Document:

SECURITIES
PURCHASE AGREEMENT

       

      This
Securities Purchase Agreement (this “Agreement”) is dated
as of September 22, 2010, between New Generation Biofuels Holdings, Inc., a
Florida corporation (the “Company”), and each
purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and
collectively the “Purchasers”).

       

      WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
an effective registration statement under the Securities Act of 1933, as amended
(the “Securities
Act”), the Company desires to issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, desires to purchase from the Company,
securities of the Company 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 each Purchaser agree as
follows:

       

      ARTICLE
I.

      DEFINITIONS

       

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

       

      “Acquiring Person”
shall have the meaning ascribed to such term in Section 4.5.

       

      “Action” shall have
the meaning ascribed to such term in Section 3.1(j).

       

      “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 405 under the Securities Act.

       

      “Base Prospectus”
means the prospectus in the form in which it appears in the Registration
Statement.

       

      “Board of Directors”
means the board of directors of the Company.

       

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

       

      “Closing” means the
closing of the purchase and sale of the Securities pursuant to Section
2.1.

       

      “Closing Date” means
the Trading Day on which all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to (i)
the Purchasers’ obligations to pay the Subscription Amount and (ii) the
Company’s obligations to deliver the Securities, in each case, have been
satisfied or waived, but in no event later than the third Trading Day following
the date hereof.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

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

       

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

       

      “Common Stock
Equivalents” means any securities of the Company or the Subsidiaries
which would entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, right, option, warrant
or other instrument that is at any time convertible into or exercisable or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

       

      “Company Counsel”
means Fredrikson & Byron, P.A., with offices located at 200 South 6th Street,
Suite 4000, Minneapolis, Minnesota, 55402.

       

      “Evaluation Date”
shall have the meaning ascribed to such term in Section 3.1(r).

       

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

      

      “GAAP” shall have the
meaning ascribed to such term in Section 3.1(h).

       

      “Indebtedness” means
(x) any liabilities for borrowed money or amounts owed in excess of $50,000
(other than trade accounts payable incurred in the ordinary course of business),
(y) all guaranties, endorsements and other contingent obligations in respect of
indebtedness of others, whether or not the same are or should be reflected in
the Company’s consolidated balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and (z) the present
value of any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP..

       

      “Intellectual Property
Rights” shall have the meaning ascribed to such term in Section
3.1(o).

       

      “Liens” means a lien,
charge, pledge, security interest, encumbrance, right of first refusal,
preemptive right or other restriction.

       

      “Material Adverse
Effect” shall have the meaning assigned to such term in Section
3.1(b).

       

      “Material Permits”
shall have the meaning ascribed to such term in Section 3.1(m).

       

      “Per Share Purchase
Price” equals $0.13, subject to adjustment
for reverse and forward stock splits, stock dividends, stock combinations and
other similar transactions of the Common Stock that occur after the date of this
Agreement.

       

      “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 informal investigation or partial proceeding, such as a deposition), whether
commenced or threatened.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

       “Prospectus
Supplement” means the supplement to the Base Prospectus complying with
Rule 424(b) of the Securities Act that is filed with the Commission and
delivered by the Company to each Purchaser at the Closing.

       

      “Prospectus Disclosure
Package” means collectively the Registration Statement, Base Prospectus,
Prospectus Supplement and any preliminary or free writing
prospectus.

       

      “Purchaser Party”
shall have the meaning ascribed to such term in Section 4.8.

       

      “Registration
Statement” means the effective registration statement with Commission
file No. 333-156449 which registers the sale of the Shares, the Warrants and the
Warrant Shares to the Purchasers.

       

      “Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).

       

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

       

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

       

       “SEC Reports” shall
have the meaning ascribed to such term in Section 3.1(h).

       

      “Securities” means the
Shares, the Warrants and the Warrant Shares.

       

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

       

      “Shares” means the
shares of Common Stock issued or issuable to each Purchaser pursuant to this
Agreement.

       

      “Short Sales” means
all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange
Act (but shall not be deemed to include the location and/or reservation of
borrowable shares of Common Stock). 

       

       “Subscription Amount”
means, as to each Purchaser, the aggregate amount to be paid for Shares and
Warrants purchased hereunder as specified below such Purchaser’s name on the
signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.

       

      “Subsidiary” means any
subsidiary of the Company as set forth on Schedule 3.1(a), and
shall, where applicable, also include any direct or indirect subsidiary of the
Company formed or acquired after the date hereof.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      “Trading Day” means a
day on which the principal Trading Market is open for trading.

       

      “Trading Market” means
any of the following markets or exchanges on which the Common Stock is listed or
quoted for trading on the date in question: the NYSE AMEX, the Nasdaq Capital
Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange or the OTC Bulletin Board (or any successors to any of the
foregoing).

       

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

       

      “Transfer Agent” means
Olde Monmouth Stock Transfer Company, the current transfer agent of the Company,
with a mailing address of 200 Memorial Parkway, Atlantic Highlands, New Jersey
07716 and a facsimile number of 732-872-2728 and any successor transfer agent of
the Company.

       

      “Warrants” means,
collectively, the Common Stock purchase warrants delivered to the Purchasers at
the Closing in accordance with Section 2.2(a) hereof, which Warrants shall be
exercisable after the six month anniversary of the date of issuance until the
fifth anniversary of the date of issuance,  in the form of Exhibit A attached
hereto.

       

      “Warrant Shares” means
the shares of Common Stock issuable upon exercise of the Warrants.

       

      ARTICLE
II.

      PURCHASE
AND SALE

       

      2.1         
 Closing.  On
the Closing Date, upon the terms and subject to the conditions set forth herein,
substantially concurrent with the execution and delivery of this Agreement by
the parties hereto, the Company agrees to sell, and the Purchasers, severally
and not jointly,  agree to purchase, up to an aggregate of $500,000 of
Shares and Warrants.  Each Purchaser shall deliver to the Company, via
wire transfer,or a certified check of immediately available funds equal to such
Purchaser’s Subscription Amount as set forth on the signature page hereto
executed by such Purchaser and the Company shall deliver to each Purchaser its
respective Shares and a Warrant as determined pursuant to Section 2.2(a), and
the Company and each Purchaser shall deliver the other items set forth in
Section 2.2 deliverable at the Closing.  Upon satisfaction of the
covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall
occur at such location as the parties shall mutually agree.

       

      2.2         
 Deliveries.

       

      (a)           On
or prior to the Closing Date, the Company shall deliver or cause to be delivered
to each Purchaser the following:

       

      (i)            this
Agreement duly executed by the Company;

       

      (ii)          
a copy of the irrevocable instructions to the Company’s transfer agent
instructing the transfer agent to deliver via The Depository Trust Company
Deposit or Withdrawal at Custodian system (“DWAC”) Shares equal
to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price,
registered in the name of such Purchaser;

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (iii)         
a Warrant registered in the name of such Purchaser to purchase up to a number of
shares of Common Stock equal to 75% of such Purchaser’s Shares,
with an exercise price equal to $0.15, subject to adjustment
therein (such Warrant certificate may be delivered within three Trading Days of
the Closing Date); and

       

      (iv)         
the Prospectus and Prospectus Supplement (which may be delivered in accordance
with Rule 172 under the Securities Act).

       

      (b)          
On or prior to the Closing Date, each Purchaser shall deliver or cause to be
delivered to the Company the following:

       

      (i)           
this Agreement duly executed by such Purchaser; and

       

      (ii)          
such Purchaser’s Subscription Amount by wire transfer to the account as
specified in writing by the Company or a certified check of immediately
available funds.

       

      2.3           Closing
Conditions.

       

      (a)          
The obligations of the Company hereunder in connection with the Closing are
subject to the following conditions being met:

       

      (i)           
the accuracy in all material respects on the Closing Date of the representations
and warranties of the Purchasers contained herein (unless as of a specific date
therein in which case they shall be accurate as of such date);

       

      (ii)          
all obligations, covenants and agreements of each Purchaser required to be
performed at or prior to the Closing Date shall have been performed;
and

       

      (iii)         
the delivery by each Purchaser of the items set forth in Section 2.2(b) of this
Agreement.

       

      (b)          
The respective obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being met:

       

      (i)           
the accuracy in all material respects when made and on the Closing Date of the
representations and warranties of the Company contained herein (unless as of a
specific date therein);

       

      (ii)          
all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been
performed;

       

      (iii)         
the delivery by the Company of the items set forth in Section 2.2(a) of this
Agreement;

       

      (iv)         
there shall have been no Material Adverse Effect with respect to the Company
since the date hereof; and

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (v)         
from the date hereof to the Closing Date, trading in the Common Stock shall not
have been suspended by the Commission or the Company’s principal Trading Market,
and, at any time prior to the Closing Date, trading in securities generally as
reported by Bloomberg L.P. shall not have been suspended or limited, or minimum
prices shall not have been established on securities whose trades are reported
by such service, or on any Trading Market, nor shall a banking moratorium have
been declared either by the United States or New York State authorities nor
shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or
any material adverse change in, any financial market which, in each case, in the
reasonable judgment of such Purchaser, makes it impracticable or inadvisable to
purchase the Securities at the Closing.

       

      ARTICLE
III.

      REPRESENTATIONS
AND WARRANTIES

       

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

       

      (a)      
    Subsidiaries.  All
of the significant direct and indirect subsidiaries of the Company are set forth
in the SEC Reports.  The Company owns, directly or indirectly, all of
the capital stock or other equity interests of each Subsidiary free and clear of
any Liens, and all of 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 to subscribe for or purchase
securities.  If the Company has no subsidiaries, all other references
to the Subsidiaries or any of them in the Transaction Documents shall be
disregarded.

       

      (b)    
     Organization and
Qualification.  The Company and each of the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, 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 nor
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 any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business, or
financial condition 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 any Transaction
Document (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, except where the revocation, limitation or
curtailment could not reasonably be expected to result in a Material Adverse
Effect.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (c)         
 Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and each of the other Transaction Documents and otherwise to carry out
its obligations hereunder and thereunder.  The execution and delivery
of this Agreement each of the other Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary action on the part of the Company and no
further action is required by the Company, the Board of Directors or the
Company’s stockholders in connection herewith or therewith other than in
connection with the Required Approvals.  This Agreement and each other
Transaction Document to which it is a party 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.

