Document:

Exhibit
      4.1

    

    MODIGENE
      INC.

    

    CERTIFICATE
      OF DESIGNATION OF PREFERENCES, 

    RIGHTS
      AND LIMITATIONS

    OF

    SERIES
      A CONVERTIBLE PREFERRED STOCK

    

    PURSUANT
      TO SECTION 78.1955 OF CHAPTER 78 OF THE NEVADA REVISED STATUTES

    

    The
      undersigned, Shai Novik, does hereby certify that:

    

    1.
      He is
      the President of Modigene Inc., a Nevada corporation (the “Corporation”).

    

    2.
      The
      Corporation is authorized to issue ten million (10,000,000) shares of preferred
      stock, each having a par value of $0.00001, none of which have been
      issued.

    

    3.
      The
      following resolutions were duly adopted by the board of directors of the
      Corporation (the “Board
      of Directors”):

    

    WHEREAS,
      the amended and restated articles of incorporation of the Corporation provides
      for a class of its authorized stock known as preferred stock, comprised of
      ten
      million (10,000,000) shares, $0.00001 par value per share, issuable from time
      to
      time in one or more series;

    

    WHEREAS,
      the Board of Directors is authorized to fix the designation, powers, preferences
      and rights of the shares of any series of preferred stock, and to establish
      from
      time to time the number of shares constituting any such series; and

    

    WHEREAS,
      it is the desire of the Board of Directors, pursuant to its authority as
      aforesaid, to fix the designation, powers, preferences and rights and relative,
      participating, optional or other rights, preferences, restrictions and other
      matters relating to a series of the preferred stock, which shall consist of
      up
      to eight hundred thousand (800,000) shares of the preferred stock which the
      Corporation has the authority to issue, as follows:

    

    NOW,
      THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide
      for
      the issuance of a series of preferred stock for cash and does hereby fix and
      determine the designation, powers, preferences and rights and relative,
      participating optional or other rights, preferences, restrictions and other
      matters relating to such series of preferred stock as follows:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    TERMS
      OF PREFERRED STOCK

    

    Section
      1. Designation
      and Amount.
      Of the
      ten million (10,000,000) shares of preferred stock, par value $0.00001 per
      share, that the Corporation is authorized to issue under its amended and
      restated articles of incorporation (the “Articles
      of Incorporation”),
      eight
      hundred thousand (800,000) of such shares shall be designated as shares of
      Series A Preferred Stock of the Corporation (the “Series
      A Preferred Stock”),
      par
      value $0.00001 per share. Such shares of Series A Preferred Stock, together
      with
      the authorized shares of common stock of the Corporation, par value $0.00001
      per
      share (the “Common
      Stock”),
      the
      balance of the undesignated shares of preferred stock of the Corporation and
      any
      other common stock or preferred stock that may hereafter be authorized in or
      pursuant to the Articles of Incorporation of the Corporation, as amended, are
      sometimes hereinafter collectively referred to as the “capital
      stock.”

     

    Section
      2. Dividends.
      Dividends will be payable to the holders of record of the Series A Preferred
      Stock only if, when and as declared by the Board of Directors of the Corporation
      and, if declared, any such dividends will be non-cumulative. Such dividends,
      if
      any, will be paid out of, and to the extent of, any assets legally available
      therefor. If dividends are declared or paid on the Common Stock, a dividend,
      payable in the same consideration or manner, shall be simultaneously declared
      or
      paid, as the case may be, on each share of Series A Preferred Stock, with each
      share of Series A Preferred Stock participating in such dividend on an
      as-converted basis at the Basic Conversion Price. Whenever
      a dividend shall be payable in property other than cash, the value of such
      dividend shall be deemed to be the fair market value of such property as
      determined in good faith by the Board of Directors of the
      Corporation.

     

    Section
      3. Voting
      Rights; Restrictions.

     

    (a) Subject
      to the provisions of the Nevada Revised Statutes, on any matter presented to
      the
      stockholders of the Corporation for their action or consideration at any meeting
      of stockholders of the Corporation (or by written action of stockholders in
      lieu
      of meeting), each holder of outstanding shares of Series A Preferred Stock
      shall
      be entitled to vote with the holders of the Common Stock and any other class
      or
      series of preferred stock that, by its terms, votes on an as-if-converted basis
      with the holders of the Common Stock. Each holder of outstanding shares of
      Series A Preferred Stock shall be entitled to the number of votes equal to
      the
      number of whole shares of Common Stock into which the shares of Series A
      Preferred Stock held by such holder are convertible at the Basic Conversion
      Price as of the record date for determining stockholders entitled to vote on
      such matter.

     

    (b) Notwithstanding
      anything contained herein to the contrary, the holders of the Series A Preferred
      Stock shall vote as a separate class when required by law. In such
      circumstances, the affirmative vote of the holders of a majority (or such
      greater percentage as may be required by law or the Articles of Incorporation
      or
      by-laws) of the voting rights provided in this Section 3 for the Series A
      Preferred Stock, voting separately as a class, shall be necessary to approve
      such proposed action by the holders of Series A Preferred Stock.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
      4. Liquidation.

     

    (a) In
      the
      event of any liquidation, dissolution or winding up of the Corporation (each,
      a
“Liquidation”),
      whether voluntary or involuntary, the entire remaining assets and funds of
      the
      Corporation legally available for distribution, if any, shall be distributed
      pro rata
      among
      the holders of the Series A Preferred Stock (based upon the number of shares
      of
      Common Stock that such holders would have the right to acquire upon conversion
      of the Series A Preferred Stock at the Market Cap Conversion Price, assuming
      a
      Market Capitalization Contingency had occurred), the Common Stock and any other
      classes entitled to participate with Common Stock in proportion to the shares
      of
      Common Stock then held by them and the shares of Common Stock which they then
      have the right to acquire upon conversion of the capital stock held by them
      as
      of the date of such Liquidation.

     

    (b) Whenever
      the distribution provided for in this Section 4 is paid in securities or
      property other than cash, the value of such distribution shall be the fair
      market value of such securities or other property as determined in good faith
      by
      the Board of Directors of the Corporation.

     

    Section
      5. Conversion.
      The
      holders of Series A Preferred Stock shall have conversion rights as follows
      (the
“Conversion
      Rights”):

     

    (a) Right
      to Convert. Each
      holder of shares of Series A Preferred Stock shall be entitled, at the option
      of
      such holder, to convert all, but not less than all, of the shares of Series
      A
      Preferred Stock then held by such holder, at any time and from time to time
      beginning
      on March 1, 2009 and ending at 5:00 p.m., Eastern time, on March 25, 2012 (the
      “Conversion
      Deadline”),
      without the payment of any additional consideration,
      at the
      office of the Corporation or any transfer agent for such stock, into such number
      of fully
      paid and
      nonassessable shares of Common Stock as is determined in accordance with the
      terms of this Section 5. 

     

    (b) Automatic
      Conversion.
      If any
      holder of shares of Series A Preferred Stock has not exercised his, her or
      its
      right to convert the shares of Series A Preferred Stock
      then held by such holder on or prior to the Conversion Deadline, then at the
      Conversion Deadline all such shares of Series A Preferred Stock will
      automatically convert, without the payment of any additional consideration,
      into
      such number of fully
      paid and
      nonassessable shares of Common Stock as is determined in accordance with the
      terms of this Section 5.

