Document:

Unassociated Document

    Exhibit
10.1

      SECURITIES
PURCHASE AGREEMENT

      

      This
Securities Purchase Agreement (this “Agreement”) is dated
as of September 18, 2009, by and between GetFugu, Inc., a Nevada corporation
(the “Company”),  having
an address at 600 Townsend Street, San Francisco, CA 94103, and the investors
listed on the Schedule of Investors attached hereto as Appendix A (each, an
“Investor” and collectively, the “Investors”).

       

      WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
exemptions from registration under the Securities Act (as defined below), the
Company desires to issue and sell to each Investor, and each Investor, severally
and not jointly, desires to purchase from the Company, shares of the Company’s
Common Stock, as more fully described in this Agreement.

       

      NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and the Investors agree as
follows:

       

      ARTICLE
1.

      DEFINITIONS

       

      1.1           Definitions.  In
addition to the terms defined elsewhere in this Agreement, for all purposes of
this Agreement, the following terms shall have the meanings indicated in this
Section 1.1:

       

      “Action” as to any
Person, means any action, suit, inquiry, notice of violation, proceeding
(including any partial proceeding such as a deposition) or investigation pending
or threatened in writing against or affecting such Person, any of such Person’s
Subsidiaries or any of such Person’s or such Subsidiaries’ respective
properties, before or by any court, arbitrator, governmental or administrative
agency, regulatory authority (federal, state, county, local or foreign), stock
market, stock exchange or trading facility.

       

      “Additional Shares”
shall have the meaning as set forth in Section 4.14
(a).

       

      “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person, as such terms are
used in and construed under Rule 144.

       

      “Available Undersubscription
Amount” has the meaning set forth in Section 4.13(c).

       

      “Basic Amount” has the
meaning set forth in Section
4.13(b).

       

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

       

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

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      “Closing” means the
closing of the purchase and sale of the Shares on the Closing Date.

       

      “Closing Date” means
September 18, 2009, or such other date as the parties may agree.

       

      “Commission” means the
Securities and Exchange Commission.

       

      “Common Stock” means
the common stock of the Company, par value $0.001 per share, and any securities
into which such common stock may hereafter be reclassified or for which it may
be exchanged as a class.

       

      “Company” has the meaning set
forth in the recitals to this Agreement.

       

      “Company Entities”
means the Company and any entities which hereafter become Subsidiaries of the
Company.

       

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

       

      “Company Counsel”
means Reed Smith LLP, 355 Grand Avenue, Suite 2900, Los Angeles, CA
90071.

       

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

       

      “Company Party” has
the meaning set forth in Section
4.8.

       

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

       

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

       

      “Evaluation Date” has the meaning set
forth in Section
3.1(t).

       

      “Exchange” has the
meaning set forth in the recitals to this Agreement.

       

      “Exchange Act” means
the Securities Exchange Act of 1934, as amended.

       

      “GAAP” means U.S.
generally accepted accounting principles.

       

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

       

      “Investment Amount”
means, with respect to each Investor, the Investment Amount indicated on such
Investor’s signature page to this Agreement, which is also reflected on the
Schedule of Investors attached hereto as Appendix
A.

      
        
           

        

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

       

      “Investor Party” has
the meaning set forth in Section
4.7.

       

      “Investor Warrants”
shall mean the warrant certificates in the form of Exhibit A, attached
hereto and made a part hereof, respecting the holders’ rights to purchase
5,000,000 shares of Common Stock in the aggregate, at a price per share of
$0.01.

       

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

       

      “Losses” has the
meaning set forth in Section
4.7.

       

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

       

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

       

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

       

      “Notice of Acceptance”
has the meaning set forth in Section
4.13(c).

       

      “Offer” has the
meaning set forth in Section
4.13(b).

       

      “Offer Notice” has the
meaning set forth in Section
4.13(b).

       

      “Offer Period” has the
meaning set forth in Section
4.13(c).

       

      “Offered Securities”
has the meaning set forth in Section
4.13(b).

       

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

       

      “Outside Date” means
the fifteenth calendar day (if such calendar day is a Trading Day and if not,
then the first Trading Day following such fifteenth calendar day) following the
date of this Agreement.

       

      “Per Share Purchase
Price” equals $0.50.

       

      “Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.

       

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

      
        
           

        

        
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      “Refused Securities”
has the meaning set forth in Section
4.13(d).

       

      “Registrable
Securities” shall mean, collectively, the Shares , the Warrant Shares,
and the Additional Shares.

       

      “Registration Rights
Agreement” means the Registration Rights Agreement, dated as of the date
hereof, among the Company and the Investors, in the form of Exhibit B
hereto.

       

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

       

      “Rule 144” means Rule
144 promulgated by the Commission pursuant to the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.

       

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

       

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

       

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

       

      “Share Delivery Date”
has the meaning set forth in Section
4.1(c).

       

      “Shares” means the
10,000,000 shares of Common Stock being issued and sold to the Investors by the
Company hereunder (not including the Warrant Shares).

       

      “Short Sales” include,
without limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act and all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, swaps and similar
arrangements (including on a total return basis), and sales and other
transactions through non-US broker dealers or foreign regulated
brokers.

       

      “Subsequent Placement”
has the meaning set forth in Section
4.13(a).

       

      “Subsequent Placement
Agreement” has the meaning set forth in Section
4.13(f).

       

      “Subsidiary” of any
Person means any “subsidiary” as defined in Rule 1-02(x) of the Regulation S-X
promulgated by the Commission under the Exchange Act of such
Person.

       

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

      
        
           

        

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

       

      “Transaction
Documents” means this Agreement, the Registration Rights Agreement, and
any other documents or agreements executed in connection with the transactions
contemplated hereunder.

       

      “Transfer Agent” means
Empire Stock Transfer Inc., the current transfer agent of the Company with a
mailing address of 2470 Saint Rose Pkwy, Suite 304, Henderson, Nevada 89074, and
a facsimile number of (702) 974-1444, and any successor transfer agent of the
Company.

       

      “Trigger Date” has the
meaning set forth in Section
4.13(a).

       

      “Undersubscription
Amount” has the meaning set forth in Section
4.13(b).

       

      “Warrant Shares” shall
mean, collectively, the Common Stock to be issued under the Investor
Warrants.

       

      ARTICLE
2.

      PURCHASE
AND SALE

       

      2.1           Closing.  Subject
to the terms and conditions set forth in this Agreement the Closing shall occur
in two tranches.  At the first Closing (the “First Closing”), which
shall occur on the date hereof,  the Company shall issue and sell to
the Investor, and the Investor shall purchase from the Company, Three
Million  shares of Common Stock of the total Shares representing such
One Million Five Hundred Thousand ($1,500,000) of the Investor’s Investment
Amount, calculated as the quotient of such portion of Investor’s Investment
Amount divided by the Per Share Purchase Price.  Five
(5)  days after the Effectiveness Date (as that date is defined in the
Registration Rights Agreement), with regard to all of the Shares and the Warrant
Shares, the Company shall issue and sell to the Investor, and the Investor shall
have the unconditional obligation to purchase from the Company, Seven
Million   (7,000,000) shares of Common Stock of the total Shares,
representing  Three Million Five Hundred Thousand ($3,500,000) of the
Investor’s Investment Amount, calculated as the quotient of such portion of
Investor’s Investment Amount divided by the Per Share Purchase Price (the
“Second Closing”).  The First Closing shall take place at the offices
of Sichenzia Ross Friedman Ference LLP on the Closing Date or at such other
location or time as the parties may agree.  The Second Closing shall
take place at the offices of Sichenzia Ross Friedman Ference LLP five (5) days
after Effectiveness Date or at such other location or time as the parties may
agree.

       

      2.2           Closing
Deliveries.  (a)  At the First Closing, the Company
shall deliver or cause to be delivered to each Investor the following (the
“Company
Deliverables”):

       

      (i)           a
single certificate, dated the date of the First Closing, issued to each
Investor, respectively, representing 3,000,000 Shares registered in the name of
the Investor;

      
        
           

        

        
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      (ii)           an
Investor Warrant, dated the date of the First Closing, issued to the Investor,
representing the Investor’s right to purchase 1,500,000 aggregate Warrant Shares
at an exercise price per Share of $0.01;

       

      (iii)           the
legal opinion of Company Counsel, in agreed form, addressed to the Investors;
and

       

      (b)           By
the First Closing, the Investor shall deliver or cause to be delivered the
agreements specified in Section 5.2(d), each
duly signed by the Investor (collectively, the “Investor
Deliverables”).

       

      (c)           Upon
receipt of the Company Deliverables on the date of the First Closing, the
Investor shall deliver to the Company, $1,500,000, in United States Dollars and
in immediately available funds, by wire transfer to an account designated in
writing by the Company for such purpose.

       

      (d)           At
the Second Closing, the Company shall deliver or cause to be delivered to each
Investor the following (the “Company
Deliverables”):

       

      (i)           a
single certificate, dated the date of the Second Closing, issued to the
Investor, representing 7,000,000 Shares registered in the name of the
Investor;

       

      (ii)           an
Investor Warrant, dated the date of the Second Closing, issued to the Investor,
representing the Investor’s right to purchase 3,500,000 aggregate Warrant Shares
at an exercise price per Share of $0.01;

       

      (e)           At
the Second Closing, the Investor shall deliver to the Company $3,500,000, in
United States Dollars and in immediately available funds, by wire transfer to an
account designated in writing by the Company for such purpose.

       

      ARTICLE
3.

      REPRESENTATIONS
AND WARRANTIES

       

      3.1           Representations and
Warranties of the Company.  The Company hereby makes the
following representations and warranties to each Investor:

       

      (a)           Subsidiaries.  The
Company has no direct or indirect Subsidiaries.

       

      (b)           Organization and
Qualification.  The Company is duly incorporated, validly
existing and in good standing under the laws of the State of Nevada, with the
requisite power and authority to own and use its properties and assets and to
carry on its business as currently conducted.  The Company is not in
violation of any of the provisions of its Articles of Incorporation or
Bylaws.  The Company is duly qualified to conduct its businesses and
is in good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect.

      
        
           

        

        
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      (c)           Authorization;
Enforcement.  The Company has the requisite corporate and other
power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations thereunder.  The execution and delivery of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company, and no further action is required by it in connection with
such authorization.  Each Transaction Document has been (or upon
delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the valid and binding
obligation of the Company, enforceable against it in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

       

      (d)           No
Conflicts.  The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of the Company’s Articles of Incorporation or Bylaws, or
(ii) conflict with, or constitute a default (or an event that 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 (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company debt or otherwise) or other understanding to
which the Company is a party or by which any property or asset of the Company is
bound or affected, or (iii) result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any United States
court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations), or by which any property or
asset of the Company is bound or affected; except in the case of each of clauses
(ii) and (iii), such as could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect.

       

      (e)           Filings, Consents and
Approvals.  The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any United States court or other federal, state, local or
other governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other than
(i) the filing with the Commission of one or more Registration Statements in
accordance with the requirements of the Registration Rights Agreement, (ii)
filings required by state securities laws, (iii) the filing of a Notice of Sale
of Securities on Form D with the Commission under Regulation D of the Securities
Act, (iv) the filings required in accordance with Section 4.4, (v)
filings, consents and approvals required by the rules and regulations of the
applicable Trading Market, (vi) those that have been made or obtained prior to
the date of this Agreement, and (vi) other post closing securities filings or
notifications required to be made under federal or state securities
laws.

       

      (f)           Issuance of the Shares and
the Investor Warrants.  The Shares and the Investor Warrants
have been duly authorized and, when issued and paid for in accordance with the
Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens.  As of the Closing, the
Company has reserved from its duly authorized capital stock the shares of Common
Stock issuable pursuant to this Agreement in order to issue the Shares and the
Investor Warrants.

      
        
           

        

        
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      (g)           Capitalization.  The
number of shares and type of all authorized, issued and outstanding capital
stock of the Company, and all shares of Common Stock reserved for issuance under
the Company’s various option and incentive plans, is specified in Schedule
3.1(g).  Except as specified in Schedule 3.1(g), no
securities of the Company are entitled to preemptive or similar rights, and no
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by the
Transaction Documents.  Except as specified in Schedule 3.1(g),
there are no outstanding options, warrants, scrip rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving any Person any right
to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common
Stock.  The issue and sale of the Shares and the Investor Warrants
hereunder will not, immediately or with the passage of time, obligate the
Company or any Subsidiary to issue shares of Common Stock or other securities to
any Person (other than the Investors) and will not result in a right of any
holder of Company or Subsidiary securities to adjust the exercise, conversion,
exchange or reset price under such securities.

