Document:

China Nutrifruit Group Limited: Exhibit 4.1 - Prepared by TNT Filings
Inc.

  

Exhibit 4.1 

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

Right to Purchase up to _________ Shares of
Common Stock of 

China Nutrifruit Group Limited (subject to adjustment as provided herein) 

COMMON STOCK PURCHASE WARRANT 

	No._________	
    Issue Date: September 30, 2009

China Nutrifruit Group
Limited (the "Company"), hereby certifies that, for value received,
______________________, or its assigns (the "Holder"), is entitled, subject to
the terms set forth below, to purchase from the Company (as defined herein) from
and after the Issue Date and at any time or from time to time before 5:00 p.m.,
New York time, through the close of business on the date that is four years from
the Issue Date set forth above (the "Expiration Date"), up to ________________
(_________) fully paid and nonassessable shares of Common Stock (as hereinafter
defined), $0.001 par value per share, at the applicable Exercise Price per share
(as defined below). The number and character of such shares of Common Stock and
the applicable Exercise Price per share are subject to adjustment as provided
herein. 

As used herein the
following terms, unless the context otherwise requires, have the following
respective meanings: 

(a)    
The term "Company" shall
include China Nutrifruit Group Limited and any corporation which shall succeed,
or assume the obligations of, China Nutrifruit Group Limited hereunder. 

(b)
    The term
"Common Stock" includes (i) the Company’s Common Stock, par value $0.001 per
share; and (ii) any other securities into which or for which any of the
securities described in the preceding clause (i) may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of assets
or otherwise. 

(c)
    The
"Exercise Price" applicable under this Warrant shall be $3.30 on the date of
issuance. 

(d)    
The "Fair Market Value" of a
share of Common Stock as of a particular date (the "Determination Date") shall
mean (a) if the Common Stock is then listed or quoted on a national trading
market, the volume weighted average price of the Common Stock for the 20 trading
days preceding such Determination Date, (b) if the Common Stock is not then
listed or quoted on a national trading market and if prices for the Common Stock
are then quoted on the OTC Bulletin Board, the volume weighted average price of
the Common Stock for the 20 trading days preceding such Determination Date on
the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted on
the OTC Bulletin Board and if prices for the Common Stock are then reported in
the "Pink Sheets" published by Pink Sheets, LLC (or a similar organization or
agency succeeding to its functions of reporting prices), the average bid price
per share of the Common Stock for the 20 trading days preceding such
Determination Date as so reported, or (d) in all other cases, the value of the
Common Stock as determined in good faith by the Company’s Board of Directors.

(e)
    The term
"Other Securities" refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which the
holder of the Warrant at any time shall be entitled to receive, or shall have
received, on the exercise of the Warrant, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities pursuant to
Section 3 or otherwise. 

1.

Exercise of Warrant. 

1.1.    
Number of Shares Issuable
upon Exercise. From and after the Issue Date through and including the
Expiration Date, the Holder shall be entitled to receive, upon exercise of this
Warrant in whole or in part, by delivery of an original or fax copy of a duly
executed exercise notice in the form attached hereto as Exhibit A (the "Exercise
Notice") and payment of the aggregate Exercise Price of the shares thereby
purchased by wire transfer or cashier’s check drawn on a United States bank
(unless cashless exercise shall have been elected in accordance with the
provisions of Section 2.3 hereof), up to that number of shares of Common Stock
referred to above, subject to adjustment pursuant to Section 4 and subject to
the Company having sufficient authorized shares of Common Stock, provided,
however, within 5 Trading Days of the date said Exercise Notice is
delivered to the Company, the Holder shall have surrendered this Warrant to the
Company. 

2

1.2.     Limitation
on Exercise. The Company shall not effect any exercise of this Warrant, and
a Holder shall not have the right to exercise any portion of this Warrant,
pursuant to Section 2.3 or otherwise, to the extent that after giving effect to
such issuance after exercise, such Holder (together with such Holder’s
affiliates, and any other person or entity acting as a group together with such
Holder or any of such Holder’s affiliates), as set forth on the applicable
Exercise Notice, would
beneficially own in excess of the Beneficial Ownership Limitation (as defined
below). For purposes of this Section 1.2, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder, it being acknowledged by a Holder that
the Company is not representing to such Holder that such calculation is in
compliance with Section 13(d) of the Exchange Act and such Holder is solely
responsible for any schedules required to be filed in accordance therewith. To
the extent that the limitation contained in this Section 1.2 applies, the
determination of whether this Warrant is exercisable (in relation to other
securities owned by such Holder) and of which a portion of this Warrant is
exercisable shall be in the sole discretion of a Holder, and the submission of
an Exercise Notice shall be deemed to be each Holder’s determination of whether
this Warrant is exercisable (in relation to other securities owned by such
Holder) and of which portion of this Warrant is exercisable, in each case
subject to such aggregate percentage limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination. In addition,
a determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. For purposes of this Section 1.2, in
determining the number of outstanding shares of Common Stock, a Holder may rely
on the number of outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a more
recent public announcement by the Company or (z) any other notice by the Company
or the Company’s Transfer Agent setting forth the number of shares of Common
Stock outstanding. Upon the written request of a Holder, the Company shall
within five Trading Days confirm orally to such Holder the number of shares of
Common Stock then outstanding. In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the conversion or
exercise of securities of the Company, including this Warrant, by such Holder or
its affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The "Beneficial Ownership Limitation" shall be 4.99%
of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon exercise of this
Warrant. The provisions of this paragraph shall be implemented in a manner not
otherwise than in strict conformity with the terms of this Section 1.2 to
correct this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation herein contained
or to make changes or supplements necessary or desirable to properly give effect
to such limitation. The limitations contained in this paragraph shall apply to a
successor holder of this Warrant. 

2.

Procedure for Exercise.

2.1.
    Delivery of
Stock Certificates, Etc., on Exercise. The Company agrees that the shares of
Common Stock purchased upon exercise of this Warrant shall be deemed to be
issued to the Holder as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered and
payment made for such shares in accordance herewith. As soon as practicable
after the exercise of this Warrant in full or in part, and in any event within
five (5) business days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in the name
of and delivered to the Holder, or as such Holder (upon payment by such Holder
of any applicable transfer taxes) may direct in compliance with applicable
securities laws, a certificate or certificates for the number of duly and
validly issued, fully paid and nonassessable shares of Common Stock (or Other
Securities) to which such Holder shall be entitled on such exercise, plus, in
lieu of any fractional share to which such holder would otherwise be entitled,
cash equal to such fraction multiplied by the then Fair Market Value of one full
share, together with any other stock or other securities and property (including
cash, where applicable) to which such Holder is entitled upon such exercise
pursuant to Section 1 or otherwise. 

3

2.2.    
Exercise. Payment may
be made either in cash or by check payable to the order of the Company equal to
the applicable aggregate Exercise Price for the number of Common Shares
specified in such Exercise Notice (as such exercise number shall be adjusted to
reflect any adjustment in the total number of shares of Common Stock issuable to
the Holder per the terms of this Warrant) and the Holder shall thereupon be
entitled to receive the number of duly authorized, validly issued, fully paid
and nonassessable shares of Common Stock (or Other Securities) determined as
provided herein. 

2.3.    
Cashless Exercise.

(a)
       
Notwithstanding anything contained herein to the contrary, the Holder may, at
its election exercised in its sole discretion, exercise this Warrant in whole or
in part and, in lieu of making the cash payment otherwise contemplated to be
made to the Company upon such exercise in payment of the aggregate Exercise
Price, elect instead to receive upon such exercise the "Net Number" of shares of
Common Stock determined according to the following formula (a "Cashless
Exercise"): 

Net Number = (A x (B - C))/B 

(b)
        For purposes of
the foregoing formula: 

A = the total number
shares of Common Stock with respect to which this Warrant is then being
exercised; 

B = the Fair Market
Value of a share of Common Stock on the date immediately preceding the date of
the Exercise Notice; and 

C = the Exercise
Price then in effect at the time of such exercise. 

(c)
        The Holder
agrees not to elect for a period of six (6) months after the Issue Date a
Cashless Exercise. The holder of this Warrant also agrees not to elect a
Cashless Exercise so long as there is an effective registration statement for
the shares underlying this Warrant. 

3.

Effect of Reorganization, Etc.;
Adjustment of Exercise Price. 

3.1.    
Reorganization, Consolidation,
Merger, Etc. In case at any time or from time to time, the Company shall (a)
effect a reorganization, (b) consolidate with or merge into any other person, or
(c) transfer all or substantially all of its properties or assets to any other
person under any plan or arrangement contemplating the dissolution of the
Company, then, in each such case, as a condition to the consummation of such a
transaction, proper and adequate provision shall be made by the Company whereby
the Holder, on the exercise hereof as provided in Section 1 at any time after
the consummation of such reorganization, consolidation or merger or the
effective date of such dissolution, as the case may be, shall receive, in lieu
of the Common Stock (or Other Securities) issuable on such exercise prior to
such consummation or such effective date, the stock and other securities and
property (including cash) to which such Holder would have been entitled upon
such consummation or in connection with such dissolution, as the case may be, if
such Holder had so exercised this Warrant, immediately prior thereto, all
subject to further adjustment thereafter as provided in Section 4. 

4

3.2.    
Continuation of Terms.
Upon any reorganization, consolidation, merger or transfer (and any dissolution
following any transfer) referred to in this Section 3, this Warrant shall
continue in full force and effect and the terms hereof shall be applicable to
the shares of stock and other securities and property receivable on the exercise
of this Warrant after the consummation of such reorganization, consolidation or
merger or the effective date of dissolution following any such transfer, as the
case may be, and shall be binding upon the issuer of any such stock or other
securities, including, in the case of any such transfer, the person acquiring
all or substantially all of the properties or assets of the Company, whether or
not such person shall have expressly assumed the terms of this Warrant as
provided in Section 3.1. In the event this Warrant does not continue in full
force and effect after the consummation of the transactions described in this
Section 3, then the Company’s securities and property (including cash, where
applicable) receivable by the Holder will be delivered to the Holder. 

4.    
Extraordinary Events
Regarding Common Stock. In the event that the Company shall (a) issue
additional shares of the Common Stock as a dividend or other distribution on
outstanding Common Stock or any preferred stock issued by the Company (b)
subdivide its outstanding shares of Common Stock, or (c) combine its outstanding
shares of the Common Stock into a smaller number of shares of the Common Stock,
then, in each such event, the Exercise Price shall, simultaneously with the
happening of such event, be adjusted by multiplying the then Exercise Price by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such event and the denominator of which shall
be the number of shares of Common Stock outstanding immediately after such
event, and the product so obtained shall thereafter be the Exercise Price then
in effect. The Exercise Price, as so adjusted, shall be readjusted in the same
manner upon the happening of any successive event or events described herein in
this Section 4. The number of shares of Common Stock that the Holder shall
thereafter, on the exercise hereof as provided in Section 1, be entitled to
receive shall be adjusted to a number determined by multiplying the number of
shares of Common Stock that would otherwise (but for the provisions of this
Section 4) be issuable on such exercise by a fraction of which (a) the numerator
is the Exercise Price that would otherwise (but for the provisions of this
Section 4) be in effect, and (b) the denominator is the Exercise Price in effect
on the date of such exercise (taking into account the provisions of this Section
4). 

5

5.    
Subsequent Equity Sales. If the Company, at any
time while this Warrant is outstanding, shall issue shares of Common Stock or
securities or rights convertible or exchangeable into shares of Common Stock
("Common Stock Equivalents") entitling any Person to acquire shares of Common
Stock, at a price per share less than the then current Exercise Price (if the
holder of the Common Stock or Common Stock Equivalents so issued shall at any
time, whether by operation of purchase price adjustments, reset provisions,
floating conversion, exercise or exchange prices or otherwise, or due to
warrants, options or rights issued in connection with such issuance, be entitled
to receive shares of Common Stock at a price less than the Exercise Price, such
issuance shall be deemed to have occurred for less than the Exercise Price),
then, the Exercise Price shall be multiplied by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to the issuance of such shares of Common Stock or such Common Stock
Equivalents plus the number of shares of Common Stock which the offering price
for such shares of Common Stock or Common Stock Equivalents would purchase at
the Exercise Price, and the denominator of which shall be the sum of the number
of shares of Common Stock outstanding immediately prior to such issuance plus
the number of shares of Common Stock so issued or issuable. Such adjustment
shall be made whenever such Common Stock or Common Stock Equivalents are issued.
The Company shall notify the Holder in writing, no later than the third Trading
Day following the issuance of any Common Stock or Common Stock Equivalent
subject to this section, indicating therein the applicable issuance price, or
applicable reset price, exchange price, conversion price and other pricing
terms. 

For purposes of this
Section 5, the following subsections (i) to (v) shall also be applicable: 

(i)
    
Issuance of Rights or Options. In case at any time the Company shall in any
manner grant (directly and not by assumption in a merger or otherwise) any
warrants or other rights to subscribe for or to purchase, or any options for the
purchase of, Common Stock or any stock or security convertible into or
exchangeable for Common Stock (such warrants, rights or options being called 
"Options" and such convertible or exchangeable stock or securities
being called "Convertible Securities") whether or not such Options or the
right to convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon the
exercise of such Options or upon the conversion or exchange of such Convertible
Securities (determined by dividing (i) the sum (which sum shall constitute the
applicable consideration) of (x) the total amount, if any, received or
receivable by the Company as consideration for the granting of such Options,
plus (y) the aggregate amount of additional consideration payable to the Company
upon the exercise of all such Options, plus (z), in the case of such Options
which relate to Convertible Securities, the aggregate amount of additional
consideration, if any, payable upon the issue or sale of such Convertible
Securities and upon the conversion or exchange thereof, by (ii) the total
maximum number of shares of Common Stock issuable upon the exercise of such
Options or upon the conversion or exchange of all such Convertible Securities
issuable upon the exercise of such Options) shall be less than the Exercise
Price in effect immediately prior to the time of the granting of such Options,
then the total number of shares of Common Stock issuable upon the exercise of
such Options or upon conversion or exchange of the total amount of such
Convertible Securities issuable upon the exercise of such Options shall be
deemed to have been issued for such price per share as of the date of granting
of such Options or the issuance of such Convertible Securities and thereafter
shall be deemed to be outstanding for purposes of adjusting the Exercise Price.
Except as otherwise provided below, no adjustment of the Exercise Price shall be
made upon the actual issue of such Common Stock or of such Convertible
Securities upon exercise of such Options or upon the actual issue of such Common
Stock upon conversion or exchange of such Convertible Securities. 