     

    (c) Basic
      Conversion Price. Unless
      the Market Capitalization Contingency (as defined below) has occurred, the
      number of shares of Common Stock into which each outstanding share of Series
      A
      Preferred Stock is convertible shall be determined by dividing (x) 2.50, by
      (y)
      the Basic Conversion Price (as defined below) applicable to such share,
      determined as hereinafter provided, in effect on the date the certificate
      representing such share is surrendered for conversion. In the absence of a
      Market Capitalization Contingency, the price at which shares of Common Stock
      shall be deliverable upon conversion of shares of the Series A Preferred Stock
      (the “Basic
      Conversion Price”)
      shall
      initially be $2.50 per share of Common Stock. Such initial Basic Conversion
      Price shall be adjusted as hereinafter provided.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d) Market
      Cap Conversion Price.
      If a
      Market Capitalization Contingency has occurred, then from and after such Market
      Capitalization Contingency the number of shares of Common Stock into which
      the
      outstanding Series A Preferred Stock is convertible shall be determined by
      dividing (x) 2.50, by (y) the Market Cap Conversion Price (as defined below)
      applicable to such share, determined as hereinafter provided, in effect on
      the
      date the certificate representing such share is surrendered for conversion.
      In
      the event of a Market Capitalization Contingency, the price at which shares
      of
      Common Stock shall be deliverable upon conversion of shares of the Series A
      Preferred Stock (the “Market
      Cap Conversion Price”)
      shall
      initially be $0.50 per share of Common Stock. Such initial Market Cap Conversion
      Price shall be adjusted as hereinafter provided. A “Market
      Capitalization Contingency”
shall
      occur if the aggregate market value of the Common Stock, obtained by multiplying
      (a) the number of shares of Common Stock outstanding
      (on a
      fully-diluted basis, as follows: taking into account the shares of Common Stock
      issuable upon the exercise of all outstanding warrants and other convertible
      securities or instruments issued by the Corporation, but excluding all shares
      of
      capital stock issued, issuable or reserved for issuance pursuant to or under
      the
      Corporation’s 2005 Stock Incentive Plan and the Corporation’s 2007 Stock
      Incentive Plan and excluding the shares of Common Stock issuable upon conversion
      of the Series A Preferred Stock), by (b) the closing sale price of a share
      of
      Common Stock, as reported on the over-the-counter bulletin board, or, if the
      Common Stock has been admitted to trading on a nationally recognized stock
      exchange or market quotation system (including, without limitation, the American
      Stock Exchange), as reported on such exchange or market quotation system, shall,
      during any forty-five (45) trading days within any consecutive ninety (90)
      day
      period, equal or exceed one hundred fifty million dollars ($150,000,000.00).
      The
      Basic Conversion Price and the Market Cap Conversion Price may be referred
      to
      herein as the “Conversion
      Price.”

     

    (e) Mechanics
      of Conversion. Before
      any holder of Series A Preferred Stock shall be entitled to convert the same
      into shares of Common Stock, such holder shall surrender the certificate or
      certificates therefor, duly endorsed, at the office of the Corporation or any
      transfer agent of such stock, and shall give written notice to the Corporation
      at such office in the form attached as Annex
      A.
      The
      Corporation shall, as soon as practicable thereafter, issue and deliver at
      such
      office to such holder of Series A Preferred Stock, a certificate or certificates
      for the number of shares of Common Stock to which such holder shall be entitled
      as aforesaid. Such conversion shall be deemed to have been made immediately
      prior to the close of business on the date of surrender of the certificate
      or
      certificates representing the shares of Series A Preferred Stock to be
      converted, and the person or persons entitled to receive the shares of Common
      Stock issuable upon such conversion shall be treated for all purposes as the
      record holder or holders of such shares of Common Stock on such
      date.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (f) Adjustment
      for Stock Splits, Combinations and Distributions.
      In the
      event of the subdivision of the Common Stock (by forward stock split, stock
      dividend or other similar occurrence) into a greater number of shares of Common
      Stock, and no equivalent subdivision or increase is made with respect to the
      Series A Preferred Stock, the Conversion Price then in effect will be
      proportionately decreased. In the event of the combination (by reverse stock
      split or otherwise) or consolidation of the Common Stock of the Corporation
      into
      a lesser number of shares of Common Stock, and no equivalent combination or
      consolidation is made with respect to the Series A Preferred Stock, the
      Conversion Price then in effect will be proportionately increased. In the event
      of the issuance of rights or warrants to holders of Common Stock entitling
      them
      to subscribe for or purchase Common Stock, or the distribution of capital stock
      (other than shares of Common Stock) to holders of Common Stock, evidences of
      indebtedness of the Corporation, assets, rights or warrants to subscribe for
      or
      purchase any capital stock, the holders of Series A Preferred Stock will be
      entitled to receive, upon any conversion, the amount of the capital stock,
      assets, rights or warrants that they otherwise would have received had the
      Series A Preferred Stock been converted at the time of such issuance. Upon
      receipt of such issuance or distribution, no adjustment shall be made in the
      Conversion Price.

     

    (g) Automatic
      Conversion at Market Cap Conversion Price in the Event of Certain Mergers or
      Reorganizations, etc.
      If there
      shall occur any reorganization, recapitalization, consolidation, sale or merger
      involving the Corporation (i) that results in the stockholders of the
      Corporation immediately prior to such transaction owning less than 50% of the
      outstanding voting securities of the Corporation (or the surviving company
      in a
      merger) or (ii) in which transaction the Corporation is valued at at least
      one
      hundred fifty million dollars ($150,000,000.00) (in either case, a “Market
      Cap Transaction”)
      in
      which
      the Common Stock (but not the Series A Preferred Stock) is converted into or
      exchanged for capital stock, other securities or property with respect to or
      in
      exchange for shares of Common Stock, then, immediately prior to any such Market
      Cap Transaction, all outstanding shares of Series A Preferred Stock shall,
      without any further action by the Corporation or any holder of Series A
      Preferred Stock, automatically be converted into Common Stock at the
      then-applicable Market Cap Conversion Price, assuming a Market Capitalization
      Contingency had occurred, such that, upon the conversion or exchange of Common
      Stock in connection with such Market Cap Transaction, each holder of Series
      A
      Preferred Stock shall be entitled to receive the kind and number of shares
      of
      capital stock, other securities or property to which such holders of Series
      A
      Preferred Stock are entitled taking into account such conversion of the Series
      A
      Preferred Stock as provided herein. 

     

    (h) Treatment
      of the Series A Preferred Stock in the Event of Certain Mergers or
      Reorganizations, etc.
      If there
      shall occur any reorganization, recapitalization, consolidation, sale or merger
      involving the Corporation that is not a Market Cap Transaction (a “Basic
      Transaction”) in
      which
      the Common Stock (but not the Series A Preferred Stock) is converted into or
      exchanged for capital stock, other securities or property with respect to or
      in
      exchange for shares of Common Stock, then, immediately prior to any such Basic
      Transaction, all outstanding shares of Series A Preferred Stock shall, as
      applicable: (i) remain outstanding if the Corporation is the surviving
      corporation in such Basic Transaction, or (ii) be converted into shares of
      preferred stock of the surviving corporation in such Basic Transaction (if
      not
      the Corporation), with such shares of preferred stock to have the
      same
      powers,
      preferences and rights and relative, participating optional or other rights,
      preferences, restrictions and other matters relating to such series of preferred
      stock as provided herein.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (i) No
      Impairment. The
      Corporation will not, by amendment of its Articles of Incorporation or through
      any reorganization, transfer of assets, consolidation, merger, dissolution,
      issue or sale of securities or any other voluntary action, avoid or seek to
      avoid the observance or performance of any of the terms to be observed or
      performed hereunder by the Corporation, but will at all times in good faith
      assist the carrying out of all the provisions of this Section 5 and in the
      taking of all such action as may be necessary or appropriate in order to protect
      the conversion rights of the holders of the Series A Preferred Stock against
      impairment.