       

      (h)           SEC
Reports.  Except as set forth on Schedule 3.1(h) to
this Agreement, the Company has timely filed all reports required to be filed by
it under the Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, for the twelve months preceding the date hereof (or such
shorter period as the Company was required by law to file such reports), (the
foregoing materials being collectively referred to herein as the “SEC Reports” and,
together with Appendix
B hereto and the schedules to this Agreement, the “Disclosure
Materials”) or has timely filed for a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act or the
Exchange Act, as applicable, and the applicable rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

       

      (i)           Financial
Statements.  As of their respective dates, the financial
statements of the Company included in the SEC Reports complied as to form in all
material respects with applicable accounting requirements and the applicable
published rules and regulations of the Commission with respect thereto as in
effect at the time of filing.  Such financial statements were prepared
in accordance with GAAP applied on a consistent basis during the periods
involved, except as may be otherwise specified in such financial statements or
the notes thereto, and fairly present, in all material respects, the financial
position of the Company as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit
adjustments..

       

      (j)           Press
Releases.  To the knowledge of the Company, the press releases
disseminated by the Company during the twelve months preceding the date of this
Agreement taken as a whole do 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 and when made, not misleading.

      
        
           

        

        
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      (k)           Material
Changes.  Except as specified on Schedule 3.1(k) or in
the Disclosure Materials, since June 30, 2009 (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to
result in a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables, accrued
expenses and other liabilities incurred in the ordinary course of business
consistent with past practice, and (B) liabilities not in excess of $100,000 in
the aggregate not required to be reflected in the Company’s or its Subsidiaries’
financial statements pursuant to GAAP or required to be disclosed in filings
made with the Commission, (iii) the Company has not altered its method of
accounting or the identity of its auditors, (iv) the Company has not declared or
made any dividend or distribution of cash or other property to its stockholders
or purchased, redeemed or made any agreements to purchase or redeem any shares
of its capital stock, and (v) the Company has not issued any equity securities
to any officer, director or Affiliate, except pursuant to existing Company stock
option plans.  The Company does not have pending before the Commission
any request for confidential treatment of information.

       

      (l)           Litigation.  There
is no Action which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Shares or the
Warrants, or (ii) if there were an unfavorable decision, individually or in the
aggregate, result in a loss or liability in an amount in excess of $10,000 or
have or could reasonably be expected to have a Material Adverse
Effect.  Neither the Company, nor any director or officer of the
Company (in his or her capacity as such), is or has been, the subject of any
Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty, except as specifically
disclosed in the SEC Reports.  There has not been, and to the
knowledge of the Company, there is not pending any investigation by the
Commission involving the Company or any of its respective current or former
directors or officers (in his or her capacity as such).  The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company under the
Exchange Act or the Securities Act.

       

      (m)           Labor
Relations.  No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company.  Except as disclosed on Schedule 3.1(n), the
Company has no employment or labor contracts, agreements or other understandings
with any Person.

       

      (n)           Indebtedness;
Compliance.  Except as disclosed on Schedule 3.1(n), the
Company is not a party to any indenture, debt, capital lease obligations,
mortgage, loan or credit agreement by which it or any of its properties is
bound.  The Company is not (i) in default under or in violation of
(and no event has occurred that has not been waived that, with notice or lapse
of time or both, would result in a default by such entity under), nor has the
Company received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) in
violation of any order of any court, arbitrator or governmental body, or (iii)
in violation of any statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws relating
to taxes, environmental protection, occupational health and safety, product
quality and safety and employment and labor matters, except in each case as
could not, individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect.  The Company is in compliance
with all effective requirements of the Sarbanes-Oxley Act of 2002, as amended,
and the rules and regulations thereunder that are applicable to it, except where
such noncompliance could not have or reasonably be expected to result in a
Material Adverse Effect.

      
        
           

        

        
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      (o)           Regulatory
Permits.  The Company possesses all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct its businesses as described
in the SEC Reports, except where the failure to possess such permits could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, and the Company has not received any notice of
proceedings relating to the revocation or modification of any such
permits.

       

      (p)           Title to
Assets.  There is no real property that is material to the
respective business of the Company, except as disclosed in the Disclosure
Materials.  The Company has good and marketable title in all personal
property owned by it that is material to its business, in each case free and
clear of all Liens, except for Liens as do not materially affect the value of
such property and do not materially interfere with the use made and proposed to
be made of such property by the Company. Any real property and facilities held
under lease by the Company are held by it under valid, subsisting and
enforceable leases of which the Company is in compliance, except as could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.

       

      (q)           Patents and
Trademarks.  Set forth on Schedule 3.1(q) is a
list of patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights, licenses and other similar rights that
the Company owns or has the rights to use (collectively, the “Intellectual Property
Rights”).  The Intellectual Property Rights constitute all of
the patents, patent applications, trademarks, trademark applications, service
marks, trade names, copyrights, licenses and other similar rights that are
necessary and material to the business of the Company in connection with its
businesses as described in the Disclosure Materials. The Company has not
received a written notice that the Intellectual Property Rights used by it
violates or infringes upon the rights of any Person.  Except as
otherwise disclosed in the Disclosure Materials, to the knowledge of the
Company, all such Intellectual Property Rights are enforceable and there is no
existing infringement by another Person of any of the Intellectual Property
Rights.  To the knowledge of the Company, no former or current
employee, no former or current consultant, and no third-party joint developer of
the Company has any Intellectual Property Rights that are necessary and material
to the business of the Company made, developed, conceived, created or written by
the aforesaid employee, consultant or third-party joint developer during the
period of his or her retention by, or joint venture with, the Company which has
been asserted against the Company. The Intellectual Property Rights and the
owner thereof or agreement through which they are licensed to the Company are
set forth in the Disclosure Materials.

       

      (r)           Insurance.  The
Company is insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary in the
businesses it is engaged and in the country in which the Company
operates.  The Company has no reason to believe that it will not be
able to renew its existing respective insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business on terms consistent with market for the
Company’s lines of business.

      
        
           

        

        
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      (s)           Transactions With Affiliates
and Employees; Customers.  Except as set forth in the Disclosure Materials, none of the
officers, directors or 5% or more shareholders of the Company, and, to the
knowledge of the Company, none of the employees of the Company, is presently a
party to any transaction with the Company (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
such Person or, to the knowledge of the Company, any entity in which any
officer, director, or such employee or 5% or more shareholder has a substantial
interest or is an officer, director, trustee or partner.  The Company
does not owe any money or other compensation to any of their respective officers
or directors or shareholders, except to extent of contracts and ordinary course
compensation arrangements specified in Schedule
3.1(s).  No material customer of the Company has indicated its
intention to diminish its relationship with the Company, and the Company has no
knowledge from which it could reasonably conclude that any such customer
relationship may be adversely affected.

       

      (t)           Internal Accounting
Controls.  Except as set forth in the Disclosure Materials, the Company
maintains 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.  The Company is establishing disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
Company and designed such disclosure controls and procedures to ensure that
material information relating to the Company Entities is made known to the
certifying officers by others within those entities, particularly during the
period in which the Company’s Form 10-K or 10-Q, as the case may be, is being
prepared.  The Company’s certifying officers have evaluated the
effectiveness of the Company’s controls and procedures in accordance with Item
307 of Regulation S-K under the Exchange Act for the Company’s most recently
ended fiscal quarter or fiscal year-end (such date, the “Evaluation
Date”).  The Company presented in its most recently filed Form
10-K or Form 10-Q the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date.

       

      (u)           Solvency.  Based
on the financial condition of the Company, as of the Closing Date (and assuming
that the Closing shall have occurred), (i) the Company’s assets do not
constitute unreasonably small capital to carry on its business for the current
fiscal year as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of the
business conducted by the Company, and projected capital requirements and
capital availability thereof and (ii) the current cash flow of the Company,
together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash, would
be sufficient to pay all amounts on or in respect of its debt when such amounts
are required to be paid.  The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its
debt).

      
        
           

        

        
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      (v)           Certain
Fees.  Except as described in Schedule 3.1(v), no
brokerage or finder’s fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement.  The Investors shall have no
obligation with respect to any fees or with respect to any claims (other than
such fees or commissions owed by an Investor pursuant to written agreements
executed by such Investor which fees or commissions shall be the sole
responsibility of such Investor) made by or on behalf of other Persons for fees
of a type contemplated in this Section that may be due in connection with the
transactions contemplated by this Agreement.

       

      (w)           Certain Registration
Matters.  Assuming the accuracy of the Investors’
representations and warranties set forth in Sections 0, no
registration under the Securities Act is required for the offer and sale of the
Shares and the Warrants by the Company to the Investors under the Transaction
Documents.  The Company is eligible to register its Common Stock for
resale by the Investors under Form S-1 promulgated under the Securities
Act.  Except as specified in Schedule 3.1(w) the
Company has not granted or agreed to grant to any Person other than the
Investors pursuant to the Registration Rights Agreement any rights (including
“piggy-back” registration rights) to have any securities of the Company
registered with the Commission or any other governmental authority that have not
been satisfied.

       

      (x)           Listing and Maintenance
Requirements.  Except as specified in the SEC Reports, the
Company has not, in the two years preceding the date hereof, received notice
from any Trading Market to the effect that the Company is not in compliance with
the listing or maintenance requirements thereof.  The Company is, and
has no reason to believe that it will not in the foreseeable future continue to
be, in compliance with the listing and maintenance requirements for continued
listing of the Common Stock on the Trading Market on which the Common Stock is
currently listed or quoted.  The issuance and sale of the Shares or
the Investor Warrants under the Transaction Documents does not contravene the
rules and regulations of the Trading Market on which the Common Stock is
currently listed or quoted, and no approval of the stockholders of the Company
thereunder is required for the Company to issue and deliver to the Investors the
Shares and the Investor Warrants or the Warrant Shares as contemplated by the
Transaction Documents.

       

      (y)           Investment
Company.  The Company is not, and is not an Affiliate of, and
immediately following the Closing will not have become, an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended.

       

      (z)           Application of Takeover
Protections.  The Company has taken all necessary action, if
any, in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s Certificate of
Incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable to the Investors as a result of
the Investors and the Company fulfilling their obligations or exercising their
rights under the Transaction Documents, including, without limitation, the
Company’s issuance of the Shares and the Investors’ ownership of the Shares, the
Investor Warrants or the Warrant Shares.

      
        
           

        

        
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      (aa)           No Additional
Agreements.  The Company has no agreement or understanding with
any Investor with respect to the transactions contemplated by the Transaction
Documents other than as specified in the Transaction Documents.

       

      (bb)           Foreign Corrupt Practices
Act.  Neither Company, nor to the knowledge of the Company, any
agent or other person acting on behalf of the Company, has, directly or
indirectly, (i) used any funds, or will use any proceeds from the sale of the
Shares, for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to
any foreign or domestic political parties or campaigns from corporate funds,
(iii) failed to disclose fully any contribution made by the Company (or made by
any Person acting on their behalf of which the Company is aware) which is in
violation of law, or (iv) has violated in any material respect any provision of
the Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder.

       

      (cc)           PFIC.  The
Company is not, and does not intend to become a “passive foreign investment
company” within the meaning of Section 1297 of the U.S. Internal Revenue Code of
1986, as amended.

       

      (dd)           OFAC. Neither the
Company, to the knowledge of the Company, any director, officer, agent,
employee, Affiliate or Person acting on behalf of the Company, is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the sale of the
Shares, or lend, contribute or otherwise make available such proceeds to any
Subsidiary, joint venture partner or other Person or entity, towards any sales
or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country
sanctioned by OFAC or for the purpose of financing the activities of any Person
currently subject to any U.S. sanctions administered by OFAC.

       

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

       

      (ff)           Disclosure.  Neither
the Company nor any Person acting on its behalf has provided any Investor or its
respective agents or counsel with any information that the Company believes
constitutes material, non-public information concerning the Company or its
businesses, except insofar as the existence and terms of the proposed
transactions contemplated hereunder may constitute such information. The Company
understands and confirms that the Investors will rely on the foregoing
representations and covenants in effecting transactions in securities of the
Company.  All disclosure provided to the Investors regarding the
Company and its businesses and the transactions contemplated hereby, furnished
by or on behalf of the Company (including its representations and warranties set
forth in this Agreement and the disclosure set forth in any diligence report or
business plan provided by the Company or any Person acting on the Company’s
behalf) are true and correct and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

       

      Each
Investor acknowledges and agrees that the Company has not made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section
3.1.