       

      (d)       
  No
Conflicts.  The execution, delivery and performance by the
Company of this Agreement and the other Transaction Documents to which it is a
party, the issuance and sale of the Securities and the consummation by it of the
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) result in a material breach of, or conflict with, or
constitute a material default (or an event that with notice or lapse of time or
both would become a material 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) subject to the Required Approvals, 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 a 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.

       

      (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 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 filings required pursuant to Section 4.4 of this Agreement, (ii)
the filing with the Commission of the Prospectus Supplement, (iii)
application(s) to each applicable Trading Market for the listing of the Shares
and Warrant Shares for trading thereon in the time and manner required thereby
and (iv) such filings as are required to be made under applicable state
securities laws and the rules and regulations of FINRA (collectively, the “Required Approvals”),
and except where the failure to obtain any such consent, waiver, authorization
or order, give any such notice or make any such filing could not reasonably be
expected to result in a Material Adverse Effect.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (f)    
      Issuance of the Securities;
Registration.  The Shares and Warrants are duly authorized and,
when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens imposed by the Company.  The Warrant Shares,
when issued in accordance with the terms of the Warrants, will be validly
issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company.  The Company has reserved from its duly authorized capital
stock the maximum number of shares of Common Stock issuable pursuant to this
Agreement and the Warrants, subject to such adjustment to such reserve as may
occur pursuant to the terms and adjusment provisions of the Warrants. The
Securities have been registered under the Securities Act.  The
Registration Statement is effective under the Securities Act and no stop order
preventing or suspending the effectiveness of the Registration Statement or
suspending or preventing the use of the Base Prospectus has been issued by the
Commission and no proceedings for that purpose have been instituted or, to the
knowledge of the Company, are threatened by the Commission.  The
Company, if required by the rules and regulations of the Commission, proposes to
file the Prospectus Supplement, with the Commission pursuant to Rule
424(b).  At the time the Registration Statement and any amendments
thereto became effective, the Registration Statement and any amendments thereto
conformed in all material respects to the requirements of the Securities Act and
did not 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 not misleading.  The Base Prospectus, as of its date,
conformed in all material respects to the requirements of the Securities Act and
did 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 not misleading.  The Prospectus Supplement, and any amendments
or supplements thereto, as of its date and at the Closing Date, conformed and
will conform in all material respects to the requirements of the Securities Act
and did not and will not contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading.

       

      (g)     
    Capitalization.  The
capitalization of the Company is as set forth in the Prospectus Disclosure
Package.  Except as otherwise described in the Prospectus Disclosure
Package, the Company has not issued any capital stock since its most recently
filed periodic report under the Exchange Act, other than pursuant to the
exercise of employee stock options under the Company’s stock option plans, and
pursuant to the conversion and/or exercise of Common Stock Equivalents
(including the mandatory conversion of Series A preferred stock) outstanding as
of the date of the most recently filed periodic report under the Exchange
Act.  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 that has otherwise waived such
right.  Except as set forth in the Prospectus Disclosure Package,
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 exercisable 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 Common Stock Equivalents.  Except as disclosed in the SEC Reports,
the issuance and sale of the Securities will not obligate the Company to issue
shares of Common Stock or other securities to any Person (other than the
Purchasers) and will not result in a right of any holder of Company securities
to adjust the exercise, conversion, exchange or reset price under any of such
securities. All of the outstanding shares of capital stock of the Company are
duly authorized, 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 or others is
required for the issuance and sale of the Securities.  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.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (h)     
    SEC
Reports; Financial Statements.  Except for a Current Report on
Form 8-K filed May 13, 2009, the Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the Company under
the Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as the Company was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, together with the Base Prospectus and the
Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on a
timely basis or has received 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 and the
Exchange Act, as applicable, 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 the light of the circumstances under which they were made, not
misleading. The Company has never been an issuer subject to Rule 144(i) under
the Securities Act. The financial statements of the Company included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in
effect at the time of filing.  Such financial statements have been
prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”), except as may
be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of the Company and its consolidated Subsidiaries 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.

       

      (i)           Material Changes;
Undisclosed Events, Liabilities or Developments.  Since the
date of the latest audited financial statements included within the SEC Reports,
except as contemplated by this Agreement or disclosed in a subsequent SEC Report
filed 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 and
(B) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or disclosed in filings made with the Commission,
(iii) the Company has not altered its method of accounting, and (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.  The Company does not have
pending before the Commission any request for confidential treatment of
information.  Except for the issuance of the Securities contemplated
by this Agreement, the Company has publicly disclosed all information required
to be disclosed under applicable securities laws at the time this representation
is made or deemed made that has not been publicly disclosed at least 1 Trading
Day prior to the date that this representation is made.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (j)     
     Litigation.  There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect.  Neither the Company nor any Subsidiary, nor any
director or officer thereof, 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.  There has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or, to the knowledge of
the Company, any current or former director or officer of the Company that is
required to be disclosed in the SEC Reports.  The Commission has not
issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company or any Subsidiary under the Exchange
Act or the Securities Act.

       

      (k)       
  Labor
Relations.  No labor dispute exists or, to the knowledge of the
Company, is imminent with respect to any of the employees of the Company, which
could reasonably be expected to result in a Material Adverse
Effect.  None of the Company’s or its Subsidiaries’ employees is a
member of a union that relates to such employee’s relationship with the Company
or such Subsidiary, and neither the Company nor any of its Subsidiaries is a
party to a collective bargaining agreement, and the Company and its Subsidiaries
believe that their relationships with their employees are good.  To
the knowledge of the Company, no executive officer of the Company or any
Subsidiary, is, or is now expected to be, in violation of any material term of
any employment contract, confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any other contract or agreement or
any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject the Company or any of
its Subsidiaries to any liability with respect to any of the foregoing
matters.  The Company and its Subsidiaries are in compliance with all
U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

       

      (l)        
   Compliance.  Neither
the Company nor any Subsidiary: (i) is 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 the Company or any Subsidiary under),
nor has the Company or any Subsidiary 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, (ii) is in violation of any
judgment, decree or order of any court, arbitrator or other governmental
authority or (iii) is or has been in violation of any statute, rule, ordinance
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 have or
reasonably be expected to result in a Material Adverse Effect.

       

      (m)       
  Regulatory
Permits.  The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not reasonably be expected to result in a Material
Adverse Effect (“Material Permits”),
and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material
Permit.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (n)   
      Title to
Assets.  The Company owns no real property.  Other
than liens on personal or other property securing indebtedness of the Company in
the ordinary course of business or as described in the Prospectus Disclosure
Package, the Company has good and marketable title in all personal property
owned by them that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all Liens, except for (i) 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 and the Subsidiaries and (ii) Liens for the payment of federal, state or
other taxes, for which appropriate reserves have been made therefore in
accordance with GAAP and, the payment of which is neither delinquent nor subject
to penalties.  Except as disclosed in the SEC Reports or not required
to be disclosed in the SEC Reports, any real property and
facilities held under lease by the Company and the Subsidiaries are held by them
under valid, subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance.

       

      (o)   
      Intellectual
Property.  The Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights necessary or
required for use in connection with their respective businesses as described in
the SEC Reports and which the failure to so have could have a Material Adverse
Effect (collectively, the “Intellectual Property
Rights”).  None of, and neither the Company nor any Subsidiary
has received a notice (written or otherwise) that any of, the Intellectual
Property Rights has expired, terminated or been abandoned, or is expected to
expire or terminate or be abandoned, within two (2) years from the date of this
Agreement.  Neither the Company nor any Subsidiary has received, since
the date of the latest audited financial statements included within the SEC
Reports, a written notice of a claim or otherwise has any knowledge that the
Intellectual Property Rights violate or infringe upon the rights of any Person,
except as could not have or reasonably be expected to not have a Material
Adverse Effect.  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.  The Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of all of
their intellectual properties, except where failure to do so could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

       

      (p)     
    Insurance.  The
Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts, to the
Company’s knowledge, as are prudent and customary in the businesses in which the
Company and the Subsidiaries are engaged, including, but not limited to,
directors and officers insurance coverage at least equal to the aggregate
Subscription Amount.  Neither the Company nor any Subsidiary has any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business without a
significant increase in cost.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (q)  
       Transactions With Affiliates
and Employees.  Except as set forth in the SEC Reports, none of
the officers or directors of the Company or any Subsidiary and, to the knowledge
of the Company, none of the employees of the Company or any Subsidiary is
presently a party to any transaction with the Company or any Subsidiary (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, providing for
the borrowing of money from or lending of money to or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge
of the Company, any entity in which any officer, director, or any such employee
has a substantial interest or is an officer, director, trustee, stockholder,
member or partner, in each case in excess of $120,000 other than for (i) payment
of salary or consulting fees for services rendered, (ii) reimbursement for
expenses incurred on behalf of the Company and (iii) other employee benefits,
including stock option agreements under any stock option plan of the
Company.

       

      (r)    
      Sarbanes-Oxley; Internal
Accounting Controls.  The Company and the Subsidiaries is in
material compliance with any and all applicable requirements of the
Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and
all applicable rules and regulations promulgated by the Commission thereunder
that are effective as of the date hereof and as of the Closing
Date.  The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that: (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company and the Subsidiaries have established disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
the Subsidiaries and designed such disclosure controls and procedures to ensure
that information required to be disclosed by the Company in the reports it files
or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and
forms.  The Company’s certifying officers have evaluated the
effectiveness of the disclosure controls and procedures of the Company and the
Subsidiaries as of the end of the period covered by the most recently filed
periodic report under the Exchange Act (such date, the “Evaluation
Date”).  The Company presented in its most recently filed
periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date.  Since the Evaluation
Date, there have been no changes in the internal control over financial
reporting (as such term is defined in the Exchange Act) of the Company and its
Subsidiaries that have materially affected, or is reasonably likely to
materially affect, the internal control over financial reporting of the Company
and its Subsidiaries.