     

    (j) Certificates
      as to Adjustments. Upon
      the
      occurrence of each adjustment or readjustment of any Conversion Price pursuant
      to this Section 5, the Corporation at its expense shall promptly compute such
      adjustment or readjustment in accordance with the terms hereof and prepare
      and
      furnish to each holder of Series A Preferred Stock a certificate executed by
      the
      Corporation’s President setting forth such adjustment or readjustment and
      showing in detail the facts upon which such adjustment or readjustment is based.
      The Corporation shall, upon the written request at any time of any holder of
      Series A Preferred Stock, furnish or cause to be furnished to such holder a
      like
      certificate setting forth (i) such adjustments and readjustments, (ii) the
      Conversion Price for such series of Series A Preferred Stock at the time in
      effect, and (iii) the number of shares of Common Stock and the amount, if any,
      of other property which at the time would be received upon the conversion of
      the
      Series A Preferred Stock.

     

    (k) Issue
      Taxes. The
      Corporation shall pay any and all issue and other taxes that may be payable
      in
      respect of any issue or delivery of shares of Common Stock on conversion of
      Series A Preferred Stock pursuant hereto; provided, however, that the
      Corporation shall not be obligated to pay any transfer taxes resulting from
      any
      transfer requested by any holder in connection with any such
      conversion.

     

    (l) Reservation
      of Stock Issuance Upon Conversion. The
      Corporation shall at all times reserve and keep available out of its authorized
      but unissued shares of Common Stock, solely for the purpose of effecting the
      conversion of the shares of the Series A Preferred Stock, such number of its
      shares of Common Stock as shall from to time to time be sufficient to effect
      the
      conversion of all outstanding shares of the Series A Preferred Stock; and if
      at
      any time the number of authorized but unissued shares of Common Stock shall
      not
      be sufficient to effect the conversion of all then outstanding shares of the
      Series A Preferred Stock, the Corporation will take such corporate action as
      may, in the opinion of its counsel, be necessary to increase its authorized
      but
      unissued shares of Common Stock to such number of shares as shall be sufficient
      for such purpose, including, without limitation, engaging in best efforts to
      obtain the requisite stockholder approval of any necessary amendment to this
      Certificate.

     

    (m) Fractional
      Shares. No
      fractional share shall be issued upon the conversion of any share or shares
      of
      Series A Preferred Stock. All shares of Common Stock (including fractions
      thereof) issuable upon conversion of more than one share of Series A Preferred
      Stock by a holder thereof shall be aggregated for purposes of determining
      whether the conversion would result in the issuance of any fractional share.
      If,
      after the aforementioned aggregation, the conversion would result in the
      issuance of a fraction of a share of Common Stock, the fractional share will
      be
      rounded up to the nearest whole share. The Corporation will not pay any cash
      adjustment for fractional shares.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (n) Notices.
      Any
      notice required by the provisions of this Section 5 to be given to the holders
      of shares of Series A Preferred Stock shall be deemed given if deposited in
      the
      United States mail, postage prepaid return-receipt requested, or if delivered
      personally by hand or nationally recognized courier and addressed to each holder
      of record at such holder’s address or facsimile number appearing in the records
      of the Corporation.

     

    Section
      6. Restrictions
      on Transfer.
      No
      holder
      of Series A Preferred Stock shall be permitted to: (1) offer, sell, contract
      to
      sell, grant any option to purchase, hypothecate, pledge or otherwise dispose
      of,
      or (2) transfer title to (a “Prohibited
      Sale”)
      any of
      the shares of Series A Preferred Stock held by such holder; provided, however,
      that a Prohibited Sale shall not apply to any Common Stock issued following
      conversion of any Series A Preferred Stock and shall not include transfers
      to immediate family members of participants, trusts and partnerships established
      for the primary benefit of such family members in each case for estate planning
      purposes or transfers to charitable organizations so long as such transfers
      are
      not made for consideration to the holder.
      

     

    Section
      7. Waiver.
      Any of
      the rights of the holders of Series A Preferred Stock set forth herein may
      be
      waived by the affirmative vote or written consent of holders of a majority
      of
      the shares of the Series A Preferred Stock then outstanding

     

    *********************

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    RESOLVED,
      FURTHER, that the President be and hereby is authorized and directed to prepare
      and file a Certificate of Designation of Preferences, Rights and Limitations
      in
      accordance with the foregoing resolution and the provisions of Nevada
      law.

    

    IN
      WITNESS WHEREOF, the undersigned has executed this Certificate this
      24th
      day of
      March, 2008.

    

    
      	
              /s/
                Shai Novik

            
	
              Name:
                Shai Novik

              Title:
                President

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    ANNEX
      A

    

    NOTICE
      OF
      CONVERSION

    (TO
      BE
      EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES 
OF SERIES A
      PREFERRED STOCK)

    

    The
      undersigned hereby elects to convert the number of shares of Series A
      Convertible Series A Preferred Stock indicated below into shares of common
      stock, par value $0.00001 per share (the “Common
      Stock”),
      of
      Modigene Inc., a Nevada corporation (the “Corporation”),
      according to the conditions hereof, as of the date written below. If shares
      of
      Common Stock are to be issued in the name of a person other than the
      undersigned, the undersigned will pay all transfer taxes payable with respect
      thereto and is delivering herewith such certificates and opinions as may be
      required by the Corporation or its transfer agent. No fee will be charged to
      the
      holders for any conversion, except for any such transfer taxes.

    

    Conversion
      calculations:

    

    
      	
              Date
                to Effect Conversion:
                _____________________________________________

            
	 
	
              Number
                of shares of Series A Preferred Stock owned:
                _______________

            
	 
	
              Number
                of shares of Common Stock to be Issued:
                ____________________________

            
	 
	
              Applicable
                Conversion
                Price:____________________________________________

            
	 
	
              Address
                for Delivery:
                __________________________________________________

            

    

    

    
      	
              HOLDER
                

            
	 	 
	
              By:

            	 
	
            	
              Name:

              Title:Exhibit
      10.1

     

    Securities
      Purchase Agreement

     

    This
      SECURITIES PURCHASE AGREEMENT, dated as of March 25, 2008, is entered into
      by
      and among MODIGENE
      INC.,
      a
      Nevada corporation (the “Company”),
      and
      the investors identified on the signature page hereto (each a “Buyer”
and
      collectively, the “Buyers”).
      

     

    Recitals:

     

    A. The
      Buyers desire to provide financing to the Company, and the Company desires
      to
      obtain financing from the Buyers, upon the terms and conditions set forth in
      this Agreement;

     

    B. The
      total
      financing being provided by the Buyers to the Company hereunder shall consist
      of
      the purchase by the Buyers of 800,000 shares (the “Shares”)
      of
      Series A preferred stock, $0.00001 par value per share (“Preferred
      Stock”),
      at
      $2.50 per
      share, for a total purchase price of $2,000,000; and

     

    C. The
      Company and the Buyers are executing and delivering this Agreement in reliance
      upon the exemptions from securities registration afforded by Section 4(2) of
      the
      1933 Act (as defined below) and Rule 506 of Regulation D promulgated under
      the
      1933 Act.

