buyer may transfer Commitment Shares to a third party in order
to  settle  a  sale  made  by  the  Buyer where the Buyer reasonably expects the
Company  to deliver Purchase Shares to the Buyer under this Agreement so long as
the  Buyer  maintains  ownership  of the same overall number of shares of Common
Stock  by  "replacing" the Commitment Shares so transferred with Purchase Shares
when  the  Purchase  Shares  are  actually  issued  by the Company to the Buyer.

     (g)     Due  Diligence.  The  Buyer shall have the right, from time to time
as  the  Buyer  may  reasonably  deem  appropriate,  to  perform  reasonable due
diligence  on  the  Company  during  normal business hours.  The Company and its
officers  and  employees shall provide information and reasonably cooperate with
the  Buyer in connection with any reasonable request by the Buyer related to the
Buyer's  due  diligence  of the Company, including, but not limited to, any such
request  made by the Buyer in connection with (i) the filing of the registration
statement  described  in  Section  4(a)  hereof  and  (ii)  the

<PAGE>
Commencement.  Each  party  hereto  agrees  not  to  disclose  any  Confidential
Information  of  the  other  party  to  any  third  party  and shall not use the
Confidential  Information  for  any purpose other than in connection with, or in
furtherance  of,  the  transactions  contemplated  hereby.  Each  party  hereto
acknowledges  that the Confidential Information shall remain the property of the
disclosing  party  and  agrees  that  it  shall  take all reasonable measures to
protect  the  secrecy  of  any  Confidential  Information disclosed by the other
party.

     5.     TRANSFER  AGENT  INSTRUCTIONS.

     Immediately upon the execution of this Agreement, the Company shall deliver
to  the  Transfer  Agent a letter in the form as set forth as Exhibit E attached
hereto  with  respect  to the issuance of the Initial Commitment Shares.  On the
Commencement Date, the Company shall cause any restrictive legend on the Initial
Commitment  Shares  to  be removed and all of the Purchase Shares and Additional
Commitment Shares, to be issued under this Agreement shall be issued without any
restrictive  legend  unless the Buyer expressly consents otherwise.  The Company
shall  issue  irrevocable instructions to the Transfer Agent, and any subsequent
transfer  agent,  to  issue  Purchase  Shares  in  the name of the Buyer for the
Purchase  Shares  (the  "Irrevocable Transfer Agent Instructions").  The Company
warrants  to  the  Buyer 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  with  respect  to  the  Purchase  Shares  and that the
Commitment Shares and the Purchase Shares shall otherwise be freely transferable
on  the  books  and records of the Company as and to the extent provided in this
Agreement  and  the  Registration  Rights Agreement subject to the provisions of
Section  4(e)  in  the  case  of  the  Commitment  Shares.

6.     CONDITIONS  TO  THE  COMPANY'S  RIGHT  TO  COMMENCE
       SALES  OF  SHARES  OF  COMMON  STOCK  UNDER  THIS  AGREEMENT.

     The right of the Company hereunder to commence sales of the Purchase Shares
is  subject to the satisfaction of each of the following conditions on or before
the  Commencement  Date  (the  date  that  the  Company  may  begin  sales):

     (a)     The Buyer shall have executed each of the Transaction Documents and
delivered  the  same  to  the  Company;

     (b)     A registration statement covering the sale of all of the Commitment
Shares and Purchase Shares shall have been declared effective under the 1933 Act
by the SEC and no stop order with respect to the registration statement shall be
pending  or  threatened  by  the  SEC.

7.     CONDITIONS  TO  THE  BUYER'S  OBLIGATION  TO  MAKE
       PURCHASES  OF  SHARES  OF  COMMON  STOCK.

     The  obligation of the Buyer to buy Purchase Shares under this Agreement is
subject to the satisfaction of each of the following conditions on or before the
Commencement  Date  (the  date  that  the Company may begin sales) and once such
conditions  have  been  initially  satisfied,  there  shall  not  be any ongoing
obligation  to  satisfy  such  conditions  after  the Commencement has occurred:

     (a)     The  Company  shall have executed each of the Transaction Documents
and  delivered  the  same  to  the  Buyer;

<PAGE>

     (b)     The  Company  shall have issued to the Buyer the Initial Commitment
Shares  and  shall  have  removed  the  restrictive  transfer  legend  from  the
certificate  representing  the  Initial  Commitment  Shares;

     (c)     The Common Stock shall be authorized for quotation on the Principal
Market, trading in the Common Stock shall not have been within the last 365 days
suspended  by  the  SEC  or the Principal Market and the Purchase Shares and the
Commitment  Shares shall be approved for listing upon the Principal Market up to
the  Exchange  Cap;

     (d)     The  Buyer  shall have received the opinions of the Company's legal
counsel dated as of the Commencement Date substantially in the form of EXHIBIT A
attached  hereto;

     (e)     The representations and warranties of the Company shall be true and
correct  in  all  material  respects  (except  to  the  extent  that any of such
representations and warranties is already qualified as to materiality in Section
3  above,  in  which case, such representations and warranties shall be true and
correct  without  further  qualification) as of the date when made and as of the
Commencement  Date  as  though made at that time (except for representations and
warranties  that  speak  as  of  a  specific  date)  and  the Company shall have
performed,  satisfied and complied 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 Commencement Date.  The Buyer shall have
received  a  certificate,  executed by the CEO, President or CFO of the Company,
dated  as of the Commencement Date, to the foregoing effect in the form attached
hereto  as  EXHIBIT  B;

     (f)     The  Board  of  Directors  of  the  Company  shall  have  adopted
resolutions  in  the  form  attached  hereto as EXHIBIT C which shall be in full
force  and  effect  without  any  amendment  or  supplement  thereto  as  of the
Commencement  Date;

     (g)     As of the Commencement Date, the Company shall have reserved out of
its  authorized  and  unissued  Common  Stock,  (A)  solely  for  the purpose of
effecting  purchases  of  Purchase  Shares hereunder, 1,500,000 shares of Common
Stock  and  (B)  as Additional Commitment Shares in accordance with Section 4(e)
hereof,  42,187  shares  of  Common  Stock;

     (h)     The  Irrevocable Transfer Agent Instructions, in form acceptable to
the  Buyer  shall  have  been  delivered  to  and acknowledged in writing by the
Company  and  the  Company's  Transfer  Agent;

     (i)     The  Company  shall  have  delivered  to  the  Buyer  a certificate
evidencing  the  incorporation  and good standing of the Company in the State of
Delaware  issued by the Secretary of State of the State of Delaware as of a date
within  ten  (10)  Business  Days  of  the  Commencement  Date;

     (j)     The  Company  shall have delivered to the Buyer a certified copy of
the  Certificate  of Incorporation as certified by the Secretary of State of the
State  of  Delaware  within  ten  (10)  Business  Days of the Commencement Date;

     (k)     The  Company  shall  have  delivered  to  the  Buyer  a secretary's
certificate  executed  by  the  Secretary  of  the  Company,  dated  as  of  the
Commencement  Date,  in  the  form  attached  hereto  as  EXHIBIT  D;

     (l)     A registration statement covering the sale of all of the Commitment
Shares and Purchase Shares shall have been declared effective under the 1933 Act
by  the  SEC  and  no  stop  order  with  respect

<PAGE>
to  the  registration  statement shall be pending or threatened by the SEC.  The
Company shall have prepared and delivered to the Buyer a final and complete form
of  prospectus, dated and current as of the Commencement Date, to be used by the
Buyer  in  connection  with  any  sales of any Commitment Shares or any Purchase
Shares,  and  to be filed by the Company one Business Day after the Commencement
Date.  The  Company shall have made all filings under all applicable federal and
state  securities  laws  necessary  to consummate the issuance of the Commitment
Shares  and  the  Purchase  Shares pursuant to this Agreement in compliance with
such  laws;

     (m)     No  Event of Default has occurred, or any event which, after notice
and/or  lapse  of  time,  would  become  an  Event  of  Default  has  occurred;

     (n)     On  or  prior  to the Commencement Date, the Company shall take all
necessary action, if any, and such actions as reasonably requested by the Buyer,
in  order  to  render  inapplicable  any  control  share  acquisition,  business
combination,  shareholder rights plan or poison pill (including any distribution
under  a  rights  agreement)  or other similar anti-takeover provision under the
Certificate of Incorporation or the laws of the state of its incorporation which
is  or  could  become  applicable  to  the Buyer as a result of the transactions
contemplated  by  this  Agreement,  including, without limitation, the Company's
issuance  of  the  Securities  and  the Buyer's ownership of the Securities; and

     (o)     The  Company  shall  have  provided  the Buyer with the information
requested  by the Buyer in connection with its due diligence requests made prior
to,  or  in  connection  with, the Commencement, in accordance with the terms of
Section  4(g)  hereof.

