Document:

Unassociated Document

     

    
      EXECUTIVE
EMPLOYMENT AGREEMENT

      

      

      THIS
EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of the
7th day of May of 2009, by and between Bitech Pharma, Inc., a Delaware
corporation (“Company”) and Ye, Xiangwu (“Executive”).

      

      RECITALS:

      

      A. The
Company desires that Executive perform his services as Chief Executive Officer
and President of the Company, having been duly appointed to such position by the
Board of Directors of the Company.

      

      B.
Executive desires to continue in such engagement.

      

      C. This
Agreement contains other provisions applicable to the employment of Executive by
the Company.

      

      In
consideration of the above Recitals and the provisions of this Agreement, the
Company and Executive agree as follows:

      

      Title and Responsibilities.
Executive shall serve as Chief Executive Officer (“ CEO ”) and President of the
Company. Executive’s responsibilities and duties shall include those inherent in
Executive’s position with the Company. Executive shall devote his best efforts
and full business time to the business and interests of the
Company.

      

      Compensation. The Company will
pay Executive a salary at the rate of $60,000 per year payable in accordance
with the Company's standard payroll policies, including compliance with
applicable withholding. Executive’s salary will be paid bi-monthly at 1st and
16th
of each month.

      

      Restricted Stocks. Executive
may be eligible to receive restricted stocks from time to time in the future, on
such terms and subject to such conditions as the Board of Directors shall
determine as of the date of any such grant and pursuant to the existing stock
plan(s) of the Company.

      

      Benefits. Executive shall be
entitled to such employee benefits generally available to full-time salaried
employees of the Company, including without limitation, health insurance, paid
vacation of not less than 2 weeks per year, retirement plans and other similar
benefits; provided, that Company reserves the right to amend, modify, terminate
or make any other changes in such benefits generally available to full-time
salaried employees of the Company at any time in its sole
discretion.

      

      The
Company shall pay or reimburse Executive for all travel and entertainment
expenses incurred by Executive in connection with Executive’s duties on behalf
of the Company, subject to the reasonable approval of the Company. Executive
shall only be entitled to reimbursement to the extent that Executive follows the
reasonable procedures established by the Company for reimbursement of such
expenses which will include, but will not be limited to, providing satisfactory
evidence of such expenditures.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Severance: If his employment
is terminated by the Company for any reason, other than for Cause (as defined
herein), he will receive severance pay of up to 2 months of his current base
salary, less standard deductions and withholdings after the first year of
employment and on a prorate basis over the first year of the agreement. For
purposes of this letter agreement "Cause" shall mean the occurrence of any of
the following events: (i) his repeated failure to satisfactorily perform his job
duties as assigned by the Company;(ii) his failure to comply with all written
material applicable laws in performing his job duties or in directing the
conduct of the Company's business; (iii) his commission of any felony or
intentionally fraudulent act against the Company or its affiliates, employees,
agents or customers; (iv) his engagement or participation in any activity which
is directly competitive with or intentionally injurious to the Company or any of
its affiliates; (v) his commission of any fraud against the Company or any of
its affiliates or use of intentional appropriation for his personal use or
benefit of any funds or properties of the Company not authorized by the Board to
be so used or appropriated.

      

      Term. The employment of
Executive under this Agreement shall be for an unspecified term. The Company and
Executive acknowledge and agree that Executive’s employment is and shall
continue to be at-will, as defined under applicable law, and that Executive’s
employment with the Company may be terminated by either party at any time for
any or no reason, and with or without notice. If Executive’s employment
terminates for any reason, Executive shall not be entitled to any payments,
benefits, damages award or compensation other than as provided in this
Agreement.

      

      Confidentiality Agreement.
Executive is required to complete, sign and return the Company's standard form
of Employee Confidentiality (the "Confidentiality Agreement ", Attachment
A).

      

      Invention Disclosure
Agreement. Executive is required to complete, sign and return the
Company's standard form of Employee Invention Disclosure Agreement (Attachment
B).

      

      IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first above written.

      

      COMPANY:

      BiTech
Pharma, Inc.

      By:
________________________

      Name:
_John Bao_
__________

      Title:_Chairman
of the Board

      

      EXECUTIVE

      ___________________________

      Ye, XiangwuExhibit
10.1

    Amendment
to the

    Corning
Natural Gas Corporation

    Warrant
Agreement

    

    This
Amendment
(this “Amendment”) dated as of July 1, 2009 between Corning Natural Gas
Corporation, a New York corporation (the “Corporation”), and Registrar and
Transfer Company, a New Jersey corporation, as warrant agent (the “Warrant
Agent”), amends the Warrant Agreement dated as of July 13, 2007 between the
Corporation and the Warrant Agent (the “Agreement”).

    

    Background

    

    Whereas,
the Company and the Warrant Agent entered into the Agreement in connection with
the sale of warrants to purchase shares of the Corporation’s common stock (the
“Warrants”) in the Corporation’s rights offering of investment units consisting
of shares of the Corporation’s common stock and Warrants in 2007;

    

    Whereas,
each Warrant initially entitled the Warrant holders to purchase 0.7 shares of
common stock at a cash exercise price of $19.00 per share;

    

    Whereas,
from January 2, 2009 to June 30, 2009 the common stock traded within the range
of $13.05 to $18.75 per share, substantially lower than the exercise price of
the Warrants presently in effect;

    

    Whereas,
the Corporation has determined, after a review of recent and current market
conditions and other factors, that it is in the best interest of the Corporation
to reduce the Warrant exercise price temporarily to increase the likelihood that
some Warrants will be exercised in the near term to raise capital to support the
Corporation’s business plan; and

    

    Whereas,
the Corporation desires to amend the Agreement pursuant to Section 20 of the
Agreement and has determined that the proposed amendment will not in any way
adversely affect the interests of the Warrant holders.

    

    Now,
Therefore,
the parties agree as follows:

    

    
      	
               
      

            	
              1.

            	
              Capitalized
      terms not defined in this Amendment have the meanings assigned to them in
      the Agreement.

            

    

    

    
      	
               
      

            	
              2.

            	
              From
      July 6, 2009 to August 5, 2009 the Exercise Price shall be $15.00 per
      share. After 5:00 p.m.,
      New York City time, on August 5, 2009, the Exercise Price shall revert to
      $19.00 per share, subject to adjustment as provided for in the
      Agreement.