6

(ii)
    Issuance of Convertible Securities.
In case the Company shall in any manner issue (directly and not by assumption in
a merger or otherwise) or sell any Convertible Securities, whether or not the
rights to exchange or convert any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon
such conversion or exchange (determined by dividing (i) the sum (which sum shall
constitute the applicable consideration) of (x) the total amount received or
receivable by the Company as consideration for the issue or sale of such
Convertible Securities, plus (y) the aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (ii) the total number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities) shall be less than
the Exercise Price in effect immediately prior to the time of such issue or
sale, then the total maximum number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible Securities shall be deemed to
have been issued for such price per share as of the date of the issue or sale of
such Convertible Securities and thereafter shall be deemed to be outstanding for
purposes of adjusting the Exercise Price, provided that (a) except as otherwise
provided in subsection (iii) below, no adjustment of the Exercise Price shall be
made upon the actual issuance of such Common Stock upon conversion or exchange
of such Convertible Securities and (b) no further adjustment of the Exercise
Price shall be made by reason of the issue or sale of Convertible Securities
upon exercise of any Options to purchase any such Convertible Securities for
which adjustments of the Exercise Price have been made pursuant to the other
provisions of this Section 5. 

(iii)    
Change in Option Price or Conversion Rate. Upon the happening of any of
the following events, namely, if the purchase price provided for in any Option
referred to above, the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to above, or the
rate at which Convertible Securities referred to above are convertible into or
exchangeable for Common Stock shall change at any time (including, but not
limited to, changes under or by reason of provisions designed to protect against
dilution), the Exercise Price in effect at the time of such event shall
forthwith be readjusted to the Exercise Price which would have been in effect at
such time had such Options or Convertible Securities still outstanding provided
for such changed purchase price, additional consideration or conversion rate, as
the case may be, at the time initially granted, issued or sold. On the
termination of any Option for which any adjustment was made pursuant to this
Section 5 or any right to convert or exchange Convertible Securities for which
any adjustment was made pursuant to this Section 5 (including without limitation
upon the redemption or purchase for consideration of such Convertible Securities
by the Company), the Exercise Price then in effect hereunder shall forthwith be
changed to the Exercise Price which would have been in effect at the time of
such termination had such Option or Convertible Securities, to the extent
outstanding immediately prior to such termination, never been issued. 

7

(iv)    
Consideration for Stock. In case any shares of
Common Stock, Options or Convertible Securities shall be issued or sold for
cash, the consideration received therefor shall be deemed to be the gross amount
received by the Company therefor, before any deduction therefrom of any expenses
incurred or any underwriting commissions or concessions paid or allowed by the
Company in connection therewith. In case any shares of Common Stock, Options or
Convertible Securities shall be issued or sold for a consideration other than
cash, the amount of the consideration other than cash received by the Company
shall be deemed to be the fair value of such consideration as determined in good
faith by the Board of Directors of the Company, after deduction of any expenses
incurred or any underwriting commissions or concessions paid or allowed by the
Company in connection therewith. In case any Options shall be issued in
connection with the issue and sale of other securities of the Company, together
comprising one integral transaction in which no specific consideration is
allocated to such Options by the parties thereto, such Options shall be deemed
to have been issued for such consideration as determined in good faith by the
Board of Directors of the Company. If Common Stock, Options or Convertible
Securities shall be issued or sold by the Company and, in connection therewith,
other Options or Convertible Securities (the "Additional Rights") are issued,
then the consideration received or deemed to be received by the Company shall be
reduced by the fair market value of the Additional Rights (as determined using a
method mutually agreed to by the Company and the Holder). The Board of Directors
of the Company shall respond promptly, in writing, to an inquiry by the Holders
as to the fair market value of the Additional Rights. In the event that the
Board of Directors of the Company and the Holders are unable to agree upon the
fair market value of the Additional Rights, the Company and the Holders shall
jointly select an appraiser, who is experienced in such matters. The decision of
such appraiser shall be final and conclusive, and the cost of such appraiser
shall be borne evenly by the Company and the Holder. 

(v)    
Record Date. In case the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them (i)
to receive a dividend or other distribution payable in Common Stock, Options or
Convertible Securities or (ii) to subscribe for or purchase Common Stock,
Options or Convertible Securities, then such record date shall be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been
issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be. 

Notwithstanding the
foregoing, no adjustment will be made under this paragraph 5 in respect of: (1)
issuance of Common Stock or any other securities exercisable into shares of
Common Stock (so long as all such issuances in the aggregate do not exceed
fifteen percent (15%) of the Common Stock issued and outstanding immediately
prior to such issuance or grants) pursuant to the Company’s equity incentive
plans which shall have been approved by a majority of the Company’s independent
director; (2) issuance of securities upon the exercise or exchange of or
conversion of any securities issued hereunder and/or other securities
exercisable or exchangeable for or convertible into shares of Common Stock
issued and outstanding on the date hereof, provided that such securities have
not been amended since the date hereof to increase the number of such securities
or to decrease the exercise, exchange or conversion price of such securities;
(iii) securities issued pursuant to bona fide strategic acquisitions or other
business combinations by the Company which have been approved by the Board of
Directors of the Company, provided any such issuance shall not include a
transaction in which the Company is issuing securities primarily for the purpose
of raising capital; and (iv) securities issued to vendors, customers, suppliers,
consultants, or financial advisors if such issuance is approved by the Board of
Directors of the Company, provided such securities are issued for other than
primarily capital raising purposes and is limited to an aggregate of 300,000
shares of Common Stock. 

8

6.    
Pro Rata Distributions.
If the Company, at any time prior to the Expiration Date, shall distribute to
all holders of Common Stock (and not to Holders of the Warrants) evidences of
its indebtedness or assets (including cash and cash dividends) or rights or
warrants to subscribe for or purchase any security), then in each such case the
Exercise Price shall be adjusted by multiplying the Exercise Price in effect
immediately prior to the record date fixed for determination of stockholders
entitled to receive such distribution by a fraction of which the denominator
shall be the Fair Market Value determined as of the record date mentioned above,
and of which the numerator shall be such Fair Market Value on such record date
less the then per share Fair Market Value at such record date of the portion of
such assets or evidence of indebtedness so distributed applicable to one
outstanding share of the Common Stock as determined by the Board of Directors in
good faith. In either case the adjustments shall be described in a statement
provided to the Holder of the portion of assets or evidences of indebtedness so
distributed or such subscription rights applicable to one share of Common Stock.
Such adjustment shall be made whenever any such distribution is made and shall
become effective immediately after the record date mentioned above. 

7.
    
Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of this Warrant, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price
and the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the Holder and any Warrant agent of the
Company (appointed pursuant to Section 12 hereof). 

8.    
Registration Rights.
The Holder of this Warrant shall have the registration rights set forth in
Section 4.2 of that certain Securities Purchase Agreement dated September 30,
2009, by and among the Company, the Holder and other parties thereto, the
provisions of which are incorporated by reference herein in their entirety.

9.    
Status of Stock Issuable
on Exercise of Warrant. The Company represents that all shares of Common
Stock which may be issued upon the exercise of this Warrant will, when issued
and paid for in accordance with the terms of this Warrant, be duly authorized,
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges in respect of the issue thereof (other than restrictions imposed by the
applicable laws and taxes in respect of any transfer occurring contemporaneously
with such issue). 

9

10.    
Assignment; Exchange of
Warrant. Subject to compliance with any applicable securities laws and the
conditions set forth in any restrictive legend appearing on the face hereof,
this Warrant and all rights hereunder are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company, together
with a written assignment of this Warrant substantially in the form attached
hereto as Exhibit B duly executed by the Holder or its agent or attorney and
funds sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees and in the denomination or denominations specified in such instrument
of assignment, and shall issue to the assignor a new Warrant evidencing the
portion of this Warrant not so assigned, and this Warrant shall promptly be
cancelled. A Warrant, if properly assigned, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued. 

11.    
Replacement of Warrant.
On receipt of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant and, in the case of any such
loss, theft or destruction of this Warrant, on delivery of an indemnity
agreement or security reasonably satisfactory in form and amount to the Company
or, in the case of any such mutilation, on surrender and cancellation of this
Warrant, the Company at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor. 

12.    
Warrant Agent. The
Company may, by written notice to the each Holder of the Warrant, appoint an
agent for the purpose of issuing Common Stock (or Other Securities) on the
exercise of this Warrant pursuant to Section 1, and replacing this Warrant
pursuant to Section 11, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such agent. 

13.    
Transfer on the Company’s
Books. Until this Warrant is transferred on the books of the Company, the
Company may treat the registered Holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary. 

14.
    No
Rights as Shareholder Until Exercise. This Warrant does not entitle the
Holder to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof. 

15.    
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 be a Saturday,
Sunday or a legal holiday, then such action may be taken or such right may be
exercised on the next succeeding day not a Saturday, Sunday or legal holiday.

16.    
Notices, Etc. All
notices and other communications from the Company to the Holder shall be mailed
by first class registered or certified mail, postage prepaid, at such address as
may have been furnished to the Company in writing by such Holder or, until any
such Holder furnishes to the Company an address, then to, and at the address of,
the last Holder who has so furnished an address to the Company. 

10

17.    
Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
ANY ACTION BROUGHT CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS WARRANT
SHALL BE BROUGHT ONLY IN THE STATE COURTS OF NEW YORK OR IN THE FEDERAL COURTS
LOCATED IN THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT THE HOLDER MAY CHOOSE
TO WAIVE THIS PROVISION AND BRING AN ACTION OUTSIDE THE STATE OF NEW YORK. The
individuals executing this Warrant on behalf of the Company agree to submit to
the jurisdiction of such courts and waive trial by jury. The prevailing party
shall be entitled to recover from the other party its reasonable attorneys’ fees
and costs. In the event that any provision of this Warrant is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of this Warrant.
The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision hereof. The Company acknowledges that
legal counsel participated in the preparation of this Warrant and, therefore,
stipulates that the rule of construction that ambiguities are to be resolved
against the drafting party shall not be applied in the interpretation of this
Warrant to favor any party against the other party. 

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK; 

SIGNATURE PAGE FOLLOWS] 

 

      
    
  

 

 

11

IN WITNESS WHEREOF,
the Company has executed this Warrant as of the date first written above. 

 

CHINA NUTRIFRUIT
GROUP LIMITED 

By:
________________________________

Name: Jinglin Shi 

Title: Chief Executive Officer 

 

 

Exhibit A 

FORM OF SUBSCRIPTION

(To Be Signed Only On Exercise Of Warrant) 

 

TO: 

China Nutrifruit Group Limited 

Attention:        
Chief Financial Officer 

The undersigned,
pursuant to the provisions set forth in the attached Warrant hereby irrevocable
elects to purchase ____________ shares of Common Stock covered by such Warrant.

Payment shall take the
form of (check applicable box): 

[   ] in
lawful money of the United States; or 

[   ] the
cancellation of such number of shares of Common Stock as is necessary, in
accordance with the formula set forth in Section 2.3, to exercise this Warrant
with respect to the maximum number of shares of Common Stock purchasable
pursuant to the cashless exercise procedure set forth in subsection 2.3. 

The undersigned is an
"accredited investor" as defined in Regulation D, as promulgated under the
Securities Act of 1933, as amended. 

The undersigned
represents and warrants that all offers and sales by the undersigned of the
shares of Common Stock shall be made pursuant to registration of the Common
Stock under the Securities Act of 1933, as amended (the "Securities Act") or
pursuant to an exemption from registration under the Securities Act. 

	Dated:
    ___________________	 
	 	
    (Signature must conform to name of
    holder as specified on the face of the Warrant)
	 	 
	 	Address:	 
	 	 
	 	 

Exhibit B 

FORM OF ASSIGNMENT

(To assign the foregoing warrant, execute 

this form and supply required information. 

Do not use this form to exercise the warrant.) 

FOR VALUE RECEIVED,
the foregoing Warrant and all rights evidenced thereby are hereby assigned to

_______________________________________________ whose address is        

_______________________________________________________________. 

_______________________________________________________________ 

Dated: ______________, _______ 

Holder’s Signature:   
_____________________________ 

Holder’s Address:    
_____________________________ 

                                    
_____________________________ 

Signature Guaranteed:
___________________________________________ 

NOTE: The signature to this Assignment Form
must correspond with the name as it appears on the face of the Warrant, without
alteration or enlargement or any change whatsoever, and must be guaranteed by a
bank or trust company. Officers of corporations and those acting in a fiduciary
or other representative capacity should file proper evidence of authority to
assign the foregoing Warrant.China Nutrifruit Group Limited: Exhibit 10.1 - Prepared by TNT Filings
   Inc.

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

          This
Securities Purchase Agreement (this “Agreement”) is dated as of September
30, 2009 among China Nutrifruit Group Limited, a Nevada corporation (the
“Company”) and the investors listed on the Schedule of Buyers attached
hereto as Exhibit A and identified on the signature pages hereto (each,
an “Investor” and collectively, the “Investors”). 

          WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
the Securities Act (as defined below), the Company desires to issue and sell to
each Investor, and each Investor, severally and not jointly, desires to purchase
from the Company certain securities of the Company, as more fully described in
this Agreement. 

AGREEMENT

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

ARTICLE 1 

  DEFINITIONS

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

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

          “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. 

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

          “BVI”
means Fezdale Investments Limited, a British Virgin Island Company .

          “Certificate
of Designation” means a Certificate of Designation to be filed prior to the
Closing by the Company with the Secretary of State of the State of Nevada,
setting forth the rights, preferences and privileges of the Series A Convertible
Preferred Stock, in the form attached as Exhibit B hereto. 

          “Closing”
means the closing of the purchase and sale of the Units pursuant to Article
2.

          “Closing
Date” means the Business Day on which all of the conditions set forth in
Sections 5.1 and 5.2 hereof are satisfied, or such other date as the parties may
agree. 

          “Closing
Escrow Agreement” means that certain Escrow Agreement, dated as of the date
hereof, among the Investors, Securities Transfer Corp., as escrow agent (the
“Escrow Agent”) and the investors identified on the signature pages
thereto and the Company, in the form of Exhibit E hereto. 

          “Commission”
means the United States Securities and Exchange Commission. “Common
Stock” means the common stock of the Company, par value $0.001 per share.
“Common Stock Equivalents” has the meaning set forth in Section 3.1(g) .

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

          “Company
Entities” means the Company, BVI, WFOE and all existing Subsidiaries of any
such entities and any other entities which hereafter become Subsidiaries of any
such entities. 

          “Conversion
Price” has the meaning set forth in Section 2.1(a) .

          “Conversion
Shares” means shares of Common Stock issuable upon conversion of the Series
A Convertible Preferred Stock. 