8.     INDEMNIFICATION.

     In  consideration  of the Buyer's execution and delivery of the Transaction
Documents  and  acquiring the Securities hereunder and in addition to all of the
Company's  other  obligations under the Transaction Documents, the Company shall
defend,  protect,  indemnify  and  hold  harmless  the  Buyer  and  all  of  its
affiliates,  shareholders, officers, directors, employees and direct or indirect
investors  and  any  of  the  foregoing person's agents or other representatives
(including,  without  limitation,  those  retained  in  connection  with  the
transactions  contemplated  by this Agreement) (collectively, the "Indemnitees")
from  and  against any and all actions, causes of action, suits, claims, losses,
costs,  penalties,  fees,  liabilities  and  damages, and expenses in connection
therewith  (irrespective of whether any such Indemnitee is a party to the action
for  which  indemnification  hereunder  is  sought),  and  including  reasonable
attorneys'  fees  and disbursements (the "Indemnified Liabilities"), incurred by
any  Indemnitee  as  a  result  of,  or  arising  out of, or relating to (a) any
misrepresentation  or  breach  of  any  representation  or  warranty made by the
Company  in  the  Transaction  Documents or any other certificate, instrument or
document  contemplated  hereby  or  thereby,  (b)  any  breach  of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby, or
(c)  any  cause of action, suit or claim brought or made against such Indemnitee
and  arising  out  of  or resulting from the execution, delivery, performance or
enforcement of the Transaction Documents or any other certificate, instrument or
document  contemplated hereby or thereby, other than with respect to Indemnified
Liabilities  which  directly  and  primarily result from the gross negligence or
willful  misconduct  of  the  Indemnitee.  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.

<PAGE>
9.     EVENTS  OF  DEFAULT.

     An  "Event  of Default" shall be deemed to have occurred at any time as any
of  the  following  events  occurs:

     (a)     while  any  registration  statement  is  required  to be maintained
effective  pursuant  to  the  terms  of  the  Registration Rights Agreement, the
effectiveness  of  such registration statement lapses for any reason (including,
without limitation, the issuance of a stop order) or is unavailable to the Buyer
for  sale  of  all of the Registrable Securities (as defined in the Registration
Rights  Agreement)  in  accordance  with  the  terms  of the Registration Rights
Agreement,  and  such lapse or unavailability continues for a period of ten (10)
consecutive  Business Days or for more than an aggregate of thirty (30) Business
Days  in  any  365-day  period;

     (b)     the  suspension  from  trading or failure of the Common Stock to be
listed  on  the  Principal Market for a period of three (3) consecutive Business
Days;

     (c)     the  delisting  of  the  Company's  Common Stock from the Principal
Market,  provided,  however, that the Common Stock is not immediately thereafter
trading  on  the  New  York Stock Exchange, the Nasdaq Global Market, the Nasdaq
Capital  Market,  the  OTC  Bulletin  Board,  or  the  American  Stock Exchange;

     (d)     the  failure for any reason by the Transfer Agent to issue Purchase
Shares  to the Buyer within five (5) Business Days after the applicable Purchase
Date  which  the  Buyer  is  entitled  to  receive;

     (e)     the  Company  breaches  any  representation,  warranty, covenant or
other term or condition under any Transaction Document if such breach could have
a  Material  Adverse  Effect  and  except, in the case of a breach of a covenant
which  is  reasonably  curable, only if such breach continues for a period of at
least  five  (5)  Business  Days;

     (f)     if  any  Person commences a proceeding against the Company pursuant
to  or  within  the  meaning  of  any  Bankruptcy  Law;

     (g)     if  the Company pursuant to or within the meaning of any Bankruptcy
Law;  (A)  commences a voluntary case, (B) consents to the entry of an order for
relief  against  it in an involuntary case, (C) consents to the appointment of a
Custodian  of  it  or  for all or substantially all of its property, (D) makes a
general  assignment  for the benefit of its creditors, (E) becomes insolvent, or
(F)  is  generally  unable  to  pay  its  debts  as  the  same  become  due;

     (h)     a  court  of competent jurisdiction enters an order or decree under
any  Bankruptcy Law that (A) is for relief against the Company in an involuntary
case, (B) appoints a Custodian of the Company or for all or substantially all of
its property, or (C) orders the liquidation of the Company or any Subsidiary; or

     (i)     a  material adverse change in the business, properties, operations,
financial condition or results of operations of the Company and its Subsidiaries
taken  as  a  whole

     (j)     if  at  any time after the Commencement Date, the "Exchange Cap" is
reached.  The "Exchange Cap" shall be deemed to be reached at such time if, upon
submission  of  a  Purchase  Notice  under  this Agreement, the issuance of such
shares  of  Common  Stock  would  exceed  that  number  of  shares

<PAGE>
of  Common  Stock  which  the  Company  may  issue  under this Agreement without
breaching  the  Company's  obligations  under  the  rules  or regulations of the
Principal  Market).

In  addition  to  any  other  rights  and remedies under applicable law and this
Agreement, including the Buyer termination rights under Section 11(k) hereof, so
long  as  an  Event  of  Default has occurred and is continuing, or if any event
which,  after notice and/or lapse of time, would become an Event of Default, has
occurred  and  is  continuing,  or  so  long  as the Purchase Price is below the
Purchase Price Floor, the Buyer shall not be obligated to purchase any shares of
Common  Stock under this Agreement.  If pursuant to or within the meaning of any
Bankruptcy Law, the Company commences a voluntary case or any Person commences a
proceeding  against the Company, a Custodian is appointed for the Company or for
all  or  substantially  all  of  its  property,  or  the Company makes a general
assignment  for the benefit of its creditors, (any of which would be an Event of
Default  as  described  in  Sections  9(f), 9(g) and 9(h) hereof) this Agreement
shall  automatically  terminate  without any liability or payment to the Company
without  further  action  or  notice by any Person.  No such termination of this
Agreement  under  Section  11(k)(i)  shall  affect  the Company's or the Buyer's
obligations  under  this  Agreement  with  respect  to pending purchases and the
Company  and  the Buyer shall complete their respective obligations with respect
to  any  pending  purchases  under  this  Agreement.

     10.     CERTAIN  DEFINED  TERMS.

     For  purposes  of  this  Agreement,  the  following  terms  shall  have the
following  meanings:

     (a)     "1933  Act"  means  the  Securities  Act  of  1933,  as  amended.

     (b)     "Available  Amount"  means  initially  Five  Million  Dollars
($5,000,000)  in  the  aggregate  which  amount shall be reduced by the Purchase
Amount  each time the Buyer purchases shares of Common Stock pursuant to Section
1  hereof.

     (c)     "Bankruptcy  Law" means Title 11, U.S. Code, or any similar federal
or  state  law  for  the  relief  of  debtors.