       

      3.2.           Representations and
Warranties of the Investors.  Each Investor hereby, for itself
and for no other Investor, represents and warrants to the Company as
follows:

       

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

       

      (b)           Investment
Intent.  Such Investor is acquiring the Shares and the Investor
Warrants as principal for its own account and not with a view to or for
distributing or reselling such Shares or Investor Warrants or any part thereof,
without prejudice, however, to such Investor’s right at all times to sell or
otherwise dispose of all or any part of such Shares or the Investor Warrants in
compliance with applicable federal and state securities laws.  Subject
to the immediately preceding sentence, nothing contained herein shall be deemed
a representation or warranty by such Investor to hold the Shares or the Investor
Warrants for any period of time.  Such Investor is acquiring the
Shares and the Investor Warrants hereunder in the ordinary course of its
business. Such Investor does not have any agreement or understanding, directly
or indirectly, with any Person to distribute any of the Shares or the Investor
Warrants.

       

      (c)           Investor
Status.  At the time such Investor was offered the Shares, it
was, and at the date hereof it is, a “qualified institutional buyer” as defined
in Rule 144A under the Securities Act.  Such Investor is not a
registered broker-dealer under Section 15 of the Exchange Act.  Such
Investor has such experience in business and financial matters that it is
capable of evaluating the merits and risks of an investment in the
Shares.  Such Investor acknowledges that an investment in the Shares
is speculative and involves a high degree of risk.

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

       

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

       

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

       

      (f)           Certain Trading
Activities.  Such Investor has not directly or indirectly, nor
has any Person acting on behalf of or pursuant to any understanding with such
Investor, engaged in any transactions in the securities of the Company
(including, without limitations, any Short Sales involving the Company’s
securities) since the earlier to occur of (1) the time that such Investor was
first contacted by the Company regarding an investment in the Company and (2)
the 30th day
prior to the date of this Agreement.  Such Investor covenants that
neither it nor any Person acting on its behalf or pursuant to any understanding
with it will engage in any transactions in the securities of the Company
(including Short Sales) prior to the time that the transactions contemplated by
this Agreement are publicly disclosed.

       

      (g)           Independent Investment
Decision.  Such Investor has independently evaluated the merits
of its decision to purchase the Shares pursuant to the Transaction Documents,
and such Investor confirms that it has not relied on the advice of any other
Investor’s business and/or legal counsel in making such decision.

       

      (h)           Rule 144.  Such
Investor understands that the Securities must be held indefinitely unless such
Securities are registered under the Securities Act or an exemption from
registration is available.  Such Investor acknowledges that it is
familiar with Rule 144 and that such Investor has been advised that
Rule 144 permits resales only under certain circumstances.  Such
Investor understands that to the extent that Rule 144 is not available,
such Investor will be unable to sell any Securities without either registration
under the Securities Act or the existence of another exemption from such
registration requirement.

       

      (i)           General.  Such
Investor understands that the Securities are being offered and sold in reliance
on a transactional exemption from the registration requirements of federal and
state securities laws and the Company is relying upon the truth and accuracy of
the representations, warranties, agreements, acknowledgments and understandings
of such Investor set forth herein in order to determine the applicability of
such exemptions and the suitability of such Investor to acquire the
Securities.  Such Investor understands that no United States federal
or state agency or any government or governmental agency has passed upon or made
any recommendation or endorsement of the Securities.

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

       

      The
Company acknowledges and agrees that no Investor has made or makes any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section
3.2.

       

      ARTICLE
4.

      OTHER
AGREEMENTS OF THE PARTIES

       

      4.1           Transferability;
Certificate.  (a)  The Shares, the Investor Warrants
and the Warrant Shares may only be disposed of in compliance with state and
federal securities laws.  In connection with any transfer of the
Shares, Investor Warrants or Warrant Shares other than pursuant to an effective
registration statement, to the Company, to an Affiliate of an Investor or in
connection with a pledge as contemplated in Section 4.1(b), the
Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Shares, Investor
Warrants or Warrant Shares under the Securities Act.

       

      (b)           Certificates
evidencing Securities (as defined in Section 4.1(c)) will
contain the following legend, until such time as they are not required under
Section
4.1(c):

       

      THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.  THESE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH
SECURITIES.

      
        
           

        

        
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      The
Company acknowledges and agrees that an Investor may from time to time pledge,
and/or grant a security interest in some or all of the Securities pursuant to a
bona fide margin agreement in connection with a bona fide margin account and, if
required under the terms of such agreement or account, such Investor may
transfer pledged or secured Securities to the pledgees or secured
parties.  Such a pledge or transfer would not be subject to approval
or consent of the Company and no legal opinion of legal counsel to the pledgee,
secured party or pledgor shall be required in connection with the pledge, but
such legal opinion may be required in connection with a subsequent transfer
following default by the Investor transferee of the pledge.  No notice
shall be required of such pledge.  At the appropriate Investor’s
expense, the Company will execute and deliver such reasonable documentation as a
pledgee or secured party of Securities may reasonably request in connection with
a pledge or transfer thereof including the preparation and filing of any
required prospectus supplement under Rule 424(b)(3) of the Securities Act or
other applicable provision of the Securities Act to appropriately amend the list
of selling stockholders thereunder.  Except as otherwise provided in
Section 4.1(c),
any Securities subject to a pledge or security interest as contemplated by this
Section 4.1(b)
shall continue to bear the legend set forth in this Section 4.1(b) and be
subject to the restrictions on transfer set forth in Section
4.1(a).

       

      (c)           Certificates
evidencing Shares or the Investor Warrant Shares (collectively with the Shares,
the “Securities”), shall
not contain any legend (including the legend set forth in Section 4.1(b)):
(i) while a registration statement (including the Registration Statement)
covering such Securities is then effective, or (ii) following a sale or transfer
of such Securities pursuant to Rule 144 (assuming the transferee is not an
Affiliate of the Company), or (iii) while such Securities are eligible for sale
by the selling Investor without volume restrictions under Rule
144.  The Company agrees that following the Effective Date or such
other time as legends are no longer required to be set forth on certificates
representing Securities under this Section 4.1(c), it
will, no longer than three (3) Trading Days following the delivery by an
Investor to the Company or the Transfer Agent of a certificate representing such
Securities containing a restrictive legend, deliver or instruct the Transfer
Agent to deliver to such Investor, Securities which are free of all restrictive
and other legends.  If the Company is then eligible, certificates for
Securities subject to legend removal hereunder shall be transmitted by the
Transfer Agent to an Investor by crediting the prime brokerage account of such
Investor with the Depository Trust Company System as directed by such
Investor.  If an Investor shall make a sale or transfer of Securities
either (x) pursuant to Rule 144 or (y) pursuant to a registration statement and
in each case shall have delivered to the Company or the Company’s transfer agent
the certificate representing the applicable Securities containing a restrictive
legend which are the subject of such sale or transfer and a representation
letter in customary form (the date of such sale or transfer and Securities
delivery being the “Share Delivery Date”)
and (1) the Company shall fail to deliver or cause to be delivered to such
Investor a certificate representing such Securities that is free from all
restrictive or other legends by the third Trading Day following the Share
Delivery Date and (2) following such third Trading Day after the Share Delivery
Date and prior to the time such Securities are received free from restrictive
legends, the Investor, or any third party on behalf of such Investor, purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Investor of such Securities (a “Buy-In”), then, in
addition to any other rights available to the Investor under the Transaction
Documents and applicable law, the Company shall pay in cash to the Investor (for
costs incurred either directly by such Investor or on behalf of a third party)
the amount by which the total purchase price paid for Common Stock as a result
of the Buy-In (including brokerage commissions, if any) exceed the proceeds
received by such Investor as a result of the sale to which such Buy-In
relates.  The Investor shall provide the Company written notice
indicating the amounts payable to the Investor in respect of the
Buy-In.  The Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the restrictions
on transfer set forth in this Section.

      
        
           

        

        
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      4.2           Furnishing of
Information.  As long as any Investor owns any Securities, the
Company covenants to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act.  As long
as any Investor owns Securities, if the Company is not required to file reports
pursuant to such laws, it will prepare and furnish to the Investors and make
publicly available in accordance with Rule 144(c) such information as is
required for the Investors to sell the Securities under Rule 144.  The
Company further covenants that it will take such further action as any holder of
Securities may reasonably request, all to the extent required from time to time
to enable such Person to sell the Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule
144.

       

      4.3           Integration.  The
Company shall not, and shall use its best efforts to ensure that no Affiliate of
the Company shall, sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Shares in a manner
that would require the registration under the Securities Act of the sale of the
Shares to the Investors, or that would be integrated with the offer or sale of
the Shares for purposes of the rules and regulations of any Trading Market in a
manner that would require stockholder approval of the sale of the Shares to the
Investors.

       

      4.4           Subsequent
Registrations.  The Company may not file any registration
statement with the Commission with respect to any securities of the Company
prior to the time that all Registrable Shares are registered pursuant to one or
more effective Registration Statement(s), and the prospectuses forming a portion
of such Registration Statement(s) is available for the resale of all Registrable
Shares.

       

      4.5           Securities Laws Disclosure;
Publicity.  By 5:00 p.m. (New York time) on the Trading Day
following the Closing Date, (a) the Company shall issue a press release,
disclosing the transactions contemplated by the Transaction Documents and the
Closing and (b) the Company will file a Form 8-K disclosing the material terms
of the Transaction Documents (and attach as exhibits thereto all existing
Transaction Documents) and the Closing.  The Company covenants that
following such disclosure, the Investors shall no longer be in possession of any
material, non-public information with respect to any of the Company
Entities.  In addition, the Company will make such other filings and
notices in the manner and time required by the Commission and the Trading Market
on which the Common Stock is listed.  The Investor will have the right
to review any press release, the Form 8-K and any other disclosure document
prior to the filing or release of such information pursuant to this Section
4.4.  Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Investor, or include the name of any Investor
in any filing with the Commission (other than the Registration Statement and any
exhibits to filings made in respect of this transaction in accordance with
periodic filing requirements under the Exchange Act) or any regulatory agency or
Trading Market, without the prior written consent of such Investor, except to
the extent such disclosure is required by law or Trading Market
regulations.

       

      4.6           Limitation on Issuance of
Future Priced Securities.  During the twelve months following
the Closing Date, the Company shall not issue any “Future Priced Securities” as
such term is described by NASD IM-4350-1.

      
        
           

        

        
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      4.7           Indemnification of
Investors.  In addition to the indemnity provided in the
Registration Rights Agreement, the Company will jointly and severally indemnify
and hold the Investors and their directors, officers, shareholders, partners,
employees and agents (each, an “Investor Party”)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation in respect thereof (collectively, “Losses”) that any
such Investor Party may suffer or incur as a result of or relating to any
misrepresentation, breach or inaccuracy of any representation, warranty,
covenant or agreement made by the Company in any Transaction
Document.  In addition to the indemnity contained herein, the Company
will reimburse each Investor Party for its reasonable legal and other expenses
(including the cost of any investigation, preparation and travel in connection
therewith) incurred in connection therewith, as such expenses are
incurred.  Except as otherwise set forth herein, the mechanics and
procedures with respect to the rights and obligations under this Section 4.7 shall be
the same as those set forth in Section 5 of the Registration Rights
Agreement.

       

      4.8           Indemnification of Company
Entities.  In addition to the indemnity provided in the
Registration Rights Agreement, each Investor, severally and not jointly, will
indemnify and hold the Company Entities and their directors, officers,
shareholders, partners, employees and agents (each, a “Company Party”)
harmless from any and all Losses that any such Company Party may suffer or incur
as a result of or relating to any misrepresentation, breach or inaccuracy of any
representation, warranty, covenant or agreement made by such Investor in any
Transaction Document.  In addition to the indemnity contained herein,
such Investor will reimburse each Company Party for its reasonable legal and
other expenses (including the cost of any investigation, preparation and travel
in connection therewith) incurred in connection therewith, as such expenses are
incurred.  Except as otherwise set forth herein, the mechanics and
procedures with respect to the rights and obligations under this Section 4.8 shall be
the same as those set forth in Section 5 of the Registration Rights
Agreement.

       

      4.9           Non-Public
Information.  The Company covenants and agrees that neither it,
any Company Entity nor any other Person acting on its or their behalf will
provide any Investor or its agents or counsel with any information that the
Company believes constitutes material non-public information, unless prior
thereto such Investor shall have executed a written agreement regarding the
confidentiality and use of such information.  The Company understands
and confirms that each Investor shall be relying on the foregoing
representations in effecting transactions in securities of the
Company.