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

          “Effectiveness
Period” means, as to any registration statement required to be filed
pursuant to Section 4.2 of this Agreement, the period commencing on the date
when such registration statement is declared effective by the Commission and
ending on the earlier to occur of (a) the second anniversary of such effective
date, (b) such time as all of the Registrable Securities covered by such
registration statement have been publicly sold by the Investors included
therein, or (c) such time as all of the Registrable Securities covered by such
registration statement may be sold by the Investors without volume restrictions
pursuant to Rule 144 as determined by the counsel to the Company pursuant to a
written opinion letter to such effect, addressed and acceptable to the Company’s
transfer agent and the affected Investors. 

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

          “Exchange
Cap” has the meaning set forth in Section 6.2 hereof. 

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

          “Existing
Company Entities” means the Company, BVI, WFOE and their respective
Subsidiaries and “Existing Company Entity” means any of the Company, BVI,
WFOE and any of their respective Subsidiaries. 

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

2

          “Governmental
Body” shall mean any: (a) nation, state, commonwealth, province, territory,
county, municipality, district or other jurisdiction of any nature; (b) federal,
state, local, municipal, foreign or other government; or (c) governmental or
quasi-governmental authority of any nature (including any governmental or
administrative division, department, agency, commission, instrumentality,
official, organization, unit, body or entity) and any court or other tribunal.

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

          “Investment
Amount” means, with respect to each Investor, the Investment Amount
indicated on such Investor’s signature page and set forth opposite such
Investor’s name on Exhibit A to this Agreement.

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

          “Investors’
Expenses” has the meaning set forth in Section 4.2(d) . 

          “Legal
Requirement” shall mean any federal state, local, municipal, foreign or
other law, statute, constitution, principle of common law, resolution,
ordinance, code, edict, decree, rule, regulation, ruling or requirement issued,
enacted, adopted, promulgated, implemented or otherwise put into effect by or
under the authority of any Governmental Body (or under the authority of any
national securities exchange upon which the Common Stock is then listed or
traded). Reference to any Legal Requirement means such Legal Requirement as
amended, modified, codified, replaced or reenacted, in whole or in part, and in
effect from time to time, and reference to any section or other provision of any
Legal Requirement means that provision of such Legal Requirement from time to
time in effect and constituting the substantive amendment, modification,
codification, replacement or reenactment of such section or other provision.

          “Lien”
  means any lien, charge, encumbrance, security interest, or other charge of any
  kind.

          “Material
Adverse Effect” means any of (i) a material and adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a
material and adverse effect on the results of operations, assets, prospects,
business or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, except for results or consequences attributable
to the effects of, or changes in, general economic or capital markets conditions
or effects and changes that generally affect the industries in which the Company
Entities operate, such as regulatory action by the PRC or municipal governments
or (iii) an adverse impairment to the Company’s ability to perform on a timely
basis its obligations under any Transaction Document. 

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

          “Outside
Date” means the forty-fifth (45th) calendar day (if such calendar day is a
Trading Day and if not, then the first Trading Day following such forty-fifth
(45th) calendar day) following the date of this Agreement. 

3 

          “PRC”
means, for the purpose of this Agreement, the People’s Republic of China, not
including Taiwan, Hong Kong and Macau. 

          “Participation
Maximum” has the meaning set forth in Section 4.7(a) .

          “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. 

          “Per
  Unit Purchase Price” equals $33.00.

          “Piggyback
Notice” has the meaning set forth in Section 4.2(b) . 

          “Piggyback
Registration” has the meaning set forth in Section 4.2(b) . 

          “Placement
Agent” means WLT Brothers Capital, Inc. 

          “Pre-Notice”
has the meaning set forth in Section 4.7(b) . 

          “Proceeding”
means an action, claim, suit, investigation or proceeding (including an
investigation or partial proceeding, such as a deposition), whether commenced or
threatened. 

          “Qualified
Investor” has the meaning set forth in Section 4.7(a) .

          “Regulation
D” has the meaning set forth in Section 2.1(c) . 

          “Registrable
  Securities” means the Shares.

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

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

          “Securities”
means the Series A Convertible Preferred Stock and the Warrants.

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

          “Series
A Convertible Preferred Stock” means the Series A Convertible Preferred
Stock, par value $0.001 per share, issued or issuable to the Investors pursuant
to this Agreement, which is convertible into shares of the Common Stock at an
initial conversion price of $3.30 per share, subject to adjustments as set forth
in the Certificate of Designation. 

          “Shares”
means the Conversion Shares and the Warrant Shares.

          “Short
Sales” include all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act and all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, swaps and similar
arrangements (including on a total return basis), and sales and other transactions through non-US
broker dealers or foreign regulated brokers. 

4 

          “Subsequent
Financing” has the meaning set forth in Section 4.7(a) . 

          “Subsequent
Financing Notice” has the meaning set forth in Section 4.7(b) .

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

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

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

          “Transaction
Documents” means this Agreement, the Certificate of Designation, the Warrant
and the Closing Escrow Agreement. 

          “Transfer
Agent” means Interwest Transfer Company, Inc., and any successor transfer
agent of the Company. 

          “Units”
has the meaning set forth in Section 2.1(a) .

          “Warrants”
means the Common Stock purchase warrants in the form of Exhibit C,
which are issuable to the Investors at the Closing. 

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

          “WFOE”
means Daqing Longheda Food Company Limited, a wholly foreign-owned enterprise
organized under the laws of the People’s Republic of China . 

ARTICLE 2 

  PURCHASE AND SALE

          2.1      Purchase
Price and Closing. 

                         (a)     
Subject to the terms and conditions hereof, the Company agrees to issue and sell
to the Investors and, in consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
the Investors, severally but not jointly, agree to purchase, up to an aggregate
purchase price of $15,000,000 (subject to increase prior to the Outside Date, as contemplated by Section 6.5) of
Units (the “Units”), each consisting of one (1) share of Series A
Convertible Preferred Stock and a Warrant to purchase 2.5 shares of Common
Stock. The closing of the purchase and sale of the Units to be acquired by the
Investors from the Company under this Agreement shall take place at the offices
of Loeb & Loeb LLP, 345 Park Avenue, New York, New York 10154 at 9:00 a.m.,
New York time on such date as the Investors and the Company may agree upon;
provided, that all of the conditions set forth in Article 5 hereof and
applicable to the Closing shall have been fulfilled or waived in accordance
herewith. Subject to the terms and conditions of this Agreement, at the Closing
the Company shall deliver or cause to be delivered to each Investor (x) a
certificate evidencing a number of shares of Series A Convertible Preferred
Stock as determined pursuant to Section 2.2(a)(i) hereof, and (y) a Warrant to
purchase such number of shares of Common Stock as determined pursuant to Section
2.2(a)(ii) hereof. At or prior to the Closing, each Investor shall deliver its
Investment Amount set forth opposite to such Investor’s name on Exhibit A
hereto by wire transfer to the escrow account established pursuant to the
Closing Escrow Agreement.

5 

                         (b)     
No Fractional Shares. Notwithstanding anything to the contrary herein, no
certificate or scrip representing fractional shares of the Series A Convertible
Preferred Stock or Warrant shall be issued and any such fractional share will be
rounded up to the nearest whole number. 

                         (c)     
Regulation D. The Company and the Investors are executing and delivering
this Agreement in accordance with and in reliance upon the exemption from
securities registration afforded by Rule 506 of Regulation D (“Regulation
D”) as promulgated by the Commission under the Securities Act. 

          2.2     
Closing Deliveries. 

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

                                        (i)     
a certificate representing the shares of Series A Convertible Preferred Stock
equal to such Investor’s Investment Amount divided by the Per Unit Purchase
Price as is set forth opposite the name of such Investor on Exhibit A
attached hereto; 

                                        (ii)     
a Warrant to purchase such number of shares of Common Stock equal to 25% of such
Investor’s Investment Amount divided by the Per Unit Purchase Price, as is set
forth opposite the name of such Investor on Exhibit A attached hereto;

                                        (iii)     
an officer’s certificate, in agreed form, certifying the satisfaction of each of
the conditions precedent to the Investors’ obligation to purchase Shares; 

                                        (iv)      this
Agreement, duly executed by the Company; 

                                        (v)     
the Closing Escrow Agreement, duly executed by the Company; and 

                                        (vi)     
legal opinions of Nevada and PRC counsel to the Company. 

6 

                         (b)      At
or prior to the Closing, each Investor shall deliver or cause to be delivered

                                        (i)      to
the Company, this Agreement, duly executed by such Investor; 

                                        (ii)      to
the Company, the Closing Escrow Agreement, duly executed by such Investor; 

                                        (iii)      to
the Company, one or more investor questionnaires in the respective forms of
Exhibit D-1, D-2 and D-3 hereto; 

                                        (iv)      to
the Escrow Agent, its Investment Amount, in immediately available funds, by wire
transfer to the account designated in the Closing Escrow Agreement (the
“Investor Deliverables”). 

ARTICLE 3 

  REPRESENTATIONS AND WARRANTIES

          3.1      Representations
and Warranties of the Company.

          Subject
to exceptions set forth in the disclosure schedule of the Existing Company
Entities or in the SEC Reports (as hereinafter defined), the Company hereby
makes the following representations and warranties to each Investor: 

                         (a)      Subsidiaries.
The Existing Company Entities have no direct or indirect Subsidiaries other than
as disclosed in Schedule 3.1(a) . Except as disclosed in Schedule 3.1(a), the
Company owns, directly or indirectly, all of the capital stock of each
Subsidiary free and clear of any and all Liens, and all the issued and
outstanding shares of capital stock of each Subsidiary are validly issued and
are fully paid except as permitted under PRC laws, non-assessable and free of
preemptive and similar rights. 

                         (b)     
Organization and Qualification. Each of the Existing Company Entities is
duly incorporated or otherwise organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted. No
Existing Company Entity is in violation of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each Existing Company Entity is duly
qualified to conduct its respective businesses and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect. 

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

7 

                         (d)     
No Conflicts. Except as set forth on Schedule 3.1(d), the execution,
delivery and performance of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated thereby do not and
will not (i) conflict with or violate any provision of the Company’s, or any
Existing Company Entity’s certificate of incorporation or bylaws, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing any of the debt of any Existing Company Entity’s debt or
otherwise) or other understanding to which any of the Existing Company Entities
is a party or by which any property or asset of any of the Existing Company
Entities is bound or affected, or (iii) result in a violation of any Legal
Requirement, 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 any Existing Company Entity
is bound or affected; except in the case of each of clauses (ii) and (iii), such
as could not, individually or in the aggregate, have or reasonably be expected
to result in a Material Adverse Effect. It is understood that the failure by the
Company to timely make payments of cash dividends on the Series A Convertible
Preferred Stock would be a Material Adverse Effect for purposes of the foregoing
sentence and Schedule 3.1(d) contains an explanation of the Company’s intended
method of transmitting dividend payment funds from the PRC to the holders from
time to time of the Series A Convertible Preferred Stock. 

                         (e)     
Filings, Consents and Approvals. None of the Existing Company Entities is
required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any Governmental Body in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than (i) the filing with the Commission of one or
more Registration Statements in accordance with the requirements of this
agreement, (ii) filings required by state securities laws, (iii) the filing of a
Notice of Sale of Securities on Form D with the Commission under Regulation D of
the Securities Act, (iv) the filings required in accordance with Section 4.5,
(v) such filing as required to be made under the rules and regulations of the
applicable Trading Market, and (vi) those that have been made or obtained prior
to the date of this Agreement. 

                         (f)     
Issuance of the Securities. The Securities have been duly authorized and
when issued and paid for in accordance with the Transaction Documents, will be
duly and validly issued, fully paid and nonassessable, free and clear of all
Liens. The Warrants are valid and binding obligations of the Company,
enforceable in accordance with their terms. The Company has reserved from its duly authorized capital stock the
shares of Common Stock issuable pursuant to all Securities sold to the
Investors. 

8 

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

                         (h)      Financial
Statements. The Company has filed all reports required to be filed by it
under the Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, for the twelve months preceding the date hereof (or such
shorter period as the Company was required by law to file such reports) (the
foregoing materials being collectively referred to herein as the “SEC
Reports” and, together with the Schedules to this Agreement (if any), the
“Disclosure Materials”) on a timely basis or has timely filed 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, as to form, in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company and each Subsidiary 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 GAAP applied on a consistent basis during the
periods involved, except as may be otherwise specified in such financial
statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP for full year financial
statements, 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. Since the date of the latest audited financial
statements of the Company, except as disclosed in the Disclosure Materials (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 Existing Company
Entities have not incurred any liabilities (contingent or otherwise) other than
(A) trade payables, accrued expenses and other liabilities incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to
GAAP, (iii) the Existing Company Entities have not altered its method of
accounting or the identity of its auditors, and (iv) the Existing Company
Entities have 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. 

9 

                         (j)     
Litigation. There is no Action which (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or
the Shares or (ii) except as disclosed in the Disclosure Materials, could, if
there were an unfavorable decision, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect. Neither the
Existing Company Entities, nor to the knowledge of the Existing Company
Entities, any director or officer thereof (in his or her capacity as such), is
or has been the subject of any Action involving a claim of violation of or
liability under federal or state securities laws or a claim of breach of
fiduciary duty, except as disclosed in the Disclosure Materials. There has not
been, and to the knowledge of the Company, there is not pending any
investigation by the Commission involving any Existing Company Entity or any
current or former director or officer of an Existing Company Entity (in his or
her capacity as such). 

                         (k)     
Labor Relations. No material labor dispute exists or, to the knowledge of
the Existing Company Entities, is imminent with respect to any of the employees
of the Existing Company Entities. 

                         (l)      Compliance.
None of the Existing Company Entities (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 an Existing Company Entity under),
nor has any Existing Company Entity received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any order of any court,
arbitrator or governmental body, or (iii) is or has been in violation of any
statute, rule or regulation of any governmental authority, including all
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, such as could not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect. 

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

10 

                         (n)     
Title to Assets. The Existing Company Entities own or have valid land use
rights to all real property that is material to their respective businesses and
good and marketable title in all personal property owned by them that is
material to their respective businesses, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Existing Company Entities. Any real property and facilities
held under lease by the Existing Company Entities are held by them under valid,
subsisting and enforceable leases. 

                         (o)      Patents
and Trademarks. The Existing Company Entities have, or have rights to use,
all patents, patent applications, trademarks, trademark applications, service
marks, trade names, copyrights, licenses and other similar rights (collectively,
the “Intellectual Property Rights”) that are necessary or material for
use in connection with their respective businesses and which the failure to so
have could, individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect. No Existing Company Entity has received a
written notice that the Intellectual Property Rights used by such Existing
Company Entity violates or infringes upon the rights of any Person. Except as
set forth in the Disclosure Materials, to the knowledge of the Existing Company
Entities, all such Intellectual Property Rights are enforceable and there is no
existing infringement by another Person of any of the Intellectual Property
Rights. 