     (d)     "Base  Purchase  Notice"  shall  mean an irrevocable written notice
from the Company to the Buyer directing the Buyer to buy up to the Base Purchase
Amount  in Purchase Shares as specified by the Company therein at the applicable
Purchase  Price  on  the  Purchase  Date.

     (e)     "Block  Purchase  Amount"  shall mean such Block Purchase Amount as
specified  by  the  Company  in  a Block Purchase Notice subject to Section 1(b)
hereof.

     (f)     "Block  Purchase  Notice"  shall mean an irrevocable written notice
from  the  Company  to  the  Buyer directing the Buyer to buy the Block Purchase
Amount  in  Purchase  Shares  as  specified  by the Company therein at the Block
Purchase  Price  as  of  the  Purchase  Date  subject  to  Section  1  hereof.

     (g)     "Business  Day" means any day on which the Principal Market is open
for  trading including any day on which the Principal Market is open for trading
for  a  period  of  time  less  than  the  customary  time.

     (h)  "Closing  Sale Price" means, for any security as of any date, the last
closing trade price for such security on the Principal Market as reported by the
Principal  Market,  or,  if the Principal Market is not the principal securities
exchange  or  trading  market for such security, the last closing trade price of

<PAGE>
such  security on the principal securities exchange or trading market where such
security  is  listed  or  traded  as  reported  by  the  Principal  Market.

     (i)     "Confidential  Information"  means  any  information  disclosed  by
either  party  to  the  other  party, either directly or indirectly, in writing,
orally  or  by  inspection  of  tangible objects (including, without limitation,
documents,  prototypes,  samples,  plant  and equipment), which is designated as
"Confidential,"  "Proprietary"  or  some  similar  designation.  Information
communicated  orally  shall  be  considered  Confidential  Information  if  such
information is confirmed in writing as being Confidential Information within ten
(10)  Business  Days  after the initial disclosure. Confidential Information may
also  include  information  disclosed  to  a  disclosing party by third parties.
Confidential  Information  shall not, however, include any information which (i)
was  publicly  known  and made generally available in the public domain prior to
the  time of disclosure by the disclosing party; (ii) becomes publicly known and
made  generally  available  after  disclosure  by  the  disclosing  party to the
receiving  party  through no action or inaction of the receiving party; (iii) is
already  in  the  possession of the receiving party at the time of disclosure by
the  disclosing  party  as  shown  by  the  receiving  party's files and records
immediately  prior  to the time of disclosure; (iv) is obtained by the receiving
party  from  a third party without a breach of such third party's obligations of
confidentiality;  (v)  is independently developed by the receiving party without
use of or reference to the disclosing party's Confidential Information, as shown
by  documents  and other competent evidence in the receiving party's possession;
or (vi) is required by law to be disclosed by the receiving party, provided that
the  receiving  party  gives  the disclosing party prompt written notice of such
requirement  prior  to  such  disclosure  and  assistance  in obtaining an order
protecting  the  information  from  public  disclosure.

     (j)     "Custodian"  means  any  receiver, trustee, assignee, liquidator or
similar  official  under  any  Bankruptcy  Law.

     (k)     "Maturity  Date"  means  the  date  that  is  480 Business Days (24
Monthly  Periods)  from  the  Commencement  Date.

     (l)     "Monthly  Period"  means  each  successive  20  Business Day period
commencing  with  the  Commencement  Date.

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

     (n)     "Principal  Market"  means  the  American  Stock Exchange; provided
however,  that  in the event the Company's Common Stock is ever listed or traded
on  the  OTC Bulletin Board, the Nasdaq Global Market, the Nasdaq Capital Market
or  the  New  York  Stock  Exchange, than the "Principal Market" shall mean such
other  market  or exchange on which the Company's Common Stock is then listed or
traded.

     (o)     "Purchase  Amount"  means,  with respect to any particular purchase
made hereunder, the portion of the Available Amount to be purchased by the Buyer
pursuant  to  Section 1 hereof as set forth in a valid Base Purchase Notice or a
valid  Block  Purchase  Notice  which  the  Company  delivers  to  the  Buyer.

     (p)     "Purchase  Date" means with respect to any particular purchase made
hereunder,  the Business Day after receipt by the Buyer of a valid Base Purchase
Notice or a valid Block Purchase Notice that the Buyer is to buy Purchase Shares
pursuant  to  Section  1  hereof.

<PAGE>
     (q)  "Purchase  Price"  means the lower of the (A) the lowest Sale Price of
the  Common  Stock  on  the  Purchase Date and (B) the arithmetic average of the
three (3) lowest Closing Sale Prices for the Common Stock during the twelve (12)
consecutive  Business Days ending on the Business Day immediately preceding such
Purchase  Date  (to  be  appropriately  adjusted  for  any  reorganization,
recapitalization,  non-cash dividend, stock split or other similar transaction).

     (u)     "Sale  Price" means, any trade price for the shares of Common Stock
on  the  Principal  Market  as  reported  by  the  Principal  Market.

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

     (s)     "Transfer  Agent"  means  the  transfer agent of the Company as set
forth  in  Section  11(f) hereof or such other person who is then serving as the
transfer  agent  for  the  Company  in  respect  of  the  Common  Stock.

     11.     MISCELLANEOUS.

     (a)     Governing Law; Jurisdiction; Jury Trial.  The corporate laws of the
State  of Delaware shall govern all issues concerning the relative rights of the
Company  and  its shareholders. All other questions concerning the construction,
validity,  enforcement  and  interpretation  of  this  Agreement  and  the other
Transaction  Documents  shall  be  governed by the internal laws of the State of
Illinois,  without  giving  effect  to  any  choice  of  law  or conflict of law
provision  or rule (whether of the State of Illinois or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State  of  Illinois.  Each  party  hereby  irrevocably  submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of Chicago, for
the  adjudication  of  any  dispute  hereunder  or  under  the other Transaction
Documents  or  in  connection  herewith  or  therewith,  or with any transaction
contemplated  hereby  or  discussed  herein,  and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or  proceeding  is  brought  in  an inconvenient forum or that the venue of such
suit,  action  or  proceeding is improper.  Each party hereby irrevocably waives
personal  service  of  process  and consents to process being served in any such
suit,  action  or  proceeding  by  mailing  a  copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such service
shall  constitute  good  and  sufficient  service of process and notice thereof.
Nothing  contained herein shall be deemed to limit in any way any right to serve
process  in  any  manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY  RIGHT  IT  MAY  HAVE,  AND  AGREES  NOT  TO  REQUEST,  A JURY TRIAL FOR THE
ADJUDICATION  OF  ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT
OF  THIS  AGREEMENT  OR  ANY  TRANSACTION  CONTEMPLATED  HEREBY.

     (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.

<PAGE>
     (d)  Severability.  If  any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction  or  the  validity  or  enforceability  of  any  provision  of this
Agreement  in  any  other  jurisdiction.

     (e)     Entire  Agreement.  This  Agreement supersedes all other prior oral
or  written  agreements  between  the  Buyer,  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  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  the  Buyer  makes  any representation,
warranty,  covenant  or  undertaking  with respect to such matters.  The Company
acknowledges and agrees that is has not relied on, in any manner whatsoever, any
representations  or  statements,  written  or  oral, other than as expressly set
forth  in  this  Agreement.