            

    

    

    
      	
               
      

            	
              3.

            	
              Except
      as specifically amended in Section 2 of this Amendment, the terms and
      conditions of the Agreement are unchanged and remain in full force and
      effect.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    In
Witness
Whereof,
the undersigned have caused this Amendment to be duly executed and
delivered on the date listed above.

    

    
      
        	
                Corning
      Natural
      Gas
      Corporation

              
	 
      
	
                /s/ Michael I. German

              
	
                By
      Michael I. German, President and

              
	
                     
      Chief Executive Officer

              
	 
      
	
                Registrar
      and
      Transfer
      Company

              
	 
      
	
                /s/ William P. Tatler

              
	
                By
      William P. Tatler, Vice
President

              

      

    

    
      
         

      

      
        2SECURITIES
PURCHASE AGREEMENT

     

    This
Securities Purchase Agreement (this “Agreement”) is dated
as of June 30, 2009, between Avantair, Inc., a Delaware corporation (the “Company”), and each
purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and
collectively, the “Purchasers”).

     

    WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and
Rule 506 of Regulation D promulgated thereunder, the Company desires to issue
and sell to each Purchaser, and each Purchaser, severally and not jointly,
desires to purchase from the Company, securities of the Company as more fully
described in this Agreement; and

     

    WHEREAS,
each Purchaser is an “accredited investor”, as such term is defined in Rule
501(a) of Regulation D.

     

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

     

    ARTICLE
I.

    DEFINITIONS

     

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

     

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

     

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

     

    “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person, as such terms are
used in and construed under Rule 405 under the Securities Act.

     

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

     

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

     

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

     

    “Closing Date” means
each Trading Day on which a Closing occurs.

     

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

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    “Common Stock” means
the common stock of the Company, par value $0.0001 per share, and any other
class of securities into which such securities may hereafter be reclassified or
changed into.

     

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

     

    “Company Counsel”
means DLA Piper LLP (US), with offices located at 1251 Avenue of the Americas,
New York, New York 10022.

     

    “Disclosure Schedules”
means the Disclosure Schedules of the Company delivered concurrently
herewith.

     

    “Discussion Time”
shall have the meaning ascribed to such term in Section 3.2(f).

     

    “EBC” means
EarlyBirdCapital, Inc., the exclusive placement agent for the
Offering.

     

    “Effective Date” means
the date that the initial Registration Statement filed by the Company pursuant
to the Registration Rights Agreement is first declared effective by the
Commission.

     

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

    

    “Exempt Issuance”
means the issuance of (a) shares of Common Stock or any other securities to
employees, officers or directors of the Company pursuant to any stock or
incentive plan duly adopted for such purpose, by a majority of the members of
the Board of Directors or a majority of the members of a committee of directors
established for such purpose, (b) securities upon the exercise or exchange of or
conversion of any Securities issued hereunder or in connection herewith and/or
other securities exercisable or exchangeable for or convertible into shares of
Common Stock issued and outstanding on the date of this Agreement, provided that
such securities have not been amended since the date of this Agreement to
increase the number of such securities or to decrease the exercise, exchange or
conversion price of such securities, (c) securities upon the declaration of a
dividend on any of the outstanding preferred stock, (d) securities issued in an
offering to investors at a discount to then current market prices equivalent or
less than the discount to market in the Offering and (e) securities issued
pursuant to acquisitions or strategic transactions approved by a majority of the
directors of the Company, provided that any such issuance shall only be to a
Person which is, itself or through its subsidiaries, an operating company in a
business synergistic with the business of the Company and in which the Company
receives benefits in addition to the investment of funds, but shall not include
a transaction in which the Company is issuing securities primarily for the
purpose of raising capital or to an entity whose primary business is investing
in securities.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     “GM” means Graubard
Miller with offices located at The Chrysler Building, 405 Lexington Avenue, New
York, New York 10174.

     

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

     

    “Initial
Closing”  means the first closing of the sale of Units to occur
under the terms of this Agreement.

     

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

     

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

     

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

     

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

     

    “Offering” means the
private placement of the Units as set forth herein.

     

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

     

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

     

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

     

    “Purchaser
Questionnaire” means the form of Purchaser Questionnaire attached hereto
as Exhibit
A.

     

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

     

    “Registration
Statement” means a registration statement meeting the requirements set
forth in the Registration Rights Agreement and covering the resale by the
Purchasers of the Shares and the Warrant Shares.

     

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

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

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

     

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

     

    “Securities” means the
Shares and the Warrants comprising the Units and the Warrant
Shares.

     

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

     

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

     

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

     

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

     

    “Subsidiary” means a
corporation, partnership, joint venture, limited liability company or other
business entity of which a majority of the shares of securities or other
interests having ordinary voting power for the election of directors or other
governing body (other than securities or interests having such power only by
reason of the happening of a contingency) are at the time beneficially owned, or
the management of which is otherwise controlled, directly, or indirectly through
one or more intermediaries, or both, by such Person.

     

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

     

    “Trading Market” means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the American Stock Exchange, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange or the OTC Bulletin Board.

     

    “Transaction
Documents” means this Agreement, the Warrants, the Registration Rights
Agreement, each Purchaser Questionnaire, all exhibits and schedules thereto and
hereto and any other documents or agreements executed in connection with the
transactions contemplated hereunder.

     

    “Transfer Agent” means
Continental Stock Transfer & Trust Company, the current transfer agent of
the Company, with a mailing address of 17 Battery Place, New York, New York
10004 and a facsimile number of (212) 509-5150, and any successor transfer agent
of the Company.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    “Units” means the
units being purchased by the Purchasers hereby, each of which is comprised of
two shares of Common Stock and one Warrant.

     

    “Warrants” means,
collectively, the common stock purchase warrants delivered to the Purchasers at
each Closing in accordance with Section 2.2(a)(iv) hereof, which Warrants shall
be exercisable immediately and have a term of exercise equal to three years from
the execution of this Agreement, in the form of Exhibit C attached
hereto.

     

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

     

    ARTICLE
II.