     

    Agreement

     

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

     

    ARTICLE
      1

    Definitions

     

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

     

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

     

    “Action” means
      any
      action, suit claim, inquiry, notice of violation, proceeding (including any
      partial proceeding such as a deposition) or investigation against or affecting
      the Company, any of its Subsidiaries or any of their respective properties
      before or by any court, arbitrator, governmental or administrative agency,
      regulatory authority (federal, state, county, local or foreign), public board,
      stock market, stock exchange or trading facility.

     

    “Certificate
      of Designation”
means
      the Certificate of Designation of Preferences, Rights and Limitations of Series
      A Convertible Preferred Stock in the form attached as Exhibit
      A
      hereto.

     

    “Common
      Stock” means
      the
      Company’s common stock, $0.0001 par value per share.

     

    “Per
      Share Price”
      means
      $2.50 per Share.

     

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

     

    “Subsidiaries”
means
      Modigene
      Inc, a
      Delaware corporation, and ModigeneTech Ltd., an Israeli corporation.

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    “Transaction
      Documents”
means
      this Agreement, the Certificate of Designation, and any other documents
      contemplated by this Agreement.

     

    ARTICLE
      2

    Purchase
      and Sale of Shares

     

    2.1 Purchase
      of Shares.
      Subject
      to the terms and conditions of this Agreement, on the Closing Date, the Company
      shall issue and sell the Shares and the Buyers shall purchase the Shares. The
      number of Shares to be purchased by each Buyer shall be identified in
Schedule
      1.

     

    2.2 Purchase
      Price for Shares and Form of Payment; Delivery.
      On the
      Closing Date each Buyer shall pay the Per Share Price for the Shares, for a
      total price of $2,000,000 for all of the Shares sold hereunder (the “Purchase
      Price”).
      The
      Purchase Price shall be paid by wire transfer of immediately available funds
      in
      accordance with the Company’s written instructions. At the Closing, upon payment
      of the Purchase Price the Company will deliver or cause to be delivered
      certificates representing the Shares registered in the name of each Buyer and
      to
      deliver such certificates to or at the direction of each Buyer.

     

    2.3 Closing
      Date.
      Subject
      to the terms of this Agreement, the closing of the transactions contemplated
      by
      this Agreement shall be held on the date that is three (3) business days after
      the date that the last of the conditions in Article
      6
      and
Article
      7
      has been
      satisfied, or such other time as may be mutually agreed upon by the parties
      to
      this Agreement (the “Closing
      Date”),
      at
      the offices of Barack Ferrazzano Kirschbaum & Nagelberg LLP, 200 West
      Madison Street, Suite 3900, Chicago, Illinois 60606 or
      at
      such other location or by such other method (including exchange of signed
      documents by mail, electronic mail, and/or facsimile) as may be mutually agreed
      upon by the parties to this Agreement (“Closing”). 

     

    ARTICLE
      3

    Buyers’
      Representations and Warranties

     

    Each
      Buyer represents and warrants to the Company that:

     

    3.1 Organization
      and Qualification.
      If a
      corporation, partnership, limited partnership, limited liability company, or
      other form of entity, the Buyer is duly organized or formed, as the case may
      be,
      validly existing, and in good standing under the laws of its jurisdiction of
      organization or formation. The Buyer has all requisite individual or entity
      right, power, and authority to execute, deliver, and perform this
      Agreement.

     

    3.2 Authorization;
      Enforcement.
      The
      execution, delivery, and performance of this Agreement by the Buyer have been
      duly authorized by all requisite partnership, corporate or other entity action,
      as applicable. This Agreement has been duly executed and delivered by the Buyer,
      and, upon its execution by the Company, shall constitute the legal, valid,
      and
      binding obligation of the Buyer, enforceable in accordance with its terms,
      except to the extent that its enforceability is limited by bankruptcy,
      insolvency, reorganization, moratorium, or other laws relating to or affecting
      the enforcement of creditors’ rights generally and by general principles of
      equity.

     

    3.3 No
      Violations.
      The
      execution, delivery, and performance of this Agreement by the Buyer do not
      and
      will not, with or without the passage of time or the giving of notice, result
      in
      the breach of, or constitute a default, cause the acceleration of performance,
      or require any consent under, or result in the creation of any lien, charge
      or
      encumbrance upon any property or assets of the Buyer pursuant to, any material
      instrument or agreement to which the Buyer is a party or by which the Buyer
      or
      its properties may be bound or affected, and, do not or will not violate or
      conflict with any provision of the articles of incorporation or bylaws,
      partnership agreement, operating agreement, trust agreement, or similar
      organizational or governing document of the Buyer, as applicable.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    3.4 Knowledge
      of Investment and its Risks.
      The
      Buyer has such knowledge and experience in financial and business matters so
      as
      to be capable of evaluating the merits and risks of Buyer’s investment in the
      Shares. The Buyer understands that an investment in the Company represents
      a
      high degree of risk and there is no assurance that the Company’s business or
      operations will be successful. The Buyer has considered carefully the risks
      attendant to an investment in the Company, and that, as a consequence of such
      risks, the Buyer could lose Buyer’s entire investment in the
      Company.

     

    3.5 Investment
      Intent.
      The
      Buyer hereby represents and warrants that (i) the Buyer’s Shares are being
      acquired for investment for the Buyer’s own account, and not as a nominee or
      agent and not with a view to the resale or distribution of all or any part
      of
      the Buyer’s Shares, and the Buyer has no present intention of selling, granting
      any participation in, or otherwise distributing any of the Buyer’s Shares within
      the meaning of the 1933 Act, (ii) the Buyer’s Shares are being acquired in the
      ordinary course of the Buyer’s business, and (iii) the Buyer does not have any
      contracts, understandings, agreements, or arrangements, directly or indirectly,
      with any person and/or entity to distribute, sell, transfer, or grant
      participations to such person and/or entity with respect to, any of the Buyer’s
      Shares. The Buyer is not purchasing the Buyer’s Shares as a result of any
      advertisement, article, notice or other communication regarding the Buyer’s
      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.

     

    3.6 Buyer
      Status.
      The
      Buyer is an “accredited investor” as that term is defined by Rule 501 of
      Regulation D promulgated under the 1933 Act. The Buyer is not registered as
      a
      broker-dealer under Section 15 of the 1934 Act or an affiliate of such
      broker-dealer.

     

    3.7 Disclosure.
      The
      Buyer has reviewed the information provided to the Buyer by the Company in
      connection with the Buyer’s decision to purchase the Buyer’s Shares, including
      but not limited to, the Company’s publicly available filings with the SEC and
      the information contained therein. The Company has provided the Buyer with
      all
      the information that the Buyer has requested in connection with the decision
      to
      purchase the Buyer’s Shares. The Buyer further represents that the Buyer has had
      an opportunity to ask questions and receive answers from the Company regarding
      the business, properties, prospects, and financial condition of the Company.
      All
      such questions have been answered to the full satisfaction of the Buyer. Neither
      such inquiries nor any other investigation conducted by or on behalf of the
      Buyer or its representatives or counsel shall modify, amend, or affect the
      Buyer’s right to rely on the truth, accuracy, and completeness of the disclosure
      materials and the Company’s representations and warranties contained
      herein.