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

     If  to  the  Company:
          Competitive Technologies, Inc.
          777 Commerce Drive, Suite 100
          Fairfield, Connecticut 06825
          Telephone:     203-368-6044
          Facsimile:     203-368-5399
          Attention:     Chief Executive Officer

     With  a  copy  to:
          Cutler  Law  Group
          3206  West  Wimbledon  Dr
          Augusta,  GA  30909
          Telephone:     706-737-6600
          Facsimile:     706-738-1966
          Attention:     M.  Richard  Cutler

     If  to  the  Buyer:
          Fusion  Capital  Fund  II,  LLC
          222  Merchandise  Mart  Plaza,  Suite  9-112
          Chicago,  IL  60654
          Telephone:     312-644-6644
          Facsimile:     312-644-6244
          Attention:     Steven  G.  Martin

     If  to  the  Transfer  Agent:
          American  Stock  Transfer  and  Trust  Company
          59  Maiden  Lane
          Plaza  Level

<PAGE>
          New  York,  NY  10038
          Telephone:     718-921-8257
          Facsimile:     718-921-8355
          Attention:

or at 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  three  (3)  Business Days prior to the effectiveness of such
change.  Written  confirmation  of  receipt  (A)  given by the recipient of such
notice,  consent  or  other  communication,  (B)  mechanically or electronically
generated  by  the  sender's  facsimile  machine  containing the time, date, and
recipient  facsimile number or (C) provided by a nationally recognized overnight
delivery  service,  shall be rebuttable evidence of personal service, receipt by
facsimile  or receipt from a nationally recognized overnight delivery service in
accordance  with  clause  (i),  (ii)  or  (iii)  above,  respectively.

     (g)     Successors  and  Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
The  Company  shall  not  assign  this  Agreement  or  any rights or obligations
hereunder without the prior written consent of the Buyer, including by merger or
consolidation.  The  Buyer  may  not assign its rights or obligations under this
Agreement.

     (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)     Publicity.  The  Buyer  shall  have  the  right  to  approve before
issuance any press release, SEC filing or any other public disclosure made by or
on  behalf  of the Company whatsoever with respect to, in any manner, the Buyer,
its  purchases  hereunder  or  any  aspect of this Agreement or the transactions
contemplated  hereby,  provided,  however,  that  the Company shall be entitled,
without  the  prior  approval  of  the Buyer, to make any press release or other
public  disclosure  (including  any  filings  with the SEC) with respect to such
transactions  as  is  required  by applicable law and regulations so long as the
Company  and  its counsel provide the Buyer with a copy of such press release or
other public disclosure at least one (1) Business Day prior to its release.  The
Company  agrees  and  acknowledges  that  its  failure to fully comply with this
provision  constitutes  a  material adverse effect on its ability to perform its
obligations  under  this  Agreement.

     (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
the  other  party  may  reasonably  request in order to carry out the intent and
accomplish  the  purposes  of  this  Agreement  and  the  consummation  of  the
transactions  contemplated  hereby.

     (k)     Termination.  This  Agreement  may  be  terminated only as follows:

          (i)  By  the  Buyer  any  time  an Event of Default exists without any
     liability  or payment to the Company. However, if pursuant to or within the
     meaning  of  any  Bankruptcy Law, the Company commences a voluntary case or
     any  Person  commences  a  proceeding  against  the Company, a Custodian is
     appointed  for the Company or for all or substantially all of its property,
     or the Company makes a general assignment for the benefit of its creditors,
     (any  of  which would be an Event of Default as described in Sections 9(f),
     9(g)  and 9(h) hereof) this Agreement shall automatically terminate without
     any liability or payment to the Company without further action or notice by
     any  Person.  No  such  termination  of  this  Agreement  under  this

<PAGE>
     Section  11(k)(i)  shall  affect  the  Company's or the Buyer's obligations
     under  this Agreement with respect to pending purchases and the Company and
     the  Buyer  shall complete their respective obligations with respect to any
     pending  purchases  under  this  Agreement.

          (ii)  In  the event that the Commencement shall not have occurred, the
     Company shall have the option to terminate this Agreement for any reason or
     for  no  reason  without any liability whatsoever of any party to any other
     party  under  this  Agreement.

          (iii) In the event that the Commencement shall not have occurred on or
     before  October  1,  2008, due to the failure to satisfy the conditions set
     forth  in  Sections  6  and  7  above with respect to the Commencement, the
     nonbreaching party shall have the option to terminate this Agreement at the
     close of business on such date or thereafter without liability of any party
     to  any  other  party.

          (iv)  At  any time after the Commencement Date, the Company shall have
     the  option  to terminate this Agreement for any reason or for no reason by
     delivering notice (a "Company Termination Notice") to the Buyer electing to
     terminate  this  Agreement without any liability whatsoever of any party to
     any  other party under this Agreement. The Company Termination Notice shall
     not  be  effective until one (1) Business Day after it has been received by
     the  Buyer.

          (v)  This Agreement shall automatically terminate on the date that the
     Company sells and the Buyer purchases the full Available Amount as provided
     herein,  without  any action or notice on the part of any party and without
     any  liability  whatsoever  of  any  party  to  any  other party under this
     Agreement.

          (vi)  If by the Maturity Date for any reason or for no reason the full
     Available  Amount  under  this Agreement has not been purchased as provided
     for  in  Section  1  of  this Agreement, this Agreement shall automatically
     terminate on the Maturity Date, without any action or notice on the part of
     any  party  and  without any liability whatsoever of any party to any other
     party  under  this  Agreement.

Except  as  set  forth  in  Sections 11(k)(i) (in respect of an Event of Default
under  Sections  9(f),  9(g)  and  9(h))  and 11(k)(vi), any termination of this
Agreement  pursuant  to  this  Section 11(k) shall be effected by written notice
from  the Company to the Buyer, or the Buyer to the Company, as the case may be,
setting  forth  the  basis  for the termination hereof.  The representations and
warranties of the Company and the Buyer contained in Sections 2, 3 and 5 hereof,
the  indemnification provisions set forth in Section 8 hereof and the agreements
and  covenants  set  forth in Section 11, shall survive the Commencement and any
termination  of  this  Agreement.  No termination of this Agreement shall affect
the  Company's  or  the Buyer's rights or obligations (i) under the Registration
Rights  Agreement  which  shall  survive any such termination or (ii) under this
Agreement  with respect to pending purchases and the Company and the Buyer shall
complete  their  respective  obligations  with  respect to any pending purchases
under  this  Agreement.

     (l)     No  Financial  Advisor,  Placement  Agent, Broker or Finder.    The
Company  represents  and  warrants  to  the  Buyer  that  it has not engaged any
financial  advisor,  placement  agent,  broker  or finder in connection with the
transactions  contemplated  hereby.  The  Buyer  represents  and warrants to the
Company  that  it has not engaged any financial advisor, placement agent, broker
or  finder in connection with the transactions contemplated hereby.  The Company
shall  be responsible for the payment of any fees or commissions, if any, of any
financial  advisor,  placement  agent,  broker  or  finder  relating  to  or

<PAGE>
arising out of the transactions contemplated hereby.  The Company shall pay, and
hold  the  Buyer  harmless  against,  any liability, loss or expense (including,
without  limitation,  attorneys'  fees  and  out  of pocket expenses) arising in
connection  with  any  such  claim.

     (m)     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.

     (n)     Remedies,  Other  Obligations, Breaches and Injunctive Relief.  The
Buyer's  remedies provided in this Agreement shall be cumulative and in addition
to  all other remedies available to the Buyer under this Agreement, at law or in
equity  (including  a  decree  of  specific  performance and/or other injunctive
relief),  no  remedy  of  the Buyer contained herein shall be deemed a waiver of
compliance  with  the  provisions  giving rise to such remedy and nothing herein
shall  limit  the  Buyer's right to pursue actual damages for any failure by the
Company  to  comply  with the terms of this Agreement.  The Company acknowledges
that  a breach by it of its obligations hereunder will cause irreparable harm to
the Buyer and that the remedy at law for any such breach may be inadequate.  The
Company  therefore  agrees  that,  in the event of any such breach or threatened
breach,  the  Buyer  shall  be  entitled,  in  addition  to  all other available
remedies,  to  an  injunction  restraining  any breach, without the necessity of
showing  economic  loss  and  without any bond or other security being required.