    PURCHASE
AND SALE

     

    2.1           Closing.  Up
to an aggregate of $12 million of Units may be sold by the Company in the
Offering.   An Initial Closing shall occur at such time as
mutually determined by the Company and EBC.  Thereafter, additional
Closings may occur from time to time in the mutual discretion of the Company and
EBC; provided that no Closing shall occur after July 31, 2009. On
the applicable Closing Date, upon the terms and subject to the conditions
set forth herein, the Company agrees to sell, and the applicable Purchasers,
severally and not jointly, agree to purchase, the Units being subscribed for by
them as set forth on Schedule 2.1 hereto,
as same is amended for each Closing. In connection with each Closing, each
applicable Purchaser shall deliver to the Company via wire transfer funds equal
to its Subscription Amount and the Company shall deliver to each Purchaser
certificates representing the Shares and Warrants comprising the Units for which
such Purchaser has subscribed and paid, and the Company and each Purchaser shall
deliver the items set forth in Section 2.2 that are deliverable at the
applicable Closing.  Each Closing shall occur at the offices of GM or
such other location as the parties shall mutually agree, on such date as the
parties shall mutually agree upon. All subscription amounts delivered by
Purchasers prior to a Closing thereon shall be held in a noninterest bearing
escrow by the Transfer Agent under the terms of the escrow agreement attached
hereto as Exhibit
A.

     

    2.2         Deliveries.

     

    (a)          On
or prior to each Closing Date, the Company shall deliver or cause to be
delivered to each of the applicable Purchasers participating in the applicable
Closing the following:

     

    (i)        
    a copy of this Agreement duly executed by the
Company;

     

    (ii)           a
copy of a legal opinion of Company Counsel, substantially in the form of Exhibit D attached
hereto, brought down, as necessary to the applicable Closing Date;

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (iii)           a
copy of the irrevocable instructions to the Transfer Agent instructing the
Transfer Agent to deliver for the applicable Closing certificates evidencing the
Shares contained in the Units purchased by the applicable Purchasers, registered
in the respective names of such Purchasers;

     

    (iv)          certificates
evidencing the Warrants contained in the Units purchased by the applicable
Purchasers;

     

    (v)           a
copy of the Registration Rights Agreement, duly executed by the
Company;

     

    (vi)           a
copy of Lock-Up Agreements in the form of Exhibit E attached
hereto, executed by the Chief Executive Officer, the Chief Financial Officer,
the Chief Operating Officer, the General Counsel and by each director of the
Company.

     

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

     

    (i)           
 a duly executed copy of its signature page to this Agreement;

     

    (ii)       
    such Purchaser’s Subscription Amount by wire transfer to
the account as specified in writing by the Company;

     

    (iii)           a
duly executed copy of its signature page to the Registration Rights Agreement;
and

     

    (iv)           a
duly executed copy of the Purchaser Questionnaire.

     

    2.3         Closing
Conditions.

     

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

     

    (i)          
  the accuracy when made and on the applicable Closing Date of the
representations and warranties of the Purchasers participating in the applicable
Closing contained herein (unless as of a specific date therein) in all material
respects for representations and warranties not qualified herein by materiality
and in all respects for representations and warranties qualified herein by
materiality;

     

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

     

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

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

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

     

    (i)         
  the accuracy when made and on the applicable Closing Date of the
representations and warranties of the Company contained herein (unless as of a
specific date therein) in all material respects for representations and
warranties not qualified herein by materiality and in all respects for
representations and warranties qualified herein by materiality;

     

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

     

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

     

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

     

    (v)        
   from the date hereof to the applicable Closing Date, trading
in the Common Stock shall not have been suspended by the Commission or the
Company’s principal Trading Market.

     

    ARTICLE
III.

    REPRESENTATIONS
AND WARRANTIES

     

    3.1         Representations and
Warranties of the Company. Except as set forth in the Disclosure
Schedules, which Disclosure Schedules shall be deemed a part hereof and shall
qualify any representation or otherwise made herein to the extent of the
disclosure contained in the corresponding section of the Disclosure Schedules,
the Company hereby makes the following representations and warranties as of the
date hereof to each Purchaser and as of the applicable Closing Date to each
Purchaser participating in such Closing as follows (unless as of a specific date
therein):

     

    (a)           Subsidiaries.  All
of the direct and indirect subsidiaries of the Company are set forth on Schedule
3.1(a).  The Company owns, directly or indirectly, all of the
capital stock or other equity interests of each Subsidiary free and clear of any
Liens, and all of the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase
securities.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

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

     

    (c)           Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder.  The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Company and no further action is required by
the Company, the Board of Directors or the Company’s stockholders in connection
therewith other than in connection with the Required Approvals.  Each
Transaction Document to which it is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms,
except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.

     

    (d)           No
Conflicts.  The execution, delivery and performance by the
Company of the Transaction Documents, the issuance and sale of the Securities
and the consummation by it to which it is a party of the other transactions
contemplated hereby and thereby do not and will not: (i) conflict with or
violate any provision of the Company’s or any Subsidiary’s certificate of
incorporation or bylaws, (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under
any agreement, credit facility, debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) or other understanding to which the Company or
any Subsidiary is a party or by which any property or asset of the Company or
any Subsidiary is bound or affected, or result in the creation of any Lien upon
any of the properties or assets of the Company or any Subsidiary, or (iii)
subject to the Required Approvals, conflict with or result in a violation of any
law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company or a Subsidiary is
subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company or a Subsidiary is bound or affected;
except in the case of each of clauses (ii) and (iii), such as could not have or
reasonably be expected to result in a Material Adverse Effect.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    (e)           Filings, Consents and
Approvals.  The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other
than: (i) the
filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with
the Commission of the Registration Statement, (iii) the notice and/or
application(s) to each applicable Trading Market for the issuance and sale of
the Securities and the listing of the Securities for trading thereon in the time
and manner required thereby, if applicable, and (iv) the filing of a
post-closing Form D with the Commission and such post-closing filings as are
required to be made under applicable state securities laws (collectively, the
“Required
Approvals”) which shall be timely filed.

     

    (f)           Issuance of the
Securities.  The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company other than restrictions on transfer provided
for in the Transaction Documents.  The Warrant Shares, when issued in
accordance with the terms of the Transaction Documents, will be validly issued,
fully paid and nonassessable, free and clear of all Liens imposed by the Company
other than restrictions on transfer provided for in the Transaction
Documents.  The Company has reserved from its duly authorized capital
stock the maximum number of shares of Common Stock issuable pursuant to this
Agreement and the Warrants.