                         (p)      Insurance.
The Existing Company Entities are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Existing Company Entities are
engaged. 

                         (q)      Certain
Registration Matters. Assuming the accuracy of the Investors’
representations and warranties set forth in Section 3.2(b) -(e), no registration
under the Securities Act is required for the offer and sale of the Securities by
the Company to the Investors to the Investors under the Transaction Documents.
The Company is eligible to register its Common Stock underlying the Securities
for resale by the Investors under the Securities Act. 

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

                         (s)     
Transactions With Affiliates and Employees; Customers. Except as
described in the Disclosure Materials, none of the officers or directors of the
Company, and, to the knowledge of the Company, none of the employees of any of
the Company, is presently a party to any transaction of a value of $120,000 or
greater with the Company or any of its Subsidiaries which would be required to
be reported under Item 404 Regulation S-K (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such Person or, to the knowledge of the
Company, any entity in which any officer, director, or such employee or 5% or
more shareholder has a substantial interest or is an officer, director, trustee
or partner. None of the Existing Company Entities owes any money or other
compensation to any of their respective officers or directors or shareholders,
except to the extent of ordinary course compensation arrangements and
reimbursement for expenses incurred on behalf of the Company. No material
customer of any of the Existing Company Entities has indicated their intention
to diminish their relationship with such Existing Company Entity and none of the
Existing Company Entities has any knowledge from which it could reasonably
conclude that any such customer relationship may be adversely affected. 

11 

                         (t)      No
Additional Agreements. None of the Existing Company Entities has any
agreement or understanding with any Investor with respect to the transactions
contemplated by the Transaction Documents other than as specified in the
Transaction Documents. 

                         (u)     
Foreign Corrupt Practices Act. None of the Existing Company Entities nor
to the knowledge of the Company, any agent or other person acting on behalf of
the Existing Company Entities, has, directly or indirectly, (i) used any funds,
or will use any proceeds from the sale of the Securities, 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 such Existing
Company Entity (or made by any Person acting on their behalf of which the
Company is aware) or, to the knowledge of the Existing Company Entities, any
members of their respective management which is in violation of any Legal
Requirement, or (iv) has violated in any material respect any provision of the
Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder which was applicable to the Existing Company Entities. 

                         (v)     
Sarbanes-Oxley; Internal Accounting Controls. The Company is in material
compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are
applicable to it 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 has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
designed such disclosure controls and procedures to ensure that material
information relating to the Company, including its Subsidiaries, is made known
to the certifying officers by others within those entities, particularly during
the period in which the Company’s most recently filed periodic report under the
Exchange Act, as the case may be, is being prepared. The Company’s certifying
officers have evaluated the effectiveness of the Company’s controls and
procedures as of the date prior to the filing date of 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 significant changes in the Company’s
internal controls (as such term is defined in Item 307(b) of Regulation S-K
under the Exchange Act) or, to the best knowledge of the Company, in other
factors that could significantly affect the Company’s internal controls. 

12 

                         (w)      Other
Representations and Warranties Relating to WFOE. 

                                        (i)      All
material consents, approvals, authorizations or licenses requisite under PRC
Legal Requirements for the due and proper establishment and operation of WFOE
have been duly obtained from the relevant PRC Governmental Bodies and are in
full force and effect. 

                                        (ii)      All
filings and registrations with the PRC Governmental Bodies required in respect
of WFOE and its capital structure and operations including, without limitation,
the registration with the Ministry of Commerce, the China Securities Regulatory
Commission, the State Administration of Industry and or their respective local
divisions of Commerce, the State Administration of Foreign Exchange, tax bureau
and customs authorities have been duly completed in accordance with the relevant
PRC Legal Requirements, except where, the failure to complete such filings and
registrations does not, and would not, individually or in the aggregate, have a
Material Adverse Effect. 

                                        (iii)     
WFOE has complied with all relevant PRC Legal Requirements regarding the
contribution and payment of its registered share capital, the payment schedule
of which has been approved by the relevant PRC Governmental Bodies. There are no
outstanding commitments made by the Company or any Subsidiary (or any of their
shareholders) to sell any equity interest in WFOE. 

                                        (iv)      WFOE
has not received any letter or notice from any relevant PRC Governmental Body
notifying it of revocation of any licenses or qualifications issued to it or any
subsidy granted to it by any PRC Governmental Body for non-compliance with the
terms thereof or with applicable PRC Legal Requirements, or the lack of
compliance or remedial actions in respect of the activities carried out by WFOE,
except such revocation as does not, and would not, individually or in the
aggregate, have a Material Adverse Effect. 

                                        (v)      WFOE
has conducted its business activities within the permitted scope of business or
has otherwise operated its business in compliance with all relevant Legal
Requirements and with all requisite licenses and approvals granted by competent
PRC Governmental Bodies other than such non-compliance that do not, and would
not, individually or in the aggregate, have a Material Adverse Effect. As to
licenses, approvals and government grants and concessions requisite or material
for the conduct of any material part of WFOE’s business which is subject to
periodic renewal, the Company has no knowledge of any reasons related to the
WFOE for which such requisite renewals will not be granted by the relevant PRC
Governmental Bodies. 

13 

                                        (vi)      With
regard to employment and staff or labor, WFOE has complied with all applicable
PRC Legal Requirements in all material respects, including without limitation,
those pertaining to welfare funds, social benefits, medical benefits, insurance,
retirement benefits, pensions or the like, other than such non-compliance that
do not, and would not, individually or in the aggregate, have a Material Adverse
Effect. 

                         (x)     
Acknowledgement Regarding Investors’ Trading Activity. Except as set
forth in Section 3.2(f), anything in this Agreement or elsewhere herein to the
contrary notwithstanding, but subject to compliance by the Investors with
applicable law, it is understood and agreed by the Company (i) that past or
future open market or other transactions by any Investor, including Short Sales,
and 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; (ii) that any Investor, and counter parties in
“derivative” transactions to which any such Investor is a party, directly or
indirectly, presently may have a “short” position in the Common Stock, and (iv)
that each Investor shall not be deemed to have any affiliation with or control
over any arm’s length counter-party in any “derivative” transaction. The Company
further understands and acknowledges that (a) one or more Investors 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 shares deliverable with respect to Securities are being determined and (b)
such hedging activities (if any) could reduce the value of the existing
shareholders’ equity interests in the Company at and after the time that the
hedging activities are being conducted. 

                         (y)      Manipulation
of Price. 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 (other than for the Placement Agent’s placement 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
commissions payable to the Placement Agent. 

                         (z)      Disclosure.
Other than the Transactions contemplated by the Transaction Documents, the
Company confirms that neither it nor, to its knowledge, any other Person acting
on its behalf has provided any of the Investors or their agents or counsel with
any information that constitutes or might constitute material, nonpublic
information. The Company understands and confirms that the Investors will rely
on the foregoing representations and covenants in effecting transactions in
securities of the Company. All disclosure provided to the Investors in
connection with the transactions contemplated hereunder regarding the Company,
its business and the transactions contemplated hereby, including the Disclosure
Schedules to this Agreement, furnished by or on behalf of the Company with
respect to the representations and warranties made herein are true and correct
in all material respects with respect to such representations and warranties and
do not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.

14 

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

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

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

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

                         (c)     
Investor Status. At the time such Investor was offered the Securities, it
was an “accredited investor” as defined in Rule 501(a) under the Securities Act.
Such Investor is not a registered broker dealer under Section 15 of the Exchange
Act. 

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

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

15 

                         (f)     
Certain Trading Activities. Such Investor has not directly or indirectly,
nor has any Person acting on behalf of or pursuant to any understanding with
such Investor, engaged in any transactions in the securities of the Company
(including any Short Sales involving the Company’s securities) since the time
that such Investor was first contacted by the Company, the Placement Agent, or
any other Person acting on behalf of the Company regarding the investment in the
Company contemplated by this Agreement. Such Investor covenants that neither it
nor any Person acting on its behalf or pursuant to any understanding with it
will engage in any transactions in the securities of the Company (including
Short Sales) prior to the time that the transactions contemplated by this
Agreement are publicly disclosed. 

                         (g)     
Independent Investment Decision. Such Investor has independently
evaluated the merits of its decision to purchase Securities pursuant to the
Transaction Documents, and such Investor confirms that it has not relied on the
advice of any other Investor’s business and/or legal counsel in making such
decision. Such Investor has not relied on the business or legal advice of the
Placement Agent or any of its agents, counsel, or Affiliates in making its
investment decision hereunder, and confirms that none of such Persons has made
any representations or warranties to such Investor in connection with the
transactions contemplated by the Transaction Documents. 

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

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

                         (j)      Regulation
S. If such Investor is not a U.S. Person (as such term is defined in Section
902(a) of Regulation S), such Investor (i) acknowledges that the
certificate(s) representing or evidencing the Securities contain a customary
restrictive legend restricting the offer, sale or transfer of any Securities
except in accordance with the provisions of Regulation S, pursuant to
registration under the Securities Act, or pursuant to an available exemption
from registration, (ii) agrees that all offers and sales by such Investor of
Securities shall be made pursuant to an effective registration statement under
the Securities Act or pursuant to an exemption from, or a transaction not
subject to the registration requirements of, the Securities Act, (iii)
represents that the offer to purchase the Securities was made to such Investor
outside of the United States, and such Investor was, at the time of the offer
and will be, at the time of the sale and is now, outside the United States, (iv)
has not engaged in or directed any unsolicited offers to purchase Securities in
the United States, (v) is neither a U.S. Person nor a Distributor (as such terms
are defined in Section 902(a) and 902(c), respectively, of Regulation S), (vi)
has purchased the Securities for its own account and not for the account or
benefit of any U.S. Person, (vii) is the sole beneficial owner of the Securities
specified on Exhibit A opposite his name and has not pre-arranged any
sale with a Investor in the United States, and (ix) is familiar with and
understands the terms and conditions and requirements contained in Regulation S,
specifically, without limitation, each Investor understands that the statutory
basis for the exemption claimed for the sale of the Securities would not be
present if the sale, although in technical compliance with Regulation S, is part
of a plan or scheme to evade the registration provisions of the Securities Act. 

16

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

ARTICLE 4 

  OTHER AGREEMENTS OF THE PARTIES

          4.1      Compliance
with Securities Laws. 

                         (a)      Securities
may only be disposed of in compliance with state and federal securities laws. In
connection with any transfer of the Securities, other than pursuant to an
effective registration statement, pursuant to Rule 144, or to the Company, to an
Affiliate of an Investor or in connection with a pledge as contemplated in
Section 4.1(b), the Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor, the substance of which
opinion shall be reasonably acceptable to the Company, to the effect that such
transfer does not require registration of such transferred Securities under the
Securities Act. Notwithstanding the foregoing, the Company hereby consents to
and agrees to register on the books of the Company and with its transfer agent,
without any such legal opinion, any transfer of Securities by an Investor to an
Affiliate of such Investor, provided that the transferee certifies to the
Company that it is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and provided that such Affiliate does not request any removal of
any existing legends on any certificate evidencing the Securities. 

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

17 

NEITHER THESE SECURITIES NOR THE SHARES OF COMMON STOCK
ISSUABLE PURSUANT HERETO HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, NEITHER THESE SECURITIES NOR ANY SUCH
SHARES OF COMMON STOCK MAY BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT SECURED BY SUCH SECURITIES. 

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

                         (c)     
Certificates evidencing Securities shall not contain any legend (including the
legend set forth in Section 4.1(b)): 

                                        (i)      following
a sale or transfer of such Securities pursuant to an effective registration
statement (including a Registration Statement), or 

                                        (ii)     
following a sale or transfer of such Securities pursuant to Rule 144 (assuming
the transferee is not an Affiliate of the Company), or 

                                        (iii)      while
such Securities are eligible for sale under Rule 144 without volume restriction.

18 

          4.2      Registration
Obligation.

                         (a)      The
Company shall file a registration statement as soon as commercially reasonable,
but in any event within thirty (30) days of the Closing Date, on Form S-1, or
such other form that is appropriate, covering the resale of the Shares and cause
such registration statement to become effective as soon as commercially
reasonable, but in any event within ninety (90) days of the Closing Date (which
period shall be extended by thirty (30) additional days in the event such
registration statement shall be the subject of a full review). 

                         (b)      If
at any time prior to the one (1) year anniversary of the Closing Date, the
Company or any shareholder of the Company proposes to register any of its Common
Stock or any securities convertible into Common Stock under the Securities Act
(other than pursuant to an offering of securities in connection with an employee
benefit, share dividend, share ownership or dividend reinvestment plan or
registration of securities in connection with a business combination
transaction) and the registration form to be used may be used by the Company for
the registration of the Registrable Securities, the Company shall give prompt
written notice to the Investors of its intention to effect such a registration
(each a “Piggyback Notice”) and shall, if commercially practicable,
include in such registration statement all Registrable Securities then required
to be registered that are not then covered by an effective registration
statement with respect to which the Company has received written request from
the Investors for inclusion therein within ten (10) days after the date of
sending the Piggyback Notice (the “Piggyback Registration”) to the
Investors; provided that if the Company and any underwriter reduce the number of
shares proposed to be registered under such registration statement, the shares
to be registered by holders of the Registrable Securities acquired hereunder
will be reduced proportionately based on the relative number of Securities
purchased by each Investor hereunder only after all other stockholders’ shares
are reduced. 