     (0)     Enforcement  Costs.  If:  (i) this Agreement is placed by the Buyer
in  the hands of an attorney for enforcement or is enforced by the Buyer through
any  legal proceeding; or (ii) an attorney is retained to represent the Buyer in
any  bankruptcy,  reorganization,  receivership  or  other proceedings affecting
creditors'  rights  and  involving  a  claim  under  this Agreement; or (iii) an
attorney  is retained to represent the Buyer in any other proceedings whatsoever
in  connection  with this Agreement, then the Company shall pay to the Buyer, as
incurred  by  the  Buyer, all reasonable costs and expenses including attorneys'
fees  incurred  in  connection  therewith,  in addition to all other amounts due
hereunder.

     (p)  Failure  or Indulgence Not Waiver. No failure or delay in the exercise
of  any  power,  right or privilege hereunder shall operate as a waiver thereof,
nor  shall  any single or partial exercise of any such power, right or privilege
preclude  other  or  further  exercise  thereof  or of any other right, power or
privilege.

                           *     *     *     *     *

<PAGE>
     IN WITNESS WHEREOF, the Buyer and the Company have caused this Common Stock
Purchase  Agreement  to  be  duly  executed  as of the date first written above.

                                        THE  COMPANY:

                                        COMPETITIVE  TECNOLOGIES,  INC.

                                        By: \s\ John Nano
                                            -------------
                                        Name:  John  Nano
                                        Title:  President

                                        BUYER:

                                        FUSION  CAPITAL  FUND  II,  LLC
                                        BY: FUSION CAPITAL PARTNERS, LLC
                                        BY:  ROCKLEDGE  CAPITAL  CORPORATION

                                        By: \s\ Josh Scheinfeld
                                            -------------------
                                        Name:  Josh  Scheinfeld
                                        Title:  President

<PAGE>

                                   SCHEDULES

Schedule  3(a)     Subsidiaries
Schedule  3(c)     Capitalization
Schedule  3(e)     Conflicts
Schedule  3(f)     1934  Act  Filings
Schedule  3(g)     Material  Changes
Schedule  3(h)     Litigation
Schedule  3(k)     Intellectual  Property
Schedule  3(m)     Liens
Schedule  3(q)     Certain  Transactions

                                    EXHIBITS

Exhibit  A         Form of Company Counsel Opinion
Exhibit  B         Form of Officer's Certificate
Exhibit  C         Form of Resolutions of Board of Directors of the Company
Exhibit  D         Form of Secretary's Certificate
Exhibit  E         Form of Letter to Transfer Agent

<PAGE>
                              DISCLOSURE SCHEDULES

                          Schedule 3(a) - Subsidiaries

                         Schedule 3(c) - Capitalization

                          Schedule 3(e) - No Conflicts

                        Schedule 3(f) - 1934 Act Filings

                   Schedule 3(g) - Absence of Certain Changes

                           Schedule 3(h) - Litigation

                  Schedule 3(k) - Intellectual Property Rights

                             Schedule 3(m) - Title

                  Schedule 3(q) - Transactions with Affiliates

<PAGE>
                                   EXHIBIT A

                        FORM OF COMPANY COUNSEL OPINION

     Capitalized  terms used herein but not defined herein, have the meaning set
forth  in  the  Common  Stock  Purchase  Agreement.  Based on the foregoing, and
subject  to  the  assumptions and qualifications set forth herein, we are of the
opinion  that:

     1.  The  Company  is  a corporation existing and in good standing under the
laws  of  the  State  of  Delaware. The Company is qualified to do business as a
foreign  corporation  and  is  in  good  standing  in  the State of Connecticut.

     2.  The Company has the corporate power to execute and deliver, and perform
its  obligations  under,  each  Transaction Document to which it is a party. The
Company  has  the corporate power to conduct its business as, to the best of our
knowledge, it is now conducted, and to own and use the properties owned and used
by  it.

     3.  The  execution,  delivery  and  performance  by  the  Company  of  the
Transaction  Documents  to  which it is a party have been duly authorized by all
necessary  corporate  action  on  the  part  of  the  Company. The execution and
delivery  of  the  Transaction  Documents by the Company, the performance of the
obligations  of  the  Company  thereunder  and  the  consummation  by  it of the
transactions  contemplated therein have been duly authorized and approved by the
Company's  Board  of Directors and no further consent, approval or authorization
of  the  Company,  its  Board  of Directors or its stockholders is required. The
Transaction  Documents  to  which the Company is a party have been duly executed
and  delivered  by  the Company and are the valid and binding obligations of the
Company,  enforceable  against the Company in accordance with their terms except
as  such  enforceability  may  be  limited  by  general  principles of equity or
applicable  bankruptcy,  insolvency, liquidation or similar laws relating to, or
affecting  creditor's  rights  and  remedies.

     4.  The  execution,  delivery  and  performance  by  the  Company  of  the
Transaction  Documents,  the  consummation  by  the  Company of the transactions
contemplated thereby including the offering, sale and issuance of the Commitment
Shares,  and  the Purchase Shares in accordance with the terms and conditions of
the  Common  Stock Purchase Agreement, and fulfillment and compliance with terms
of  the  Transaction  Documents,  does  not  and  shall  not: (i) conflict with,
constitute  a breach of or default (or an event which, with the giving of notice
or  lapse  of  time  or  both,  constitutes  or  could  constitute a breach or a
default),  under  (a)  the  Certificate  of  Incorporation  or the Bylaws of the
Company,  (b)  any  material  agreement,  note,  lease,  mortgage, deed or other
material instrument to which to our knowledge the Company is a party or by which
the  Company or any of its assets are bound, (ii) result in any violation of any
statute,  law,  rule  or  regulation  applicable to the Company, or (iii) to our
knowledge,  violate  any  order,  writ,  injunction  or decree applicable to the
Company  or  any  of  its  subsidiaries.

     5.  The  issuance  of Purchase Shares and Commitment Shares pursuant to the
terms and conditions of the Transaction Documents has been duly authorized up to
the  Exchange  Cap  and  Commitment  Shares  are  validly issued, fully paid and
non-assessable,  to  our  knowledge,  free  of  all  taxes,  liens,  charges,
restrictions, rights of first refusal and preemptive rights. 1,500,000 shares of
Common  Stock  have  been  properly reserved for issuance under the Common Stock
Purchase Agreement. When issued and paid for in accordance with the Common Stock
Purchase  Agreement, the Purchase Shares shall be validly issued, fully paid and
non-assessable,  to  our  knowledge,  free  of  all  taxes,  liens,  charges,
restrictions,  rights  of  first refusal and preemptive rights. 42,187 shares of
Common  Stock  have been properly reserved for issuance as Additional Commitment
Shares under the Common Stock Purchase Agreement. When issued in accordance with
the  Common  Stock  Purchase  Agreement,  the  Additional

<PAGE>
Commitment Shares shall be validly issued, fully paid and non-assessable, to our
knowledge, free of all taxes, liens, charges, restrictions, rights of first
refusal and preemptive rights.  To our knowledge, the execution and delivery of
the Registration Rights Agreement do not, and the performance by the Company of
its obligations thereunder shall not, give rise to any rights of any other
person for the registration under the 1933 Act of any shares of Common Stock or
other securities of the Company which have not been waived.

     6.  As  of  the  date  hereof,  the authorized capital stock of the Company
consists  of  20,000,000  shares  of common stock, par value $0.01 per share, of
which  to  our  knowledge 8,179,872 shares are issued and outstanding and 35,920
sharse  of  Preferred  Stock, par value $25 per share, of which 2,427 shares are
issued and outstanding. Except as set forth on Schedule 3(c) of the Common Stock
Purchase Agreement, to our knowledge, there are no outstanding shares of capital
stock  or  other  securities convertible into or exchangeable or exercisable for
shares  of  the  capital  stock  of  the  Company.