     

    (g)           Capitalization.  The
capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g),
which Schedule
3.1(g) shall also include the number of shares of Common Stock owned
beneficially, and of record, as of the date hereof by Affiliates of the Company
and, to the Company’s knowledge, by each holder of five percent or more of the
Company’s outstanding Common Stock as disclosed in  the SEC Reports.
The Company has not issued any capital stock since its most recently filed
periodic report under the Exchange Act, other than pursuant to this Agreement,
the exercise of employee stock options under the Company’s stock option plans,
the issuance of shares of Common Stock to employees pursuant to the Company’s
employee stock purchase plans and pursuant to the conversion and/or exercise of
Common Stock Equivalents that were outstanding as of the date of the most
recently filed periodic report under the Exchange Act.  No Person has
any right of first refusal, preemptive right, right of participation, or any
similar right to participate in the transactions contemplated by the Transaction
Documents.  Except as set forth 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 exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to issue additional shares of Common Stock
or Common Stock Equivalents.  Except with respect to the rights of
holders of the Company’s outstanding preferred stock, the issuance and sale of
the Securities will not obligate the Company to issue shares of Common Stock or
other securities to any Person (other than the Purchasers) and will not result
in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under any of such securities. All of the
outstanding shares of capital stock of the Company are validly issued, fully
paid and nonassessable, have been issued in compliance with all federal and
state securities laws, and none of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities.  No further approval or authorization of any
stockholder, the Board of Directors or others is required for the issuance and
sale of the Securities.  There are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s stockholders.

     

    
      
         

      

      
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    (h)          SEC Reports; Financial
Statements.  The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the Company under
the Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, since June 31, 2007 (or such shorter period as the Company was
required by law or regulation to file such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”) on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective filing dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act, as applicable, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.  The financial statements of the Company included in the
SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing.  Such financial statements
have been prepared in accordance with accounting principles generally accepted
in the United States (“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,
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.

     

    
      
         

      

      
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    (i)           Material Changes;
Undisclosed Events, Liabilities or Developments.  Since the
date of the latest audited financial statements included within the SEC Reports,
except as specifically disclosed in a subsequent SEC Report filed prior to the
date hereof: (i) there has been no event, occurrence or development that has had
or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company’s financial statements and related notes
thereto pursuant to GAAP or disclosed in filings made with the Commission, (iii)
the Company has not altered its method of accounting, (iv) the Company has not
declared or made any dividend or distribution of cash or other property to its
common stockholders or purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock and (v) the Company has not issued any
equity securities to any officer, director or Affiliate, except pursuant to
existing Company stock option or incentive plans.  The Company does
not have pending before the Commission any request for confidential treatment of
information.  Except for the issuance of the Securities contemplated
by this Agreement or as set forth on Schedule 3.1(i), no
event, liability or development that could reasonably be expected to result in a
Material Adverse Effect has occurred or exists with respect to the Company or
its Subsidiaries or their respective business, properties, operations or
financial condition, that would be required to be disclosed by the Company under
applicable securities laws at the time this representation is made or deemed
made that has not been publicly disclosed at least one Trading Day prior to the
date that this representation is made.

     

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

     

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

     

    
      
         

      

      
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    (l)           Compliance.  Neither
the Company nor any Subsidiary: (i) is in default under or in violation of, nor
has the Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound, (ii) is in violation of any 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
without limitation all federal, state and local laws applicable to its business
and all such laws that affect the environment, except in each case as could not
have or reasonably be expected to result in a Material Adverse
Effect.

     

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

     

    (n)           Title to
Assets.  The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for Liens reflected in the Company’s Financial Statements, and
Liens for the payment of federal, state or other taxes, the payment of which is
neither delinquent nor subject to penalties.  Any real property and
facilities held under lease by the Company and the Subsidiaries are held by them
under valid, subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance.

     

    (o)           Patents and
Trademarks.  The Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights as described
in the SEC Reports as necessary or material for use in connection with their
respective businesses and which the failure to so have could have a Material
Adverse Effect (collectively, the “Intellectual Property
Rights”).  To the knowledge of the Company, neither the Company
nor any Subsidiary has received a notice (written or otherwise) that any of the
Intellectual Property Rights used by the Company or any Subsidiary violates or
infringes upon the rights of any Person.  To the knowledge of the
Company, all such Intellectual Property Rights are enforceable and there is no
existing infringement by another Person of any of the Intellectual Property
Rights.  The Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of all of
their intellectual properties, except where failure to do so could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

     

    
      
         

      

      
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    (p)           Insurance.  The
Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Company and the Subsidiaries are
engaged, including, but not limited to, directors and officers insurance
coverage.  Neither the Company nor any Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business.

     

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

     

    (r)           Sarbanes-Oxley; Internal
Accounting Controls.  Except as specifically disclosed in the
SEC Reports, the Company is in all material respects in compliance with all
provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of
the applicable Closing Date.  There has been no change, other than as
disclosed in the SEC Reports, in the internal controls over financial reporting
during the fiscal quarter ended March 31, 2009 that has materially adversely
affected, or is reasonably likely to materially adversely affect, the Company’s
internal control over financial reporting.

     

    (s)           Certain
Fees.  No brokerage or finder’s fees or commissions are or will
be payable by the Company to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by the Transaction Documents, except for the
compensation payable to EBC or any subagent EBC appoints, as described on Schedule 3.1(s)
hereto.  The Purchasers shall have no obligation with respect to any
fees or with respect to any claims made by or on behalf of other Persons for
fees of a type contemplated in this Section that may be due in connection with
the transactions contemplated by the Transaction
Documents.  Notwithstanding the foregoing, EBC shall be entitled to
use co-placement agents in the Offering at no additional cost to the Company or
the Purchasers.

     

    
      
         

      

      
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    (t)           Private Placement.
Assuming the accuracy of the Purchasers’ representations and warranties set
forth in Section 3.2 of this Agreement, and EBC’s compliance with the terms of
the engagement letter between EBC and the Company, no registration under the
Securities Act is required for the offer and sale of the Securities by the
Company to the Purchasers as contemplated hereby. The issuance and sale of the
Securities hereunder does not contravene the rules and regulations of the
Trading Market.