     

    3.8 No
      Registration.
      The
      Buyer understands that Buyer may be required to bear the economic risk of
      Buyer’s investment in the Company for an indefinite period of time. The Buyer
      further understands that (i) neither the offering nor the sale of the
      Buyer’s Shares has been registered under the 1933 Act or any applicable state
      securities laws in reliance upon exemptions from the registration requirements
      of such laws, (ii) the Buyer’s Shares must be held by the Buyer
      indefinitely unless the sale or transfer thereof is subsequently registered
      under the 1933 Act and any applicable state securities laws, or an exemption
      from such registration requirements is available, (iii) the Company is under
      no
      obligation to register any of the shares on the Buyer’s behalf or to assist the
      Buyer in complying with any exemption from registration, and (iv) the
      Company will rely upon the representations and warranties made by the Buyer
      in
      this Agreement and the Transaction Documents in order to establish such
      exemptions from the registration requirements of the 1933 Act and any applicable
      state securities laws. 

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    3.9 Transfer
      Restrictions.
      Subject
      to Article
      9
      of this
      Agreement, the Buyer will not transfer any of the Buyer’s Shares unless such
      transfer is registered or exempt from registration under the 1933 Act and such
      state securities laws, and, if requested by the Company in the case of an exempt
      transaction, the Buyer has furnished an opinion of counsel reasonably
      satisfactory to the Company that such transfer is so exempt. The Buyer
      understands and agrees that (i) the certificates evidencing the Shares will
      bear
      appropriate legends indicating such transfer restrictions placed upon the
      Shares, (ii) the Company shall have no obligation to honor transfers of any
      of
      the Buyer’s Shares, including any shares of Common Stock underlying the Shares,
      in violation of such transfer restrictions, and (iii) the Company shall be
      entitled to instruct any transfer agent or agents for the securities of the
      Company to refuse to honor such transfers.

     

    3.10 No
      Solicitation.
      The
      Buyer (i) did not receive or review any advertisement, article, notice or other
      communication published in a newspaper or magazine or similar media or broadcast
      over television or radio, whether closed circuit, or generally available, with
      respect to the Shares or (ii) was not solicited by any person, other than by
      representatives of the Company, with respect to a purchase of the
      Shares.

     

    3.11 Principal
      Address.
      The
      Buyer’s principal residence, if an individual, or principal executive office, if
      an entity, is set forth on the signature page of this Agreement.

     

    3.12 Reliance
      by the Company.
      The
      Buyer acknowledges and consents to the Company’s reliance on the Buyer’s
      representations and warranties made above for purposes of complying with all
      applicable securities laws and any applicable exemptions from registration
      requirements thereunder and otherwise.

     

    ARTICLE
      4

    Representations
      and Warranties of the Company

     

    Except
      as
      set forth in the Company’s Disclosure Schedule attached hereto, the Company
      represents and warrants to the Buyers that:

     

    4.1 Subsidiaries.
      The
      Company has no direct or indirect subsidiaries other than the Subsidiaries.
      The
      Company owns, directly or indirectly, all of the capital stock of each of its
      Subsidiaries free and clear of any and all liens, and all the issued and
      outstanding shares of capital stock of each Subsidiary are validly issued and
      are fully paid, non-assessable and free of preemptive and similar rights.

     

    4.2 Organization
      and Qualification.
      The
      Company and the Subsidiaries are each an entity duly incorporated or otherwise
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its incorporation or organization (as applicable), with the
      requisite power and authority to own and use its properties and assets and
      to
      carry on its business as currently conducted. Neither the Company nor any
      Subsidiary is in violation or default of any of the provisions of its respective
      certificate or articles of incorporation, bylaws or other organizational or
      charter documents. Each of the Company, and the Subsidiaries is duly qualified
      to conduct business and is in good standing as a foreign corporation or other
      entity in each jurisdiction in which the nature of the business conducted or
      property owned by it makes such qualification necessary, except where the
      failure to be so qualified or in good standing, as the case may be, could not
      have, or reasonably be expected to result in (i) a material adverse effect
      on
      the legality, validity or enforceability of this Agreement or the Shares, (ii)
      a
      material adverse effect on the results of operations, assets, business,
      prospects or condition (financial or otherwise) of the Company and the
      Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
      Company’s ability to perform in any material respect on a timely basis its
      obligations under this Agreement (any of (i), (ii) or (iii), a “Material
      Adverse Effect”)
      and no
      proceeding has been instituted in any such jurisdiction revoking, limiting
      or
      curtailing or seeking to revoke, limit or curtail such power and authority
      or
      qualification.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    4.3 Authorization;
      Enforcement.
      Subject
      to the filing of the Certificate of Designation with the Secretary of State
      of
      the State of Nevada, the Company has the requisite corporate power and authority
      to enter into and to consummate the transactions contemplated by this Agreement
      and otherwise to carry out its obligations hereunder. The execution and delivery
      of the Transaction Documents by the Company and, at the time of the Closing
      the
      consummation of the transactions contemplated hereby and thereby have been
      or
      will have been duly authorized by all necessary action on the part of the
      Company and no further action will, at the time of the Closing, be required
      by
      the Company or its Board of Directors or stockholders in connection therewith.
      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
      and thereof, will constitute the valid and binding obligation of the Company,
      enforceable against the Company in accordance with its terms except (i) as
      limited by general equitable principles and applicable bankruptcy, insolvency,
      reorganization, moratorium and other laws of general application affecting
      enforcement of creditors’ rights generally, (ii) as limited by laws relating to
      the availability of specific performance, injunctive relief or other equitable
      remedies and (iii) insofar as indemnification and contribution provisions may
      be
      limited by applicable law.

     

    4.4 Approvals.
      The
      execution, delivery, and performance by the Company of this Agreement require
      no
      consent of, action by or in respect of, or filing with, any person, governmental
      body, agency, or official other than those consents that have been obtained
      prior to the Closing, the filing of the Certificate of Designation and those
      filings required to be made pursuant to the 1933 Act and the 1934 Act.

     