     7.  Assuming  the  accuracy of the representations and your compliance with
the  covenants  made by you in the Transaction Documents, the offering, sale and
issuance  of  the Commitment Shares to you pursuant to the Transaction Documents
is  exempt  from  registration  under  the  1933 Act and the securities laws and
regulations  of  the  States  of  Delaware,  and  Illinois.

     8.  Other than that which has been obtained and completed prior to the date
hereof,  no  authorization,  approval,  consent,  filing  or  other order of any
federal  or  state  governmental  body,  regulatory agency, or stock exchange or
market,  or  any  court, or, to our knowledge, any third party is required to be
obtained  by  the  Company  to  enter into and perform its obligations under the
Transaction  Documents  or for the Company to issue and sell the Purchase Shares
as  contemplated  by  the  Transaction  Documents.

     9.  The  Common  Stock  is registered pursuant to Section 12(g) of the 1934
Act. To our knowledge, since January 1, 2007, the Company has been in compliance
with  the  reporting  requirements  of  the  1934  Act  applicable to it. To our
knowledge,  since  January  1,  2007,  the  Company has not received any written
notice  from  the  Principal  Market  stating  that  the Company has not been in
compliance with any of the rules and regulations (including the requirements for
continued  listing)  of  the  Principal  Market.

     We  further  advise  you  that  to  our  knowledge,  except as disclosed on
Schedule  3(h) in the Common Stock Purchase Agreement, there is no action, suit,
proceeding,  inquiry  or  investigation  before or by any court, public board or
body,  any governmental agency, any stock exchange or market, or self-regulatory
organization, which has been threatened in writing or which is currently pending
against  the  Company, any of its subsidiaries, any officers or directors of the
Company  or  any  of its subsidiaries or any of the properties of the Company or
any  of  its  subsidiaries.

     In  addition,  we  have participated in the preparation of the Registration
Statement  (SEC  File  #________)  covering the sale of the Purchase Shares, the
Commitment Shares including the prospectus dated ____________, contained therein
and  in  conferences  with  officers  and  other  representatives of the Company
(including  the Company's independent auditors) during which the contents of the
Registration  Statement  and  related  matters  were discussed and reviewed and,
although  we  are  not passing upon and do not assume any responsibility for the
accuracy,  completeness  or  fairness  of  the  statements  contained  in  the
Registration  Statement,  on  the basis of the information that was developed in
the  course  of the performance of the services referred to above, considered in
the  light  of  our  understanding  of  the  applicable law, nothing came to our
attention  that caused us to believe that the Registration Statement (other than
the  financial  statements and schedules and the other financial and statistical
data  included  therein,  as  to which we express no belief), as of their dates,
contained  any  untrue  statement  of  a  material  fact or omitted to state any
material fact necessary in order to make the statements therein, in the light of
the  circumstances  under  which  they  were  made,  not  misleading.

<PAGE>
                                   EXHIBIT B

                         FORM OF OFFICER'S CERTIFICATE

     This  Officer's  Certificate ("CERTIFICATE") is being delivered pursuant to
Section  7(e)  of  that  certain  Common  Stock  Purchase  Agreement dated as of
_________,  ("COMMON  STOCK  PURCHASE  AGREEMENT"),  by  and between COMPETITIVE
TECHNOLOGIES,  INC.,  a Delaware corporation (the "COMPANY"), and FUSION CAPITAL
FUND  II,  LLC (the "BUYER").  Terms used herein and not otherwise defined shall
have  the  meanings  ascribed  to  them  in the Common Stock Purchase Agreement.

     The  undersigned,  ___________,  ______________  of  the  Company,  hereby
certifies  as  follows:

          1.  I  am  the  _____________  of  the Company and make the statements
     contained  in  this  Certificate;

          2.  The  representations  and  warranties  of the Company are true and
     correct  in  all  material  respects (except to the extent that any of such
     representations  and  warranties  is already qualified as to materiality in
     Section  3  of  the  Common  Stock  Purchase Agreement, in which case, such
     representations  and  warranties  are  true  and  correct  without  further
     qualification)  as of the date when made and as of the Commencement Date as
     though  made  at  that time (except for representations and warranties that
     speak  as  of  a  specific  date);

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

          4.  The Company has not taken any steps, and does not currently expect
     to  take  any  steps, to seek protection pursuant to any Bankruptcy Law nor
     does the Company or any of its Subsidiaries have any knowledge or reason to
     believe  that  its  creditors  intend to initiate involuntary bankruptcy or
     insolvency proceedings. The Company is financially solvent and is generally
     able  to  pay  its  debts  as  they  become  due.

     IN  WITNESS  WHEREOF,  I  have  hereunder signed my name on this ___ day of
___________.

                               ______________________
                                   Name:
                                   Title:

     The undersigned as Secretary of COMPETITIVE TECHNOLOGIES, INC., an Delaware
corporation,  hereby  certifies that ___________ is the duly elected, appointed,
qualified  and  acting  ________  of  _________ and that the signature appearing
above  is  his  genuine  signature.

                               ___________________________________
                                   Secretary
<PAGE>
                                  EXHIBIT C-1

                          FORM OF COMPANY RESOLUTIONS
                         FOR SIGNING PURCHASE AGREEMENT

                          UNANIMOUS WRITTEN CONSENT OF
                         COMPETITIVE TECHNOLOGIES, INC.

     Pursuant to Section 141 of the Delaware General Corporation Law, the
undersigned, being all of the directors of COMPETITIVE TECHNOLOGIES, INC., a
Delaware corporation (the "Corporation") do hereby consent to and adopt the
following resolutions as the action of the Board of Directors for and on behalf
of the Corporation and hereby direct that this Consent be filed with the minutes
of the proceedings of the Board of Directors:

     WHEREAS, there has been presented to the Board of Directors of the
Corporation a draft of the Common Stock Purchase Agreement (the "Purchase
Agreement") by and between the Corporation and Fusion Capital Fund II, LLC
("Fusion"), providing for the purchase by Fusion of up to Five Million Dollars
($5,000,000) of the Corporation's common stock, par value $0.01 (the "Common
Stock"); and

     WHEREAS,  after  careful  consideration  of  the  Purchase  Agreement,  the
documents  incident  thereto  and  other factors deemed relevant by the Board of
Directors, the Board of Directors has determined that it is advisable and in the
best  interests of the Corporation to engage in the transactions contemplated by
the  Purchase  Agreement,  including, but not limited to, the issuance of 63,280
shares  of  Common  Stock  to  Fusion as an initial commitment fee (the "Initial
Commitment  Shares")  and the sale of shares of Common Stock to Fusion up to the
available  amount  under  the  Purchase  Agreement  (the  "Purchase  Shares").