                         (c)     
In connection with any registration, the Company will: 

                                        (i)      prepare
and file with the Commission a registration statement in a commercially
reasonable time with respect to such securities and use its commercially
reasonable efforts to cause such registration statement to become and remain
effective for the Effectiveness Period, in either case subject however to the
requirements of subparagraph (a) above; 

                                        (ii)      prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective and to comply with the
provisions of the Securities Act with respect to the sale or other disposition
of all securities covered by such registration statement until the such time as
all of such securities have been disposed of in a public offering; 

                                        (iii)     
furnish to the Investors, at the option of the Company in electronic format,
such number of copies of a summary prospectus or other prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents, as the Investors may reasonably request; 

19 

                                        (iv)     
register or qualify the securities covered by such registration statement under
such other securities or blue sky laws of such jurisdictions within the United
States and Puerto Rico as the Investors shall reasonably request (provided,
however, that it shall not be obligated to qualify as a foreign corporation to
do business under the laws of any jurisdiction in which it is not then qualified
or to file any general consent to service or process); 

                                        (v)      furnish,
at the request of the Investors, a legal opinion of the counsel representing the
Company for the purposes of such registration, addressed to the Investors, in
customary form and covering matters of the type customarily covered in such
legal opinions; 

                                        (vi)     
otherwise use its commercially reasonable efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, at the option of the Company in electronic format, as soon as
reasonably practicable, but not later than eighteen (18) months after the
effective date of the Registration Statement, an earnings statement covering the
period of at least twelve (12) months beginning with the first full month after
the effective date of such registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act;
provided, however, that the Company shall have no such obligation if the
Effectiveness Period has expired; 

                                        (vii)      notify
the Investors, at any time when the offering documents include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, and at the request of the Investors,
prepare and furnish to such person(s) such reasonable number of copies of any
amendment or supplement to the offering documents as may be necessary so that,
as thereafter delivered to the Investors of such shares, such offering documents
shall not include any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and to
deliver to Investors of any other securities of the Company included in the
offering copies of such offering documents as so amended or supplemented; 

                                        (viii)     
keep the Investors informed of the Company’s best estimate of the earliest date
on which the offering documents will become effective, and promptly notify the
Investors of (A) the effectiveness of such offering documents, (B) a request by
the Commission for an amendment or supplement to such offering documents, (C)
the issuance by the Commission of an order suspending the effectiveness of the
offering documents, or of the threat of any proceeding for that purpose, and (D)
the suspension of the qualification of any securities to be included in the
offering documents for sale in any jurisdiction or the initiation or threat of
any proceeding for that purpose; and 

                                        (ix)      before
filing any registration statement as contemplated by Section 4.2 hereof and any
amendment or supplement thereto (including any documents incorporated by
reference therein), the Company shall furnish to the Investors copies of all
such offering documents, at the option of the Company in electronic format to
the email address for each Investor specified on the signature pages hereto,
which offering documents shall be subject to the review of such Investors and,
where feasible, the Company shall make such changes in the offering documents as are promptly and reasonably requested by
an Investor. The Investors shall provide their comments to the offering
documents, if any, within 2 business days after the receipt of such offering
documents. 

20 

                         (d)     
All registrations (piggyback or otherwise) made by the Investors will be made
solely at the Company’s expense, other than (i) if an underwritten offering is
consented to by the Company, the underwriters’, broker-dealers’ and placement
agents’ selling discounts, commissions and fees relating to the sale of the
Investors’ securities, (ii) any costs and expenses of counsel, accountants or
other advisors retained by the Investors other than the fees and expenses of one
counsel to represent all Investors in connection with a registration statement
filed pursuant hereto, not to exceed $5,000 in the aggregate for all such
Investors in connection with such registration, and (iii) all transfer,
franchise, capital stock and other taxes, if any, applicable to the Investors’
securities (collectively, “Investors’ Expenses”) which shall be paid by
the Investors. 

                         (e)      In
the event of any registration of any Registrable Securities under the Securities
Act pursuant to this Agreement, the Company shall indemnify and hold harmless
each Investor holding such Registrable Securities, such Investor’s directors and
officers, and each other person (including each underwriter) who participated in
the offering of such Registrable Securities and each other person, if any, who
controls such Investor or such participating person within the meaning of the
Securities Act, against any losses, claims, damages, liabilities, costs
(including, without limitation, reasonable costs of preparation and reasonable
attorneys’ fees), or expenses, joint or several, to which such Investor or any
such director or officer or participating person or controlling person may
become subject under the Securities Act or any other statute or at common law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or any alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, (ii) any omission or any alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (iii) any other violation of any
applicable securities laws, and in each of the foregoing circumstances shall
reimburse such Investor or such director, officer or participating person or
controlling person for any legal or any other expenses reasonably incurred by
such Investor or such director, officer or participating person or controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any actual or alleged untrue statement
or actual or alleged omission made in such registration statement, preliminary
prospectus, prospectus or amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Investor
specifically for use therein. 

                         (f)      In
the event of any registration of any Registrable Securities under the Securities
Act pursuant to this Agreement, each Investor holding Registrable Securities
agrees to indemnify and hold harmless the Company, its directors and officers
and each other person, if any, who controls the Company within the meaning of
the Securities Act and any other Investor against any losses, claims, damages,
liabilities, costs (including, without limitation, reasonable costs of
preparation and reasonable attorneys’ fees), or expenses, joint or several, to
which the Company or any such director or officer or any such person may
become subject under the Securities Act or any other statute or at common law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or any alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, or (ii) any omission or any alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but in either case only to the extent that
such untrue statement or omission is (A) made in reliance on and in conformity
with any information furnished in writing by such Investor to the Company
concerning such Investor specifically for inclusion in the offering documents
relating to such offering, and (B) is not corrected by such Investor and
distributed to the Investors within a reasonable period of time. Notwithstanding
the provisions of this paragraph, no Investor shall be required to indemnify any
person pursuant to this paragraph or to contribute pursuant to paragraph (g)
below in an amount in excess of the amount of the aggregate net proceeds
received by such Investor in connection with any such registration under the
Securities Act. 

21 

                         (g)     
If the indemnification provided for above from the indemnifying party is
unavailable to an indemnified party hereunder in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then the indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified parties in
connection with the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified parties, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding. The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this paragraph were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

                         (h)     
In order to permit the Investors to sell the Registrable Securities, if so
desired, pursuant to any applicable resale exemption under applicable securities
laws and regulations, the Company shall: 

                                        (i)      comply
with all rules and regulations of the Commission in connection with use of any
such resale exemption; 

22 

                                        (ii)     
make and keep available adequate and current public information regarding the
Company; 

                                        (iii)      file
with the Commission in a timely manner, all reports and other documents required
to be filed under the Securities Act, the Exchange Act, or other applicable
securities laws and regulations; 

                                        (iv)     
upon written request from any Investor, furnish to such Investor copies of
annual reports required to be filed under the Exchange Act and other applicable
securities laws and regulations; and 

                                        (v)      upon
written request from any Investor, furnish to such Investor, upon written
request (A) a copy of the most recent quarterly report of the Company and such
other reports and documents filed by the Company with the Commission and (B)
such other information as may be reasonably required to permit the Investors to
sell pursuant to any applicable resale exemption under the Securities Act or
other applicable securities law and regulations, if any. 

                         (i)      All
rights of the Investors under this Section 4 are unique to and limited to the
Investors and may not be transferred or inure to the benefit of the Investors’
successors and assigns or any other transferee who obtains Registrable
Securities.

                         (j)      Notwithstanding
anything to the contrary herein, any and all of the Company’s obligations under
this Section 4.2 shall terminate upon the expiration of the Effectiveness
Period. 

                         (k)      The
Company shall not grant any registration rights without the consent of the
Investors holding a majority in interest of the then outstanding Registrable
Securities prior to the effectiveness of the registration statement referred to
in subparagraph (a) above, unless such newly granted registration rights are
subordinated to the Investor’s rights under this Section 4.2. 

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

          4.4      Subsequent
Registrations. The Company may not file any registration statement (other
than on Form S-8) with the Commission with respect to any securities of the
Company prior to the time that all Shares are registered pursuant to one or more
effective registration statement(s), and the prospectuses forming a portion of
such registration statement(s) is available for the resale of all Shares, except
that if an Investor declines in writing to include their Shares in a
registration statement, then this Section 4.4 hereafter ceases to apply to the
Shares of such Investor (other than if such Investor declines to include its
Shares because such Investor was unwilling to be named as an underwriter in such
Registration Statement). 

23 

          4.5      Securities
Laws Disclosure; Publicity. By (i) 9:30 a.m. (New York time) on the Trading
Day following the Closing Date, the Company shall issue a press release,
disclosing the transactions contemplated by the Transaction Documents and the
Closing and by (ii) 5:30 p.m. (New York time) on the Trading Day following the
Closing Date, the Company will file a Current Report on Form 8-K, disclosing the
material terms of the Transaction Documents (and attach as exhibits thereto all
existing Transaction Documents) and the Closing. The Company covenants that
following such disclosure, the Investors shall no longer be in possession of any
material, non-public information with respect to any of the Existing Company
Entities. In addition, the Company will make such other filings and notices in
the manner and time required by the Commission and the Trading Market on which
the Common Stock is listed. Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Investor, or include the name of any Investor
in any filing with the Commission (other than the Registration Statement and any
exhibits to filings made in respect of this transaction in accordance with
periodic filing requirements under the Exchange Act) or any regulatory agency or
Trading Market, without the prior written consent of such Investor, except to
the extent such disclosure is required by law or Trading Market regulations.

          4.6      Use
of Proceeds. The Company will use the net proceeds from the sale of the
Securities hereunder for working capital purposes, acquisitions and/or capital
expenditures. 

          4.7     
Participation in Future Financing.

                         (a)      From
the date hereof until the first anniversary of such date, upon any financing by
the Company of Common Stock or Common Stock Equivalents (a “Subsequent
Financing”), each Investor who owns at least 50% of the number of shares of
Series A Convertible Preferred Stock originally purchased hereunder (such
Investor, a “Qualified Investor”) shall have the right to participate in
up to an amount of the Subsequent Financing equal to the lesser of (i) the
amount of the Subsequent Financing and (ii) the aggregate Liquidation Preference
Amount of the Series A Convertible Preferred Stock then outstanding and held by
all such Qualified Investors (the “Participation Maximum”). 

                         (b)      At
least five (5) Trading Days prior to the closing of the Subsequent Financing,
the Company shall deliver to each Qualified Investor a written notice requesting
their written approval to receive nonpublic information regarding the Company
(“Pre-Notice”), which Pre-Notice shall ask such Qualified Investor if it
wants to review the details of such information (such additional notice, a
“Subsequent Financing Notice”). Upon the request of a Qualified Investor,
and only upon a request by such Qualified Investor, for a Subsequent Financing
Notice, the Company shall promptly, but no later than 1 Trading Day after such
request, deliver a Subsequent Financing Notice to such Qualified Investor. The
Subsequent Financing Notice shall describe in reasonable detail the proposed
terms of such Subsequent Financing, the amount of proceeds intended to be raised
thereunder, the person with whom such Subsequent Financing is proposed to be
effected, and attached to which shall be a term sheet or similar document
relating thereto. The Company may deliver the Pre-Notice and Subsequent
Financing Notice to such Qualified Investor by e-mail to the e-mail address
specified on the signature pages hereto.

24 

                         (c)      Any
Qualified Investor desiring to participate in such Subsequent Financing must
provide written notice to the Company by not later than 5:30 p.m. (New York City
time) on the 5th Trading Day after all of the Qualified Investors
have received the Pre-Notice that the Qualified Investor is willing to
participate in the Subsequent Financing, the amount of the Qualified Investor’s
participation, and that the Qualified Investor has such funds ready, willing,
and available for investment on the terms set forth in the Subsequent Financing
Notice. If the Company receives no notice from a Qualified Investor as of such
5th Trading Day, such Qualified Investor shall be deemed to have
notified the Company that it does not elect to participate.

                         (d)      If
by 5:30 p.m. (New York City time) on the 5th Trading Day after all of
the Qualified Investors have received the Pre-Notice, notifications by the
Qualified Investors of their willingness to participate in the Subsequent
Financing (or to cause their designees to participate) is, in the aggregate,
less than the total amount of the Subsequent Financing, then the Company may
effect the remaining portion of such Subsequent Financing on the terms and to
the persons set forth in the Subsequent Financing Notice.

                         (e)     
If by 5:30 p.m. (New York City time) on the 5th Trading Day after all
of the Qualified Investors have received the Pre-Notice, the Company receives
responses to a Subsequent Financing Notice from Investors seeking to purchase
more than the aggregate amount of the Participation Maximum, each such Qualified
Investor shall have the right to purchase the greater of (a) their Pro Rata
Portion (as defined below) of the Participation Maximum and (b) the difference
between the Participation Maximum and the aggregate amount of participation by
all other Qualified Investors. “Pro Rata Portion” is the ratio of (x) the
Subscription Amount of Securities purchased on the Closing Date by a Qualified
Investor participating under this Section 4.7 and (y) the sum of the aggregate
Subscription Amounts of Securities purchased on the Closing Date by all
Qualified Investors participating under this Section 4.7. 

                         (f)      The
Company must provide the Qualified Investors with a second Subsequent Financing
Notice, and the Qualified Investors will again have the right of participation
set forth above in this Section 4.7, if the Subsequent Financing subject to the
initial Subsequent Financing Notice is not consummated for any reason on the
terms set forth in such Subsequent Financing Notice within 60 Trading Days after
the date of the initial Subsequent Financing Notice.

                         (g)      The
rights contained in this Section shall not apply to the issuance and sale by the
Company of : 

                                        (i)     
shares of Common Stock or Common Stock Equivalents to employees, officers, or
directors of the Company, as compensation for their services to the Company or
any of its direct or indirect Subsidiaries pursuant to arrangements approved by
the Board of Directors of the Company (including, but not limited to, any stock
or option plan duly adopted by the Board of Directors of the Company); 

                                        (ii)      shares
of Common Stock or Common Stock Equivalents issued as consideration for the
acquisitions of or strategic transactions with another company or business where the primary purpose is not to raise capital for the
Company or any Subsidiary, which acquisition or strategic transaction has been
approved by the Board of Directors of the Company; 

25 

                                        (iii)     
up to an aggregate of $500,000 worth of shares of Common Stock or Common Stock
Equivalents issued to non-Affiliates in connection with services rendered to the
Company pursuant to arrangements approved by the Board of Directors of the
Company; 

                                        (iv)      shares
of Common Stock or Common Stock Equivalents issued as part of a primary
underwritten public offering (which shall not include a shelf takedown) with
proceeds to the Company equal to or greater than $10,000,000; or 

                                        (v)      shares
of Common Stock issued upon conversion or exercise of the Securities. 

          4.8      Conversion
Shares. At the Closing, the Company shall have authorized and reserved and
shall continue to reserve, free of preemptive rights and other similar
contractual rights of stockholders, a number of shares of Common Stock equal to
one hundred thirty percent (130%) of the number of shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all of the
Series A Convertible Preferred Stock and exercise of the Warrants then
outstanding.

          4.9      Trading
Market Rules and Regulations. The Company shall, if applicable: (i) in the
time and manner required by the Trading Market, prepare and file with such
Trading Market an additional shares listing application covering a number of
shares of Common Stock at least equal to one hundred percent (100%) of the
number of shares of Common Stock as shall be sufficient to effect the conversion
of all of the Series A Convertible Preferred Stock and exercise of the Warrants
on the date of such application, (ii) take all steps necessary to cause such
shares of Common Stock to be approved for listing on the Trading Market as soon
as possible thereafter, (iii) provide to the Investors evidence of such listing,
and (iv) maintain the listing of such Common Stock on any date on such Trading
Market or another Trading Market. Prior to the Closing Date, the Company shall
obtain the Shareholder Approval, and the Company shall, within thirty (30)
calendar days after the Closing Date, file a Preliminary Information Statement
on Schedule 14C with the Commission, and, if such Preliminary Information
Statement is not reviewed by the Commission, 10 calendar days thereafter, shall
mail a Definitive Information Statement on Schedule 14C to the non-consenting
shareholders in connection therewith (if such Preliminary Information Statement
is reviewed by the Commission, the Company shall use their best efforts to
respond to any comments the Commission may have to such Preliminary Information
Statement and shall mail a Definitive Information Statement to the
non-consenting shareholders as soon as practicable following the date such
Preliminary Information Statement is cleared by the Commission). 