       

      4.10           Listing of
Shares.  The Company agrees, (i) if the Company applies to have
the Common Stock traded on any other Trading Market, it will include in such
application the Shares, and will take such other action as is necessary or
desirable to cause the Shares to be listed on such other Trading Market as
promptly as possible, and (ii) the Company will take all action reasonably
necessary to continue the listing and trading of its Common Stock on a Trading
Market and will comply in all material respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Trading
Market.

       

      4.11           Use of
Proceeds.  The Company will use the net proceeds from the sale
of the Shares hereunder for capital expenditures, research and development,
marketing, sales and distribution expansion and general working capital
purposes.

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

       

      4.12           Further
Assurances.  Each Investor will, the Company will, and the
Company will cause its management to, use their respective reasonable best
efforts to satisfy all of the closing conditions under Section 5.1, and
will not take any action which could frustrate or delay the satisfaction of such
conditions.  In addition, either prior to or following the Closing,
each Investor signatory will, and the Company will, and the Company will cause
its management to, perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as any other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.

       

      4.13           Right of First
Refusal.  (a)  From the date hereof until the one
year anniversary of the Effective Date (plus one additional day for each Trading
Day following the Effective Date of any Registration Statement during which
either (1) the Registration Statement is not effective or (2) the
prospectus forming a portion of the Registration Statement is not available for
the resale of all Registrable Securities (as defined in the Registration Rights
Agreement) (the “Trigger Date”), the
Company will not, directly or indirectly, offer, sell, grant any option to
purchase, or otherwise dispose of (or announce any offer, sale, grant or any
option to purchase or other disposition of) any of its equity or equity
equivalent securities, including, without limitation, any debt, preferred stock
or other instrument or security that is, at any time during its life and under
any circumstances, convertible into or exchangeable or exercisable for shares of
Common Stock or Common Stock Equivalents, or if the Company shall receive an
offer regarding the purchase of the Company’s securities and desires to offer
securities consistent with or otherwise in connection with or in furtherance of
such offer (any such offer, sale, grant, disposition or announcement being
referred to as a “Subsequent
Placement”) unless the Company shall have first complied with this Section
4.13.  If the Company desires to engage in a Subsequent
Placement it shall deliver to each of the Investors a written notice requesting
their written approval to receive nonpublic information regarding the
Company.  The Investors shall have ten (10) days to deliver to the
Company such approval.  Any Investor failing to deliver timely to the
Company such written approval, or who shall have delivered to the Company a
written notice withholding such approval, shall be deemed to have waived its
rights under this Section 4.13 with
regard to such Subsequent Placement.  The Investors who, in response
to such request from the Company, shall have delivered timely to the Company a
written approval to receive nonpublic information regarding the Company
(collectively, the “Responding Investors”
and each a “Responding
Investor”), shall receive a written notice that the Company desires to
engage in a Subsequent Placement specifying the general terms of the offering
the Company desires to make (including, without limitation, all information
relating to price, structure and amount of such offering, but not including the
identity of any potential investors therein) and for a period of at least ten
(10) Business Days after the giving of such notice the Company agrees to
negotiate in good faith with the Responding Investors the terms of a sale of the
Company’s securities to the Responding Investors.

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

       

      (b)           In
the event that a Subsequent Placement contemplated in the last sentence of Section 4.13(a) shall
not have closed by the 30th
Business Day following the delivery to the Responding Investors of the written
notice for such Subsequent Placement, and in any event prior to such Subsequent
Placement, the Company shall deliver to the Responding  Investors a
written notice (the “Offer Notice”) of any
proposed or intended issuance or sale or exchange (the “Offer”) of the
securities being offered (the “Offered Securities”)
in a Subsequent Placement, which Offer Notice shall (v) identify and describe
the Offered Securities, (x) include the final form of documents and agreements
governing the Subsequent Placement, (y) specify the price and other terms
upon which the Offered Securities are to be issued, sold or exchanged, and the
number or amount of the Offered Securities to be issued, sold or exchanged, and
(z) offer to issue and sell to or exchange with such Investors all of the
Offered Securities, allocated among such Responding Investors (a) based on such
Responding Investor’s pro rata portion of the total Investment Amount hereunder
attributable to such Responsing Investors (the “Basic Amount”), and
(b) with respect to each of the Responding Investors that elects to purchase its
Basic Amount, any additional portion of the Offered Securities attributable to
the Basic Amounts of other Responding Investors as such Responding Investor
shall indicate it will purchase or acquire should the other Responding Investors
subscribe for less than their Basic Amounts (the “Undersubscription
Amount”), which process shall be repeated until the Responding Investors
shall have an opportunity to subscribe for any remaining Undersubscription
Amount.

       

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

       

      (d)           The
Company shall have sixty (60) Business Days from the expiration of the Offer
Period above to (i) offer, issue, sell or exchange all or any part of such
Offered Securities as to which a Notice of Acceptance has not been given by the
Responding Investors (the “Refused Securities”),
but only to the offerees described in the Offer Notice (if so described therein)
and only upon terms and conditions (including, without limitation, unit prices
and interest rates) that are not more favorable to the acquiring person or
persons or less favorable to the Company than those set forth in the Offer
Notice and (ii) to publicly announce (a) the execution of such Subsequent
Placement Agreement (as defined below), and (b) either (x) the consummation of
the transactions contemplated by such Subsequent Placement Agreement or (y) the
termination of such Subsequent Placement Agreement, which shall be filed with
the Commission on a Current Report on Form 8-K with such Subsequent Placement
Agreement and any documents contemplated therein filed as exhibits
thereto.  If no disclosure has been made by the Company by the end of
the sixty (60) Business Day period referred to in this subsection (d), the
Subsequent Placement shall be deemed to have been abandoned and the Responding
Investors shall no longer be deemed to be in possession of any non-public
information with respect to the Company.

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

       

      (e)           In
the event the Company shall propose to sell less than all the Refused Securities
(any such sale to be in the manner and on the terms specified in this Section 4.13), then
each Responding Investor may, at its sole option and in its sole discretion,
reduce the number or amount of the Offered Securities specified in its Notice of
Acceptance to an amount that shall be not less than the number or amount of the
Offered Securities that such Responding Investor elected to purchase pursuant to
Section 4.13(c)
above multiplied by a fraction, (i) the numerator of which shall be the number
or amount of Offered Securities the Company actually proposes to issue, sell or
exchange (including Offered Securities to be issued or sold to Investors
pursuant to Section 4.13(c)
above prior to such reduction) and (ii) the denominator of which shall be the
original amount of the Offered Securities.  In the event that any
Responding Investor so elects to reduce the number or amount of Offered
Securities specified in its Notice of Acceptance, the Company may not issue,
sell or exchange more than the reduced number or amount of the Offered
Securities unless and until such securities have again been offered to the
Responding Investors in accordance with Section 4.13(b)
above.

       

      (f)           Upon
the closing of the issuance, sale or exchange of all or less than all of the
Refused Securities, the Responding Investors shall acquire from the Company, and
the Company shall issue to the Responding Investors, the number or amount of
Offered Securities specified in the Notices of Acceptance, as reduced pursuant
to Section
4.13(e) above if the Responding Investors have so elected, upon the terms
and conditions specified in the Offer.  The purchase by the Responding
Investors of any Offered Securities is subject in all cases to the preparation,
execution and delivery by the Company and the Responding Investors of a purchase
agreement relating to such Offered Securities substantially the same in form and
substance as the agreement disclosed above in Section 4.13(b)(x)
and otherwise reasonably satisfactory to Responding Investors’ counsel (such
agreement, the “Subsequent Placement
Agreement”).

       

      (g)           Any
Offered Securities not acquired by the Responding Investors or other persons in
accordance with Section 4.13(f) above
may not be issued, sold or exchanged until they are again offered to the
Investors under the procedures specified in this Agreement.

       

      (h)           In
exchange for the Company’s willingness to agree to these procedures, each
Responding Investor hereby irrevocably agrees that it will hold in strict
confidence any and all Offer Notices, the information contained therein, and the
fact that the Company is contemplating a Subsequent Placement, until such time
as the Company is obligated to make the disclosures required by Section 4.13(d), or
unless it notifies the Company in writing that it no longer desires to receive
Offer Notices.

       

      (i)           The
rights contained in this Section 4.13 shall
not apply to (i) the issuance and sale by the Company of shares of Common Stock
or Common Stock Equivalents issued as consideration for the acquisition of
another company or business in which the shareholders of the Company do not have
an ownership interest, and where the primary purpose is not to raise capital for
the Company or any Subsidiary, which acquisition has been approved by the Board
of Directors of the Company, (ii) the issuance of stock options or restricted
stock to directors, employees or consultants for compensatory purposes, where
such issuance has been approved by the Board of Directors of the Company, (iii)
the exercise or conversion of currently outstanding warrants, options or
convertible instruments pursuant to their current terms, or (iv) additional
borrowings by the Company from Newport Financial Inc. under its outstanding
Revolving Promissory Note (each, an “Exempt
Issuance”).

      
        
           

        

        
          22

          
            

          

        

        
           

        

      

       

      4.14             Adjustments for Issuance of
Additional Shares of Common Stock.  (a) If, prior to the first
anniversary of the Closing Date, the Company,  at any time, shall
issue, grant or sell any additional shares of Common Stock or Common Stock
Equivalents (hereinafter defined) (the “New Equity”), at a price per share that
is less than $0.3333, or without consideration, (either being deemed issued at a
“Lower Price”) the Company promptly shall issue additional shares of its Common
Stock (the “Additional Shares”) to each of the Investors (pro rata) in an amount
sufficient to adjust the Per Share Purchase price paid by the Investors,
respectively,  to such Lower Price.

       

      (b) No
adjustment of the number of shares of Common Stock shall be made under paragraph
this Section upon the issuance of any New Equity issued pursuant to the exercise
of any warrants, options or other subscription or purchase rights outstanding as
of the date hereof or pursuant to the exercise of any conversion or exchange
rights in any Common Stock Equivalents outstanding as of the date hereof , if
any such adjustment shall previously have been made upon the issuance of such
warrants or other rights or upon the issuance of such Common Stock Equivalents
(or upon the issuance of any warrant or other rights therefor).

       

      ARTICLE
5.

      CONDITIONS
PRECEDENT TO CLOSING

       

      5.1           Conditions Precedent to the
Obligations of the Investors to Purchase Shares.  The
obligation of each Investor to acquire Shares at the Closing is subject to the
satisfaction or waiver by such Investor, at or before the Closing, of each of
the following conditions:

       

      (a)           Representations and
Warranties.  The representations and warranties of the Company
contained herein shall be true and correct in all material respects as of the
date when made and as of the Closing as though made on and as of such
date;

       

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

       

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

       

      (d)           Adverse
Changes.  Since the date of execution of this Agreement, no
event or series of events shall have occurred that reasonably could have or
result in a Material Adverse Effect or a material adverse change with respect to
the Company or the Subsidiaries;

       

      (e)           Opinions.  The
Company shall have delivered to the Investors, and the Investors shall be able
to rely upon, the legal opinion of Company counsel with regard to the
enforceability of the Transaction Documents;

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

       

      (f)           Closing Officer’s
Certificate.  At the Closing, the Company shall have delivered
to each Investor an officer’s certificate to the effect that each of the
conditions specified in Sections 5.1(a) -
5.1(e) is satisfied in all respects;

       

      (g)           Company
Agreements.  The Company shall have delivered or cause to be
delivered:

       

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

       

      (ii)           The
Registration Rights Agreement, duly executed by the Company; and

       

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

       

      (i)           Termination.  This
Agreement shall not have been terminated as to such Investor in accordance with
Section
6.5.

       

      (j)           Second
Closing.  As to the Second Closing, the Investor shall have
received written notice from the Company of the Effectiveness Date with regard
to all of the Shares and the Warrant Shares.

       

      5.2           Conditions Precedent to the
Obligations of the Company to Sell Shares.  The obligation of
the Company to sell Shares at the Closing is subject to the satisfaction or
waiver by the Company, at or before the Closing, of each of the following
conditions:

       

      (a)           Representations and
Warranties.  The representations and warranties of each
Investor contained herein shall be true and correct in all material respects as
of the date when made and as of the Closing Date as though made on and as of
such date;

       

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

       

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

       

      (d)           Investor
Deliverables.  Each Investor shall have delivered the
Registration Rights Agreement, each duly executed by such Investor and a
completed Selling Holder Questionnaire (as defined in the Registration Rights
Agreement); and

       

      (e)           Termination.  This
Agreement shall not have been terminated as to such Investor in accordance with
Section
6.5.