       

      (s)    
     Certain
Fees.  Except as set forth in the Prospectus Supplement, no
brokerage or finder’s fees or commissions are or will be payable by the Company
or any Subsidiary to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents.  The
Purchasers shall have no obligation with respect to any fees or with respect to
any claims 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 the Transaction Documents.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (t)       
   Investment Company.
The Company is not, and is not an Affiliate of, and immediately after receipt of
payment for the Securities, will not be or be an Affiliate of, an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.  The Company shall conduct its business in a manner so that
it will not become an “investment company” subject to registration under the
Investment Company Act of 1940, as amended.

      

      (u)         
Registration
Rights.  Except as disclosed in the SEC Reports, no Person has
any right to cause the Company to effect the registration under the Securities
Act of any securities of the Company.

       

      (v)      
   Listing
and Maintenance Requirements.  The Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act nor has the Company received any notification that the Commission is
contemplating terminating such registration.  Except as disclosed in
the SEC Reports, the Company has not, in the 12 months preceding the date
hereof, received notice from any Trading Market on which the Common Stock is or
has been listed or quoted to the effect that the Company is not in compliance
with the listing or maintenance requirements of such Trading Market. Except as
disclosed in the SEC Reports, the Company is, and has no reason to believe that
it will not in the foreseeable future continue to be, in compliance with all
such listing and maintenance requirements.

       

      (w)      
   Application of Takeover
Protections.  The Company and the Board of Directors have taken
all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the 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 Purchasers as a
result of the Purchasers and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without
limitation as a result of the Company’s issuance of the Securities and the
Purchasers’ ownership of the Securities.

       

      (x) 
         Disclosure.  Except
with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms that neither it
nor any other Person acting on its behalf has provided any of the Purchasers or
their agents or counsel with any information that it believes constitutes or
might constitute material, non-public information which is not otherwise
disclosed in the Prospectus Disclosure Package.  The Company
understands and confirms that the Purchasers will rely on the foregoing
representation in effecting transactions in securities of the
Company.  All of the disclosure furnished by or on behalf of the
Company to the Purchasers regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby, is true and
correct and does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading. The
press releases disseminated by the Company during the twelve months preceding
the date of this Agreement taken as a whole, together with other public
disclosure included in the SEC Reports, 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.  The Company
acknowledges and agrees that no Purchaser makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in Section 3.2 hereof.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (y)          No Integrated
Offering. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2, neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of
any applicable shareholder approval provisions of any Trading Market on which
any of the securities of the Company are listed or designated.

       

      (aa)    
   Tax
Status.  Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and its Subsidiaries each (i) has made or filed all United
States federal, state and local income and all foreign income and franchise tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for periods subsequent
to the periods to which such returns, reports or declarations
apply.  There are no unpaid taxes in any material amount claimed to be
due by the taxing authority of any jurisdiction, and the officers of the Company
or of any Subsidiary know of no basis for any such claim.

      

      (bb)   
    Foreign Corrupt
Practices.  Neither the Company nor any Subsidiary, nor to the
knowledge of the Company or any Subsidiary, any agent or other person acting on
behalf of the Company or any Subsidiary, has (i) directly or indirectly, used
any funds 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 any
Subsidiary (or made by any person acting on its behalf of which the Company is
aware) which is in violation of law, or (iv) violated in any material respect
any provision of the Foreign Corrupt Practices Act of 1977, as
amended.

       

      (cc)     
  Accountants.  The
Company’s accounting firm is named in the Prospectus Supplement.  To
the knowledge and belief of the Company, such accounting firm (i) is a
registered public accounting firm as required by the Exchange Act and (ii) shall
express its opinion with respect to the financial statements to be included in
the Company’s Annual Report for the fiscal year ending December 31,
2010.

       

      (dd)     
  Acknowledgment
Regarding Purchasers’ Purchase of Securities.  The Company
acknowledges and agrees that each of the Purchasers 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 Purchaser 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
Purchaser or any of their respective representatives or agents in connection
with the Transaction Documents and the transactions contemplated thereby is
merely incidental to the Purchasers’ purchase of the Securities.  The
Company further represents to each Purchaser 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 its representatives.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

(ee)     
 Acknowledgement
Regarding Purchaser’s Trading Activity.  Anything in this
Agreement or elsewhere herein to the contrary notwithstanding (except for
Sections 3.2(e) and 4.14 hereof), it is understood and acknowledged by the
Company that: (i) none of the Purchasers has been asked by the Company to agree,
nor has any Purchaser agreed, to desist from purchasing or selling, long and/or
short, securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the Securities for any specified term; (ii)
past or future open market or other transactions by any Purchaser, specifically
including, without limitation, Short Sales or “derivative” transactions, before
or after the closing of this or future private placement transactions, may
negatively impact the market price of the Company’s publicly-traded securities;
(iii) any Purchaser, and counter-parties in “derivative” transactions to which
any such Purchaser is a party, directly or indirectly, presently may have a
“short” position in the Common Stock, and (iv) each Purchaser shall not be
deemed to have any affiliation with or control over any arm’s length
counter-party in any “derivative” transaction.  The Company further
understands and acknowledges that (y) one or more Purchasers may engage in
hedging activities at various times during the period that the Securities are
outstanding, including, without limitation, during the periods that the value of
the Warrant Shares deliverable with respect to Securities are being determined,
and (z) such hedging activities (if any) could reduce the value of the existing
stockholders' equity interests in the Company at and after the time that the
hedging activities are being conducted.  The Company acknowledges that such
aforementioned hedging activities do not constitute a breach of any of the
Transaction Documents.

     

    (ff)      
 Regulation M
Compliance.  The Company has not, and to its knowledge no one acting
on its behalf has, (i) taken, directly or indirectly, any action designed to
cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or, paid any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay
to any Person any compensation for soliciting another to purchase any other
securities of the Company, other than, in the case of clauses (ii) and (iii),
compensation paid to the Company’s placement agent in connection with the
placement of the Securities.

     

    (gg)     
Office of Foreign
Assets Control.  Neither the Company or any Subsidiary nor, to
the Company's knowledge, any director, officer, agent, employee or affiliate of
the Company  or any Subsidiary is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”).

     

    (hh)    
 U.S. Real
Property Holding Corporation.  The Company is not and has never
been a U.S. real property holding corporation within the meaning of Section 897
of the Internal Revenue Code of 1986, as amended, and the Company shall so
certify upon Purchaser’s request.

     

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

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

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

    

    3.2             
Representations and
Warranties of the Purchasers.  Each Purchaser, for itself and
for no other Purchaser, hereby represents and warrants as of the date hereof and
as of the Closing Date to the Company as follows (unless as of a specific date
therein):

     

    (a)       
 Organization;
Authority.  Such Purchaser is either an individual or an entity
duly incorporated or formed, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation with full right,
corporate, partnership, limited liability company or similar power and authority
to enter into and to consummate the transactions contemplated by this Agreement
and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and performance by such Purchaser of
the transactions contemplated by this Agreement have been duly authorized by all
necessary corporate, partnership, limited liability company or similar action,
as applicable, on the part of such Purchaser.  Each Transaction
Document to which it is a party has been duly executed by such Purchaser, and
when delivered by such Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of such Purchaser,
enforceable against it 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.

    

    (b)  
      Understandings or
Arrangements.  Such Purchaser is acquiring the Securities as
principal for its own account and has no direct or indirect arrangement or
understandings with any other persons to distribute or regarding the
distribution of such Securities (this representation and warranty not limiting
such Purchaser’s right to sell the Securities pursuant to the Registration
Statement or otherwise in compliance with applicable federal and state
securities laws).  Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business.

     

    (c)     
   Purchaser
Status.  At the time such Purchaser was offered the Securities,
it was, and as of the date hereof it is, and on each date on which it exercises
any Warrants, it will be either: (i) an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act.  Such Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    (d)       
 Experience of
Such Purchaser.  Such Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so evaluated the
merits and risks of such investment.  Such Purchaser is able to bear
the economic risk of an investment in the Securities and, at the present time,
is able to afford a complete loss of such investment. The Purchaser understands
that nothing in this Agreement, the Prospectus Disclosure Package or any other
materials presented to the Purchaser in connection with the purchase and sale of
the Securities constitutes legal, tax or investment advice. The Purchaser has
consulted such legal, tax and investment advisors and made such investigation as
it, in its sole discretion, has deemed necessary or appropriate in connection
with its purchase of Securities.

     

    (e)    
    Certain Transactions and
Confidentiality.  Other than consummating the transactions
contemplated hereunder, such Purchaser has not, nor has any Person acting on
behalf of or pursuant to any understanding with such Purchaser, directly or
indirectly executed any purchases or sales, including Short Sales, of the
securities of the Company during the period commencing as of the time that such
Purchaser first received a term sheet (written or oral) from the Company or any
other Person representing the Company setting forth the material terms of the
transactions contemplated hereunder and ending immediately prior to the
execution hereof.  Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s assets, the
representation set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager that made the investment decision to
purchase the Securities covered by this Agreement.  Other than to
other Persons party to this Agreement, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this
transaction).

     

    (f)       
 No Trading
Market for Warrants. The Purchaser understands that there is no
established public trading market for the Warrants and that the Company does not
expect such a market to develop.  In addition, the Company does not
intend to apply for listing the Warrants on any securities
exchange.  Without an active market, the liquidity of the Warrants
will be limited.

     

    The
Company acknowledges and agrees that the representations contained in Section
3.2 shall not modify, amend or affect such Purchaser’s right to rely on the
Company’s representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction Document or
any other document or instrument executed and/or delivered in connection with
this Agreement or the consummation of the transaction contemplated
hereby.

     

    ARTICLE
IV.