    4.5 Capitalization;
      Valid Issuance of Securities .
      Upon
      issuance in accordance with the terms of this Agreement against payment of
      the
      Purchase Price therefor, the Shares will be duly and validly issued, fully
      paid,
      and nonassessable and free and clear of all liens imposed by or through the
      Company, and, assuming the accuracy of the representations and warranties of
      the
      Buyers, will be issued in accordance with a valid exemption from the
      registration or qualification provisions of the 1933 Act, and any applicable
      state securities laws. The Company has not issued any capital stock since its
      most
      recently filed periodic report under the
      1934
      Act and
      the
      rules and regulations thereunder, 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 set forth on Schedule
      4.5
      attached
      hereto, there are no anti-dilution or price adjustment provisions contained
      in
      any security issued by the Company (or in any agreement providing rights to
      security holders) that may be triggered by the transactions contemplated by
      the
      Transaction Documents. All of the outstanding shares of capital stock of the
      Company are validly issued, fully paid and nonassessable, have been issued
      in
      compliance with all federal and state securities laws, and none of such
      outstanding shares was issued in violation of any preemptive rights or similar
      rights to subscribe for or purchase securities. No further approval or
      authorization of any stockholder, the Board of Directors of the Company or
      others is required for the issuance and sale of the Shares. There are no
      stockholders agreements, voting agreements or other similar agreements with
      respect to the Company’s capital stock to which the Company is a party or, to
      the knowledge of the Company, between or among any of the Company’s
      stockholders. Upon
      the
      Closing, the Series A Preferred Stock will have the rights, preferences and
      privileges set forth in the Certificate of Designation. 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    4.6 No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by the Company,
      the issuance and sale of the Shares and the consummation by the Company of
      the
      other transactions contemplated hereby and thereby do not and will not (i)
      conflict with or violate any provision of the Company’s or any Subsidiary’s
      certificate or articles of incorporation, bylaws or other organizational or
      charter documents, 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,
      result in the creation of any lien upon any of the properties or assets of
      the
      Company or any Subsidiary, or give to others any rights of termination,
      amendment, acceleration or cancellation (with or without notice, lapse of time
      or both) of, any agreement, credit facility, debt or other instrument
      (evidencing a Company or Subsidiary debt or otherwise) or other understanding
      to
      which the Company or any Subsidiary is a party or by which any property or
      asset
      of the Company or any Subsidiary is bound or affected, or (iii) conflict with
      or
      result in a violation of any law, rule, regulation, order, judgment, injunction,
      decree or other restriction of any court or governmental authority to which
      the
      Company or any Subsidiary is subject (including federal and state securities
      laws and regulations), or by which any property or asset of the Company or
      a
      Subsidiary is bound or affected; except in the case of each of clauses (ii)
      and
      (iii), such as could not have, or reasonably be expected to result in, a
      Material Adverse Effect. 

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    4.7 SEC
      Documents.
      During
      the period between May 9, 2007 and the date of this Agreement, all reports
      and
      statements, including all amendments, required to be filed by the Company with
      the SEC under the 1934 Act, have been timely filed. Such filings, together
      with
      all amendments and all documents incorporated by reference therein, are referred
      to as “SEC
      Documents.”
Each
      SEC Document conformed in all material respects to the requirements of the
      1934
      Act and the rules and regulations thereunder, and no SEC Document, at the time
      each such document was filed, included any untrue statement of a material fact
      or omitted 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.

     

    4.8 Company
      Financial Statements.
      The
      audited financial statements, together with the related notes of the Company
      as
      of December 31, 2006, included in the Company’s Form 8-K as filed with the SEC
      on May 14, 2007, and the unaudited financial statements, together with the
      related notes of the Company as of September 30, 2007, included in the Company’s
      Form 10-QSB as filed with the SEC on November 13, 2007, fairly present in all
      material respects, on the basis stated therein and on the date thereof, the
      financial position of the Company at the respective dates therein specified
      and
      its results of operations and cash flows for the periods then ended. Such
      statements and related notes have been prepared in accordance with generally
      accepted accounting principles in the United States (“GAAP”)
      applied on a consistent basis except as expressly noted therein and subject
      in
      the case of the unaudited financial statements to year-end
      adjustments.

     

    4.9 Material
      Changes; Undisclosed Events, Liabilities or Developments.
      Since
      May 9, 2007, except as specifically disclosed in any SEC Document filed
      subsequent to May 9, 2007 and prior to the date hereof, (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
      and accrued expenses incurred in the ordinary course of business consistent
      with
      past practice, (B) liabilities not required to be reflected in the Company’s
      financial statements pursuant to GAAP, and (C) liabilities arising under that
      certain Credit Agreement dated as of the date hereof between the Company and
      The
      Frost Group, LLC, and the related note and security agreement issued thereunder;
      (iii) the Company has not altered its method of accounting; (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. The Company does not
      have pending before the SEC any request for confidential treatment of
      information. Except for the issuance of the Shares contemplated by this
      Agreement, no event, liability or development has occurred or exists with
      respect to the Company or its Subsidiaries or their respective business,
      properties, operations or financial condition that is required to be disclosed
      by the Company under applicable securities laws as of the time this
      representation is made.

     

    4.10 Certain
      Registration Matters.
      Assuming the accuracy of each of the Buyer’s representations and warranties set
      forth in this Agreement, no registration under the 1933 Act is required for
      the
      offer and sale of the Shares by the Company to the Buyers
      hereunder.

     

    4.11 No
      General Solicitation.
      Neither
      the Company nor any person acting on behalf of the Company has offered or sold
      any of the Shares by any form of general solicitation or general
      advertising.

     

    4.12 Acknowledgment
      Regarding Buyers’ Purchase of Securities.
      The
      Company acknowledges and agrees that each of the Buyers is acting solely in
      the
      capacity of an arm’s length purchaser with respect to the Transaction Documents
      and the transactions contemplated thereby. The Company further acknowledges
      that
      no Buyer is acting as a financial advisor or fiduciary of the Company (or in
      any
      similar capacity) with respect to the Transaction Documents and the transactions
      contemplated thereby, and any advice given by any Buyer or any of their
      respective representatives or agents in connection with the Transaction
      Documents and the transactions contemplated thereby is merely incidental to
      the
      Buyers’ purchase of the Shares. The Company further represents to each Buyer
      that the Company’s decision to enter into this Agreement and the other
      Transaction Documents has been based solely on the independent evaluation of
      the
      transactions contemplated hereby by the Company and their
      representatives.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    4.13 Disclosure.
      The
      representations and warranties of the Company in this Agreement are true and
      correct in all material respects 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 herein, in light of the circumstances under which they are
      made,
      not misleading.

     

    ARTICLE
      5

    Covenants

     

    5.1 Form
      D; Blue Sky Laws.
      Upon
      completion of the Closing, the Company shall file with the SEC a Form D with
      respect to the Securities as required under Regulation D and each applicable
      state securities commission and will provide a copy thereof to the Buyers
      promptly after such filing. 

     

    5.2 Filing
      of Certificate of Designation.
      Prior
      to the Closing Date the Certificate of Designation shall be signed by an officer
      of the Company and filed with the Secretary of State of the State of Nevada,
      all
      as required by Section 78.1955 of Chapter 78 of the Nevada Revised
      Statutes.

     

    5.3 Expenses.
      The
      Company and each Buyer shall each bear its respective expenses and legal fees
      incurred with respect to this Agreement and the other Transaction Documents
      and
      the transactions hereunder and thereunder. 

     

    ARTICLE
      6

    Conditions
      To The Company’s Obligation

     

    The
      obligation of the Company hereunder to issue and sell the Shares to the Buyers
      at the Closing is subject to the satisfaction, at or before the Closing Date,
      of
      each of the following conditions thereto, provided that these conditions are
      for
      the Company’s sole benefit and may be waived by the Company at any time in its
      sole discretion:

     

    6.1 Delivery
      of Transaction Documents.
      The
      Buyers shall have executed and delivered the Transaction Documents to which
      they
      are a party to the Company.

     

    6.2 Payment
      of Purchase Price.
      The
      Buyers shall have delivered the Purchase Price in accordance with Section
      2.2
      above.

     

    6.3 Representations
      and Warranties.
      The
      representations and warranties of the Buyers shall be true and correct in all
      material respects (provided, however, that such qualification shall only apply
      to representations or warranties not otherwise qualified by materiality) as
      of
      the date when made and as of the Closing Date as though made at that time
      (except for representations and warranties that speak as of a specific date),
      and the applicable Buyer shall have performed, satisfied and complied in all
      material respects with the covenants, agreements and conditions required by
      this
      Agreement to be performed, satisfied or complied with by the applicable Buyer
      at
      or prior to the Closing Date. 