                             TRANSACTION DOCUMENTS

     NOW, THEREFORE, BE IT RESOLVED, that the transactions described in the
Purchase Agreement are hereby approved and John Nano, President (the "Authorized
Officers") are severally authorized to execute and deliver the Purchase
Agreement, and any other agreements or documents contemplated thereby including,
without limitation, a registration rights agreement (the "Registration Rights
Agreement") providing for the registration of the shares of the Company's Common
Stock issuable in respect of the Purchase Agreement on behalf of the
Corporation, with such amendments, changes, additions and deletions as the
Authorized Officers may deem to be appropriate and approve on behalf of, the
Corporation, such approval to be conclusively evidenced by the signature of an
Authorized Officer thereon; and

     FURTHER RESOLVED, that the terms and provisions of the Registration Rights
Agreement by and among the Corporation and Fusion are hereby approved and the
Authorized Officers are authorized to execute and deliver the Registration
Rights Agreement (pursuant to the terms of the Purchase Agreement), with such
amendments, changes, additions and deletions as the Authorized Officer may deem
appropriate and approve on behalf of, the Corporation, such approval to be
conclusively evidenced by the signature of an Authorized Officer thereon; and

     FURTHER RESOLVED, that the terms and provisions of the Form of Transfer
Agent Instructions (the "Instructions") are hereby approved and the Authorized
Officers are authorized to execute and deliver the Instructions (pursuant to the
terms of the Purchase Agreement), with such amendments, changes, additions and
deletions as the Authorized Officers may deem appropriate and

<PAGE>
approve  on  behalf  of,  the  Corporation,  such  approval  to  be conclusively
evidenced  by  the  signature  of  an  Authorized  Officer  thereon;  and

                        EXECUTION OF PURCHASE AGREEMENT

     FURTHER RESOLVED, that the Corporation be and it hereby is authorized to
execute the Purchase Agreement providing for the purchase of common stock of the
Corporation; and

ISSUANCE OF COMMON STOCK

     FURTHER RESOLVED, that the Corporation is hereby authorized to issue 63,280
shares of Common Stock to Fusion Capital Fund II, LLC as Initial Commitment
Shares and that upon issuance of the Initial Commitment Shares pursuant to the
Purchase Agreement, the Initial Commitment Shares shall be duly authorized,
validly issued, fully paid and nonassessable with no personal liability
attaching to the ownership thereof; and

     FURTHER RESOLVED, that the Corporation is hereby authorized to issue shares
of Common Stock upon the purchase of Purchase Shares up to the available amount
under the Purchase Agreement in accordance with the terms of the Purchase
Agreement and that, upon issuance of the Purchase Shares pursuant to the
Purchase Agreement, the Purchase Shares will be duly authorized, validly issued,
fully paid and nonassessable with no personal liability attaching to the
ownership thereof; and

     FURTHER RESOLVED, that the Corporation shall initially reserve 1,500,000
shares of Common Stock for issuance as Purchase Shares under the Purchase
Agreement.

     FURTHER RESOLVED, that the Corporation is hereby authorized to issue 42,187
shares of Common Stock (subject to equitable adjustment for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction)
in connection with the purchase of Purchase Shares (the "Additional Commitment
Shares") in accordance with the terms of the Purchase Agreement and that, upon
issuance of the Additional Commitment Shares pursuant to the Purchase Agreement,
the Additional Commitment Shares will be duly authorized, validly issued, fully
paid and nonassessable with no personal liability attaching to the ownership
thereof; and

     FURTHER RESOLVED, that the Corporation shall initially reserve 42,187
shares of Common Stock (subject to equitable adjustment for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction)
for issuance as Additional Commitment Shares under the Purchase Agreement.

                              APPROVAL OF ACTIONS

     FURTHER RESOLVED, that, without limiting the foregoing, the Authorized
Officers are, and each of them hereby is, authorized and directed to proceed on
behalf of the Corporation and to take all such steps as deemed necessary or
appropriate, with the advice and assistance of counsel, to cause the Corporation
to consummate the agreements referred to herein and to perform its obligations
under such agreements; and

     FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby
is, authorized, empowered and directed on behalf of and in the name of the
Corporation, to take or cause to be taken all such further actions and to
execute and deliver or cause to be executed and delivered all such further
agreements, amendments, documents, certificates, reports, schedules,
applications, notices, letters and undertakings and to incur and pay all such
fees and expenses as in their judgment shall be necessary,

<PAGE>
proper or desirable to carry into effect the purpose and intent of any and all
of the foregoing resolutions, and that all actions heretofore taken by any
officer or director of the Corporation in connection with the transactions
contemplated by the agreements described herein are hereby approved, ratified
and confirmed in all respects.

     IN WITNESS WHEREOF, the Board of Directors has executed and delivered this
Consent effective as of __________, 2008.

_________________________________
John  B.  Nano

_________________________________
William  L.  Reali

_________________________________
Richard  D.  Hornidge,  Jr.

_________________________________
Joel  M.  Evans,  MD

_________________________________
Rustin  Howard

_________________________________
Ralph  S.  Torello.

being all of the directors of COMPETITIVE TECHNOLOGIES, INC.
<PAGE>

                                  EXHIBIT C-2

     FORM OF COMPANY RESOLUTIONS APPROVING REGISTRATION STATEMENT

                          UNANIMOUS WRITTEN CONSENT OF
                         COMPETITIVE TECHNOLOGIES, INC.

     Pursuant to Section 141 of the Delaware General Corporation Law,, the
undersigned, being all of the directors of COMPETITIVE TECHNOLOGIES, INC., a
Delaware corporation (the "Corporation") do hereby consent to and adopt the
following resolutions as the action of the Board of Directors for and on behalf
of the Corporation and hereby direct that this Consent be filed with the minutes
of the proceedings of the Board of Directors.

     WHEREAS, there has been presented to the Board of Directors of the
Corporation a Common Stock Purchase Agreement (the "Purchase Agreement") by and
among the Corporation and Fusion Capital Fund II, LLC ("Fusion"), providing for
the purchase by Fusion of up to Five Million Dollars ($5,000,000) of the
Corporation's common stock, par value $0.01 (the "Common Stock"); and

     WHEREAS, after careful consideration of the Purchase Agreement, the
documents incident thereto and other factors deemed relevant by the Board of
Directors, the Board of Directors has approved the Purchase Agreement and the
transactions contemplated thereby and the Company has executed and delivered the
Purchase Agreement to Fusion; and

     WHEREAS, in connection with the transactions contemplated pursuant to the
Purchase Agreement, the Company has agreed to file a registration statement with
the Securities and Exchange Commission (the "Commission") registering the
Commitment Shares (as defined in the Purchase Agreement) and the Purchase Shares
(as herein defined in the Purchase Agreement;

     WHEREAS, the management of the Corporation has prepared an initial draft of
a Registration Statement on Form ___ (the "Registration Statement") in order to
register the sale of the Purchase Shares and the Commitment Shares
(collectively, the "Shares"); and

     WHEREAS, the Board of Directors has determined to approve the Registration
Statement and to authorize the appropriate officers of the Corporation to take
all such actions as they may deem appropriate to effect the offering.

     NOW, THEREFORE, BE IT RESOLVED, that the officers and directors of the
Corporation be, and each of them hereby is, authorized and directed, with the
assistance of counsel and accountants for the Corporation, to prepare, execute
and file with the Commission the Registration Statement, which Registration
Statement shall be filed substantially in the form presented to the Board of
Directors, with such changes therein as the Chief Executive Officer of the
Corporation or any Vice President of the Corporation shall deem desirable and in
the best interest of the Corporation and its shareholders (such officer's
execution thereof including such changes shall be deemed to evidence
conclusively such determination); and

     FURTHER RESOLVED, that the officers of the Corporation be, and each of them
hereby is, authorized and directed, with the assistance of counsel and
accountants for the Corporation, to prepare, execute and file with the
Commission all amendments, including post-effective amendments, and supplements
to the Registration Statement, and all certificates, exhibits, schedules,
documents and other instruments relating to the Registration Statement, as such
officers shall deem necessary or appropriate

<PAGE>
(such officer's execution and filing thereof shall be deemed to evidence
conclusively such determination); and

     FURTHER RESOLVED, that the execution of the Registration Statement and of
any amendments and supplements thereto by the officers and directors of the
Corporation be, and the same hereby is, specifically authorized either
personally or by the Authorized Officers as such officer's or director's true
and lawful attorneys-in-fact and agents; and

     FURTHER RESOLVED, that the Authorized Officers are hereby designated as
"Agent for Service" of the Corporation in connection with the Registration
Statement and the filing thereof with the Commission, and the Authorized
Officers hereby are authorized to receive communications and notices from the
Commission with respect to the Registration Statement; and

     FURTHER RESOLVED, that the officers of the Corporation be, and each of them
hereby is, authorized and directed to pay all fees, costs and expenses that may
be incurred by the Corporation in connection with the Registration Statement;
and