    OTHER
AGREEMENTS OF THE PARTIES

     

    4.1         
 Warrant
Shares.  If all or any portion of a Warrant is exercised at a
time when there is an effective registration statement to cover the issuance or
resale of the Warrant Shares or if the Warrant is exercised via cashless
exercise, the Warrant Shares issued pursuant to any such exercise shall be
issued free of all legends.  If at any time following the date hereof
the Registration Statement (or any subsequent registration statement registering
the sale or resale of the Warrant Shares) is not effective or is not otherwise
available for the sale or resale of the Warrant Shares, the Company shall
immediately notify the holders of the Warrants in writing that such registration
statement is not then effective and thereafter shall promptly notify such
holders when the registration statement is effective again and available for the
sale or resale of the Warrant Shares (it being understood and agreed that the
foregoing shall not limit the ability of the Company to issue, or any Purchaser
to sell, any of the Warrant Shares in compliance with applicable federal and
state securities laws).  The Company shall use best efforts to keep a
registration statement (including the Registration Statement) registering the
issuance or resale of the Warrant Shares effective during the term of the
Warrants.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    4.2       
   Furnishing of
Information.  Until the earliest of the time that (i) no
Purchaser owns Securities or (ii) the Warrants have expired, the Company
covenants use all reasonable efforts 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, if the Company is subject to the reporting requirements of the
Exchange Act.

     

    4.3        
  Integration.  The
Company shall not 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 Securities for
purposes of the rules and regulations of any Trading Market such that it would
require shareholder approval prior to the closing of such other transaction
unless shareholder approval is obtained before the closing of such subsequent
transaction.

     

    4.4        
  Securities Laws
Disclosure; Publicity.  The Company shall (a) by 9:00 a.m. (New
York City time) on the Trading Day immediately following the date hereof, issue
a press release disclosing the material terms of the transactions contemplated
hereby, and (b) file a Current Report on Form 8-K, including the Transaction
Documents as exhibits thereto, with the Commission within the time required by
the Exchange Act.  From and after the issuance of such press release,
the Company represents to the Purchasers that it shall have publicly disclosed
all material, non-public information delivered to any of the Purchasers by the
Company or any of its Subsidiaries, or any of their respective officers,
directors, employees or agents in connection with the transactions contemplated
by the Transaction Documents.  The Company and each Purchaser shall consult
with each other in issuing any other press releases with respect to the
transactions contemplated hereby, and neither the Company nor any Purchaser
shall issue any such press release nor otherwise make any such public statement
without the prior consent of the Company, with respect to any press release of
any Purchaser, or without the prior consent of each Purchaser, with respect to
any press release of the Company, which consent shall not unreasonably be
withheld or delayed, except if such disclosure is required by law, in which case
the disclosing party shall promptly provide the other party with prior notice of
such public statement or communication.  Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or
include the name of any Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of such
Purchaser, except (a) as required by federal securities law in connection with
the filing of final Transaction Documents (including signature pages thereto)
with the Commission and (b) to the extent such disclosure is required by law or
Trading Market regulations.

     

    4.5      
    Shareholder Rights
Plan.  No claim will be made or enforced by the Company or,
with the consent of the Company, any other Person, that any Purchaser is an
“Acquiring Person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar
anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of any such plan
or arrangement, by virtue of receiving Securities under the Transaction
Documents or under any other agreement between the Company and the
Purchasers.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    4.6        
  Non-Public
Information.  Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company covenants and agrees that neither it, nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any information
that the Company believes constitutes material non-public information, unless
prior thereto such Purchaser shall have entered into a written agreement with
the Company regarding the confidentiality and use of such
information.  The Company understands and confirms that each Purchaser
shall be relying on the foregoing covenant in effecting transactions in
securities of the Company.

     

    4.7       
   Use of
Proceeds.  The Company shall use the net proceeds from the sale
of the Securities hereunder for working capital purposes or as otherwise
described in the Prospectus Supplement and shall not use such proceeds: (a) for
the redemption of any Common Stock or Common Stock Equivalents, (b) for the
settlement of any outstanding litigation or (c) in violation of the “FCPA”
(means the Foreign Corrupt Practices Act) or OFAC regulations.

    .

    4.8       
   Indemnification of
Purchasers.   Subject to the provisions of this Section
4.8, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other
Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“Purchaser
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 that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their respective
Affiliates, by any stockholder of the Company who is not an Affiliate of such
Purchaser Party, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of such
Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with
any such stockholder or any violations by such Purchaser Party of state or
federal securities laws or any conduct by such Purchaser Party which constitutes
fraud, gross negligence, willful misconduct or malfeasance).  If any
action shall be brought against any Purchaser Party in respect of which
indemnity may be sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and the Company shall have the right to
assume the defense thereof with counsel of its own choosing reasonably
acceptable to the Purchaser Party.  Any Purchaser Party shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of
counsel, a material conflict on any material issue between the position of the
Company and the position of such Purchaser Party, in which case the Company
shall be responsible for the reasonable fees and expenses of no more than one
such separate counsel.  The Company will not be liable to any
Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party
effected without the Company’s prior written consent, which shall not be
unreasonably withheld or delayed; or (z) to the extent, but only to the extent
that a loss, claim, damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or agreements made
by such Purchaser Party in this Agreement or in the other Transaction Documents.
The indemnification required by this Section 4.8 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or are incurred. The indemnity
agreements contained herein shall be in addition to any cause of action or
similar right of any Purchaser Party against the Company or others, and (y) any
liabilities the Company may be subject to pursuant to law.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    4.9       
   Reservation of Common
Stock. As of the date hereof, the Company has reserved and the Company
shall continue to reserve and keep available at all times, free of preemptive
rights, a sufficient number of shares of Common Stock for the purpose of
enabling the Company to issue Shares pursuant to this Agreement and Warrant
Shares pursuant to any exercise of the Warrants, subject to such adjustment to
such reserve as may occur pursuant to the terms and adjusment provisions of the
Warrants or any corporate restructuring.

     

    4.10    
    Listing
of Common Stock. The Company hereby agrees to use best efforts (but shall
not be obliged to conduct a reverse stock split) to maintain the listing or
quotation of the Common Stock on the Trading Market on which it is currently
listed, and concurrently with the Closing, the Company shall apply to list or
quote all of the Shares and Warrant Shares on such Trading Market and promptly
secure the listing of all of the Shares and Warrant Shares on such Trading
Market, if required by the rules of the Trading Market. The Company further
agrees, if the Company applies to have the Common Stock traded on any other
Trading Market, it will then include in such application all of the Shares and
Warrant Shares, and will take such other action as is necessary to cause all of
the Shares and Warrant Shares to be listed or quoted on such other Trading
Market as promptly as possible.  The Company will then take all action
reasonably necessary to continue the listing and trading of its Common Stock on
a Trading Market and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Trading
Market.

     

    4.11    
    Equal
Treatment of Purchasers.  No consideration (including any
modification of any Transaction Document) shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of any of the
Transaction Documents unless the same consideration is also offered to all of
the parties to the Transaction Documents.  For clarification purposes,
this provision constitutes a separate right granted to each Purchaser by the
Company and negotiated separately by each Purchaser, and is intended for the
Company to treat the Purchasers as a class and shall not in any way be construed
as the Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    4.12     
   Certain
Transactions and Confidentiality. Each Purchaser, severally and not
jointly with the other Purchasers, covenants that neither it nor any Affiliate
acting on its behalf or pursuant to any understanding with it will execute any
purchases or sales, including Short Sales of any of the Company’s securities
during the period commencing with the execution of this Agreement and ending at
such time that the transactions contemplated by this Agreement are first
publicly announced pursuant to the initial press release as described in Section
4.4.  Each Purchaser, severally and not jointly with the other Purchasers,
covenants that until such time as the transactions contemplated by this
Agreement are publicly disclosed by the Company pursuant to the initial press
release as described in Section 4.4, such Purchaser will maintain the
confidentiality of the existence and terms of this transaction and the
information included in the Disclosure Schedules.  Notwithstanding the
foregoing and notwithstanding anything contained in this Agreement to the
contrary, the Company expressly acknowledges and agrees that (i) no Purchaser
makes any representation, warranty or covenant hereby that it will not engage in
effecting transactions in any securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.4, (ii) no
Purchaser shall be restricted or prohibited from effecting any transactions in
any securities of the Company in accordance with applicable securities laws from
and after the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as described in
Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality to the
Company or its Subsidiaries after the issuance of the initial press release as
described in Section 4.4.  Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s assets, the
covenant set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement.

     

    4.15   
      Delivery of Warrants After
Closing.  The Company shall deliver, or cause to be delivered,
the respective Warrant certificates purchased by each Purchaser to such
Purchaser within 3 Trading Days of the Closing Date.

     

    4.16    
    Capital
Changes.  Until the one year anniversary of the Closing Date,
the Company shall not undertake a reverse or forward stock split or
reclassification of the Common Stock without the prior written consent of the
Purchasers holding a majority in interest of the Shares or unless required by
the rule of the Trading Market to maintain a listing on such Trading
Market.

     

    4.17          Right to
Participate.  For the  thirty (30) trading days after
the Closing Date, the Company will make a daily determination related to its
ability to issue additional shares pursuant to the Registration Statement and
the Company shall notify Purchasers of such determination after closing on the
Trading Market.  Purchasers shall thereafter have the right, but not
the obligation, to purchase such additional shares during the time period the
Company has the ability to issue the additional shares.  The purchase
price for such additional shares shall be the the closing bid price on the date
immediately prior to the date the Purchasers purchase the additional shares.
The Parties agree
that the rights in this Section 4.17 are superior to and shall be entitled to be
effectuated prior to the rights in Section 4.17 of that Securities Purchase
Agreement dated August 16, 2010.  Purchasers represent and warrant to
the Company that they have all requisite authority to agree to this provision on
behalf of the purchasers in the Securities Purchase Agreement dated August 16,
2010.

    

    4.18          Issuance of Other
Securities.  The Company shall not to issue any securities
(including any security convertible or exercisable into common stock) in a bona
fide financing transaction at a price under $0.20 per share without the consent
of the investors for a period of one year from the date of
Closing.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    ARTICLE
V.

    MISCELLANEOUS

     

    5.1        
  Termination. 
This Agreement may be terminated by any Purchaser, as to such Purchaser’s
obligations hereunder only and without any effect whatsoever on the obligations
between the Company and the other Purchasers, by written notice to the other
parties, if the Closing has not been consummated on or before September 22,
2010; provided,
however, that
no such termination will affect the right of any party to sue for any breach by
any other party (or parties).

     

    5.2         
 Fees and
Expenses.  Except as expressly set forth in the Transaction
Documents to the contrary, 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 this Agreement.  The Company shall pay all
Transfer Agent fees, stamp taxes and other taxes and duties levied in connection
with the delivery of any Securities to the Purchasers.