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

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

     

    ARTICLE
      7

    Conditions
      to The Buyers’ Obligation

     

    The
      obligation of the Buyers hereunder to purchase the Shares at the Closing is
      subject to the satisfaction, at or before the Closing Date, of each of the
      following conditions, provided that these conditions are for the Buyers’ sole
      benefit and may be waived by the Buyers at any time in their sole
      discretion:

     

    7.1 Approval
      and Filing of Certificate of Designation.
      The
      Certificate of Designation shall have been approved by the Board of Directors
      of
      the Company as required by the Chapter 78 of the Nevada Revised Statutes and
      shall have been filed with the Secretary of State of the State of Nevada in
      accordance with Section 78.1955 of the Nevada Revised Statutes.

     

    7.2 Delivery
      of Transaction Documents; Issuance of Securities.
      The
      Company shall be prepared to issue certificates in the name of each Buyer
      representing the Shares being purchased by such Buyer. 

     

    7.3 Representations
      and Warranties.
      The
      representations and warranties of the Company shall be true and correct in
      all
      material respects (provided, however, that such qualification shall only apply
      to representations or warranties not otherwise qualified by materiality) as
      of
      the date when made and as of the Closing Date as though made at such time
      (except for representations and warranties that speak as of a specific date)
      and
      the Company shall have performed, satisfied and complied in all material
      respects with the covenants, agreements and conditions required by this
      Agreement to be performed, satisfied or complied with by the Company at or
      prior
      to the Closing Date.

     

    7.4 Consents.
      Any
      consents or approvals required to be secured by the Company for the consummation
      of the transactions contemplated by the Transaction Documents shall have been
      obtained.

     

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

     

    7.6 Reservation
      of Common Stock.
      The
      shares of Common Stock issuable upon conversion of the Shares shall have been
      duly authorized and reserved for issuance upon such conversion. 

     

    ARTICLE
      8

    Termination

     

    8.1 Termination
      Provisions.
      This
      Agreement may be terminated at any time before the Closing Date:

     

    a. By
      mutual
      consent of the Company and the Buyers;

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    b. By
      either
      the Company or the Buyers as applicable, in the event that any of the conditions
      precedent to their respective obligations to consummate the transactions
      contemplated hereby as set forth in Article
      6
      or
Article
      7,
      through
      no fault of the terminating party, have not been met and satisfied and have
      become impossible of fulfillment; or

     

    c. By
      either
      the Company or the Buyers if the Closing Date does not occur within one hundred
      twenty (120) days after the date hereof, or such later date as the parties
      may
      mutually agree upon (provided that the terminating party is not then in material
      breach of any representation, warranty, covenant or other agreement contained
      herein).

     

    8.2 Effect
      of Termination.
      Upon
      the termination of this Agreement pursuant to the terms hereof, this Agreement
      will be void and neither party will have any further liability obligations
      with
      respect hereof, except as otherwise provided in this Agreement or except and
      to
      the extent termination results from the intentional breach by a party of any
      of
      its representations, warranties or covenants hereunder.

     

    ARTICLE
      9

    Restrictions
      on Transfer

     

    9.1 Restrictions
      on Transfer.
      The
      Shares and Common Stock issuable upon conversion of the Shares (the
“Conversion
      Shares”)
      (the
      Shares, Common Stock and Conversion Shares are collectively referred to as
      the
“Securities”)
      may
      only be disposed of in compliance with state and federal securities laws. In
      connection with any transfer of Securities other than pursuant to an effective
      registration statement or Rule 144 of the 1933 Act, the Company may require
      the
      transferor thereof to provide to the Company an opinion of counsel selected
      by
      the transferor and reasonably acceptable to the Company, the form and substance
      of which opinion shall be reasonably satisfactory to the Company, to the effect
      that such transfer does not require registration of such transferred Securities
      under the 1933 Act. As a condition of transfer, any such transferee shall agree
      in writing to be bound by the terms of this Agreement.

     

    9.2 Lock-Up
      Agreement.
      Each
      Buyer hereby covenants and agrees, except as provided herein, not to (1) offer,
      sell, contract to sell, grant any option to purchase, hypothecate, pledge or
      otherwise dispose of, or (2) transfer title to (a “Prohibited
      Sale”)
      any of
      the Shares acquired by the Buyer pursuant to this Agreement, without the prior
      written consent of the Company; provided, however, that a Prohibited Sale shall
      not apply to any Conversion Shares and shall not include transfers
      to immediate family members of participants, trusts and partnerships established
      for the primary benefit of such family members in each case for estate planning
      purposes or transfers to charitable organizations so long as such transfers
      are
      not made for consideration to the Buyer.
       

     

    9.3 General
      Legend.
      The
      Buyers agree to the imprinting, so long as is required by this Article
      9,
      of a
      legend on any of the Securities in substantially the following
      form:

     

    THIS
      SECURITY HAS 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.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    9.4  Lock-up
      Legend.
      The
      Buyers agree to the imprinting of a legend on the Shares in substantially the
      following form:

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
      CONDITIONS SET FORTH IN THE SECURITIES PURCHASE AGREEMENT, DATED AS OF MARCH
      25,
      2008, A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER OR FROM THE HOLDER OF
      THESE SECURITIES. NO TRANSFER OF SUCH SECURITIES WILL BE MADE ON THE BOOKS
      OF
      THE ISSUER UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE TERMS OF SUCH
      AGREEMENT. 

     

    ARTICLE
      10

    Indemnification;
      Governing Law; Miscellaneous

     

    10.1 Company
      Indemnification.
      The
      Company will indemnify and hold the Buyers and, if applicable, their respective
      directors, officers, stockholders, members, managers, partners, employees and
      agents (each, a “Buyer 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 (collectively, “Losses”)
      that
      any such Buyer 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 this Agreement. In addition to
      the
      indemnity contained herein, the Company will reimburse each Buyer 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.

     

    10.2 Buyer
      Indemnification.
      Each of
      the Buyers, severally and not jointly, will indemnify and hold the Company
      and
      its directors, officers, stockholders, members, managers, 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 Buyer in
      this
      Agreement. In addition to the indemnity contained herein, each of the Buyers
      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.

     

    10.3 Contribution.
      If the
      indemnification under Section 10.1 or 10.2 is unavailable to an indemnified
      party or insufficient to hold an indemnified party harmless for any Losses,
      then
      each indemnifying party shall contribute to the amount paid or payable by such
      indemnified party, 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 this Agreement, any reasonable attorneys’ or other fees or expenses incurred
      by such party in connection with any Action 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.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    10.4 Governing
      Law.
      This
      Agreement shall be enforced, governed by and construed in accordance with the
      laws of the State of New York applicable to agreements made and to be performed
      entirely within such state, without regard to the principles of conflict of
      laws. Any
      judicial proceeding brought against any of the parties to this agreement or
      any
      dispute arising out of this Agreement or any matter related hereto shall be
      brought in the courts of the State of New York, New York County, or in the
      United States District Court for the Southern District of New York and, by
      its
      execution and delivery of this agreement, each party to this Agreement accepts
      the jurisdiction of such courts.
      The
      party which does not prevail in any dispute arising under this Agreement shall
      be responsible for all reasonable fees and expenses, including reasonable
      attorneys’ fees, incurred by the prevailing party in connection with such
      dispute.