ARTICLE 5 

  CONDITIONS PRECEDENT TO CLOSING

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

26 

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

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

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

                         (d)      Adverse
Changes. Since the date of execution of this Agreement, no event or series
of events shall have occurred that reasonably could have or result in a Material
Adverse Effect; 

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

                         (f)     
Series A Certificate of Designation. The Company shall have filed with
the Secretary of State of Nevada the Series A Certificate of Designation
substantially in the form of Exhibit B attached hereto; 

                         (g)     
Opinion of PRC Counsel. The Investors shall have received an opinion of
PRC counsel to the Company in form and substance reasonably satisfactory to the
Investors; 

                         (h)      Opinion
of Nevada Counsel. The Investors shall have received an opinion of Nevada
counsel to the Company in form and substance reasonably satisfactory to the
Investors;

                         (i)      Opinion
of New York Counsel. The Investors shall have received an opinion of New
York counsel to the Company in form and substance reasonably satisfactory to the
Investors; 

                         (j)     
Stockholder Approval. If the Common Stock is listed on a Trading Market
and the issuance of the Shares as contemplated under the Transaction Documents
would exceed that number of shares of Common Stock which the Company may issue
without breaching the Company’s obligations under the rules or regulations of
the Trading Market on which it is listed, then the Company shall have obtained
the approval of its stockholders as required by the applicable rules of the
Trading Market for issuances of the Shares in excess of such amount; and 

                         (k)     
Termination. This Agreement shall not have been terminated as to such
Investor in accordance with Section 6.6. 

27 

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

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

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

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

                         (d)     
Investors Deliverables. Each Investor shall have delivered its Investors
Deliverables in accordance with Section 2.2(b); and 

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

ARTICLE 6 

  MISCELLANEOUS

          6.1     
Fees and Expenses. Except as otherwise set forth in this Agreement and
the other Transaction Documents, each party shall pay the fees and expenses of
its advisors, 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 the
registration expenses all stamp and other taxes and duties levied in connection
with the issuance and/or transfer of the Securities and any fees in connection
with the registration of the Registrable Securities. 

          6.2     
Share Issuance Limitations. Notwithstanding anything to the contrary in
the Transaction Documents, the Company shall not be obligated to issue any
shares of Common Stock (i) upon conversion of the Series A Convertible Preferred
Stock, or (ii) upon exercise of the Warrants if the aggregate number of shares
of Common Stock issued thereunder would exceed 7,225,150 shares of Common Stock
(the “Exchange Cap”), which is the aggregate number of shares of Common
Stock which the Company may issue in connection with such transactions without
breaching the Company’s obligations under the rules or regulations of any
applicable Trading Market, except that such limitation shall not apply in the
event that the Company (A) obtains the approval of its stockholders as required
by the applicable rules of such Trading Market for issuances of Common Stock in
excess of such amount or (B) obtains a written opinion from outside counsel to
the Company that such approval is not required, which opinion shall be
reasonably satisfactory to the Investors. 

28 

          6.3      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 supersede all prior agreements, understandings,
discussions and representations, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules. 

          6.4     
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 (provided the sender
receives a machine-generated confirmation of successful transmission) at the
facsimile number specified in this Section 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 specified in this Section 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 Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be
as follows: 

If to the Company:

China Nutrifruit Group Limited 
5th
Floor, Chuangye Building, Chuangye Plaza
Industrial Zone 3, Daqing Hi-Tech
Industrial Development Zone 
Daqing, Heilongjiang China 163316

Facsimile: (86) 459 8972774 
Attention: Chief Executive Officer 

With a copy to:

Pillsbury Winthrop Shaw Pittman
LLP
2300 N Street, NW 
Washington, DC 20037-1122 
Facsimile: (202)
663-8007 

  Attn.: Joseph Tiano, Esq. 

If to an Investor:

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

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

          6.5      Amendments;
Waivers; No Additional Consideration. No provision of this Agreement may be
waived or amended except in a written instrument signed by the Company and the
Investors holding a majority of the Securities subscribed for by Investors
(excluding any Investors that are Affiliates of the Company). No waiver of any
default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver
of any other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right. No consideration shall be offered or paid to any
Investor to amend or consent to a waiver or modification of any provision of any
Transaction Document unless the same consideration is also offered to all
Investors who then hold Shares. Notwithstanding anything contained herein to the
contrary, a Person can, without the need for approval by any other Investors to
this Agreement, become a Party to this Agreement by executing and delivering a
joinder signature page hereto before the Outside Date, whereupon such Person
will be deemed an Investor for all purposes of this Agreement and will be
automatically added to Exhibit A hereto. 

29 

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

                         (a)     
  by written agreement of an Investor (as to itself but no other Investor) and
  the Company; and

                         (b)     
by the Company or an Investor (as to itself but no other Investor) upon written
notice to the other, if the Closing shall not have taken place by 6:30 p.m.
Eastern time on the Outside Date; provided, that the right to terminate this
Agreement under this Section 6.6(b) shall not be available to any Person whose
failure to comply with its obligations under this Agreement has been the cause
of or resulted in the failure of the Closing to occur on or before such time.

          In
the event of a termination pursuant to this Section, the Company shall promptly
notify all non-terminating Investors. Upon a termination in accordance with this
Section 6.6, the Company and the terminating Investor(s) shall not have any
further obligation or liability (including as arising from such termination) to
the other and no Investor will have any liability to any other Investor under
the Transaction Documents as a result therefrom. 

          6.7      Construction;
Interpretation. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party. 

          This
Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement or any of the
Transaction Documents. The words “including,” “include” and other words of
similar import shall be deemed to be followed by the words “without limitation.”

          6.8     
Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Investors. Any Investor may assign any
or all of its rights under this Agreement (other than registration rights set
forth in Section 4.2 hereof) to any Person to whom such Investor assigns or transfers any Securities, provided such transferee agrees in
writing to be bound, with respect to the transferred Securities, by the
provisions hereof that apply to the Investors. 

30 

          6.9     
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. 

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

          6.11     
Survival. The representations, warranties, agreements and covenants
contained herein shall survive the Closing and the delivery of the Securities
for 18 months following the Closing Date. 

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

31 

          6.13     
Severability. If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby. 

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

          6.15     
Independent Nature of Investors’ Obligations and Rights. The obligations
of each Investor under any Transaction Document are several and not joint with
the obligations of any other Investor, and no Investor shall be responsible in
any way for the performance of the obligations of any other Investor under any
Transaction Document. The decision of each Investor to purchase Securities
pursuant to the Transaction Documents has been made by such Investor
independently of any other Investor. Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. Each
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such Investor in connection with monitoring its
investment in the Shares or enforcing its rights under the Transaction
Documents. Each Investor shall be entitled to independently protect and enforce
its rights, including the rights arising out of this Agreement or out of the
other Transaction Documents, and it shall not be necessary for any other
Investor to be joined as an additional party in any proceeding for such purpose.
The Company acknowledges that each of the Investors has been provided with the
same Transaction Documents for the purpose of closing a transaction with
multiple Investors and not because it was required or requested to do so by any
Investor. 

          6.16     
Limitation of Liability. Notwithstanding anything herein to the contrary,
the Company acknowledges and agrees that the liability of an Investor arising
directly or indirectly, under any Transaction Document of any and every nature
whatsoever shall be satisfied solely out of the assets of such Investor, and
that no trustee, officer, other investment vehicle or any other Affiliate of
such Investor or any investor, shareholder or holder of shares of beneficial
interest of such a Investor shall be personally liable for any liabilities of
such Investor. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK --
SIGNATURE
PAGES FOLLOW] 

32 

          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. 

CHINA NUTRIFRUIT GROUP LIMITED

By:
_____________________________________
Name: Jinglin Shi 
Title: Chief
Executive Officer 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK -- SIGNATURE PAGES
FOR INVESTORS 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. 

	_________________________________________Units 	 	Aggregate Subscription Price: US$
    ___________
	 	 	 
	
    Name and Address of Investor: 
	
     
	
    Registration Instructions (if different):
  

	
     
	
     
	
     

	
     
	
     
	
     

	
    Name of Investor (please print) 
	
     
	
    Name 

	
     
	
     
	
     

	
    By: ______________________________________________
	
     
	
      

	
           Authorized Signature 
	
     
	
    Account Reference, if applicable 

	
     
	
     
	
     

	
    Official Capacity or Title (please print) 
	
     
	
      

	
      
	
     
	
      

	
     
	
     
	
     

	
     
	
     
	
     

	
    (Please print name of signatory if different from the

	
     
	
    Address, including postal code 

	
    name of the Investor printed above.) 
	
     
	
      

	
      
	
     
	
    Delivery Instructions (if different): 

	
    Investor’s Address: 
	
     
	
      

	
      
	
     
	
    Name 

	
     
	
     
	
     

	
      
	
     
	
      

	
      
	
     
	
    Account Reference, if applicable 

	
      
	
     
	
      

	
     
	
     
	
     

	
    Telephone Number: __________________________________
	
     
	
      

	
     
	
     
	
     

	
    Fax Number: ________________________________________
	
     
	
      

	
      
	
     
	
    Address, including postal code 

	
    E-mail Address: ______________________________________
	
     
	
      

	
     
	
     
	
     

	
      
	
     
	
    Telephone Number 

EXHIBIT A

______________________________________________

SCHEDULE OF BUYERS 

  	

        
No. 	

        
Investor Name 	

Investor Address 	
Investment 
Amount 	
Units 
Purchased 	Shares of Series 

        A Convertible
      
Preferred Stock 	

Warrants 
	1. 
	Bruce Walker Ravenel III 
	1265 Carriage Hill Ct 
Franktown, CO 80116-8903
    	$200,000.00 
	6,061 
	6,061 
	15,153 

	2. 
	Bruce Wapen 
	969-G Edgewater Blvd 807 
Foster City, CA
      94404-3760 	$75,000.00 
	2,273 
	2,273 
	5,683 

	3. 
	Donald Shoff 
	P.O. Box 1133 
Red Bluff, CA 96080-1133 	$75,000.00 
	2,273 
	2,273 
	5,683 

	4. 
	John Michael Cheezem 
	2201 4th N Ste 200 
St Petersburg, Fl 33704-4300
    	$100,000.00 
	3,031 
	3,031 
	7,578 

	5. 
	Mary Neiberg 
	3600 Cerrillos Rd Ste 406 A/B 
Santa Fe, NM
      87507-2612 	$100,000.00 
	3,031 
	3,031 
	7,578 

	6. 
	Steven Duane Chism 

        Lynne Chism Jt Ten 	P.O. Box 37 
Brighton, IL 62012-0037 	$50,000.00 
	1,516 
	1,516 
	3,790 

	7. 
	Jesse D Smith Melanie M 

        Smith Ten Com 	8518 Fathom Circle #103 
Austin, TX 78750-3036
    	$50,000.00 
	1,516 
	1,516 
	3,790 

	8. 
	Pom Investments LLC 
	387 Avenue I 
Boulder City, NV 89005-2623 	$100,000.00 
	3,031 
	3,031 
	7,578 

	9. 
	Integrity Funds LP 
	1122 Garraty Rd 
San Antonio, TX 78209-6015 	$50,000.00 
	1,516 
	1,516 
	3,790 

	10. 
	JMC Family Investments, 

        Ltd. 	2201 4th N Ste 200 
St Petersburg, Fl 33704-4300
    	$100,000.00 
	3,031 
	3,031 
	7,578 

	11. 

        

	Living Trust UAD 

        04/24/01 Robert K 
Heimann
      TTEE FBO 
Robert K Heimann 	181 Indian Shadows Drive 
Maryville, TN
      37801-1547 

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	12. 

        

	Arthur R. Eklund & Janet 

        L. Eklund TTEES
      The 
Arthur & Janet Eklund 
1998 Inter Vivos Trust 
Dec. 	1650 Via Chaparral 
Fallbrook, CA 92028-8518
      

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	13. 

        
	Rod Mcintyre TR Rod 

        Mcintyre Trust UA Dated
      
5/1/01 	2169 Mcintyre Rd 
Stevensville, MT 59870-6800
      
	$50,000.00 

	1,516 

	1,516 

        
	3,790 

	14. 
	Anthony James Johnson 
	4919 Vista Place 
San Diego, CA 92116-1428 	$50,000.00 
	1,516 
	1,516 
	3,790 

	15. 
	Paul P Ulrich Deborah A 

        Dean Jt Ten 	56 Crooked Ave 
San Anselmo, CA 94960-2378 	$50,000.00 
	1,516 
	1,516 
	3,790 

	16. 

        

	Carlos Alfonso Merino 

        Rev Living Trust UAD
      
12/04/96 Carlos A 
Merino TTEE 	283 Waiama Way 
Haiku, HI 96708-5899 

	$100,000.00 

	3,031 

	3,031 

        

	7,578 

	17. 

        
	Savings Trust Mark 

        Dugger TTEE Attn Mark
      
Dugger 	207 Avenue D Ste 200 
Snohomish, WA 98290-2773
      
	$100,000.00 

	3,031 

	3,031 

        
	7,578 

  	

        
No. 	

        
Investor Name 	

Investor Address 	
Investment
      
Amount 	
Units
      
Purchased 	Shares of Series 

        A
      Convertible 
Preferred Stock 	

Warrants 
	18. 
	Corey Shannon 

        McNamee 	4003 Dunsinane St 
Ocean Springs, MS 39564-3444
    	$50,000.00 
	1,516 
	1,516 
	3,790 

	19. 
	Thomas W Morris 
	890 Maplewood Drive 
Reno, NV 89509-3670 	$50,000.00 
	1,516 
	1,516 
	3,790 

	20. 
	Henry Louis Schairer Jr 
	229 Hopewell Dr 
Allentown, PA 18104-9596 	$50,000.00 
	1,516 
	1,516 
	3,790 

	21. 
	Edmund Schweitzer 
	1605 NW Valhalla Drive 
Pullman, WA 99163-3779
    	$50,000.00 
	1,516 
	1,516 
	3,790 

	22. 
	Ronald Bovasso Linda 

        Bovasso Jt Ten 	3 April Lane 
Wilmington, DE 19810-4122 	$50,000.00 
	1,516 
	1,516 
	3,790 

	23. 
	Van J Clark Dessie Clark 

        Jt Ten 	38 Delgado Way 
Hot Springs, AR 71909-3711 	$50,000.00 
	1,516 
	1,516 
	3,790 

	24. 