     

    5.3        
  Entire
Agreement.  The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules.

     

    5.4     
     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 at the facsimile number set forth on
the signature pages attached hereto at or prior to 5:30 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 set forth on the signature pages attached hereto on a day that is not a
Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c)
the second (2nd)
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 set forth on the signature pages attached
hereto.

     

    5.5      
    Amendments;
Waivers.  No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and the Purchasers holding at least 67% in
interest of the Shares based on the initial Subscription Amounts hereunder or,
in the case of a waiver, by the party against whom enforcement of any such
waived provision is sought.  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 any party to exercise any right hereunder in any manner
impair the exercise of any such right.

     

    5.6     
      Headings.  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.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    5.7      
    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 each Purchaser (other
than by merger).  Any Purchaser may assign any or all of its rights
under this Agreement to any Person to whom such Purchaser assigns or transfers
any Securities, provided that such transferee agrees in writing to be bound,
with respect to the transferred Securities, by the provisions of the Transaction
Documents that apply to the “Purchasers.”

     

    5.8        
  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 4.8.

     

    5.9         
 Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents 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 legal 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, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or is an inconvenient venue for such
proceeding.  Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof 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 other manner permitted by law.  If
either party shall commence an action, suit or proceeding to enforce any
provisions of the Transaction Documents, then, in addition to the obligations of
the Company under Section 4.8, the prevailing party in such action, suit or
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 action or proceeding.

     

    5.10     
    Survival.  The
representations and warranties contained herein shall survive the Closing and
the delivery of the Securities.

     

    5.11        
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 each
other party, it being understood that the parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, 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 or “.pdf” signature page were an original
thereof.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    5.12        
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 commercially
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.

     

    5.13       
 Rescission and
Withdrawal Right.  Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) any of the other
Transaction Documents, whenever any Purchaser 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
Purchaser 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; provided, however, that in the
case of a rescission of an exercise of a Warrant, the applicable Purchaser shall
be required to return any shares of Common Stock subject to any such rescinded
exercise notice concurrently with the return to such Purchaser of the aggregate
exercise price paid to the Company for such shares and the restoration of such
Purchaser’s right to acquire such shares pursuant to such Purchaser’s Warrant
(including, issuance of a replacement warrant certificate evidencing such
restored right).

     

    5.14     
   Replacement of
Securities.  If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), 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.  The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Securities.

     

    5.15    
    Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of the Purchasers 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 contained in the Transaction Documents and hereby agree to waive and
not to assert in any action for specific performance of any such obligation the
defense that a remedy at law would be adequate.

     

    5.16    
    Payment Set
Aside.  To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
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.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    5.17     
   Independent Nature of
Purchasers’ Obligations and Rights.  The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document.  Nothing contained herein or
in any other Transaction Document, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers 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 Purchaser 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 Purchaser to be joined as an
additional party in any proceeding for such purpose.  Each Purchaser
has been represented by its own separate legal counsel in its review and
negotiation of the Transaction Documents.  The Company has elected to
provide all Purchasers with the same terms and Transaction Documents for the
convenience of the Company and not because it was required or requested to do so
by any of the Purchasers.  It is expressly understood and agreed that
each provision contained in this Agreement and in each other Transaction
Document is between the Company and a Purchaser, solely, and not between the
Company and the Purchasers collectively and not between and among the
Purchasers.

     

    5.18         
Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein shall not be a
Business Day, then such action may be taken or such right may be exercised on
the next succeeding Business Day.

     

    5.19    
    Construction. The
parties agree that each of them and/or their respective counsel have reviewed
and had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction
Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common
Stock that occur after the date of this Agreement.

     

    5.20   
   WAIVER OF
JURY TRIAL.  IN ANY
ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY
OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST
EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

    

    (Signature
Pages Follow)

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    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.

    

    
      
        
          	
                  NEW
      GENERATION BIOFUELS HOLDINGS, INC.

                	 
      	
                  Address
      for Notice:

                
	 
      	 
      	 
      
	
                  By:

                	 
      	 
      	
                  Fax:

                
	 
      	
                  Name:

                	 
      	 
      
	 
      	
                  Title:

                	 
      	 
      
	 	 	 
	
                  With
      a copy to (which shall not constitute notice):

                	 
      	 
      

        

      

    

    

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    [PURCHASER
SIGNATURE PAGES TO NGBF SECURITIES PURCHASE AGREEMENT]

    

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

     

    Name of
Purchaser: ________________________________________________________

    Signature of Authorized Signatory of
Purchaser:

    _________________________________

    Name of
Authorized Signatory:

    

    _______________________________________________

    Title of
Authorized Signatory:

    

    ________________________________________________

    Email
Address of Authorized

    

    Signatory:________________________________________

    

    Facsimile
Number of Authorized Signatory:

    __________________________________________

    

    Address
for Notice to Purchaser:

    

    Address
for Delivery of Securities to Purchaser (if not same as address for
notice):

    

    Subscription
Amount: $_________________

    

    Shares:
_________________

    

    Warrant
Shares: __________________

    

    EIN
Number:  [PROVIDE
THIS UNDER SEPARATE COVER]

    

     ̈  Notwithstanding
anything contained in this Agreement to the contrary, by checking this box (i)
the obligations of the above-signed to purchase the securities set forth in this
Agreement to be purchased from the Company by the above-signed, and the
obligations of the Company to sell such securities to the above-signed, shall be
unconditional and all conditions to Closing shall be disregarded, (ii) the
Closing shall occur on the third (3rd)
Trading Day following the date of this Agreement and (iii) any condition to
Closing contemplated by this Agreement (but prior to being disregarded by clause
(i) above) that required delivery by the Company or the above-signed of any
agreement, instrument, certificate or the like or purchase price (as applicable)
shall no longer be a condition and shall instead be an unconditional obligation
of the Company or the above-signed (as applicable) to deliver such agreement,
instrument, certificate or the like or purchase price (as applicable) to such
other party on the Closing Date.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    FORM
OF WARRANTUnassociated Document

     

    REGISTRATION RIGHTS
AGREEMENT

     

    This
Registration Rights Agreement (the “Agreement”) made as of the __
day of January, 2007 by and among BioLine Rx Ltd., with a business address at 19
Hartum St., P.O. Box 45158, Jerusalem 91450, Israel (the “Company”) and shareholders of
the Company listed on Schedule 1 hereto (the “Holders”);

     

    WITNESSETH

     

    WHEREAS the Board of Directors
of the Company has determined that it is in the best interest of the Company
that the Company shall grant the Holders certain rights as set forth herein;
and

     

    NOW THEREFORE, the parties,
intending to be legally bound, hereby agree as follows:

     

    1.           
Registration.  The
following provisions govern the registration of the Company's
securities:

     

    1.1          Definitions.  As
used herein, the following terms have the following meanings:

     

    (a)          "Form
S-3" means Form S-3 or Form F-3 under the United States Securities Act of
1933, as amended (the "Securities Act"), as in effect
on the date hereof or any registration form under the Securities Act
subsequently adopted by the Securities and Exchange Commission ("SEC") which permits inclusion
or incorporation of substantial information by reference to other documents
filed by the Company with the SEC;

     

    (b)           

     

    "IPO"
shall mean the first registration statement for a public offering of securities
of the Company, other than a registration statement relating to the sale of
securities to employees of the Company pursuant to a stock option, stock
purchase or similar plan;

     

     (c)         "Registrable
Securities" means (1) Ordinary Shares now owned or hereafter acquired by
the Holders, including all Ordinary Shares issuable with respect to Preferred
Shares of the Company, and (2) any Ordinary Shares issued in respect of the
shares described in clause (1) above (as a result of share splits, share
dividends, reclassifications, recapitalizations or similar); provided, however,
that Ordinary Shares that are Registrable Securities shall cease to be
Registrable Securities upon (i) any sale thereof pursuant to a Registration
Statement or Rule 144 under the Securities Act or (ii) any sale thereof in any
manner to a person or entity which is not entitled to the rights provided by
this Agreement;

     

    (d)          "Register",
"registered"
and "registration"
refer to a registration effected by filing a registration statement in
compliance with the Securities Act and the declaration or ordering by the SEC of
effectiveness of such registration statement, or the equivalent actions under
the laws of any other jurisdiction;

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    1.2          Incidental
Registration.

     

    (a)           If
the Company at any time proposes to register any of its securities (other than
in its IPO, a demand registration under Section 1.3, a registration relating to
stock option plan(s) of the Company, or a registration on Form F-4/S-4 in
connection with a merger, acquisition or other business combination, but
including the first public offering of the Company’s shares in a U.S. market
following an IPO), it shall give prompt written notice to all Holders of such
intention, together with a list of jurisdictions in which the Company intends to
attempt to qualify such securities under applicable state securities
laws.  Upon the written request of any such Holder given within twenty
(20) days after receipt of any such notice, the Company shall include in such
registration all of the Registrable Securities indicated in such request, so as
to permit the disposition of the shares so registered. The said “piggyback”
or incidental right of the Holders under this Section, may be exercised an
unlimited number of times.

     

    (b)           Notwithstanding
any other provision of this Section 1.2, if the managing underwriter, if any,
advises the Company in writing that marketing factors require a limitation of
the number of shares to be underwritten (an "Underwriters' Cutback"), then,
there shall be excluded from such registration and underwriting, to the extent
necessary to satisfy such limitation, first,
securities of the Company not held by the Holders, to the extent necessary, and
second,
Registrable Securities, to the extent necessary (on a pro rata basis according
to the respective holdings of the Holders of Registrable Securities at the time
of such registration); provided however,
that if the number of Registrable Securities to be registered by the Holders is
limited by the underwriter, the securities to be sold for the account of the
Company shall have priority over those of the Holders in each such registration
and the number of Registrable Securities, if any, that may be included in the
registration shall be in accordance with the above order and preference; further
provided, however, that without the written consent of the Holders holding a
majority of the Registrable Securities requested to be included in such
registration the Registrable Securities held by the Holders shall not be reduced
to less than twenty-five percent (25%) of the aggregate shares to be registered
in such underwriting.