     

    (u)           Registration
Rights.  Except as set forth on Schedule 3.1(u)
hereto, no Person has any right to cause the Company to effect the registration
under the Securities Act of any securities of the Company.

     

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

     

    (w)           Application of Takeover
Protections. Except with respect to the restrictions on foreign ownership
of the Company’s securities, the Company and the Board of Directors have taken
all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the Purchasers as a
result of the Purchasers and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without
limitation as a result of the Company’s issuance of the Securities and the
Purchasers’ ownership of the Securities.

     

    (x)           Disclosure.  The
disclosure furnished, taken as a whole, by or on behalf of the Company to the
Purchasers regarding the Company, its business and the transactions contemplated
hereby, including the Disclosure Schedules to this Agreement, is true and
correct in all material respects and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.  The Company acknowledges and agrees that no
Purchaser makes or has made any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in
Section 3.2 hereof.

     

    
      
         

      

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

     

    (z)           Tax
Status.  Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and each Subsidiary has filed all necessary federal and
state income and franchise tax returns and has paid or accrued all taxes shown
as due thereon, and the Company has no knowledge of a material tax deficiency
which has been asserted or threatened against the Company or any
Subsidiary.

     

    (aa)           No General
Solicitation.  Neither the Company nor any person acting on
behalf of the Company has offered or sold any of the Securities by any form of
general solicitation or general advertising.  The Company has offered
the Securities for sale only to the Purchasers and certain other “accredited
investors” within the meaning of Rule 501 under the Securities Act.

     

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

     

    (cc)           Accountants.  The
Company’s accounting firm is set forth on Schedule 3.1(cc) of
the Disclosure Schedules.  To the knowledge and belief of the Company,
such accounting firm: (i) is a registered public accounting firm as required by
the Exchange Act and (ii) shall express its opinion with respect to the
financial statements to be included in the Company’s Annual Report for the
Company’s current fiscal year.

     

    (dd)           No Disagreements with
Accountants and Attorneys.  There are no disagreements of any
kind presently existing, or reasonably anticipated by the Company to arise,
between the Company and the accountants and attorneys formerly or presently
employed by the Company and the Company is current with respect to any fees owed
to its accountants and lawyers which could affect the Company’s ability to
perform any of its obligations under any of the Transaction
Documents.

     

    
      
         

      

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

     

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

     

    (gg)           Stock Option Plans.
Each stock option granted by the Company under the Company’s stock option plan
was granted (i) in accordance with the terms of the Company’s stock option plan
and (ii) with an exercise price at least equal to the fair market value of the
Common Stock on the date such stock option would be considered granted under
GAAP and applicable law. No stock option granted under the Company’s stock
option plan has been backdated.

     

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

     

    (a)           Organization;
Authority.  Such Purchaser, if an entity, is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with full right, corporate or partnership power
and authority to enter into and to consummate the transactions contemplated by
the Transaction Documents and otherwise to carry out its obligations hereunder
and thereunder. The execution and delivery of the Transaction Documents and
performance by such Purchaser of the transactions contemplated by the
Transaction Documents have been duly authorized by all necessary corporate or
similar action on the part of such Purchaser. If the Purchaser is an individual,
the Purchaser has the legal capacity to enter into this Agreement and is a bona
fide resident of the state shown in the address set forth in the signature page
hereto.  Each Transaction Document to which it is a party has been
duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof and thereof, will constitute the valid and
legally binding obligation of such Purchaser, enforceable against it in
accordance with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.

     

    
      
        
        

      

      
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    (b)           Own
Account.  Such Purchaser understands that the Securities are
“restricted securities” and have not been registered under the Securities Act or
any applicable state securities law and is acquiring the Securities as principal
for its own account and not with a view to or for distributing or reselling such
Securities or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of distributing any of
such Securities in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with
any other persons to distribute or regarding the distribution of such Securities
(this representation and warranty not limiting such Purchaser’s right to sell
the Securities pursuant to the Registration Statement or otherwise in compliance
with applicable federal and state securities laws) in violation of the
Securities Act or any applicable state securities law.  Such Purchaser
is acquiring the Securities hereunder in the ordinary course of its
business.

     

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

     

    (d)           Experience of Such
Purchaser.  Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Units, and has so evaluated the merits and
risks of such investment.  Such Purchaser is able to bear the economic
risk of an investment in the Securities and, at the present time, is able to
afford a complete loss of such investment.

     

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

     

    
      
        
        

      

      
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    (f)           Short Sales and
Confidentiality Prior To The Date Hereof.  Other than
consummating the transactions contemplated hereunder, such Purchaser has
not directly or indirectly, nor has any Person acting on behalf of or
pursuant to any understanding with such Purchaser, executed any purchases or
sales, including Short Sales, of the securities of the Company during the
period commencing from the time that such Purchaser first received a term sheet
(written or oral) from the Company or any other Person representing the Company
setting forth the material terms of the transactions contemplated hereunder
until the date hereof (“Discussion Time”).  Notwithstanding the foregoing, in
the case of a Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of such Purchaser’s assets
and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s
assets, the representation set forth above shall only apply with respect to the
portion of assets managed by the portfolio manager that made the investment
decision to purchase the Units covered by this Agreement.  Other than
to other Persons party to this Agreement, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction).
Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein
shall constitute a representation or warranty, or preclude any actions, with
respect to the identification of the availability of, or securing of, available
shares to borrow in order to effect short sales or similar transactions in the
future.

     

    (g)           Need for additional
financing.  Such Purchaser understands that it is likely that
the Company will need to obtain additional financing following consummation of
the Offering in order to fully execute its current business plan and
objectives.  Such financing could be in the form of a sale or sales of
equity or debt or equipment lease financing or a combination of the foregoing.
Such financing could lead to material dilution to the Company’s then existing
equity holders and could provide for terms that restrict the operations of the
Company.  There can be no assurance that any additional financing
following the Offering will be available to the Company on commercially
reasonable terms or at all.  In the event the Company is unable to
obtain additional financing, it may not be able to fully execute its business
plan and objectives and could be forced to curtail some or all of its
operations.

     

    (h)           The
Purchaser understands and recognizes that the purchase of the Units is highly
speculative and involves a high degree of risk and that only investors who can
afford the loss of their entire investment should consider investing in the
Company.  The Purchaser has also reviewed the risk factors in the SEC
Reports.