     

    10.5 Counterparts;
      Electronic Signatures.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original but all of which shall constitute one and the same agreement
      and shall become effective when counterparts have been signed by each party
      and
      delivered to the other party. This Agreement, once executed by a party, may
      be
      delivered to the other party hereto by electronic transmission of a copy of
      this
      Agreement bearing the signature of the party so delivering this
      Agreement.

     

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

     

    10.7 Severability.
      In the
      event that any provision of this Agreement is invalid or unenforceable under
      any
      applicable statute or rule of law, then such provision shall be deemed
      inoperative to the extent that it may conflict therewith and shall be deemed
      modified to conform to such statute or rule of law. Any provision hereof which
      may prove invalid or unenforceable under any law shall not affect the validity
      or enforceability of any other provision hereof.

     

    10.8 Entire
      Agreement; Amendments.
      This
      Agreement and the instruments referenced herein contain the entire understanding
      of the parties with respect to the matters covered herein and therein and
      supersede all previous understandings or agreements between the parties with
      respect to such matters. No provision of this Agreement may be waived other
      than
      by an instrument in writing signed by the party to be charged with enforcement.
      The provisions of this Agreement may be amended only by a written instrument
      signed by the Company and the Buyers.

     

    10.9 Notices.
      Any
      notices required or permitted to be given under the terms of this Agreement
      shall be sent by certified or registered mail (return receipt requested) or
      delivered personally or by courier (including a recognized overnight delivery
      service) or by facsimile and shall be effective five days after being placed
      in
      the mail, if mailed by regular United States mail, or upon receipt, if delivered
      personally or by courier (including a recognized overnight delivery service)
      or
      by facsimile, in each case addressed to a party. The addresses for such
      communications shall be:

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    if
      to any
      Buyer:

    

    to
      the
      address set forth on the signature page of this Agreement

    

    if
      to
      Modigene or to the Company after the Closing Date, to: 

    

    Modigene
      Inc.

    3
      Sapir
      Street

    Weizmann
      Science Park

    Nes-Ziona,
      Israel 74140

    Attention:
      Shai Novik, President

    Facsimile:
      (866) 644-7811

    

    with
      a
      copy to:

    

    Barack
      Ferrazzano Kirschbaum & Nagelberg LLP

    200
      W.
      Madison Street, Suite 3900

    Chicago,
      Illinois 60606

    Attention:
      Gretchen Anne Trofa, Esq.

    Telephone:     (312)
      984-3100

    Facsimile:      (312)
      984-3150

    

    Each
      party shall provide notice to the other party of any change in
      address.

     

    10.10 Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and assigns. No party shall assign this Agreement or any rights
      or obligations hereunder without the prior written consent of the other parties
      hereto.

     

    10.11 Third
      Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      permitted successors and assigns, and is not for the benefit of, nor may any
      provision hereof be enforced by, any other person.

     

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

     

    10.13 No
      Strict Construction.
      The
      language used in this Agreement will be deemed to be the language chosen by
      the
      parties to express their mutual intent, and no rules of strict construction
      will
      be applied against any party.

     

    10.14 Rights
      Cumulative.
      Each
      and all of the various rights, powers and remedies of the parties shall be
      considered cumulative with and in addition to any other rights, powers and
      remedies which or the Transaction Documents such parties may have at law or
      in
      equity in the event of the breach of any of the terms of this Agreement. The
      exercise or partial exercise of any right, power or remedy shall neither
      constitute the exclusive election thereof nor the waiver of any other right,
      power or remedy available to such party.

     

    [Signature
      Page Follows]

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed
      as of the date first above written.

     

    COMPANY:

    

    
      	
              MODIGENE
                INC., a Nevada corporation

            
	 	 
	
              By:
                

            	
              /s/
                Shai Novik

            
	
              Name:
                Shai Novik

            
	
              Title:
                President

            

    

    

    BUYERS:

    

    
      	
              Frost
                Gamma Investments Trust

            	 	
              Jane
                Hsiao, M.B.A., Ph.D.

            
	
              By:
                Phillip Frost, M.D., Sole Trustee

            	 	 
	 	 	 
	
              /s/Phillip
                Frost

            	 	
              /s/
                Jane Hsiao

            
	
              Signature

            	 	
              Signature

            
	 	 	 
	
              Address
                of Principal Place of Business:

            	 	
              Address
                of Principal Residence:

            
	
              4400
                Biscayne Boulevard

            	 	
              4400
                Biscayne Boulevard

            
	
              Suite
                1500

            	 	
              Suite
                1500

            
	
              Miami,
                Florida 33137

            	 	
              Miami,
                Florida 33137

            
	 	 	 
	
              Tax
                ID number:

            	 	
              Social
                Security Number:

            
	
              46-0464745

            	 	
              ###-##-####

            
	 	 	 
	
              Telephone
                Number:

            	 	
              Telephone
                Number:

            
	
              (305)
                575-6001

            	 	
              (305)
                575-6004

            
	 	 	 
	
              Facsimile
                Number:

            	 	
              Facsimile
                Number:

            
	
              (305)
                575-6016

            	 	
              (305)
                575-6016

            
	 	 	 
	
              Email
                Address:

            	 	
              Email
                Address:

            
	
              phillip_frost@tevausa.com

            	 	
              jh@thefrostgrp.com

            

    

    

    [Signatures
      Continue on Next Page]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              Steven
                D. Rubin

            	 	
              Subbarao
                Uppaluri

            
	 	 	 
	
              /s/
                Steven D. Rubin

            	 	
              /s/
                Subbarao Uppaluri

            
	
              Signature

            	 	
              Signature

            
	 	 	 
	
              Address
                of Principal Place of Business:

            	 	
              Address
                of Principal Residence:

            
	
              4400
                Biscayne Boulevard

            	 	
              4400
                Biscayne Boulevard

            
	
              Suite
                1500

            	 	
              Suite
                1500

            
	
              Miami,
                Florida 33137

            	 	
              Miami,
                Florida 33137

            
	 	 	 
	
              Social
                Security Number:

            	 	
              Social
                Security Number:

            
	
              ###-##-####

            	 	
              ###-##-####

            
	 	 	 
	
              Telephone
                Number:

            	 	
              Telephone
                Number:

            
	
              (305)
                575-6015

            	 	
              (305)
                575-6118

            
	 	 	 
	
              Facsimile
                Number:

            	 	
              Facsimile
                Number:

            
	
              (305)
                575-6444

            	 	
              (305)
                575-6444

            
	 	 	 
	
              Email
                Address:

            	 	
              Email
                Address:

            
	
              sr@thefrostgrp.com

            	 	
              ru@thefrostgrp.com

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      I

    

    
      	
              Name

            	 	
              Investment Amount

            	 	
              Number of Shares

            	 
	 	 	 	 	 	 	 	 
	
              Frost
                Gamma Investments Trust

            	 	
              $

            	
              1,580,000

            	 	 	
              632,000

            	 
	 	 	 	 	 	 	 	 
	
              Jane
                Hsiao

            	 	 	
              380,000

            	 	 	
              152,000

            	 
	 	 	 	 	 	 	 	 
	
              Subbarao
                Uppaluri

            	 	 	
              20,000

            	 	 	
              8,000

            	 
	 	 	 	 	 	 	 	 
	
              Steven
                D. Rubin

            	 	 	
              20,000

            	 	 	
              8,000

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