     

    1.3          Demand
Registration.

     

    (a)           If
the Company receives, at any time beginning six (6) months after the effective
date of the IPO, from the Holders of a majority in interest of the Registrable
Securities (calculated on an as converted basis) then outstanding, a request in
writing that all or part of the Registrable Securities held by them having an
aggregate value of at least $5,000,000 shall be registered for trading under the
Securities Act, then, within seven (7) days after receipt of any such request,
the Company shall give written notice of such request to the other Holders, and
shall include in such registration all Registrable Securities held by all such
Holders who wish to participate in such demand registration and provide the
Company with written requests for inclusion therein within fifteen (15) days
after the receipt of the Company's notice.  Thereupon, the Company
shall use its best efforts to effect the registration of all Registrable
Securities, as to which it has received requests for registration under the
Securities Act.

     

    (b)           Notwithstanding
any other provision of Section 1.3(a), if the managing underwriter, if any,
advises the Company in writing that marketing factors require an Underwriters
Cutback, then there shall be excluded from such registration and underwriting,
to the extent necessary to satisfy such limitation, first,
securities of the Company not held by the Holders, to the extent necessary, and
second,
Registrable Securities, to the extent necessary (on a pro rata basis according
to the respective holdings of the Holders of Registrable Securities at the time
of such registration); provided however, that in any event all Registrable
Securities must be included in such registration prior to any other shares of
the Company.  The Holders shall not be entitled to request a
registration under Section 1.3(a) if the Company shall furnish to the Holders a
certificate signed by the CEO of the Company confirming that in the good faith
judgment of the Board of Directors of the Company it would be seriously
detrimental to the Company or its shareholders for such registration statement
to be effected at such time, in which event the Company shall have the right to
defer the filing of the registration statement for a period of no more than
ninety (90) days after the receipt of the request of the Holders under Section
1.3(a); provided,
however, the Company may not make more than one (1) such deferral in any
twelve (12) month period.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c)           In
addition, the Company shall not be obligated to effect, or to take any action to
effect, any registration pursuant to Section 1.3(a):

     

    (i)           after
the Company has effected two (2) registrations pursuant to
Section 1.3(a);

    

    (ii)          during
the period ending (A) six (6) months after the effective date of a registration
subject to Section 1.3(a) hereof or (B) six (6) months after the effective date
of any other registration statement pertaining to Ordinary Shares of the
Company, or such shorter periods if such shorter periods are acceptable to the
underwriters of such offering;

    

    (iii)         in
any jurisdiction in which the Company would be required to execute a general
consent to service of process in effecting such registration, qualification or
compliance, unless the Company is already subject to service in such
jurisdiction and except as may be required by the Securities Act or applicable
rules or regulations thereunder; or

     

    (iv)         if
such request does not cover shares representing a market value at the time of
such request equal to a minimum of $5,000,000.

     

    1.4          Form S-3
Registration.

     

    (a)           In
the event the Company receives from any Holder a written request that the
Company effect a registration on Form S-3, and any related qualification or
compliance, the Company will within seven (7) days from receipt of any such
request give written notice of the proposed registration, and any related
qualification or compliance, to all other Holders, and include in such
registration all Registrable Securities held by all such Holders, who wish to
participate in such registration and provide the Company with written requests
for inclusion therein within fifteen (15) days after the receipt of the
Company's notice.  Thereupon, the Company shall use its best efforts
to effect such registration of the Registrable Securities held by the Holders,
and all such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request.

     

    (b)             In
addition, the Company shall not be obligated to effect, or to take any action to
effect, any registration qualification or compliance pursuant to
Section 1.4(a):

     

    (i)           if
the Company has, within the twelve (12) month period preceding the date of such
request, already effected two registrations on Form S-3 for the Holders
pursuant to this Section 1.4;

    

    (ii)          in
any particular jurisdiction in which the Company would be required to qualify to
do business or to execute a general consent to service of process in effecting
such registration, qualification or compliance;

    

    (iii)         during
the period ending 90 days after the effective date of any registration statement
pertaining to Ordinary Shares of the Company (or such shorter period if such
shorter period is acceptable to the underwriters of such offering);

     

    (iv)         if
such request does not cover shares representing a market value at the time of
such request equal to a minimum of $1,000,000; or

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (v)          if
Form S-3 is not available for such offering by the Holders.

     

    1.5          Designation of
Underwriter.

     

    (a)           In
the case of any underwritten registration effected pursuant to Section 1.3,
a majority in interest of the Holders of the Registrable Shares (calculated on
an as converted basis) that submitted the request for registration shall appoint
an underwriter reasonably acceptable to the Company.

     

    (b)           In
the case of any registration initiated by the Company, the Company shall have
the right to designate the managing underwriter in any underwritten
offering.

     

    1.6          Expenses.  All
expenses incurred in connection with any registration or sale of shares under
Section 1.2, Section 1.3 or Section 1.4 shall be borne by the Company (including
fees up to $200,000 of one counsel for the selling shareholders); provided, however,
that each of the Holders participating in such registration or sale shall pay
its pro rata portion of the customary and standard discounts or commissions
payable to any underwriter.

     

    1.7          Indemnities.  In
the event of any registered offering of Ordinary Shares pursuant to this
Section 1:

     

    1.7.1       The
Company will indemnify and hold harmless, to the fullest extent permitted by
law, any Holder (including its officers, directors, partners and legal counsel)
and any underwriter for such Holder, and each person, if any, who controls the
Holder or such underwriter, from and against any and all losses, damages,
claims, liabilities, joint or several, costs and expenses (including any amounts
paid in any settlement effected with the Company's consent) to which the Holder
or any such underwriter or controlling person may become subject under
applicable law or otherwise, insofar as such losses, damages, claims,
liabilities (or actions or proceedings in respect thereof), costs or expenses
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the registration statement or
included in the prospectus, as amended or supplemented including any free
writing prospectus, or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they are made, not
misleading, (iii) any violation or alleged violation by the Company of the
Securities Act, the Securities Exchange Act of 1934, as amended, any state
securities law; or any rule or regulation promulgated under the Securities Act,
Securities Exchange Act or any state security law; and the Company will
reimburse the Holder, such underwriter and each such controlling person of the
Holder or the underwriter, promptly upon demand, for any legal or any other
expenses reasonably incurred by them in connection with investigating, preparing
to defend or defending against or appearing as a third-party witness in
connection with such loss, claim, damage, liability, action or proceeding;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, damage, liability, cost or expense arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished in writing by
a  Holder, such underwriter or such controlling persons in writing
specifically for inclusion therein; provided, further, that the indemnity
agreement contained in this subsection 1.7.1 shall not apply to amounts
paid in settlement of any such claim, loss, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the selling
shareholder, the underwriter or any controlling person of the selling
shareholder or the underwriter, and regardless of any sale in connection with
such offering by the selling shareholder. Such indemnity shall survive the
transfer of securities by a selling shareholder.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    1.7.2       Each
Holder participating in a registration hereunder will indemnify and hold
harmless the Company, any underwriter for the Company, and each person, if any,
who controls the Company or such underwriter, from and against any and all
losses, damages, claims, liabilities, costs or expenses (including any amounts
paid in any settlement effected with the selling shareholder's consent) to which
the Company or any such controlling person and/or any such underwriter may
become subject under applicable law or otherwise, insofar as such losses,
damages, claims, liabilities (or actions or proceedings in respect thereof),
costs or expenses arise out of or are based on (i) any untrue or alleged
untrue statement of any material fact contained in the registration statement or
included in the prospectus, as amended or supplemented, including any free
writing prospectus or (ii) the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances in which they were made,
not misleading, and each such Holder will reimburse the Company, any underwriter
and each such controlling person of the Company or any underwriter, promptly
upon demand, for any reasonable legal or other expenses incurred by them in
connection with investigating, preparing to defend or defending against or
appearing as a third-party witness in connection with such loss, claim, damage,
liability, action or proceeding; in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was so made in strict conformity with written information
furnished by such  Holder specifically for inclusion therein. The
foregoing indemnity agreement is subject to the condition that, insofar as it
relates to any such untrue statement (or alleged untrue statement) or omission
(or alleged omission) made in the preliminary prospectus but eliminated or
remedied in the amended prospectus at the time the registration statement
becomes effective or in the Final Prospectus, such indemnity agreement shall not
inure to the benefit of (i) the Company and (ii) any underwriter, if a
copy of the Final Prospectus was not furnished to the person or entity asserting
the loss, liability, claim or damage at or prior to the time such furnishing is
required by the Securities Act; provided, further, that this indemnity shall not
be deemed to relieve any underwriter of any of its due diligence obligations;
provided, further, that the indemnity agreement contained in this
subsection 1.7.2 shall not apply to amounts paid in settlement of any such
claim, loss, damage, liability or action if such settlement is effected without
the consent of the Holders, as the case may be, which consent shall not be
unreasonably withheld.  In no event shall the liability of a Holder
exceed the net proceeds from the offering received by such Holder.

     

    1.7.3       Promptly
after receipt by an indemnified party pursuant to the provisions of Sections
1.7.1 or 1.7.2 of notice of the commencement of any action involving the subject
matter of the foregoing indemnity provisions, such indemnified party will, if a
claim thereof is to be made against the indemnifying party pursuant to the
provisions of said Section 1.7.1 or 1.7.2, promptly notify the indemnifying
party of the commencement thereof; but the omission to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than hereunder.  In case such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party shall have the right to
participate in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any action include both the indemnified party and the
indemnifying party and there is a conflict of interests which would prevent
counsel for the indemnifying party from also representing the indemnified party,
the indemnified party or parties shall have the right to select one separate
counsel to participate in the defense of such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of said Sections 1.7.1 or 1.7.2 for any legal or other expense
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed counsel in
accordance with the provision of the preceding sentence, (ii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after the
notice of the commencement of the action and within fifteen (15) days after
written notice of the indemnified party's intention to employ separate counsel
pursuant to the previous sentence, or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party.  No indemnifying party will consent to entry
of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    1.7.4       If
recovery is not available under the foregoing indemnification provisions, for
any reason other than as specified therein, the parties entitled to
indemnification by the terms thereof shall be entitled to contribution to
liabilities and expenses as more fully set forth in an underwriting agreement to
be executed in connection with such registration. In determining the amount of
contribution to which the respective parties are entitled, there shall be
considered the parties' relative knowledge and access to information concerning
the matter with respect to which the claim was asserted, the opportunity to
correct and prevent any statement or omission, and any other equitable
considerations appropriate under the circumstances. In no event shall the
contribution obligation of a Holder exceed the net proceeds from the offering
received by such Holder.