      
        
           

        

        
          24

          
            

          

        

        
           

        

      

       

      ARTICLE
6.

      MISCELLANEOUS

       

      6.1           Fees and
Expenses.  Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of the Transaction Documents.  The Company
shall pay all stamp and other taxes and duties levied in connection with the
sale of the Shares.

       

      6.2           Entire
Agreement.  The Transaction Documents, together with the
Exhibits, Appendix
A and Appendix
B, and Schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements,
understandings, discussions and representations, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.

       

      6.3           Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via (i) facsimile (provided the sender receives a
machine-generated confirmation of successful transmission) at the facsimile
number specified in this Section or (ii) electronic mail (i.e., Email) prior to
6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after
the date of transmission, if such notice or communication is delivered via (i)
facsimile at the facsimile number specified in this Section or (ii) electronic
mail (i.e., Email) on a day that is not a Trading Day or later than 6:30 p.m.
(New York City time) on any Trading Day, (c) the Trading Day following the date
of mailing, if sent by U.S. nationally recognized overnight courier service, or
(d) upon actual receipt by the party to whom such notice is required to be
given, if sent by any means other than facsimile or Email
transmission.  The address for such notices and communications shall
be as follows:

       

      
        
          
            	
                    If
      to the Company:

                  	
                    600
      Townsend Street

                    San
      Francisco, CA 94103

                    Facsimile:  (415)
      848-8803

                    Email:
      bernard@getfugu.com

                    Attn.:  Chief
      Executive Officer

                  
	 
      	 
      
	
                    With
      a copy to:

                  	
                    Reed
      Smith LLP

                    355
      Grand Avenue, Suite 2900

                    Los
      Angeles, CA 90071

                    Attention:
      Allen Z. Sussman, Esq.

                    Facsimile:
      (213) 457-8080

                    Email:
      asussman@reedsmith.com

                  
	 
      	 
      
	
                    If
      to an Investor:

                  	
                    To
      the address set forth under such Investor’s name on the signature pages
      hereof;

                  
	
                    With
      a copy to:

                  	
                    Sichenzia
      Ross Friedman Ference LLP

                    61
      Broadway, 32nd
      Floor

                    New
      York, NY 10006

                    Attention:
      Marc Ross, Esq.

                    Facsimile:
      (212) 930-9725

                  

          

        

      

       

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

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

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

       

      6.5           Termination.  This
Agreement may be terminated prior to Closing:

       

      (a)           by
written agreement of the Investors and the Company; and

       

      (b)           by
the Company or an Investor (as to itself but no other Investor) upon written
notice to the other, if the Closing shall not have taken place by 6:30 p.m.
Eastern time on the Outside Date; provided, that the right to terminate this
Agreement under this Section 6.5(b)
shall not be available to any Person whose failure to comply with its
obligations under this Agreement has been the cause of or resulted in the
failure of the Closing to occur on or before such time.

       

      In the
event of a termination pursuant to Section 6.5(a) or
6.5(b), each Investor shall have the right to a return of up to its
entire Investment Amount, without interest or deduction.  The Company
covenants and agrees to cooperate with such Investor in obtaining the return of
its Investment Amount.

       

      In the
event of a termination pursuant to this Section 6.5, the
Company shall promptly notify all non-terminating Investors. Upon a termination
in accordance with this Section 6.5, the
Company and the terminating Investor(s) shall not have any further obligation or
liability (including as arising from such termination) to the other and no
Investor will have any liability to any other Investor under the Transaction
Documents as a result therefrom.

       

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

      
        
           

        

        
          26

          
            

          

        

        
           

        

      

       

      6.7           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the
Investors.  Any Investor may assign any or all of its rights under
this Agreement to any Person to whom such Investor assigns or transfers any
Shares, provided such transferee agrees in writing to be bound, with respect to
the transferred Shares, by the provisions hereof that apply to the
“Investors.”

       

      6.8           No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.7 (as
to each Investor Party and Company Party).

       

      6.9           Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law
thereof.  Each party agrees that all Proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective Affiliates, employees or agents) shall be
commenced exclusively in the New York Courts.  Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New York Courts
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of the any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any Proceeding, any claim that
it is not personally subject to the jurisdiction of any such New York Court, or
that such Proceeding has been commenced in an improper or inconvenient
forum.  Each party hereto hereby irrevocably waives personal service
of process and consents to process being served in any such Proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.  Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.  If either party
shall commence a Proceeding to enforce any provisions of a Transaction Document,
then the prevailing party in such Proceeding shall be reimbursed by the other
party for its reasonable attorneys’ fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such
Proceeding.

       

      6.10           Survival.  The
representations, warranties, agreements and covenants contained herein shall
survive the Closing and the delivery of the Shares.

       

      6.11           Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

      
        
           

        

        
          27

          
            

          

        

        
           

        

      

       

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

       

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

       

      6.14           Replacement of
Shares.  If any certificate or instrument evidencing any Shares
is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for and upon cancellation thereof, or in
lieu of and substitution therefor, a new certificate or instrument, but only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction and customary and reasonable indemnity, if
requested.  The applicants for a new certificate or instrument under
such circumstances shall also pay any reasonable third-party costs associated
with the issuance of such replacement Shares.  If a replacement
certificate or instrument evidencing any Shares is requested due to a mutilation
thereof, the Company may require delivery of such mutilated certificate or
instrument as a condition precedent to any issuance of a
replacement.

       

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

       

      6.16           Payment Set
Aside.  To the extent that the Company makes a payment or
payments to any Investor pursuant to any Transaction Document or an Investor
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

      
        
           

        

        
          28

          
            

          

        

        
           

        

      

       

      6.17           Independent Nature of
Investors’ Obligations and Rights.  The obligations of each
Investor under any Transaction Document are several and not joint with the
obligations of any other Investor, and no Investor shall be responsible in any
way for the performance of the obligations of any other Investor under any
Transaction Document.  The decision of each Investor to purchase
Shares pursuant to the Transaction Documents has been made by such Investor
independently of any other Investor.  Nothing contained herein or in
any Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction
Documents.  Each Investor acknowledges that no other Investor has
acted as agent for such Investor in connection with making its investment
hereunder and that no Investor will be acting as agent of such Investor in
connection with monitoring its investment in the Shares or enforcing its rights
under the Transaction Documents.  Each Investor shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Investor to be joined as an
additional party in any proceeding for such purpose.  The Company
acknowledges that each of the Investors has been provided with the same
Transaction Documents for the purpose of closing a transaction with multiple
Investors and not because it was required or requested to do so by any
Investor.

       

      6.18           Limitation of
Liability.  Notwithstanding anything herein to the contrary,
each party acknowledges and agrees that the liability of a party arising
directly or indirectly, under any Transaction Document of any and every nature
whatsoever shall be satisfied solely out of the assets of such party, and that
no trustee, officer, other investment vehicle or any other Affiliate of such
party or any investor, shareholder or holder of shares of beneficial interest of
such party shall be personally liable for any liabilities of such
party.

       

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          29

          
            

          

        

        
           

        

      

       

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

      

      
        
          
            
              
                
                  
                    	
                            GETFUGU,
      INC.

                          
	 	 
	
                            By:

                          	
                            /s/
      Bernard Stolar

                          
	
                            Name:
      

                          	Bernard
      Stolar
	
                            Title:

                          	
                            Chief
      Executive
Officer

                          

                  

                

              

            

          

        

      

       

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                            Appendix
      A

                          	
                            Schedule
      of Investors

                          
	
                            Appendix
      B

                          	
                            Disclosure
      Schedules

                          
	
                            Exhibit
      A

                          	
                            Form
      of Investor Warrant

                          
	
                            Exhibit
      B

                          	
                            Form
      of Registration Rights
AgreementUnassociated Document

    Exhibit 10.2

    REGISTRATION RIGHTS
AGREEMENT

    

    This
Registration Rights Agreement (this “Agreement”) is made and
entered into as of September 18, 2009, by and among GetFugu, Inc., a Nevada
corporation (the “Company”), and the investors
from time to time signatory hereto (each an “Investor” and collectively,
the “Investors”).

     

    This
Agreement is made in connection with the Securities Purchase Agreement, dated as
of the date hereof among the Company and the Investors (the “Purchase
Agreement”).

     

    The
Company and the Investors hereby agree as follows:

     

    1.           Definitions.  Capitalized
terms used and not otherwise defined herein that are defined in the Purchase
Agreement will have the meanings given such terms in the Purchase
Agreement.  As used in this Agreement, the following terms have the
respective meanings set forth in this Section 1:

     

    “Advice” has the meaning set
forth in Section 6(c).

     

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

     

    “Commission” means the
Securities and Exchange Commission.

     

    “Commission Comments” means
written comments pertaining solely to Rule 415 which are received by the
Company from the Commission to a filed Registration Statement, a copy of which
shall have been provided by the Company to the Holders, which either (i)
requires the Company to limit the number of Registrable Securities which may be
included therein to a number which is less than the number sought to be included
thereon as filed with the Commission or (ii) requires the Company to either
exclude Registrable Securities held by specified Holders or deem such Holders to
be underwriters with respect to Registrable Securities they seek to include in
such Registration Statement.

     

    “Cut Back Shares” has the
meaning set forth in Section 2(b).

     

    “Common Stock” shall mean the common
stock of the Company, par value $0.001 per share, and any securities into which
such common stock may hereafter be reclassified.

     

    “Effective Date” means, as to
a Registration Statement, the date on which such Registration Statement is first
declared effective by the Commission.

     

    “Effectiveness Date” means,
subject in each instance to Section 2(f):

     

    (a) with respect to the initial
Registration Statement required to be filed under Section 2(a), the earlier of
(i) the 90th day
following the Closing Date and (ii) the fifth Trading Day following the date on
which the Company is notified by the Commission that such initial Registration
Statement will not be reviewed or is no longer subject to further review and
comments;

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (b) with respect to any additional
Registration Statements that may be required pursuant to Section 2(b), the
earlier of (i) the 60th day
following (x) if such Registration Statement is required because the Commission
shall have notified the Company in writing that certain Registrable Securities
were not eligible for inclusion on a previously filed Registration Statement,
the date or time on which the Commission shall indicate as being the first date
or time that such Registrable Securities may then be included in a Registration
Statement, or (y) if such Registration Statement is required for a reason other
than as described in (x) above, the date on which the Company first knows, or
reasonably should have known, that such additional Registration Statement(s) is
required; provided, that, if
the Commission reviews and has written comments to a Registration Statement
filed under Section 2(b) that would require the filing of a pre-effective
amendment thereto with the Commission, then the Effectiveness Date under this
clause (b)(i) for such Registration Statement shall be the earlier of the
90th
day following the date that the Company first knows, or reasonably should have
known, that such additional Registration Statement is required under such
Section, and (ii) the fifth Trading Day following the date on which the Company
is notified by the Commission that such additional Registration Statement will
not be reviewed or is no longer subject to further review and comments;
and

     

    (c) with respect to a Registration
Statement required to be filed under Section 2(c), the earlier of: (c)(i) the
60th
day following the date on which the Company becomes eligible to utilize Form S-3
to register the resale of Common Stock; provided, that, if
the Commission reviews and has written comments to such filed Registration
Statement that would require the filing of a pre-effective amendment thereto
with the Commission, then the Effectiveness Date under this clause (c)(i) shall
be the earlier of the 90th day
following the date on which the Company becomes eligible to utilize Form S-3 to
register the resale of Common Stock, and (ii) the fifth Trading Day following
the date on which the Company is notified by the Commission that the initial
Registration Statement will not be reviewed or is no longer subject to further
review and comments.

     

    “Effectiveness Period” has the
meaning set forth in Section 2(a).

     

    “Exchange Act” means the
Securities Exchange Act of 1934, as amended.

     

    “Filing Date” means, subject
in each instance to Section 2(f), (a) with respect to the initial Registration
Statement required to be filed under Section 2(a), the 30th day
following the Closing Date; (b) with respect to any additional Registration
Statements that may be required pursuant to Section 2(b), the 30th day
following (x) if such Registration Statement is required because the Commission
shall have notified the Company in writing that certain Registrable Securities
were not eligible for inclusion on a previously filed Registration Statement,
the date or time on which the Commission shall indicate as being the first date
or time that such Registrable Securities may then be included in a Registration
Statement, or (y) if such Registration Statement is required for a reason other
than as described in (x) above, the date on which the Company first knows, or
reasonably should have known, that such additional Registration Statement(s) is
required, but in any event no earlier than the initial Filing Date; and (c) with
respect to a Registration Statement required to be filed under Section 2(c), the
30th
day following the date on which the Company becomes eligible to utilize Form S-3
to register the resale of Common Stock, but in any event no earlier than the
initial Filing Date.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Holder” or “Holders” means the holder or
holders, as the case may be, from time to time of Registrable
Securities.