        

	IRA FBO Jonathan N 

        Edwards Pershing LLC 
as
      Custodian Roth 
Account 	Box 8905 
Kodiak, AK 99615-8905 

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	25. 
	M Carl Rice Ellen Hyde 

        Rice Comm Prop 	1030 Kings Hwy 
Shreveport, LA 71104-2932 	$150,000.00 
	4,546 
	4,546 
	11,365 

	26. 

        

	Alma D Arthur Survivors 

        Trust Dated 10/18/1990
      
UAD 10/18/90 Alma D 
Arthur TTEE 	10724 Waterbury Dr 
Stockton, CA 95209-4212
      

	$100,000.00 

	3,031 

	3,031 

        

	7,578 

	27. 

        

	James V. Bacon Trust 

        DTD 09/14/1995 UAD
      
09/14/95 James Bacon 
TTEE 	1446 Norton Avenue 
Glendale, CA 91202-1424
      

	$300,000.00 

	9,091 

	9,091 

        

	22,728 

	28. 

        

	Timothy R. Crane Trust 

        Dated 12/06/2004 UAD
      
12/06/04 Timothy Crane 
TTEE 	24615 Park Miramar 
Calabasas, CA 91302-1455
      

	$150,000.00 

	4,546 

	4,546 

        

	11,365 

	29. 

        

	Trust DTD 1/31/2008 

        UAD 01/31/08 Paul
      
Dipaolo & Nancy L 
Worthington TTEES 	PO Box 6089 
Incline Vlg, NV 89450-6089
    

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	30. 

        

	Goodwin Living Trust 

        Dated 3/27/2008 UAD
      
03/27/08 Buford Charles 
Goodwin Jr. & Danalyn 
S Goodwin
      TTEES 	15150 Dendinger Drive 
Covington, LA 70433-6866
      

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	31. 

        

	Ingram Living Trust 

        Dated 11/02/2005
      
UAD11/02/05 Thomas L 
Ingram & Carissa Ingram 
TTEES 	4001 Stone Canyon Avenue 
Sherman Oaks, CA
      91403-4542 

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	32. 

        

	Petersen Family Trust 

        Dated 11/14/2008 UAD
      
11/14/08 Eric Petersen & 
Mechel S Petersen 
TTEES 	3422 Jewell Street 
San Diego, CA 92109-6720
      

	$50,000.00 

	1,516 

	1,516 

        

	3,790

  	

        
No. 	

        
Investor Name 	

Investor Address 	
Investment
      
Amount 	
Units
      
Purchased 	Shares of Series 

        A
      Convertible 
Preferred Stock 	

Warrants
    
	33. 

        

	Revocable Trust of 

        Barbara J. Peterson UAD
      
02/04/00 Barbara J 
Peterson TTEE 	6426 Oakwood Dr 
Oakland, CA 94611-1330
    

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	34. 

        
	Eva M. Salas UAD 

        11/06/03 Eva Marie Salas
      
TTEE 	2016 Stockbridge Ave. 
Redwood City, CA
      94061-4131 
	$50,000.00 

	1,516 

	1,516 

        
	3,790 

	35. 
	Ajay Kalra 
	639 W. 9th St 
San Pedro, CA 90731-3107 	$80,000.00 
	2,425 
	2,425 
	6,063 

	36. 
	Robert Vecchione 
	PO Box 307 
Felton, CA 95018-0307 	$70,000.00 
	2,122 
	2,122 
	5,305 

	37. 

        
	John A Rupp Trust UAD 

        03/25/94 John A Rupp
      
TTEE AMD 03/09/07 	PO Box 1733 
Clackamas, OR 97015-1733 
	$70,000.00 

	2,122 

	2,122 

        
	5,305 

	38. 

        
	Lynn Rollins Stull Trust 

        UAD 08/01/08 Lynn
      
Rollins Stull TTEE 	463 Baughman Ave 
Claremont, CA 91711-3838
    
	$50,000.00 

	1,516 

	1,516 

        
	3,790 

	39. 

        

	John E. Erskine Jr. 

        Living Trust DTD
      
05/14/2009 UAD 
05/14/09 John E Erskine 
Jr TTEE 	8635 Washington Ave 
Racine, WI 53406-3738
      

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	40. 

        

	Karges Revocable 

        Intervivos Trust UAD
      
04/29/85 William A 
Karges Jr TTEE Attn 
William A Karges Jr 	PO Box D1 
Carmel, CA 93921-0729 

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	41. 
	John D. Smead 
	16 Joliet Drive 
Coto De Caza, CA 92679-3269 	$100,000.00 
	3,031 
	3,031 
	7,578 

	42. 
	David W Larson Jennifer 

        L Larson Jt Ten 	120 Birch Bluff Rd 
Excelsior, MN 55331-8512 	$100,000.00 
	3,031 
	3,031 
	7,578 

	43. 
	Robert C Sayson Alice K 

        Sayson Jt Ten 	1005 West Pwell Blvd 
Gresham, OR 97030-7107 	$100,000.00 
	3,031 
	3,031 
	7,578 

	44. 
	Richard Griff Jackie 

        Griff Jt Ten 	2354 E 2900 N 
Twin Falls, ID 83301-0600 	$200,000.00 
	6,061 
	6,061 
	15,153 

	45. 
	Ronald A Griff Marilyn 

        Jane Griff Jt Ten 	2377 E 3000 N 
Twin Falls, ID 83301-0600 	$50,000.00 
	1,516 
	1,516 
	3,790 

	46. 
	O'Connor Investments, 

        LP 	3358 Highway 12 
Kamiah, ID 83536-5001 	$50,000.00 
	1,516 
	1,516 
	3,790 

	47. 

        

	Scott And Lori 

        Langmack Family Trust 
UAD
      06/22/02 Scott F 
Langmack & Lori 
Langmack TTEES 	10 Scott Ct 
Hillsborough, CA 94010-6057
      

	$100,000.00 

	3,031 

	3,031 

        

	7,578 

	48. 

        

	Dennis And Mary Trine 

        Family Trust UAD
      
09/20/06 Dennis Trine & 
Mary Trine TTEES 	10006 Santa Fe Springs Rd 
Santa Fe Springs, CA
      90670 

	$100,000.00 

	3,031 

	3,031 

        

	7,578 

	49. 

        
	William Peckovich Trust 

        UAD 04/11/02 
	2230 Manhattan Ave 
Hermosa Beach, CA 90254-
      
2522 	$100,000.00 

	3,031 

	3,031 

        
	7,578

  	

        
No. 	

        
Investor Name 	

Investor Address 	
Investment
      
Amount 	
Units
      
Purchased 	Shares of Series 

        A
      Convertible 
Preferred Stock 	

Warrants
    
	50. 

        

	Mark E. Smead 

        Revocable Living Trust 
UAD
      11/17/95 Marke 
Edward Smead TTEE 	862 Gray Fox Circle 
Pleasanton, CA 94566-4400
      

	$100,000.00 

	3,031 

	3,031 

        

	7,578 

	51. 

        

	Terrence And Trudy 

        Rose 1979 Living Trust
      
UAD 05/14/79 Tj Rose & 
Ta Rose TTEES Terrence 
Rose Leasing
    	3375 Scott Blvd Ste 308 
Santa Clara, CA 95054
      

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	52. 
	Gose Investments LLC 
	2243 Kauhana Street 
Honolulu, HI 96816-3054 	$50,000.00 
	1,516 
	1,516 
	3,790 

	53. 

        

	F. Brent May, D.M.D., 

        M.S.D. PC PS Plan
      
Francis Brent May TTEE 
Dr May DMD 	127 NE Eads St 
Newport, OR 97365-2840
    

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	54. 

        
	Brunzlick Medical 

        Services Inc. Larry
      
Brunzlick TTEE 	W6280 Sherry Rd 
Bryant, WI 54418-9613 
	$50,000.00 

	1,516 

	1,516 

        
	3,790 

	55. 

        
	H Kathuria Investments 

        II Pension Plan &
      TRST 
Hemant Kathuria TTEE 	12400 Wilshire Blvd Ste 1060 
Los Angeles, CA
      90025-1055 
	$50,000.00 

	1,516 

	1,516 

        
	3,790 

	56. 
	Michael Louris 
	3714 Moorpark Avenue 
San Jose, CA 95117-1955
	$50,000.00 
	1,516 
	1,516 
	3,790 

	57. 
	Timothy M Weaver 
	9450 Metcalf Rd 
Waite Hill, OH 44094-9716 	$200,000.00 
	6,061 
	6,061 
	15,153 

	58. 
	Akshay Kapur 
	44849 Vista Del Sol 
Fremont, CA 94539-4900 	$50,000.00 
	1,516 
	1,516 
	3,790 

	59. 
	James Lutter 
	3775 Coleman Creek Rd 
Medford, OR 97501-9615
	$90,000.00 
	2,728 
	2,728 
	6,820 

	60. 
	William C Schoelen 
	4715 E Woodland Dr 
Post Falls, ID 83854-7721
	$100,000.00 
	3,031 
	3,031 
	7,578 

	61. 
	Andres Keichian 
	10207 Memorial Dr 
Houston, TX 77024-3212 	$70,000.00 
	2,122 
	2,122 
	5,305 

	62. 

        
	Jonathan Pawelko Marisa 

        Pawelko Jt Ten 
	2247 W. Eastwood Avenue Apt. 
1 
Chicago, IL
      60625-2056 	$50,000.00 

	1,516 

	1,516 

        
	3,790 

	63. 
	George Pellettieri Precy 

        Pellettieri Jt Ten 	617 W Meadow Ave 
Rahway, NJ 07065-2308 	$50,000.00 
	1,516 
	1,516 
	3,790 

	64. 

        
	James A Sheahan 

        Melody K Sheahan Jt 
Ten 	29711 133 Rd Place SE 
Monroe, WA 98272-9598
    
	$50,000.00 

	1,516 

	1,516 

        
	3,790 

	65. 
	KK Swogger Asset 

        Management, L.P. 	4211 Waters Edge Cove 
Austin, TX 78731-5139 	$100,000.00 
	3,031 
	3,031 
	7,578 

	66. 

        

	Ten Brink Trust Dated 

        10/02/1986 UAD
      
10/02/86 William Ten 
Brink TTEE 	1164 Wellesley Avenue #301 
Los Angeles, CA
      90049-5889 

	$90,000.00 

	2,728 

	2,728 

        

	6,820 

	67. 

        
	Revocable Trust UAD 

        03/31/04 Robert Foss &
      
Margaret Foss TTEES 	202 N. Irving St 
Arlington, VA 22201-1030
    
	$50,000.00 

	1,516 

	1,516 

        
	3,790

  	

        
No. 	

        
Investor Name 	

Investor Address 	
Investment
      
Amount 	
Units
      
Purchased 	Shares of Series 

        A
      Convertible 
Preferred Stock 	

Warrants
	68. 

        

	Kenneth H & Maureen K 

        Nass Charitable
      
Remainder Trust UAD 
6/7/05 Kenneth Henry 
Nass & Maureen K
      Nass 
TTEES 	3305 No 80th Street 
Omaha, NE 68134-4909
      

	$100,000.00 

	3,031 

	3,031 

        

	7,578 

	69. 

        

	The Maryann Migas 

        Revocable Trust UAD
      
10/10/05 Maryann Migas 
TTEE 	975 Springview Circle 
San Ramon, CA 94583-4719
      

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	70. 

        

	The Anita Berwind 

        Welch Rev Trus UAD
      
12/05/05 Anita Welch 
TTEE 	1356 Hibiscus St 
Clearwater, FL 33755-3405
      

	$90,000.00 

	2,728 

	2,728 

        

	6,820 

	71. 

        

	Kaoru Matsunaga Trust 

        UAD 05/17/05 Benson
      
Araki TTEE Attn Benson 
H Araki 	94-615 Kupuohi St Ste 206 
Waipahu, HI
      96797-5329 

	$150,000.00 

	4,546 

	4,546 

        

	11,365 

	72. 

        

	William Henry Meurer 

        1997 Trust UAD
      
08/05/97 Bill Meurer 
TTEE 	612 S Mentor Ave 
Pasadena, CA 91106-4023
      

	$60,000.00 

	1,819 

	1,819 

        

	4,548 

	73. 

        

	Scott R. Lennes 

        Revocable Trust DTD
      
06/07/2005 UAD 
06/07/05 Scott R Lennes 
TTEE 	Finca La Culebra 
Savegre De Quepos
      
Puntarenas, Costa Rica 

	$100,000.00 

	3,031 

	3,031 

        

	7,578 

	74. 

        

	The Alexander Galuz 

        And Yana Galuz Jt
      
Living TST UAD 
08/24/05 Alexander 
Galux & Yana Galux
      
TTEES 	10350 Santa Monica Blvd Ste 
120 
Los
      Angeles, CA 90025 

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	75. 

        

	The Westcott Family 

        Trust UAD 8/15/1990 
UAD
      08/15/90 Donald E 
Westcott TTEE 	2954 Mill Creek Rd 
Healdsburg, CA 95448-9753
      

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	76. 

        

	Barbara Gallunseidel 

        Residual Trust UAD
      
02/09/60 Barbara Seidel 
TTEE 	1945 Straits View Dr 
Tiburon, CA 94920-1820
      

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	77. 

        

	Christianna Seidel 

        Separate Property Trust
      
UAD 11/05/99 
Christianna Seidel TTEE 	30 Reedland Woods Way 
Tiburon, CA 94920-2029
      

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	78. 

        
	Valerie Anne Hillesheim 

        Thomas Alfred Hillsheim
      
Jt Ten 	549 Aguajito Rd 
Carmel, CA 93923-9433 
	$50,000.00 

	1,516 

	1,516 

        
	3,790 

	79. 
	F J Pollok Jr 
	10855 IH 35 N 
San Antonio, TX 78233-6632 	$100,000.00 
	3,031 
	3,031 
	7,578

  	

        
No. 	

        
Investor Name 	

Investor Address 	
Investment 
Amount 	
Units 
Purchased 	Shares of Series 

        A Convertible
      
Preferred Stock 	

Warrants 
	80. 

        

	The Masunas Family 

        Trust UAD 08/20/03
      
Annalisa Moore Masunas 
TTEE 1049 S Desert 
Senna LP Tucson AZ
      
85748-3562 	1049 S Desert Senna Loop 
Tucson, AZ 85748-3562
      

	$30,000.00 

	910 

	910 

        

	2,275 

	81. 
	HCR Investments, Inc. 

        c/o Charles Indyg 	6641 Black Horse Pike 
Cardiff, NJ 08234-1805
	$200,000.00 
	6,061 
	6,061 
	15,153 

	82. 
	James Buckner 
	6951 Obispo Ave 
Long Beach, CA 90805-1860 	$300,000.00 
	9,091 
	9,091 
	22,728 

	83. 
	Carolyn L. Bailey 
	62 Foster Street 
Cambridge, MA 02138-4817 	$50,000.00 
	1,516 
	1,516 
	3,790 

	84. 
	David Arita Tod DTD 

        05/10/2009 	4139 Rosalita Ct 
Fremont, CA 94536-4623 	$50,000.00 
	1,516 
	1,516 
	3,790 

	85. 