     

    1.8          Obligations of the
Company.  Whenever required under this Section 1 to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as possible:

     

    1.8.1       Prepare
and file with the SEC a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become effective, and, upon the request of the holders of a majority of the
Registrable Securities registered thereunder, keep such registration statement
effective for a period of up to nine months or, if sooner, until the
distribution contemplated in the Registration Statement has been
completed;

     

    1.8.2       Prepare
and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration statement
as may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by such
registration statement;

     

    1.8.3       Furnish
to the Holders such numbers of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents, including any free writing prospectus as they may reasonably
request in order to facilitate the disposition of Registrable Securities owned
by them;

     

    1.8.4       In
the event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the managing underwriter of such offering.  Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement;

     

    1.8.5       Notify
each holder of Registrable Securities covered by such registration statement at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;

     

    1.8.6       Cause
all Registrable Securities registered pursuant hereunder to be listed on each
securities exchange on which similar securities issued by the Company are then
listed;

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    1.8.7       Provide
a transfer agent and registrar for all Registrable Securities registered
pursuant hereunder and a CUSIP number for all such Registrable Securities, in
each case not later than the effective date of such registration;

     

    1.8.8       Furnish,
at the request of any Holder requesting registration of Registrable Securities
pursuant to this Section 1, on the date that such Registrable Securities are
delivered to the underwriters for sale in connection with a registration
pursuant to this Section 1, if such securities are being sold through
underwriters, or, if such securities are not being sold through underwriters, on
the date that the registration statement with respect to such securities becomes
effective, (i) an opinion, dated such date, of the counsel representing the
Company for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the  Holders requesting
registration of Registrable Securities, and (ii) a letter dated such date, from
the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable
Securities;

     

    1.9          Assignment of Registration
Rights.  Any of the Holders may assign its rights to cause the
Company to register Shares pursuant to this Section 1 to any transferee of its
Registrable Securities; provided, however,
that within thirty (30) days subsequent to such transfer, such transferor shall
furnish the Company with written notice of the name and address of such
transferee and the securities with respect to which such registration rights are
being assigned, and the transferee's written agreement to be bound by this
Section 1.

     

    1.10        Lock-Up and Other Requests
by the Underwriter.  Each Holder hereby agrees that such Holder
shall not sell or otherwise transfer or dispose of any Registrable Securities of
the Company held by such Holder (other than those included in the registration)
for a period specified by the representative of the underwriters of Ordinary
Shares (or other securities) of the Company not to exceed one hundred eighty
(180) days following the effective date of the IPO, and provided that each of
the senior officers of the Company (i.e. CEO and CFO) and holders of at least
one percent (1%) of the Company’s issued and outstanding shares enters in an
identical undertaking. Each Holder agrees to execute and deliver such other
agreements as may be reasonably requested by the Company or the underwriter
which are consistent with the foregoing or which are necessary to give further
effect thereto. The Company may impose stop-transfer instructions with respect
to the shares of Ordinary Shares (or other securities) subject to the foregoing
restriction until the end of said one hundred eighty (180) day
period;

     

    1.11        Rule 144
Reporting.  With a view to making available to the Holders the
benefits of certain rules and regulations of the SEC which may permit the sale
of the Registrable Securities to the public without registration, the Company
agrees to use its best efforts to:

     

    (a)           make
and keep public information available, as those terms are understood and defined
in SEC Rule 144 or any similar or analogous rule promulgated under the
Securities Act, at all times after the effective date of the first registration
filed by the Company for an offering of its securities to the general
public;

     

    (b)           file
with the SEC, in a timely manner, all reports and other documents required of
the Company under the Exchange Act; and

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c)           so
long as a Holder owns any Registrable Securities, furnish to such Holder
forthwith upon request: a written statement by the Company as to its compliance
with the reporting requirements of said Rule 144 of the Securities Act, and of
the Exchange Act (at any time after it has become subject to such reporting
requirements); a copy of the most recent annual or quarterly report of the
Company; and such other reports and documents as a Holder may reasonably request
in availing itself of any rule or regulation of the SEC allowing it to sell any
such securities without registration;

     

    1.12        Termination of Registration
Rights.  All registration rights granted under this Section 1,
shall terminate and be of no further force and effect five (5) years after the
date of the IPO.  In addition, a Holder's registration rights shall
expire if all Registrable Securities held by and issuable to such Holder may be
sold under Rule 144(k) during any ninety (90) day period.

     

    1.13        Additional Rights to Third
Parties.  The Company shall not grant shareholder registration
rights to any party that is not a party to this Agreement having preference
over, or in parity with, the registration rights of the Holders hereunder,
without the written consent of a majority of interest of the holders of the
Registrable Securities.

     

    2.            Miscellaneous.

     

    2.1          
Further
Assurances.  Each of the parties hereto shall perform such
further acts and execute such further documents as may reasonably be necessary
to carry out and give full effect to the provisions of this Agreement and the
intentions of the parties as reflected thereby.

     

    2.2          Governing
Law.  This Agreement shall be governed by and construed
according to the laws of New York, without regard to the conflict of laws
provisions thereof.

     

    2.3          Successors and
Assigns.  Except as otherwise expressly limited herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties
hereto.

     

    2.4          Entire Agreement; Amendment
and Waiver.

     

    (a)           This
Agreement constitutes the full and entire understanding and agreement between
the parties, and supersedes any agreement and understanding between any of the
parties, with regard to the subject matters hereof.  (b)Any term of
this Agreement (as amended) may be amended and the observance of any term hereof
may be waived (either prospectively or retroactively and either generally or in
a particular instance) only with the written consent of: (i) the Company, and
(ii) a majority of interest of the holders of Registrable Securities (calculated
on an as converted basis); provided that (x) should such waiver or amendment
adversely affect the rights or privileges granted hereunder to the particular
Holder or group of Holders, in a manner which discriminates such Holder/s
against other Holders (a “Discriminated Class”), such waiver or amendment shall
be subject to the written approval of the Holder/s who are the owners of record
of a majority of the outstanding shares of such Discriminated Class, and (y) any
right or limitation provided for the express benefit of a specifically named
party may not be amended or waived without the consent of such party. Any
amendment or waiver effected in accordance with this Section 2.4 shall be
binding upon the Company, the Holders, and each of their respective successors
and assigns.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2.5          Notices,
etc.

     

    2.5.1       All
notices and other communications made pursuant to this Agreement shall be in
writing and shall be conclusively deemed to have been duly given: (i) in the
case of hand delivery to the address shown below, on the next Business Day after
delivery; (ii) in the case of delivery by an internationally recognized
overnight courier to the address set forth below, freight prepaid, on the next
Business Day after delivery; (iii) in the case of a notice sent by facsimile
transmission or email to the number, and addressed as, set forth below, on the
next Business Day after delivery, if facsimile transmission or email is
confirmed; (iv) in the case of a notice sent by email to any of the email
addresses set forth in  Schedule 1 hereto, on the date of written
acknowledgment of receipt of such email by the receiving party. A “Business Day”
means a day on which the banks are open for business in the country of receipt
of any notice.

     

    2.5.2       In
the event that notices are given pursuant to one of the methods listed in
subsections 2.5.1 (i) to (iii) above, a copy of the notice shall also be sent by
email to such address set forth in Schedule 1.

     

    2.5.3       A
party may change or supplement the contact details for service of any notice
pursuant to this Agreement, or designate additional addresses, facsimile numbers
and email addresses for the purposes of this Section 2.5 by giving the other
party written notice of the new contact details in the manner set forth
above.

     

    
      
        
          
            	
                    if
      to the Holders:

                  	
                    to
      the addresses set forth in Schedule
      1;

                  
	 
      	 
      
	
                    If
      to the Company:

                  	
                    To
      the address set forth in the Preamble

                  
	 
      	 
      
	
                    With
      a copy to:

                  	
                    Yigal
      Arnon & Co.

                  
	 
      	
                    22
      Rivlin Street

                  
	 
      	
                    Jerusalem,
      Israel 91000

                  
	 
      	
                    Attn.:
      Adv. Barry P. Levenfeld

                  
	 
      	
                    Tel:
      972-2-623-9200

                  
	 
      	
                    Fax:
      972-2-623-9236

                  

          

        

      

    

     

    2.6          Delays or
Omissions.  No delay or omission to exercise any right, power,
or remedy accruing to any party upon any breach or default under this Agreement,
shall be deemed a waiver of any other breach or default therefore or
thereafter.  Any waiver, permit, consent, or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing.  All remedies,
either under this Agreement or by law or otherwise afforded to any of the
parties, shall be cumulative and not alternative.

     

    2.7          Severability.  If
any provision of this Agreement is held by a court of competent jurisdiction to
be unenforceable under applicable law, then such provision shall be excluded
from this Agreement and the remainder of this Agreement shall be interpreted as
if such provision were so excluded and shall be enforceable in accordance with
its terms; provided, however, that in such event this Agreement shall be
interpreted so as to give effect, to the greatest extent consistent with and
permitted by applicable law, to the meaning and intention of the excluded
provision as determined by such court of competent jurisdiction.

     

    2.8          Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original and enforceable against the parties actually executing such
counterpart, and all of which together shall constitute one and the same
instrument.

     

    2.9          No Third Party
Beneficiaries.  Except as expressly provided in this Agreement,
this Agreement (including the documents and instruments referred to herein) is
not intended to confer on any person other than the parties hereto any rights,
remedies, obligations or liabilities hereunder.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    [REMAINDER
OF PAGE INTENTIONALLY BLANK]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
parties have signed this Investors Rights Agreement as of the date first
hereinabove set forth.

     

    
      
        
          
            
              
                	
                         BIOLINE
      RX LTD.