     

    “Indemnified Party” has the
meaning set forth in Section 5(c).

     

    “Indemnifying Party” has the
meaning set forth in Section 5(c).

     

    “Losses” has the meaning set
forth in Section 5(a).

     

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

     

    “Person” means an individual
or corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.

     

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

     

    “Prospectus” means the
prospectus included in a Registration Statement (including, without limitation,
a prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Securities covered by a Registration Statement, and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

     

    “Registrable Securities”
means: (i) the Shares, (ii) any shares of Common Stock issuable upon the
exercise of warrants issued to the Investors (the “Warrant Shares”), (iii)
Additional Shares issued pursuant to Section 4.14 of the Securities Purchase
Agreement and (iv) any securities issued or issuable upon any stock split,
dividend or other distribution, recapitalization or similar event, or any price
adjustment with respect to any of the securities referenced in (i)
above.

     

    “Registration Statement” means
the initial registration statement required to be filed in accordance with
Section 2(a) and any additional registration statement(s) required to be filed
under Section 2(b) and 2(c), including (in each case) the Prospectus, amendments
and supplements to such registration statements or Prospectus, including pre-
and post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference
therein.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Rule 144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.

     

    “Rule 415” means Rule 415
promulgated by the Commission pursuant to the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.

     

    “Rule 424” means Rule 424
promulgated by the Commission pursuant to the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.

     

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

     

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

     

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

     

    2.           Registration.

     

    (a)           On
or prior to each Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the resale of all Registrable
Securities not already covered by an existing and effective Registration
Statement for an offering to be made on a continuous basis pursuant to Rule 415,
on Form S-1 or if eligible, Form S-3 (or on such other form appropriate for such
purpose), which Registration Statement will contemplate the ability of such
Holder to do an underwritten offering.  Such Registration Statement
shall contain (except if otherwise required pursuant to written comments
received from the Commission upon a review of such Registration Statement) the
“Plan of Distribution” attached hereto as Annex
A.  The Company shall use its reasonable best efforts to cause
such Registration Statement to be declared effective under the Securities Act as
soon as possible but, in any event, no later than its Effectiveness Date, and
shall use its reasonable best efforts to keep the Registration Statement
continuously effective under the Securities Act until the date which is the
earlier of (i) such time as all of the Registrable Securities covered by such
Registration Statement have been publicly sold by the Holders, or (ii) such time
as all of the Registrable Securities covered by such Registration Statement may
be sold by the Holders pursuant to Rule 144 as determined by the counsel to the
Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Company’s transfer agent and the affected Holders (the “Effectiveness
Period”).  By 5:00 p.m. (New York City time) on the Business
Day immediately following the Effective Date of each Registration Statement, the
Company shall file with the Commission in accordance with Rule 424 under the
Securities Act the final prospectus to be used in connection with sales pursuant
to such Registration Statement (whether or not such filing is technically
required under such Rule).  If for any reason other than due solely to
Commission restrictions, a Registration Statement is effective but not all
outstanding Registrable Securities are registered for resale pursuant thereto,
then the Company shall prepare and file by the applicable Filing Date an
additional Registration Statement to register the resale of all such
unregistered Registrable Securities for an offering to be made on a continuous
basis pursuant to Rule 415.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (b)           Notwithstanding
anything to the contrary contained in this Section 2, if the Company receives
Commission Comments, and following discussions with and responses to the
Commission in which the Company uses its reasonable best efforts and time to
cause as many Registrable Securities for as many Holders as possible to be
included in the Registration Statement filed pursuant to Section 2(a) without
characterizing any Holder as an underwriter unless such characterization is
consistent with written information provided by the Holder or the in the Selling
Holder Questionnaire (and in such regard uses its reasonable best efforts to
cause the Commission to permit the affected Holders or their respective counsel
to participate in Commission conversations on such issue together with Company
Counsel, and timely conveys relevant information concerning such issue with the
affected Holders or their respective counsel), the Company is unable to cause
the inclusion of all Registrable Securities, then the Company may, following not
less than three (3) Trading Days prior written notice to the Holders (i) remove
from the Registration Statement such Registrable Securities (the “Cut Back Shares”) and/or (ii)
agree to such restrictions and limitations on the registration and resale of the
Registrable Securities, in each case as the Commission may require in order for
the Commission to allow such Registration Statement to become effective; provided, that in no
event may the Company characterize any Holder as an underwriter unless such
characterization is required by the Commission or consented to by such Holder,
or the Holder has identified itself as an underwriter in the Selling Holder
Questionnaire (collectively, the “SEC Restrictions”). Unless the
SEC Restrictions otherwise require, any cut-back imposed pursuant to this
Section 2(b) shall be determined in the following order: (A) with respect to the
Registrable Securities, any cut-back imposed pursuant to this Section 2(b) shall
be as follows: (i) first, the Warrant Shares shall be cut-back on a pro rata
basis among the Holders, and (ii) second, the Shares shall be cut-back on a pro
rata basis among the Holders.  Each such additional Registration
Statement shall contain (except if otherwise required pursuant to written
comments received from the Commission upon a review of such additional
Registration Statement) the “Plan of Distribution” attached hereto as Annex
A.  The Company shall use its reasonable best efforts to cause
each such additional Registration Statement to be declared effective under the
Securities Act as soon as possible but, in any event, by its Effectiveness Date,
and shall use its reasonable best efforts to keep such additional Registration
Statement continuously effective under the Securities Act during the entire
Effectiveness Period.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (c)           Promptly
following any date on which the Company becomes eligible to use a registration
statement on Form S-3 to register the Registrable Securities for resale, the
Company shall file a registration statement on Form S-3 covering the Registrable
Securities (or a post-effective amendment on Form S-3 to the then effective
Registration Statement) and shall use its reasonable best efforts to cause
such Registration Statement to be declared effective as soon as possible
thereafter, but in any event prior to the Effectiveness Date therefor. Such
Registration Statement shall contain (except if otherwise required pursuant to
written comments received from the Commission upon a review of such Registration
Statement) the “Plan of Distribution” attached hereto as Annex
A.  The Company shall use its reasonable best efforts to cause
such Registration Statement to be declared effective under the Securities Act as
soon as possible but, in any event, by its Effectiveness Date, and shall use its
reasonable best efforts to keep such additional Registration Statement
continuously effective under the Securities Act during the entire Effectiveness
Period.

     

    (d)           Each
Holder agrees to furnish to the Company a completed Questionnaire in the form
attached to this Agreement as Annex B (a “Selling Holder
Questionnaire”).  The Company shall not be required to include
the Registrable Securities of a Holder in a Registration Statement who fails to
furnish to the Company a fully completed Selling Holder Questionnaire at least
two Trading Days prior to the Filing Date (subject to the requirements set forth
in Section 3(a)).

     

    (e)           In
the event that the Investor wants to distribute the Shares to all of its
stockholders, the Company will on any occasion file a Registration Statement
covering such distribution.  The Company will use the same efforts
described in subsection 2(a) in connection with such Registration
Statement.

     

    (f)           If:
(i) a Registration Statement is not filed on or prior to its Filing Date
covering the Registrable Securities required under this Agreement to be included
therein (if the Company files a Registration Statement without affording the
Holders the opportunity to review and comment on the same as required by Section
3(a) hereof, the Company shall not be deemed to have satisfied this clause (i)),
or (ii) the Company does not respond as promptly as reasonably possible to, and
in no event later than 21 calendar days following receipt of, any comments
received from the Commission with respect to each Registration Statement and
prepare and file with the Commission such amendments, including pre-effective
amendments, to each Registration Statement and the Prospectus, or (iii) the
Company fails to file with the Commission a request for acceleration of a
Registration Statement in accordance with Rule 461 of the Securities Act within
10 Trading Days of the date that the Company is notified by the Commission that
such Registration Statement will not be “reviewed” or will not be subject to
further review, (iv) if, after the Effective Date of a Registration Statement,
such Registration Statement ceases to remain continuously effective as to all
Registrable Securities covered thereby or the Holders otherwise are not
permitted to utilize the Prospectus therein to resell such Registrable
Securities, for more than 10 consecutive calendar days or more than an aggregate
of 15 calendar days (which need not be consecutive calendar days) during any
12-month period, (v) the Effectiveness Date for the Registration Statement
required to be filed under Section 2(a) above shall occur later than the date
that is 90 days after the Filing Date, or (vi) the Company shall fail for any
reason to satisfy the current public information requirement under Rule 144 as
to the applicable Registrable Securities at a time when there is no effective
Registration Statement (any such failure or breach being referred to as an
“Event,” and for
purposes of  clauses (i) - (vi), the date on which such Event occurs,
being referred to as “Event
Date”), then in addition to any other rights the Holders may have
hereunder or under applicable law, on each such Event Date and on each monthly
anniversary of each such Event Date (if the applicable Event shall not have been
cured by such date) until the applicable Event is cured, the Company shall pay
to each Holder an amount in cash per month, as partial liquidated damages and
not as a penalty, equal to Twenty Thousand ($20,000) Dollars (provided that such
liquidated damages will decrease by 50% if the number of unregistered
Registrable Securities is no more than 100,000 Shares) .  The parties
agree that in no event will the Company be liable for liquidated damages under
this Agreement in excess of $20,000 in any 30 day period payable under this
Section 2(f).  The partial liquidated damages pursuant to the terms
hereof shall apply on a daily pro-rata basis for any portion of a month prior to
the cure of an Event (except in the case of the first Event Date), and shall
cease to accrue (unless earlier cured) upon the expiration of the Effectiveness
Period.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    3.           Registration
Procedures.

     

    In
connection with the Company’s registration obligations hereunder, the Company
shall:

     

    (a)           Not
less than four Trading Days prior to the filing of a Registration Statement or
any related Prospectus or any amendment or supplement thereto, the Company shall
furnish to each Holder copies of the “Selling Stockholders” section of such
document, the “Plan of Distribution” and any risk factor contained in such
document that addresses specifically this transaction or the Selling
Stockholders, as proposed to be filed which documents will be subject to the
review of such Holder.  The Company shall not file a Registration
Statement, any Prospectus or any amendments or supplements thereto in which the
“Selling Stockholder” section thereof differs from the disclosure received from
a Holder in its Selling Holder Questionnaire (as amended or
supplemented).  The Company shall not file a Registration Statement,
any Prospectus or any amendments or supplements thereto in which it (i)
characterizes any Holder as an underwriter, (ii) excludes a particular
Holder due to such Holder refusing to be named as an underwriter (except as
otherwise permitted in Section 2(b)), or (iii) reduces the number of
Registrable Securities being registered on behalf of a Holder except pursuant
to, in the case of subsection (iii), comments received from the Commission,
without, in each case, such Holder’s express written authorization.

     

    (b)           (i)  Prepare
and file with the Commission such amendments, including post-effective
amendments, to each Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement continuously
effective as to the applicable Registrable Securities for its Effectiveness
Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of the
Registrable Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so supplemented or
amended to be filed pursuant to Rule 424; (iii) respond as promptly as
reasonably possible to any comments received from the Commission with respect to
each Registration Statement or any amendment thereto and, as promptly as
reasonably possible provide the Holders true and complete copies of all
correspondence from and to the Commission relating to such Registration
Statement that would not result in the disclosure to the Holders of material and
non-public information concerning the Company; and (iv) comply in all material
respects with the provisions of the Securities Act and the Exchange Act with
respect to the Registration Statements and the disposition of all Registrable
Securities covered by each Registration Statement.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (c)           Notify
the Holders as promptly as reasonably possible (and, in the case of (i)(A)
below, not less than three Trading Days prior to such filing and, in the case of
(v) below, not less than three Trading Days prior to the financial statements in
any Registration Statement becoming ineligible for inclusion therein) and (if
requested by any such Person) confirm such notice in writing no later than one
Trading Day following the day (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to a Registration Statement is proposed
to be filed; (B) when the Commission notifies the Company whether there will be
a “review” of such Registration Statement and whenever the Commission comments
in writing on such Registration Statement (the Company shall provide true and
complete copies thereof and all written responses thereto to each of the Holders
that pertain to the Holders as a Selling Stockholder or to the Plan of
Distribution, but not information which the Company believes would constitute
material and non-public information); and (C) with respect to each Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the Commission or any other federal or state governmental
authority for amendments or supplements to a Registration Statement or
Prospectus or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of a Registration
Statement covering any or all of the Registrable Securities or the initiation of
any Proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.