     

    (i)           The
Purchaser acknowledges that, as of March 31, 2009, the Company has $14,506,136
of Series A Preferred Shares outstanding that have anti dilution
rights.  Assuming all of the Units are sold in the Offering, the
conversion price of the Preferred Shares will be reduced from $5.15 to
$3.59.  Therefore, the number of fully diluted shares will be
increased approximately 1,277,000 shares as a result of this
Offering.

     

    (j)           The
Purchaser understands that he may never be able to liquidate his investment in
the Company.  Although the Company has undertaken to register under
the Securities Act the Common Stock comprising Units and the shares of Common
Stock issuable upon the exercise of the Warrants pursuant to the Registration
Rights Agreement, there can be no assurance that such registration will ever be
effective or remain effective, or that there will be any liquidity with respect
to the sale of such securities, if and when registered.  The Purchaser
represents that he has sufficient liquid assets so that the illiquidity
associated with this investment will not cause any undue financial difficulties
or affect the Purchaser’s ability to provide for its current needs and possible
financial contingencies, and that the Purchaser’s commitment to all high risk
investments (including this one if this purchase is agreed to and accepted by
the Company) is reasonable in relation to the Purchaser’s net worth and/or
annual income.

     

    
      
        
        

      

      
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    (k)           The
Purchaser understands that pending an effective registration under the
Securities Act, if any, the Common Stock, the Warrants and the Warrant Shares
will be restricted securities as such term is defined under Rule 144 promulgated
under the Securities Act and cannot be sold except pursuant to such registration
or an exemption therefrom.  The Purchaser further understands that the
Company has no obligation to register the Warrants for resale under the
Securities Act.

     

    (l)           The
Purchaser understands that the Company is relying on the Purchaser’s
representations herein and the information provided by the Purchaser in the
Purchaser Questionnaire.  Any information which the Purchaser has
heretofore furnished to the Company in the Purchaser Questionnaire or otherwise,
including, without limitation, information with respect to its financial
position and business experience is correct and complete as of the date of this
Agreement, and if there should be any material change in such information prior
to the applicable Closing in which the Purchaser is participating, the Purchaser
will immediately furnish such revised or corrected information to EBC and the
Company.

     

    (m)           The
address of the Purchaser furnished by him on the signature pages hereto is the
undersigned’s principal residence if he is an individual or its principal
business address if it is a corporation or other entity.

     

    (n)           If
the Purchaser is not a United States person, it has satisfied itself as to the
full observance of the laws of its jurisdiction in connection with any
invitation to purchase the Units or any use of this Agreement, including (i) the
legal requirements within its jurisdiction for the purchase of the Units, (ii)
any foreign exchange restrictions applicable to such purchase, (iii) any
governmental or other consents that may need to be obtained and (iv) the income
tax and other tax consequences, if any, that may be relevant to the purchase,
holding, redemption, sale or transfer of the Units.  Such Purchaser’s
payment for, and his or her continued beneficial ownership of the Units, will
not violate any applicable securities or other laws of the Purchaser’s
jurisdiction.

     

    (o)           The
Purchaser also understands and agrees that, although the Company will use its
best efforts to keep confidential the information provided herein, the Company
may present the information provided herein to such parties as it deems
advisable (a) if called upon to establish either the availability under any
Federal or state securities laws of an exemption from registration of the
Offering or compliance with any other legal requirement, or (b) if the contents
hereof are relevant to any issue in any action, regulatory request, inspection,
investigation, suit or proceeding to which the Company is a party, is subject,
or by which it is or may be bound.  Further, the Purchaser understands
that the Offering may be reported to the SEC pursuant to the requirements of
applicable Federal law and to various state securities or blue sky commissioners
pursuant to applicable laws.

     

    
      
        
        

      

      
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    (p)           No
court or governmental injunction, order or decree affecting the Purchaser and
prohibiting the execution and delivery by the Purchaser of this Agreement and
the consummation of the transactions contemplated hereby is in effect, and the
terms of this Agreement do not conflict with any provision of the Certificate or
Articles of Incorporation or By-laws (or comparable charter, partnership or
other organizational documents) of the Purchaser, or conflict with, or result in
a material breach or violation of, any of the terms or provisions of, or
constitute (with due notice or lapse of time or both) a material default under,
any material lease, loan agreement, mortgage, security agreement, trust
indenture or other agreement or instrument to which the Purchaser is a
party.

     

    (q)           No
material consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, remains to be obtained or is otherwise required to be obtained by the
Purchaser in connection with the authorization, execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby,
including, without limitation the purchase and sale of the Units.

     

    (r)           The
Purchaser acknowledges that pursuant to the terms of the engagement letter
between EBC and the Company, EBC is being paid from the Company for its services
in connection with the Offering.  The Purchaser further acknowledges
that pursuant to the terms of the engagement letter, the Company is reimbursing
EBC for certain expenses incurred by EBC in connection with the
Offering.

     

    (s)           Other
than the EBC (as placement agent on behalf of the Company), and any subagents
they may appoint, no finder, broker, agent, financial person or other
intermediary has acted on behalf of the Purchaser in connection with the
Purchaser’s purchase of the Units, the consummation of this Agreement or any of
the transactions contemplated hereby.  The Purchaser has not had any
direct or indirect contact with any other investment banking firm (or similar
firm) with respect to the offer of the Units by the Company to the Purchaser or
the Purchaser’s purchase of the Units.

     

    (t)           The
Purchaser acknowledges that the Offering is confidential and non-public and
agrees that all information about the Offering shall be kept in confidence by
the Purchaser until the public announcement of the Offering by the
Company.  The Purchaser acknowledges that the foregoing restrictions
on the Purchaser’s use and disclosure of any such confidential, non-public
information contained in the above-described documents restricts the Purchaser
from trading in the Company’s securities to the extent such trading is on the
basis of material, non-public information of which the Purchaser is aware and is
in violation of applicable securities laws.  Except for the terms of
the Transaction Documents and the fact that the Company is considering
consummating the transactions contemplated therein, the Company confirms that
neither the Company nor, to its knowledge, any other person acting on its
behalf, has provided any of the Purchasers or their agents or counsel with any
information that constitutes material, non-public information.

     

    
      
        
        

      

      
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    ARTICLE
IV.