     FURTHER RESOLVED, that it is desirable and in the best interest of the
Corporation that the Shares be qualified or registered for sale in various
states; that the officers of the Corporation be, and each of them hereby is,
authorized to determine the states in which appropriate action shall be taken to
qualify or register for sale all or such part of the Shares as they may deem
advisable; that said officers be, and each of them hereby is, authorized to
perform on behalf of the Corporation any and all such acts as they may deem
necessary or advisable in order to comply with the applicable laws of any such
states, and in connection therewith to execute and file all requisite papers and
documents, including, but not limited to, applications, reports, surety bonds,
irrevocable consents, appointments of attorneys for service of process and
resolutions; and the execution by such officers of any such paper or document or
the doing by them of any act in connection with the foregoing matters shall
conclusively establish their authority therefor from the Corporation and the
approval and ratification by the Corporation of the papers and documents so
executed and the actions so taken; and

     FURTHER RESOLVED, that if, in any state where the securities to be
registered or qualified for sale to the public, or where the Corporation is to
be registered in connection with the public offering of the Shares, a prescribed
form of resolution or resolutions is required to be adopted by the Board of
Directors, each such resolution shall be deemed to have been and hereby is
adopted, and the Secretary is hereby authorized to certify the adoption of all
such resolutions as though such resolutions were now presented to and adopted by
the Board of Directors; and

     FURTHER RESOLVED, that the officers of the Corporation with the assistance
of counsel be, and each of them hereby is, authorized and directed to take all
necessary steps and do all other things necessary and appropriate to effect the
listing of the Shares on the American Stock Exchange.

                              APPROVAL OF ACTIONS

     FURTHER RESOLVED, that, without limiting the foregoing, the Authorized
Officers are, and each of them hereby is, authorized and directed to proceed on
behalf of the Corporation and to take all such steps as are deemed necessary or
appropriate, with the advice and assistance of counsel, to cause the Corporation
to take all such action referred to herein and to perform its obligations
incident to the registration, listing and sale of the Shares; and

     FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby
is, authorized, empowered and directed on behalf of and in the name of the
Corporation, to take or cause to be taken all

<PAGE>
such further actions and to execute and deliver or cause to be executed and
delivered all such further agreements, amendments, documents, certificates,
reports, schedules, applications, notices, letters and undertakings and to incur
and pay all such fees and expenses as in their judgment shall be necessary,
proper or desirable to carry into effect the purpose and intent of any and all
of the foregoing resolutions, and that all actions heretofore taken by any
officer or director of the Corporation in connection with the transactions
contemplated by the agreements described herein are hereby approved, ratified
and confirmed in all respects.

     IN WITNESS WHEREOF, the Board of Directors has executed and delivered this
Consent effective as of __________, 2008.

_________________________________
John  B.  Nano

_________________________________
William  L.  Reali

_________________________________
Richard  D.  Hornidge,  Jr.

_________________________________
Joel  M.  Evans,  MD

_________________________________
Rustin  Howard

_________________________________
Ralph  S.  Torello.

being all of the directors of COMPETITIVE TECHNOLOGIES, INC.
<PAGE>

                                   EXHIBIT D

                        FORM OF SECRETARY'S CERTIFICATE

     This Secretary's Certificate ("Certificate") is being delivered pursuant to
Section 7(k) of that certain Common Stock Purchase Agreement dated as of
__________, ("Common Stock Purchase Agreement"), by and between COMPETITIVE
TECHNOLOGIES, INC., a Delaware corporation (the "Company") and FUSION CAPITAL
FUND II, LLC (the "Buyer"), pursuant to which the Company may sell to the Buyer
up to Thirty Million Dollars ($5,000,000) of the Company's Common Stock, par
value $0.01 per share (the "Common Stock").  Terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Common Stock Purchase
Agreement.

     The undersigned, ____________, Secretary of the Company, hereby certifies
as follows:

          1. I am the Secretary of the Company and make the statements contained
     in this Secretary's Certificate.

          2. Attached hereto as Exhibit A and Exhibit B are true, correct and
     complete copies of the Company's bylaws ("Bylaws") and Certificate of
     Incorporation ("Articles"), in each case, as amended through the date
     hereof, and no action has been taken by the Company, its directors,
     officers or shareholders, in contemplation of the filing of any further
     amendment relating to or affecting the Bylaws or Articles.

          3. Attached hereto as Exhibit C are true, correct and complete copies
     of the resolutions duly adopted by the Board of Directors of the Company on
     _____________, at which a quorum was present and acting throughout. Such
     resolutions have not been amended, modified or rescinded and remain in full
     force and effect and such resolutions are the only resolutions adopted by
     the Company's Board of Directors, or any committee thereof, or the
     shareholders of the Company relating to or affecting (i) the entering into
     and performance of the Common Stock Purchase Agreement, or the issuance,
     offering and sale of the Purchase Shares and the Commitment Shares and (ii)
     and the performance of the Company of its obligation under the Transaction
     Documents as contemplated therein.

          4. As of the date hereof, the authorized, issued and reserved capital
     stock of the Company is as set forth on Exhibit D hereto.

     IN  WITNESS  WHEREOF,  I  have  hereunder signed my name on this ___ day of
____________.

                                _________________________
                                   Secretary

The  undersigned  as  ___________  of COMPETITIVE TECHNOLOGIES, INC., a Delaware
corporation,  hereby certifies that ____________ is the duly elected, appointed,
qualified  and  acting  Secretary of _________, and that the signature appearing
above  is  his  genuine  signature.

                                                                       _________
__________________________
<PAGE>
                                   EXHIBIT E

FORM OF LETTER TO THE TRANSFER AGENT FOR THE ISSUANCE OF THE COMMITMENTS SHARES
                      AT SIGNING OF THE PURCHASE AGREEMENT

                              [COMPANY LETTERHEAD]

[DATE]

[TRANSFER  AGENT]
_______________
_______________
Attention:  __________

Re: Issuance of Common Shares to Fusion Capital Fund II, LLC

Dear ________,

On behalf of COMPETITIVE TECHNOLOGIES, INC., (the "Company"), you are hereby
instructed to issue AS SOON AS POSSIBLE 63,280 shares of our common stock in the
name of FUSION CAPITAL FUND II, LLC.  The share certificate should be dated
[DATE OF THE COMMON STOCK PURCHASE AGREEMENT].  I have included a true and
correct copy of a unanimous written consent executed by all of the members of
the Board of Directors of the Company adopting resolutions approving the
issuance of these shares.  The shares should be issued subject to the following
restrictive legend:

     THE  SECURITIES  REPRESENTED  BY  THIS  CERTIFICATE  HAVE  NOT  BEEN
     REGISTERED  UNDER  THE  SECURITIES  ACT  OF 1933, AS AMENDED, OR APPLICABLE
     STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
     MAY  NOT  BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE
     OF  AN  EFFECTIVE  REGISTRATION  STATEMENT  FOR  THE  SECURITIES  UNDER THE
     SECURITIES  ACT  OF  1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS,
     UNLESS  SOLD PURSUANT TO: (1) RULE 144 UNDER THE SECURITIES ACT OF 1933, AS
     AMENDED,  OR  (2) AN OPINION OF HOLDER'S COUNSEL, IN A CUSTOMARY FORM, THAT
     REGISTRATION  IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES
     LAWS.

<PAGE>
The share certificate should be sent AS SOON AS POSSIBLE VIA OVERNIGHT MAIL to
the following address:

          Fusion Capital Fund II, LLC
          222 Merchandise Mart Plaza, Suite 9-112
          Chicago, IL 60654
          Attention: Steven Martin

Thank you very much for your help.  Please call me at ______________ if you have
any questions or need anything further.

COMPETITIVE TECHNOLOGIES, INC.

BY:_____________________________
     [name]
     [title]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}]]