     

    (d)           Use
its reasonable best efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of a Registration
Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.

     

    (e)           Furnish
to each Holder, without charge, at least one conformed copy of each Registration
Statement and each amendment thereto and all exhibits to the extent requested by
such Person (including those previously furnished) promptly after the filing of
such documents with the Commission.

     

    (f)           Promptly
deliver to each Holder, without charge, as many copies of each Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request.  The
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (g)           Prior
to any public offering of Registrable Securities, register or qualify such
Registrable Securities for offer and sale under the securities or “Blue Sky”
laws of all jurisdictions within the United States, to keep each such
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statements.

     

    (h)           Cooperate
with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee
pursuant to the Registration Statements, which certificates shall be free, to
the extent permitted by the Purchase Agreement, of all restrictive legends, and
to enable such Registrable Securities to be in such denominations and registered
in such names as any such Holders may request.

     

    (i)           Upon
the occurrence of any event contemplated by Section 3(c)(v), as promptly as
reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the affected Registration Statements or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, no Registration Statement nor any Prospectus will
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.

     

    (j)           Make
available to any underwriter participating in such offering and the
representatives of any underwriter (but not more than one firm of counsel to
such Holders), all financial and other information as shall be reasonably
requested by them, and provide the underwriter and the representatives of such
underwriter the opportunity to discuss the business affairs of the Company with
its principal executives and independent public accountants who have certified
the audited financial statements included in such Registration Statement, in
each case all as reasonably necessary to enable them to exercise their due
diligence responsibility under the Securities Act; provided, however, that
information that the Company determines, in good faith, to be confidential and
which the Company advises such Person in writing is confidential shall not be
disclosed unless such Person signs a confidentiality agreement reasonably
satisfactory to the Company.

     

    (k)           In
the event of any underwritten or agented offering, select an underwriter
reasonably acceptable to Holders of a majority in interest of the Regsitrable
Securities, enter into and perform its obligations under an underwriting
agreement, in customary and usual form, with the managing underwriter of such
underwritten offering, including, without limitation, to obtain a so-called
“comfort letter” from the Company’s independent public accountants, and legal
opinions of counsel to the Company addressed to the underwriter participating in
such offering, in customary form and covering such matters of the type
customarily covered by such letters, and in a form that shall be reasonably
satisfactory to the underwriters.  Delivery of any such opinion or
comfort letter shall be subject to the recipient furnishing such written
representations or acknowledgements as are required or customarily provided by
selling shareholders who receive such comfort letters or opinions.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (l)           Otherwise
use its reasonable efforts to comply with all applicable rules and regulations
of the Commission, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at least
twelve months, beginning with the first fiscal quarter beginning after the
effective date of the Registration Statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act;

     

    (m)           Use
its reasonable efforts to list such Registrable Securities on any securities
exchange or interdealer quotation system on which the Common Stock is then
listed, if the listing or quotation of such Registrable Securities is then
permitted under the rules of such exchange or interdealer quotation
system;

     

    (n)           Upon
the request of the Holders, take any and all other actions which may be
reasonably necessary to complete the registration and thereafter to complete the
distribution of the Registrable Securities so registered.

     

    4.           Registration
Expenses.  All fees and expenses incident to the performance of
or compliance with this Agreement by the Company shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to a Registration
Statement.  The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with any Trading Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or
“Blue Sky” laws), (ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities and of printing
prospectuses if the printing of prospectuses is reasonably requested by the
holders of a majority of the Registrable Securities included in the Registration
Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company, (v) Securities Act liability
insurance, if the Company so desires such insurance, and (vi) fees and expenses
of all other Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement.  In addition, the
Company shall be responsible for all of its internal expenses incurred in
connection with the consummation of the transactions contemplated by this
Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder.  The Company shall not be responsible for the payment of
underwriting discounts or similar fees, discounts or commissions.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    5.           Indemnification.

     

    (a)           Indemnification by the
Company.  The Company shall, notwithstanding any termination of
this Agreement, indemnify and hold harmless each Holder, the officers,
directors, agents, investment advisors, partners, members and employees of each
of them, each Person who controls any such Holder (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, agents and employees of each such controlling Person, to the fullest
extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable costs of
preparation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred,
arising out of or relating to any violation by the Company of the Securities
Act, Exchange Act, or any state securities law or any rule or regulation
thereunder in connection with the performance of its obligations to register
securities under this Agreement, or any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, any Prospectus or any
form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (1) such
untrue statements or omissions are based solely upon information regarding such
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder’s proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in
the Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto (it being understood that the Holder has
approved Annex
A hereto for this purpose) or (2) in the case of an occurrence of an
event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of
an outdated or defective Prospectus after the Company has notified such Holder
in writing that the Prospectus is outdated or defective and prior to the receipt
by such Holder of an Advice or an amended or supplemented Prospectus, but only
if and to the extent that following the receipt of the Advice or the amended or
supplemented Prospectus the misstatement or omission giving rise to such Loss
would have been corrected.  The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceeding of which the
Company is aware in connection with the transactions contemplated by this
Agreement.

     

    (b)           Indemnification by
Holders. Each Holder shall, severally and not jointly, indemnify and hold
harmless the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses, as incurred, arising solely out of
or based solely upon: (x) such Holder’s failure to comply with the prospectus
delivery requirements of the Securities Act (without regard to the content of
such prospectus) after receiving written notice from the Company that Rule 172
of the Securities Act may not be relied upon or (y) any untrue statement of a
material fact contained in any Registration Statement, any Prospectus, or any
form of prospectus, or in any amendment or supplement thereto, or arising solely
out of or based solely upon any omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading to the
extent, but only to the extent that, (1) such untrue statements or omissions are
based solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement (it
being understood that the Holder has approved Annex A hereto for
this purpose), such Prospectus or such form of Prospectus or in any amendment or
supplement thereto or (2) in the case of an occurrence of an event of the type
specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or
defective Prospectus after the Company has notified such Holder in writing that
the Prospectus is outdated or  defective and prior to the receipt by
such Holder of an Advice or an amended or supplemented Prospectus, but only if
and to the extent that following the receipt of the Advice or the amended or
supplemented Prospectus the misstatement or omission giving rise to such Loss
would have been corrected.  In no event shall the liability of any
selling Holder hereunder be greater in amount than the dollar amount of the net
proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (c)           Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted against any
Person entitled to indemnity hereunder (an “Indemnified Party”), such
Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying
Party”) in writing, and the Indemnifying Party shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have proximately and materially adversely prejudiced the
Indemnifying Party.

     

    An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless:  (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party).  The Indemnifying Party shall not be liable
for any settlement of any such Proceeding effected without its written consent,
which consent shall not be unreasonably withheld.  No Indemnifying
Party shall, without the prior written consent of the Indemnified Party, effect
any settlement of any pending Proceeding in respect of which any Indemnified
Party is a party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter
of such Proceeding.

     

    All fees
and expenses of the Indemnified Party (including reasonable fees and expenses to
the extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten Trading Days of written notice
thereof to the Indemnifying Party (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the Indemnifying Party may require such Indemnified
Party to undertake to reimburse all such fees and expenses to the extent it is
finally judicially determined that such Indemnified Party is not entitled to
indemnification hereunder).

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (d)           Contribution.  If
a claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations.  The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission.  The amount paid or payable by a party
as a result of any Losses shall be deemed to include, subject to the limitations
set forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.

     

    The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding
paragraph.  Notwithstanding the provisions of this Section 5(d), no
Holder shall be required to contribute, in the aggregate, any amount in excess
of the amount by which the net proceeds actually received by such Holder from
the sale of the Registrable Securities subject to the Proceeding exceeds the
amount of any damages that such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission.

     

    The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties and are not in diminution or limitation of the indemnification
provisions under the Purchase Agreement.

     

    6.           Miscellaneous.

     

    (a)           Remedies.  In
the event of a breach by the Company or by a Holder, of any of their obligations
under this Agreement, each Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under this
Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement.  The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

     

    (b)           Compliance.  Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (c)           Discontinued
Disposition.  Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(c), such Holder will
forthwith discontinue disposition of such Registrable Securities under the
Registration Statement until such Holder’s receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the “Advice”) by the Company that
the use of the applicable Prospectus may be resumed, and, in either case, has
received copies of any additional or supplemental filings that are incorporated
or deemed to be incorporated by reference in such Prospectus or Registration
Statement.  The Company may provide appropriate stop orders to enforce
the provisions of this paragraph.

     

    (d)           Piggy-Back
Registrations.  If at any time during the Effectiveness
Period  there is not an effective Registration Statement covering all
of the Registrable Securities and the Company shall determine to prepare and
file with the Commission a registration statement relating to an offering for
its own account or the account of others under the Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated under
the Securities Act) or their then equivalents relating to equity securities to
be issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Holder written notice of such
determination and, if within fifteen days after receipt of such notice, any such
Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
holder requests to be registered, subject to customary underwriter cutbacks
applicable to all holders of registration rights.

     

    (e)           Amendments and
Waivers.  The provisions of this Agreement, including the
provisions of this Section 6(e), may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the Company and the
Holders of no less than a majority in interest of the then outstanding
Registrable Securities.  Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of certain Holders and that does not directly
or indirectly affect the rights of other Holders may be given by Holders of at
least a majority of the Registrable Securities to which such waiver or consent
relates.

     

    (f)           Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile (provided the sender receives a
machine-generated confirmation of successful transmission) at the facsimile
number specified in this Section prior to 6:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in this Section on a day that is not a Trading Day or later than 6:30
p.m. (New York City time) on any Trading Day, (c) the Trading Day following the
date of mailing, if sent by U.S. nationally recognized overnight courier
service, or (d) upon actual receipt by the party to whom such notice is required
to be given.  The address for such notices and communications shall be
as follows:

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              If
      to the Company:

            	
              GetFugu,
      Inc.

            

    

    
      	
            	
               
      

            	
              600
      Townsend Street

            

    

    
      	
            	
               
      

            	
              San
      Francisco, CA 94103

            

    

    
      	
            	
               
      

            	
              Facsimile:  (415)
      _____-_______

            

    

    
      	
            	
               
      

            	
              Attention:  Chief
      Executive Officer

            

    

     

    
      	
               
      

            	
              With
      a copy to:

            	
              Reed
      Smith LLP

            

    

    355 Grand Avenue, Suite
2900

    Los
Angeles, CA 90071

    Attention:
Allen Z. Sussman, Esq.

    Facsimile:  (213)
457-8080

    

    
      	
               
      

            	
              If
      to a Investor:

            	
              To
      the address set forth under such Holder’s name on the signature pages
      hereto.

            

    

     

    
      	
               
      

            	
              With
      a copy to:

            	
              Sichenzia
      Ross Friedman Ference LLP

            

    

    
      	
               
      

            	
              61
      Broadway, 32nd
      Floor

            

    

    
      	
               
      

            	
              New
      York, NY 10006

            

    

    
      	
               
      

            	
              Attention:
      Marc Ross, Esq.

            

    

    
      	
               
      

            	
              Facsimile:
      (212) 920-9725

            

    

    
      	
               
      

            	
              Email:
      mross@srff.com

            

    

    

    
      
        	
                 
      

              	
                If
      to any other Person who is then the registered
  Holder:

              

      

    

     

    
      	
               
      

            	
              To
      the address of such Holder as it appears in the stock transfer books of
      the Company

            

    

     

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

     

    (g)           Successors and
Assigns.  This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Holder.  The Company may not assign
its rights or obligations hereunder without the prior written consent of each
Holder.  Each Holder may assign their respective rights hereunder in
the manner and to the Persons as permitted under the Purchase
Agreement.

     

    (h)           Execution and
Counterparts.  This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same
Agreement.  In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (i)           Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Nevada, without regard to the principles of conflicts of law
thereof.  Each party agrees that all Proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement (whether brought against a party hereto or its respective
Affiliates, employees or agents) will be commenced in the New York
Courts.  Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any Proceeding, any claim that it is not personally subject to the jurisdiction
of any New York Court, or that such Proceeding has been commenced in an improper
or inconvenient forum.  Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such
Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.  Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any Proceeding arising out of or
relating to this Agreement or the transactions contemplated
hereby.  If either party shall commence a Proceeding to enforce any
provisions of this Agreement, then the prevailing party in such Proceeding shall
be reimbursed by the other party for its attorney’s fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
Proceeding.