    OTHER
AGREEMENTS OF THE PARTIES

     

    4.1         Transfer
Restrictions.

     

    (a)           The
Securities may only be disposed of in compliance with state and federal
securities laws.  In connection with any transfer of Securities other
than pursuant to an effective registration statement or Rule 144, to the
Company, or to an Affiliate of a Purchaser 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 and
reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Securities under the
Securities Act.  As a condition of transfer, any such transferee shall
agree in writing to be bound by the terms of this Agreement, the Registration
Rights Agreement and the transactions contemplated by the Transaction Documents
and shall have the rights of a Purchaser under this Agreement, the Registration
Rights Agreement and the other Transaction Documents.

     

    (b)           The
Purchasers agree to the imprinting, so long as is required by this Section 4.1,
of a legend on any of the Securities in the following form:

     

    THIS
SECURITY HAS NOT BEEN  REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A
FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

     

    (c)           Each
Purchaser, severally and not jointly with the other Purchasers, agrees that such
Purchaser will sell any Securities pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom, and that if Securities are sold
pursuant to a Registration Statement, they will be sold in compliance with the
plan of distribution set forth therein, and acknowledges that the removal of the
restrictive legend from certificates representing Securities as set forth in
this Section 4.1 is predicated upon the Company’s reliance upon this
understanding.

     

    
      
        
        

      

      
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    4.2         Furnishing of
Information;
Public Information.

     

    (a)           Until
the time that no Purchaser owns Securities, the Company covenants to maintain
the registration of the Common Stock under Section 12(b) or 12(g) of the
Exchange Act and to timely file with the Commission (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act.  As long as any Purchaser owns Securities, if the
Company is not required to file reports pursuant to the Exchange Act, it will
prepare and furnish to the Purchasers and make publicly available in accordance
with Rule 144(c) such information as is required for the Purchasers to sell the
Securities under Rule 144. The Company further covenants that it will take such
further action as any holder of Securities may reasonably request, to the extent
required from time to time to enable such Person to sell such Securities without
registration under the Securities Act within the requirements of the exemption
provided by Rule 144.

     

    (b)           At
any time during the period commencing from the six (6) month anniversary of the
date hereof and ending at such time that all of the Securities may be sold
without the requirement for the Company to be in compliance with Rule 144(c)(1)
and otherwise without restriction or limitation pursuant to Rule 144, if the
Company shall fail for any reason to satisfy the current public information
requirement under Rule 144(c) (a “Public Information
Failure”) then, in addition to such Purchaser’s other available remedies,
the Company shall pay to a Purchaser, in cash, as partial liquidated damages and
not as a penalty, by reason of any such delay in or reduction of its ability to
sell the Securities, an amount in cash equal to one percent (1.0%) of the
aggregate Subscription Amount of such Purchaser’s Securities on the day of a
Public Information Failure and on every thirtieth (30th) day
(pro rated for periods totaling less than thirty days) thereafter until the
earlier of (a) the date such Public Information Failure is cured and (b) such
time that such public information is no longer required  for the Purchasers
to transfer the Shares and Warrant Shares pursuant to Rule 144.  The
payments to which a Purchaser shall be entitled pursuant to this Section 4.2(b)
are referred to herein as “Public Information Failure
Payments.”  Public Information Failure Payments shall be paid
on the earlier of (i) the last day of the calendar month during which such
Public Information Failure Payments are incurred
and (ii) the third (3rd)
Business Day after the event or failure giving rise to the Public Information
Failure Payments is
cured.  In the event the Company fails to make Public Information
Failure Payments in
a timely manner, such Public Information Failure Payments shall bear
interest at the rate of one percent ( 1.0%) per month (prorated for partial
months) until paid in full. Nothing herein shall limit such Purchaser’s right to
pursue actual damages for the Public Information Failure, and such Purchaser
shall have the right to pursue all remedies available to it at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief.

     

    4.3           Integration.  The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities to the
Purchasers in a manner that would require the registration under the Securities
Act of the sale of the Securities to the Purchasers or that would be integrated
with the offer or sale of the Securities for purposes of the rules and
regulations of any Trading Market such that it would require shareholder
approval prior to the closing of such other transaction unless shareholder
approval is obtained before the closing of such subsequent
transaction.

     

    
      
        
        

      

      
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    4.4           Securities Laws Disclosure;
Publicity.  Within four Business Days following the date of
this Agreement, the Company shall issue a Current Report on Form 8-K, disclosing
the material terms of the transactions contemplated hereby, and including the
Transaction Documents as exhibits thereto.  Thereafter, within four
Business Days following each Closing, the Company shall file an amendment to
such Current Report on Form 8-K disclosing that such Closing has occurred and
the amount of Units sold and proceeds raised therein and such other material
information as may be required.  The Company shall issue timely press
releases with respect to each Closing and shall consult with EBC in issuing any
press releases with respect to the transactions contemplated hereby, and EBC
shall have reasonable and timely opportunity to review and comment on any press
release and any public filing to be made by the Company in connection with the
Offering.  The Company shall not publicly disclose the name of any
Purchaser, or include the name of any Purchaser in any filing with the
Commission or any regulatory agency or Trading Market, without the prior written
consent of such Purchaser, except: (a) as required by federal securities law in
connection with (i) any registration statement contemplated by the Registration
Rights Agreement and (ii) the filing of final Transaction Documents (including
signature pages thereto) with the Commission and (b) to the extent such
disclosure is required by law or Trading Market regulations, in which case the
Company shall provide the Purchasers with prior notice of such disclosure
permitted under this clause (b).

     

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

     

    4.6           [Reserved].

     

    4.7           Use of
Proceeds.  The Company shall use the net proceeds from the sale
of the Securities hereunder for working capital purposes and for the payment of
the indebtedness.  Notwithstanding anything to the contrary, none of
the net proceeds shall be used to pay any amounts owed as of any Closing Date to
directors or officers of the Company.

     

    
      
        
        

      

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

     

    4.9           Indemnification of the
Company.  In consideration of the Company’s execution and
delivery of this Agreement, and in addition to all of the Purchaser’s other
obligations under this Agreement, each Purchaser individually and not
jointly will indemnify and hold the Company and its directors, officers,
employees and agents (and any other Persons with a functionally equivalent role
of a Person holding such titles notwithstanding a lack of such title or any
other title) (each, a “Company
Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Company Party may suffer or incur as a
result of or relating to (a) any breach of such Purchaser’s (and only such
Purchaser’s) representations or warranties made in this Agreement or in the
other Transaction Documents or (b) any breach of any of such Purchaser’s
covenants, agreements or obligations of the Purchasers contained in this
Agreement, the Transaction Documents or any other instrument or document
contemplated hereby or thereby executed by such Purchaser.