        

	Revocable Living Trust 

        of Roger T. Daun and
      
Lily T UAD 06/29/95 
Roger Daun & Lily Daun 
TTEES FBO
      Launrence 
Daun 	20209 Via Cellini 
Northridge, CA 91326-4063
      

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	86. 
	Quincy Murphy Inc. 
	23277 County Road 780 
Bernie, MO 63822-7238 	$100,000.00 
	3,031 
	3,031 
	7,578 

	87. 
	Stephen Kenneth 

        Kershner 	1465 Edgewood Drive 
Palo Alto, CA 94301-3118
	$50,000.00 
	1,516 
	1,516 
	3,790 

	88. 
	James A Peterson 
	121 Alta Ave 
Piedmont, CA 94611-3448 	$100,000.00 
	3,031 
	3,031 
	7,578 

	89. 
	Patrick Kirk & Gloria 

        Kirk Jtwros 	100 Trelawney St. 
Mcqueeney, TX 78123-3423 	$50,000.00 
	1,516 
	1,516 
	3,790 

	90. 
	Norman S Kramer Linda 

        L Kramer Jt Ten 	4536 Donlon Rd 
Somis, CA 93066-9618 	$150,000.00 
	4,546 
	4,546 
	11,365 

	91. 
	Russell Parker & Sue 

        Parker Jtwros 	19782 Caprice Drive 
Yorba Linda, CA 92886-4409
    	$50,000.00 
	1,516 
	1,516 
	3,790 

	92. 
	James Foreman Angelia 

        Foreman Jt Ten 	64 E. 200N 
Decator, IN 46733 	$50,000.00 
	1,516 
	1,516 
	3,790 

	93. 
	David M Anthopoulos 

        Karen B Shapiro Jt Ten 	1665 Oak Knoll Ave 
San Marino, CA 91108-1775
	$50,000.00 
	1,516 
	1,516 
	3,790 

	94. 

        

	The Meister Non-Exempt 

        Marital Trust UAD
      
11/17/83 Barbara S 
Meister TTEE 	1369 Beachmont St 
Ventura, CA 93001-4225
      

	$300,000.00 

	9,091 

	9,091 

        

	22,728 

	95. 

        

	The North Mid-Valley 

        Family Trust A UAD
      
11/22/91 Valene 
McIntyre Posey TTEE 	6 Lakeshore Terrace 
Chico, CA 95928-3914
      

	$100,000.00 

	3,031 

	3,031 

        

	7,578 

	96. 

        

	The North Mid-Valley 

        Family Trust B UAD
      
11/22/91 Valene 
McIntyre Posey TTEE 	6 Lakeshore Terrace 
Chico, CA 95928-3914
      

	$100,000.00 

	3,031 

	3,031 

        

	7,578 

	97. 

        

	The Edward Charles 

        Mohr Trust UAD 
12/21/94
      Edward Charles 
Mohr TTEE 	1887 Mott Ct 
Santa Rosa Va, CA 93012-9283
      

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

  	

        
No. 	

        
Investor Name 	

Investor Address 	
Investment 
Amount 	
Units 
Purchased 	Shares of Series 

        A Convertible
      
Preferred Stock 	

Warrants 
	98. 

        

	The Ray-Etta L. Morrell 

        Trust UAD 11/24/86
      
Ray-Etta L. Morrell 
TTEE 	3340 Del Sol Blvd #115 
San Diego, CA 92145-3456
      

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	99. 
	Peter D. Schiff 
	88 Post Road West 3rd Floor 
Westport, CT 06880
    	$100,000.00 
	3,031 
	3,031 
	7,578 

	100. 

        

	Middlesex Ortho 

        Surgeons 401K FBO 
Lawrence
      Berson L 
Berson & J Bash & B 
Moeckel & S J O'Donnel
      
TTEES 	71 Arlen Way 
West Hartford, CT 06117-1104
      

	$70,000.00 

	2,122 

	2,122 

        

	5,305 

	101. 

        

	Bradley Anesthesiology 

        PC Proft Sharing Plan
      & 
TST William L Bradley 
TTEE Attn William 
Bradley 	315 Turnpike Rd 
Mt Pleasant, PA 15666-2547
      

	$200,000.00 

	6,061 

	6,061 

        

	15,153 

	102. 

        

	IRA FBO Thomas A 

        Ladner Pershing LLC as
      
Custodian Rollover 
Account 	6200 Pitch Ln 
Boynton Beach, FL 33437-4126
      

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	103. 

        

	IRA FBO Joseph 

        McCarthy Pershing LLC 
as
      Custodian Rollover 
Account 	5374 Via Morena 
Yorba Linda, CA 92886-5007
      

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	104. 

        

	IRA FBO Paul Harper 

        Zink Pershing LLC as
      
Custodian Rollover 
Account 	7596 S. Willow Way 
Centennial, CO 80112-2723
      

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	105. 

        

	IRA FBO Bert Brooks 

        Carder Pershing LLC as
      
Custodian Rollover 
Account 	649 California Oak 
Vista, CA 92081-7553
    

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	106. 

        
	SEP FBO Melinda G. 

        Elkin Pershing LLC as
      
Custodian 	2609 NW Market Street 
Seattle, WA 98107 
	$50,000.00 

	1,516 

	1,516 

        
	3,790 

	107. 

        

	IRA FBO Paul H 

        Freiberg Pershing LLC as
      
Custodian Rollover 
Account 	1900 23rd Ave SE 
Minot, ND 58701-6081
    

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	108. 

        
	James C. Brown TOD 

        DTD 03/05/2009 
	11321 Camino Del Sol Agua 
Dulce 
Santa
      Clarita, CA 91390-2893 	$50,000.00 

	1,516 

	1,516 

        
	3,790 

	109. 

        
	IRA FBO Diane Spolum 

        Pershing LLC as
      
Custodian 	821 Southwood Dr S 
Fargo, ND 58103-6019 
	$190,000.00 

	5,758 

	5,758 

        
	14,395 

	110. 

        
	SEP FBO Donald Fagen 

        Pershing LLC as
      
Custodian 	8 E 92nd St Apt. #2 
New York, NY 10128-0621
    
	$250,000.00 

	7,576 

	7,576 

        
	18,940 

	111. 

        
	IRA FBO Bert 

        Huntsinger Pershing LLC 
as
      Custodian 	13803 Werth Road 
Hermosa, SD 57744-5027 
	$100,000.00 

	3,031 

	3,031 

        
	7,578 

	

No. 	

Investor Name 	

Investor Address 	
Investment 
Amount 	
Units 
Purchased 	Shares of Series 
A Convertible
      
Preferred Stock 	

Warrants 
	112. 

	IRA FBO Joseph Howton 
Pershing LLC as
      
Custodian Rollover 
Account 	947 SE Malden Street 
Portland, OR 97202-5911
      

	$50,000.00 

	1,516 

	1,516 

	3,790 

	113. 

	IRA FBO Ralph Dale 
Edson Pershing LLC as
      
Custodian Rollover 
Account 	26539 Turnstone Ct 
Valencia, CA 91355-3506
      

	$100,000.00 

	3,031 

	3,031 

	7,578 

	114. 

	IRA FBO Richard W 
Ruess Pershing LLC as
      
Custodian Rollover 
Account 	22214 Sweeney Rd SE 
Maple Valley, WA 98038-6437
      

	$50,000.00 

	1,516 

	1,516 

	3,790 

	115. 

	IRA FBO James A 
Tamborello Pershing 
LLC as
      Custodian 
Rollover Account 	2302 Anacapa Street 
Santa Barbara, CA
      93105-3508 

	$100,000.00 

	3,031 

	3,031 

	7,578 

	116. 

	IRA FBO Jeffrey P Baker 
Pershing LLC as
      
Custodian 	715 N Chisholm Ct 
Post Falls, ID 83854-8845
    
	$50,000.00 

	1,516 

	1,516 

	3,790 

	117. 
	Proud Foundation 
	Po Box 0823-02038 
Panama 7, Panama 	$50,000.00 
	1,516 
	1,516 
	3,790 

	118. 
	Oleksandr Tumko 
Oksana Tumko Jt Ten 	15400 Winchester Blvd. Apt. 10 
Los Gatos, CA
      95030-2341 	$50,000.00 
	1,516 
	1,516 
	3,790 

	119. 
	Jim Pugh Nancy M Pugh 
Jt Ten 	62-2146 "A" Ouli St 
Kamuela, HI 96743-8788 	$50,000.00 
	1,516 
	1,516 
	3,790 

	120. 

	Jim Robert Pugh 

	1616 Morgan Lane 
Redondo Beach, CA 90278-
      
4751 	$80,000.00 

	2,425 

	2,425 

	6,063 

	121. 

	The Hong Family Trust 
Dated 02/26/2008 UAD
      
02/26/08 Jongmin Hong 
& Soojung Noh TTEES 	30162 Avenida Esplendida 
Rancho Palos Verdes,
      CA 
90275-5423 
	$110,000.00 

	3,334 

	3,334 

	8,335 

	122. 
	Mehran M. Taslimi 
	220 16th Street 
Santa Monica, CA 90402-2216 	$150,000.00 
	4,546 
	4,546 
	11,365 

	123. 
	Taslimi Construction Co. 
Inc. 	12400 Wilshire Blvd Ste 1000 
Los Angeles, CA
      90025-1058 	$250,000.00 
	7,576 
	7,576 
	18,940 

	124. 
	Jon Murray Karkow 
	Po Box 281 
Mojave, CA 93502-0281 	$50,000.00 
	1,516 
	1,516 
	3,790 

	125. 

	Henry R. 
Wimmersberger Family 
Partners, Ltd
      Attn Helen 
Lois Downing 	6155 S Ammons Way #307 
Littleton, CO 80123-4113
      

	$70,000.00 

	2,122 

	2,122 

	5,305 

	126. 
	John William Catalfio 
	10775 E Sunnyside Dr 
Scottsdale, AZ 85259-2913
    	$50,000.00 
	1,516 
	1,516 
	3,790 

	127. 

	Richard Glaser MDDBPP 
And Trust Richard Glaser
      
TTEE 	43 Dormidera Ave 
Piedmont, CA 94611-3746

	$50,000.00 

	1,516 

	1,516 

	3,790 

	128. 
	Carolyn R. Long 
	1100 Ridge Oak Drive 
Wimberley, TX 78676-6186
    	$50,000.00 
	1,516 
	1,516 
	3,790 

	129. 
	Walter Friesen 
	3824 Evanston Avenue North #3 
Seattle, WA
      98103-9322 	$110,000.00 
	3,334 
	3,334 
	8,335 

  	

        
No. 	

        
Investor Name 	

Investor Address 	
Investment 
Amount 	
Units 
Purchased 	Shares of Series 

        A Convertible
      
Preferred Stock 	

Warrants 
	130. 

        
	Tina C. Peterson 

        Hendrikus M Schraven Jt
      
Ten 	P. O. Box 1289 
Issaquah, WA 98027-0050 
	$100,000.00 

	3,031 

	3,031 

        
	7,578 

	131. 

        
	Bruce A. Franklin Family 

        Trust UAD 11/16/00
      
Bruce Franklin TTEE 	518 21st Street 
Manhattan Beach, CA 90266-
      
2202 	$50,000.00 

	1,516 

	1,516 

        
	3,790 

	132. 
	Brad K Carr Roxane Carr 

        Jt Ten 	310 County Hwy 1 
Ottertail, MN 56571-7022 	$100,000.00 
	3,031 
	3,031 
	7,578 

	133. 
	Thomas Tan 
	95 Intervale Rd Unit 12 
Stamford, CT 06905-1342
    	$10,000.00 
	304 
	304 
	760 

	134. 
	Paul Fosse 
	5906 Jefferson Park Dr 
Tampa, FL 33625-3315 	$50,000.00 
	1,516 
	1,516 
	3,790 

	135. 
	Layne Yoshida 
	922 Waiholo St 
Honolulu, HI 96821-1226 	$50,000.00 
	1,516 
	1,516 
	3,790 

	136. 

        

	IRA FBO Abby 

        Margalith Pershing LLC 
as
      Custodian Rollover 
Account 	Po Box 1187 
Del Mar, CA 92014-1187 

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	137. 

        

	Joseph A & Pamela M 

        Panella Living Trust 1
      
UAD 05/11/04 Joseph A 
Panella & Pamela M 
Panella TTEES 	2029 S E Oxton Drive 
Port St Lucie, FL
      34952-6066 

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	138. 

        

	IRA FBO Anthony Ettaro 

        Pershing LLC as
      
Custodian Rollover 
Account 	Po Box 1414 
Topanga, CA 90290-1414 

	$20,000.00 

	607 

	607 

        

	1,518 

	139. 

        

	IRA FBO Helen Erskine 

        Pershing LLC as
      
Custodian Rollover 
Account 	Po Box 1745 
Topanga, CA 90290-1745 

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	140. 
	Carol IMBT Cooper 
	2020 Chancellor St 
Philadelphia, PA 19103-5605
    	$100,000.00 
	3,031 
	3,031 
	7,578 

	141. 

        

	The Eaton Family Trust 

        DTD 05/18/2004 UAD
      
05/18/04 William Eaton 
& Renee Eaton TTEES 	120 Seminary Dr. Apt. 3E 
Mill Valley, CA
      94941-3178 

	$50,000.00 

	1,516 

	1,516 

        

	3,790 

	142. 
	Paul Ehrman & Michelle 

        Ehrman Jtwros 	333 E 34th St 
New York, NY 10016-4977 	$50,000.00 
	1,516 
	1,516 
	3,790 

	143. 
	Gramercy 87 LLC Attn 

        Wain White 	7008 Cross Hook Court 
Summerfield, NC
      27358-9507 	$50,000.00 
	1,516 
	1,516 
	3,790 

	144. 

        
	James W. Bridges 

        Darlene R. Bridges COM
      
PROP WROS 	331 Walkire Lake Dr. 
Sugar Land, TX 77478-2511
      
	$50,000.00 

	1,516 

	1,516 

        
	3,790 

	145. 
	Richard Potapchuk 
	259 Franklin Blvd. 
Long Beach, NY 11561 	$250,000.00 
	7,576 
	7,576 
	18,940 

	  	  	TOTALS     
      	$11,860,000.00 	359,502 	359,502 	898,777

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]