     

    (j)           Cumulative
Remedies.  The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

     

    (k)           Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their reasonable efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction.  It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.

     

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

     

    (m)         Independent Nature of
Investors’ Obligations and Rights.  The obligations of each
Investor under this Agreement are several and not joint with the obligations of
each other Investor, and no Investor shall be responsible in any way for the
performance of the obligations of any other Investor under this
Agreement.  Nothing contained herein or in any Transaction Document,
and no action taken by any Investor pursuant thereto, shall be deemed to
constitute the Investors as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Investors are in any
way acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement or any other Transaction
Document.  Each Investor acknowledges that no other Investor will be
acting as agent of such Investor in enforcing its rights under this
Agreement.  Each Investor shall be entitled to independently protect
and enforce its rights, including without limitation the rights arising out of
this Agreement, and it shall not be necessary for any other Investor to be
joined as an additional party in any Proceeding for such purpose.  The
Company acknowledges that each of the Investors has been provided with the same
Registration Rights Agreement for the purpose of closing a transaction with
multiple Investors and not because it was required or requested to do so by any
Investor.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (n)           Rights of
Holders. Each Holder shall have the
absolute right to exercise or refrain from exercising any right or rights which
such Holder may have by reason of this Agreement or any Registrable Security,
including, without limitation, the right to consent to the waiver of any
obligation of the Company under this Agreement and to enter into an agreement
with the Company for the purpose of modifying this Agreement or any agreement
effecting any such modification, and such Holder shall not incur any liability
to any other Holder with respect to exercising or refraining from exercising any
such right or rights.

     

    (o)           Rule 144. To the extent that the Company is subject to the
filing and reporting requirements of the Securities Act and the Exchange Act,
and so long as there are Registrable Securities outstanding, the Company will
file the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the Commission thereunder,
make and keep public information available, as those terms are understood and
defined in Rule 144 under the Securities Act, and will take such further action
as any Holder may reasonably request, all to the extent required from time to
time to enable such Holder to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by (i)
Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or (ii) any similar rule or regulation hereafter adopted by the
Commission. Upon the request of any Holder, the Company will deliver to such
Holder a written statement as to whether it has complied with such information
and requirements and with a copy of the most recent annual or quarterly report
of the Company, and such other reports and documents of the Company as a Holder
may reasonably request in availing itself of any rule or regulation of the
Commission allowing a Holder to sell any such securities without
registration.

     

    (p)           Enforcement
Costs. In the event of any dispute
hereunder proceeding to litigation, the prevailing party shall be entitled to
recover from the other party, all costs and expenses incurred, including
attorneys’ fees.

     

    (q)           Subsequent
Closings.  One or more Investors
may become party to this agreement after the Closing Date and have all of the
rights and obligations hereunder by executing a signature page hereto; provided,
however, that the ascension of additional Investors to this Agreement shall not
alter the definition of Closing Date.

     

    [REMAINDER
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    IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as
of the date first written above.

    

    
      
        
          	 
      	
                  GETFUGU,
      INC.

                
	 
      	 
      	 
      
	 
      	
                  By:

                	
                  /s/
      Bernard Stolar

                
	 
      	 
      	
                  Name:
      Bernard Stolar

                
	 
      	 
      	
                  Title: 
       Chief Executive
Officer

                

        

      

    

     

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    Annex A

    Plan
of Distribution

     

    The
Selling Stockholders and any of their pledgees, donees, transferees, assignees
and successors-in-interest may, from time to time, sell any or all of their
shares of Common Stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions.  These sales
may be at fixed or negotiated prices.  The Selling Stockholders may
use any one or more of the following methods when selling shares:

     

    
      	
               
      

            	
              ·

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

            

    

     

    
      	
               
      

            	
              ·

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

            

    

     

    
      	
               
      

            	
              ·

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

            

    

     

    
      	
               
      

            	
              ·

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

            

    

     

    
      	
               
      

            	
              ·

            	
              an
      underwritten offering;

            

    

     

    
      	
               
      

            	
              ·

            	
              privately
      negotiated transactions;

            

    

     

    
      	
               
      

            	
              ·

            	
              to
      cover short sales made after the date that this Registration Statement is
      declared effective by the
Commission;

            

    

     

    
      	
               
      

            	
              ·

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

            

    

     

    
      	
               
      

            	
              ·

            	
              a
      combination of any such methods of sale;
and

            

    

     

    
      	
               
      

            	
              ·

            	
              any
      other method permitted pursuant to applicable
  law.

            

    

     

    The
Selling Stockholders may also sell shares under Rule 144 under the Securities
Act, if available, rather than under this prospectus.

     

    Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales.  Broker-dealers may receive commissions or
discounts from the Selling Stockholders (or, if any broker-dealer acts as agent
for the purchaser of shares, from the purchaser) in amounts to be
negotiated.  The Selling Stockholders do not expect these commissions
and discounts to exceed what is customary in the types of transactions
involved.

     

    The
Selling Stockholders may from time to time pledge or grant a security interest
in some or all of the shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell shares of Common Stock from time to time under this prospectus,
or under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933 amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    In
connection with the sale of the common stock or interests therein, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume.  The Selling
Stockholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities.  The
Selling Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).

     

    Upon the
Company being notified in writing by a Selling Stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of Common
Stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such Selling Stockholder and of
the participating broker-dealer(s), (ii) the number of shares involved, (iii)
the price at which such the shares of Common Stock were sold, (iv)the
commissions paid or discounts or concessions allowed to such broker-dealer(s),
where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference in
this prospectus, and (vi) other facts material to the transaction.  In
addition, upon the Company being notified in writing by a Selling Stockholder
that a donee or pledgee intends to sell more than 500 shares of Common Stock, a
supplement to this prospectus will be filed if then required in accordance with
applicable securities law.

     

    The
Selling Stockholders also may transfer the shares of Common Stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this
prospectus.

     

    The
Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales.  In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.  Discounts,
concessions, commissions and similar selling expenses, if any, that can be
attributed to the sale of Securities will be paid by the Selling Stockholder
and/or the purchasers.  Each Selling Stockholder has represented and
warranted to the Company that it acquired the securities subject to this
registration statement in the ordinary course of such Selling Stockholder’s
business and, at the time of its purchase of such securities such Selling
Stockholder had no agreements or understandings, directly or indirectly, with
any person to distribute any such securities.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    The
Company has advised each Selling Stockholder that it may not use shares
registered on this Registration Statement to cover short sales of Common Stock
made prior to the date on which this Registration Statement shall have been
declared effective by the Commission.  If a Selling Stockholder uses
this prospectus for any sale of the Common Stock, it will be subject to the
prospectus delivery requirements of the Securities Act.  The Selling
Stockholders will be responsible to comply with the applicable provisions of the
Securities Act and Exchange Act, and the rules and regulations thereunder
promulgated, including, without limitation, Regulation M, as applicable to such
Selling Stockholders in connection with resales of their respective shares under
this Registration Statement.

     

    The
Company is required to pay all fees and expenses incident to the registration of
the shares, but the Company will not receive any proceeds from the sale of the
Common Stock.  The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    Annex B

     

    GETFUGU,
INC.

     

    Selling
Securityholder Notice and Questionnaire

     

    The
undersigned beneficial owner of common stock (the “Common Stock”), of GETFUGU, INC. (the “Company”) understands that
the Company has filed or intends to file with the Securities and Exchange
Commission (the “Commission”) a Registration
Statement for the registration and resale of the Registrable Securities, in
accordance with the terms of the Registration Rights Agreement, dated as of
September 11, 2009 (the “Registration Rights
Agreement”), among the Company and the Investors named
therein.  A copy of the Registration Rights Agreement is available
from the Company upon request at the address set forth below.  All
capitalized terms used and not otherwise defined herein shall have the meanings
ascribed thereto in the Registration Rights Agreement.

     

    The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:

     

    QUESTIONNAIRE

     

    
      
        	
                1.

              	
                Name.

              

      

    

     

    
      	
               
      

            	
              (a)

            	
              Full
      Legal Name of Selling
Securityholder

            

    

    
      
        	
                 

              	
                 

              

      

    

    
      
        
           

        

      

    

    
      	
               
      

            	
              (b)

            	
              Full
      Legal Name of Registered Holder (if not the same as (a) above) through
      which Registrable Securities Listed in Item 3 below are
    held:

            

    

    
      
        
          
            	
                     

                  	
                     

                  

          

        

      

       

    

    
      	
               
      

            	
              (c)

            	
              Full
      Legal Name of Natural Control Person (which means a natural person who
      directly or indirectly alone or with others has power to vote or dispose
      of the securities covered by the
questionnaire):

            

    

    
      
        
          
            	
                     

                  	
                     

                  

          

        

      

       

      2.  Address
for Notices to Selling Securityholder:

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        	 
      
	 
      
	 
      

                      

                    

                    
                      
                        
                          
                            
                              	
                                       
      Telephone:

                                    	 
      

                            

                          

                        

                      

                       

                      
                        
                          
                          

                        

                        
                          22

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      
                        
                          
                            	
                                    Fax:

                                  	 
      

                          

                        

                      

                      
                        
                          
                            	
                                    Contact
      Person:

                                  	 
      

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      3.  Beneficial
Ownership of Registrable Securities:

    

     

    
      	
               
      

            	
              Type
      and Principal Amount of Registrable Securities beneficially
      owned:

            

    

    
      
        
          
            
              
                	
                         

                      	
                         

                      
	 	   
	 	  

              

            

          

           

        

      

    

    
      4.  Broker-Dealer
Status:

    

     

    
      	
               
      

            	
              (a)

            	
              Are
      you a broker-dealer?

            

    

     

    Yes    ̈                      No    ̈

     

    
      	
            	
              Note:

            	
              If
      yes, the Commission’s staff has indicated that you should be identified as
      an underwriter in the Registration
Statement.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Are
      you an affiliate of a
broker-dealer?

            

    

     

    Yes    ̈                      No    ̈

     

    
      	
               
      

            	
              (c)

            	
              If
      you are an affiliate of a broker-dealer, do you certify that you bought
      the Registrable Securities in the ordinary course of business, and at the
      time of the purchase of the Registrable Securities to be resold, you had
      no agreements or understandings, directly or indirectly, with any person
      to distribute the Registrable
Securities?

            

    

     

    Yes    ̈                      No    ̈

     

    
      	
            	
              Note:

            	
              If
      no, the Commission’s staff has indicated that you should be identified as
      an underwriter in the Registration
Statement.

            

    

     

    
      5.  Beneficial
Ownership of Other Securities of the Company Owned by the Selling
Securityholder.

    

     

    Except
as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.

     

    
      	
               
      

            	
              Type
      and Amount of Other Securities beneficially owned by the Selling
      Securityholder:

            

    

    
      
        
          
            
              
                	
                         

                      	
                         

                      
	 	  
	 	  

              

            

          

        

      

       

      
        
          
            
            

          

          
            23

            
              

            

          

          
            
            

          

        

         

      

    

    
      6.  Relationships
with the Company:

    

     

    Except
as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any
other material relationship with the Company (or its predecessors or affiliates)
during the past three years.

     

    
      	
               
      

            	
              State
      any exceptions here:

            

    

    
      
        
          
            
              
                	
                          

                      	
                         

                      
	 	   

              

            

          

        

      

    

     

    The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
and prior to the Effective Date for the Registration Statement.

     

    By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related
prospectus.  The undersigned understands that such information will be
relied upon by the Company in connection with the preparation or amendment of
the Registration Statement and the related prospectus.

     

    IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
and Questionnaire to be executed and delivered either in person or by its duly
authorized agent.

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Dated:

                              	 
      	 	
                                Beneficial
      Owner:

                              	 
      
	 
      	 
      	 	 
      

                      

                    

                  

                

              

            

          

        

      

    

    
      
        
          	
                	 
      	 	
                  By:

                	 
      
	 
      	 
      	 	 
      	
                  Name:

                
	 
      	 
      	 	 
      	
                  Title:

                

        

      

    

     

    PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:

    

    Reed
Smith LLP

    355 South
Grand Ave., Suite 2900

    Los
Angeles, CA  90071

    Attention: Allen Z.
Sussman, Esq.

    Facsimile:  (213)
457-8080

     

    
      
        
        

      

      
        24

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