     

    
      
        
        

      

      
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    4.10           Reservation of Common
Stock. As of the date hereof, the Company has reserved and the Company
shall continue to reserve and keep available at all times, free of preemptive
rights, a sufficient number of shares of Common Stock for the purpose of
enabling the Company to issue Shares pursuant to this Agreement and Warrant
Shares pursuant to any exercise of the Warrants.

     

    4.11           Listing/Quotation of Common Stock. The
Company hereby agrees to use best efforts to maintain the listing or quotation
of the Common Stock on a Trading Market, and as soon as reasonably practicable
following the Initial Closing (but not later than the earlier of the Effective
Date and the first anniversary of the Initial Closing Date) to list or quote all
of the Shares and Warrant Shares as set forth in the Registration Rights
Agreement. The Company further agrees, if the Company applies to have the Common
Stock traded on any other Trading Market, it will then include in such
application all of the Shares and Warrant Shares, and will take such other
action as is necessary to cause all of the Shares and Warrant Shares to be
listed on such other Trading Market as promptly as possible.  The
Company will then take all action reasonably necessary to continue the listing
or quotation and trading of its Common Stock on a Trading Market and will comply
in all respects with the Company’s reporting, filing and other obligations under
the bylaws or rules of the Trading Market.

     

    4.12           Short Sales and
Confidentiality After The Date Hereof. Each Purchaser, severally and not
jointly with the other Purchasers, covenants that neither it, nor any Affiliate
acting on its behalf or pursuant to any understanding with it, will execute any
Short Sales during the period commencing with the Discussion Time and ending at
such time the transactions contemplated by this Agreement are first publicly
announced as described in Section 4.4.  Each Purchaser, severally and not
jointly with the other Purchasers, covenants that until such time as the
transactions contemplated by this Agreement are publicly disclosed by the
Company as described in Section 4.4, such Purchaser will maintain the
confidentiality of the existence and terms of this transaction and the
information included in the Transaction Documents and the Disclosure
Schedules.  Notwithstanding the foregoing, no Purchaser makes any
representation, warranty or covenant hereby that it will not engage in Short
Sales in the Securities of the Company after the time that the transactions
contemplated by this Agreement are first publicly announced as described in
Section 4.4.  Notwithstanding the foregoing, in the case of a Purchaser
that is a multi-managed investment vehicle whereby separate portfolio managers
manage separate portions of such Purchaser’s assets and the portfolio managers
have no direct knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser’s assets, the covenant set
forth above shall only apply with respect to the portion of assets managed by
the portfolio manager that made the investment decision to purchase the
Securities covered by this Agreement.

     

    4.13           Form D; Blue Sky
Filings.  The Company agrees to timely file a Form D with
respect to the Securities as required under Regulation D and to provide a copy
thereof, promptly upon request of any Purchaser. The Company shall take such
action as the Company shall reasonably determine is necessary in order to obtain
an exemption for, or to qualify the Securities for, sale to the Purchasers at
each Closing under applicable securities or “Blue Sky” laws of the states of the
United States, and shall provide evidence of such actions promptly upon request
of any Purchaser.

     

    
      
        
        

      

      
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    4.14           Delivery of Securities After
Closing.  The Company shall use commercially reasonable efforts
to deliver, or cause to be delivered, the respective Securities purchased by
each Purchaser to such Purchaser within three Trading Days of the applicable
Closing Date.

     

    ARTICLE
V.

    MISCELLANEOUS

     

    5.1           Termination. 
This Agreement may be terminated by any Purchaser, as to such Purchaser’s
obligations hereunder only and without any effect whatsoever on the obligations
between the Company and the other Purchasers, by written notice to the other
parties, if the Initial Closing has not been consummated on or before July 31,
2009; provided,
however, that
such termination will not affect the right of any party to sue for any breach by
the other party (or parties).

     

    5.2           Fees and
Expenses.  Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement and the Transaction
Documents.  The Company shall pay all Transfer Agent fees, stamp taxes
and other taxes and duties levied in connection with the delivery of any
Securities to the Purchasers.

     

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

     

    5.4           Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of: (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 4:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto on a day that is not a Trading Day
or later than 4:30 p.m. (New York City time) on any Trading Day, (c) the
second (2nd)
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such
notice is required to be given.  The address for such notices and
communications shall be as set forth on the signature pages attached
hereto.

     

    5.5           Amendments;
Waivers.  No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and the Purchasers holding at least a
majority in interest of the Shares then outstanding or, in the case of a
waiver, by the party against whom enforcement of any such waived provision is
sought.  No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right.

     

    
      
        
        

      

      
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    5.6           Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.

     

    5.7           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of each Purchaser (other
than by merger).

     

    5.8           No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.8 and Section
4.9.

     

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

     

    5.10           Survival.  The
representations and warranties contained herein shall survive each Closing and
the delivery of the Securities for the applicable statute of
limitations.

     

    
      
        
        

      

      
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    5.11           Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to 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 or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

     

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

     

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

     

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

     

    5.15           Independent Nature of
Purchasers’ Obligations and Rights.  The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document.  Nothing contained herein or
in any other Transaction Document, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.  Each Purchaser
has been represented by its own separate legal counsel in their review and
negotiation of the Transaction Documents.

     

    
      
        
        

      

      
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    5.16           [Reserved].

     

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

     

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

     

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

     

    (Signature
Pages Follow)

     

    
      
        
        

      

      
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    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.

    

    
      
        
          
            
              
                	
                        AVANTAIR,
      INC.

                      	 
      	
                        Address for Notice:

                      
	 	 	 	 
	
                        By:

                      	
                        /s/ Steven Santo

                      	 
      	
                        Fax:

                      
	 
      	
                        Name:
      Steven Santo

                      	 
      	 
      
	 
      	
                        Title:
      Chief Executive Officer

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

                      	 
      	 
      

              

            

          

        

      

    

     

    
      
        
        

      

      
        30

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