                      	
                         
      SHAREHOLDERS – SEE SEPARATE

                          SIGNATURE
      PAGE

                      
	
                         by:

                      	
                        /s/
      Yuri Shoshan

                      	 
      
	
                         name:

                      	
                        Yuri
      Shoshan

                      	 
      
	
                         title:

                      	
                        Vice
      President, Finance and

                      	 
      
	
                         Corporate
      Development

                      	 
      

              

            

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Registration
Rights Agreement - Signature Page

    

    IN WITNESS WHEREOF, by executing this
Signature Page, the undersigned has read, understood and acknowledged the
representations and covenants in the Registration Rights Agreement (the “RRA”)
by and between BioLine Rx Ltd. (the “Company”) and its
shareholders.  Upon receipt by the Company of this Signature Page and
execution by the Company of its counterpart signature page, the undersigned
shall become a party to the RRA, and hereby authorizes this signature page to be
attached to a counterpart of the RRA executed by the Company.

    

    
      
        
          
            
              
                
                  	
                          Jerusalem Development
    Authority

                        	 
      	
                          /s/
      Ezriel M. Levi

                        
	
                          Print
      or Type Name of Shareholder

                        	 
      	
                          Signature

                        
	 
      	 
      	 
      
	 
      	 
      	
                          C.E.O.

                        
	 
      	 
      	
                           (Title,
      if applicable)

                        
	 
      	 
      	 
      
	
                          Typed
      or printed name and address of Shareholder:

                        	 
      	
                          Fax
      Number:       972-2-6250875

                        
	 
      	 
      	 
      
	 
      	 
      	
                          Telephone:      
         972-2-6297629

                        
	 
      	 
      	 
      
	 
      	 
      	
                          Email:                 ezri@jda.gov.il

                        

                

              

            

          

        

      

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Registration
Rights Agreement - Signature Page

    

    IN WITNESS WHEREOF, by executing this
Signature Page, the undersigned has read, understood and acknowledged the
representations and covenants in the Registration Rights Agreement (the “RRA”)
by and between BioLine Rx Ltd. (the “Company”) and its
shareholders.  Upon receipt by the Company of this Signature Page and
execution by the Company of its counterpart signature page, the undersigned
shall become a party to the RRA, and hereby authorizes this signature page to be
attached to a counterpart of the RRA executed by the Company.

     

    
      
        	      
                Typed
      or printed name and address of Shareholder:

              	 	 	 
	 	 	 	 
	
                /s/
      RUTH ALON 

              	 	
              	 
	
                Pitango
      Venture Capital Fund III (Israeli Sub), L.P.

              	 	
              	 
	
                Pitango
      Venture Capital Fund III (Israeli Sub) Non-Q L.P.

              	 	
              	 
	Pitango
      Venture Capital Fund III (Israeli Investors), L.P.	 	 	 
	Pitango
      Principals Fund III (Israel), L.P.	 	 	 
	Pitango
      Venture Capital Fund III Trusts 2000 Ltd.	 	 	 

      

    

     

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    Registration
Rights Agreement - Signature Page

    

    IN WITNESS WHEREOF, by executing this
Signature Page, the undersigned has read, understood and acknowledged the
representations and covenants in the Registration Rights Agreement (the “RRA”)
by and between BioLine Rx Ltd. (the “Company”) and its
shareholders.  Upon receipt by the Company of this Signature Page and
execution by the Company of its counterpart signature page, the undersigned
shall become a party to the RRA, and hereby authorizes this signature page to be
attached to a counterpart of the RRA executed by the Company.

    
      

      
        
          
            
              
                
                  
                    	
                                  
                              Hadasit

                            

                          	 
      	
                                  
                              /s/
      RAFI HOFSTEIN

                            

                          
	
                                  
                              Print
      or Type Name of Shareholder

                            

                          	 
      	
                            Signature

                          
	 
      	 
      	 
      
	 
      	 
      	
                            C.E.O.

                          
	 
      	 
      	
                             (Title,
      if applicable)

                          
	 
      	 
      	 
      
	
                                  
                              Typed
      or printed name and address of Shareholder:

                            

                          	 
      	
                                  
                              Fax
      Number:

                            

                          
	 
      	 
      	 
      
	 
      	 
      	
                                  
                              Telephone:

                            

                          
	 
      	 
      	 
      
	 
      	 
      	
                                  
                              Email:

                            

                          

                  

                

              

            

          

        

      
  

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    Registration
Rights Agreement - Signature Page

    

    IN WITNESS WHEREOF, by executing this
Signature Page, the undersigned has read, understood and acknowledged the
representations and covenants in the Registration Rights Agreement (the “RRA”)
by and between BioLine Rx Ltd. (the “Company”) and its
shareholders.  Upon receipt by the Company of this Signature Page and
execution by the Company of its counterpart signature page, the undersigned
shall become a party to the RRA, and hereby authorizes this signature page to be
attached to a counterpart of the RRA executed by the Company.

     

    
      
        
          
            
              
                
                  
                    	
                            Giza
      GE Venture Fund III, LLC

                          	 
      	 
      
	
                            Giza
      Alpinvest Venture Fund III, LLC

                          	 
      	
                            /s/

                          	
                            Ezer Soref, Managing
      Director

                          
	
                            Giza
      Venture Fund III Limited Partnership

                          	 
      	
                             

                          	
                             

                          
	
                            Giza
      Gmulot Venture Fund III Limited Partnership

                          	 
      	
                            /s/ 

                          	
                            
                              Zvi Schechter, Managing
      Director

                            

                          
	
                            Giza
      Executive Venture Fund III, LLC

                          	 
      	
                            Signature
      

                          
	
                            Giza
      Venture Fund IV, LP

                          	 
      	 
      
	
                            Giza
      Venture Fund IV (TW) L.P.

                          	 
      	 
      
	
                            Giza
      Venture Fund IV (Jersey) LP

                          	 
      	 
      
	
                            Giza
      Venture Fund IV (Israel) Limited Partnership

                          	 
      	 
      
	 
      	 
      	 
      
	
                            Print
      or Type Name of Shareholder

                          	 
      	 
      

                  

                

              

            

          

        

      

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Registration
Rights Agreement - Signature Page

    

    IN WITNESS WHEREOF, by executing this
Signature Page, the undersigned has read, understood and acknowledged the
representations and covenants in the Registration Rights Agreement (the “RRA”)
by and between BioLine Rx Ltd. (the “Company”) and its
shareholders.  Upon receipt by the Company of this Signature Page and
execution by the Company of its counterpart signature page, the undersigned
shall become a party to the RRA, and hereby authorizes this signature page to be
attached to a counterpart of the RRA executed by the Company.

     

    
      
        	
                SVE
      Star Ventures Enterprises GmbH & Co. No. IX KG

              	 
      
	
                SVM
      Star Ventures Managementgesellschaft mbH Nr.

              	 
      
	
                3
      & Co. Beteiligungs KG Nr. 4

              	 
      
	 
      	 
      
	
                By:
      SVM Star Ventures Managementgesellschaft mbH Nr. 3

              	 
      
	
                Title:
      Managing Partner

              	 
      
	
                /s/
      Meir Barel

              	 
      
	
                By:
      Dr. Meir Barel

              	 
      
	
                Title:
      Managing Director

              	 
      
	 
      	 
      
	
                Star
      Management of Investments No II (2000), L.P.

              	 
      
	
                By:
      SVM STAR Venture Capital Management Ltd.

              	 
      
	
                Title:
      Managing Partner

              	 
      
	
                /s/
      Meir Barel

              	 
      
	
                By:
      Dr. Meir Barel

              	 
      
	
                Title:
      Director

              	 
      

      

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Registration
Rights Agreement - Signature Page

    

    IN WITNESS WHEREOF, by executing this
Signature Page, the undersigned has read, understood and acknowledged the
representations and covenants in the Registration Rights Agreement (the “RRA”)
by and between BioLine Rx Ltd. (the “Company”) and its
shareholders.  Upon receipt by the Company of this Signature Page and
execution by the Company of its counterpart signature page, the undersigned
shall become a party to the RRA, and hereby authorizes this signature page to be
attached to a counterpart of the RRA executed by the Company.

     

    
      
        
          
            
              	
                      Yehuda Zisapel

                    	 
      	
                      /s/ Yehuda Zisapel

                    
	
                      Print
      or Type Name of Shareholder

                    	 
      	
                      Signature

                    
	 
      	 
      	 
      
	 
      	 
      	
                      (Title,
      if applicable)

                    
	 	 	 
	
                      Typed
      or printed name and address of Shareholder:

                    	 
      	
                      Fax
      Number:            972-3-6498520

                    
	 	 	 
	
                      Yehuda
      Zisapel

                    	 
      	
                      Telephone:               972-3-6455522

                    
	
                      c/o
      RAD Group

                    	 
      	
                       

                    
	
                      24
      Raoul Wallenberg Street,

                    	 
      	
                      Email:                      yehuda_z@rad.com

                    
	
                      Tel
      Aviv 69719, Israel

                    	 
      	
                       

                    
	 
      	 
      	 
      

            

          

        

      

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Registration
Rights Agreement - Signature Page

    

    IN WITNESS WHEREOF, by executing this
Signature Page, the undersigned has read, understood and acknowledged the
representations and covenants in the Registration Rights Agreement (the “RRA”)
by and between BioLine Rx Ltd. (the “Company”) and its
shareholders.  Upon receipt by the Company of this Signature Page and
execution by the Company of its counterpart signature page, the undersigned
shall become a party to the RRA, and hereby authorizes this signature page to be
attached to a counterpart of the RRA executed by the Company.

     

    
      
        
          	
                  Pan
      Atlantic Investments Limited

                	
                  /s/ Robert J. Bourque

                
	 
      	
                  Robert
      J. Bourque

                
	 
      	
                  Managing
      Director

                
	 	 
	
                  Musson
      Building, 2nd Floor

                	
                  Fax
      Number:         (246)
      228-1158

                
	
                  Hincks
      Street

                	 
      
	
                  Bridgetown

                	
                  Telephone:            (246)
      436-9756

                
	
                  Barbados
      West Indies 11000

                	 
      
	 
      	
                  Email:                   rjbourque@pabt.bb

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