Document:

Execution
Version

      

    [FORM
OF SENIOR SECURED CONVERTIBLE NOTE]

     

    NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.  ANY TRANSFEREE OF THIS NOTE
SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iii) AND
18(a) HEREOF.  THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND,
ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE
AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS
NOTE.

    

    THIS
NOTE IS SUBJECT IN ALL RESPECTS TO THE DEBT SUBORDINATION AND INTERCREDITOR
AGREEMENT, DATED JULY 19, 2010 (“SUBORDINATION AGREEMENT") AMONG THE COMPANY,
ROSENTHAL & ROSENTHAL, INC., ALL HOLDERS OF NOTES, AND CNH DIVERSIFIED
OPPORTUNITIES MASTER ACCOUNT, L.P., IN ITS CAPACITY AS COLLATERAL AGENT FOR ALL
HOLDERS OF NOTES, UNDER WHICH THE COMPANY’S OBLIGATIONS AND THE HOLDERS RIGHTS
HEREUNDER ARE SUBORDINATED IN THE MANNER SET FORTH THEREIN TO THE PRIOR PAYMENT
OF THE SENIOR CREDITOR INDEBTEDNESS (AS DEFINED IN THE SUBORDINATION
AGREEMENT).

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    SouthPeak
Interactive Corporation

     

    Senior
Secured Convertible Note

     

    
      
        
          	
                  Issuance
      Date:  August __, 2010

                	
                  Original
      Principal Amount: U.S. $[__________]

                

        

      

    

    

    FOR VALUE RECEIVED, SouthPeak
Interactive Corporation, a Delaware  corporation (the "Company"), hereby promises to
pay to [_________________] or registered assigns (the "Holder") the amount set out
above as the Original Principal Amount (as reduced pursuant to the terms hereof
pursuant to redemption, conversion or otherwise, the "Principal") when due, whether
upon the Maturity Date (as defined below), acceleration, redemption or otherwise
(in each case in accordance with the terms hereof) and to pay interest ("Interest") on any outstanding
Principal at the applicable Interest Rate from the date set out above as the
Issuance Date (the "Issuance Date") until the same becomes
due and payable, whether upon an Interest Date (as defined below), the Maturity
Date, acceleration, conversion, redemption or otherwise (in each case in
accordance with the terms hereof).  This Senior Secured Convertible
Note (including all Senior Secured Convertible Notes issued in exchange,
transfer or replacement hereof, this "Note") is one of an issue of
Senior Secured Convertible Notes issued pursuant to the Securities Purchase
Agreement on the Additional Closing Date (collectively, the "Notes" and such other Senior
Secured Convertible Notes issued on the Additional Closing Date, the "Other Notes").  Certain
capitalized terms used herein are defined in Section 28.

     

    (1)           PAYMENTS OF
PRINCIPAL.  On the Maturity Date, the Company shall pay to the
Holder an amount in cash representing all outstanding Principal, accrued and
unpaid Interest and accrued and unpaid Late Charges on such Principal and
Interest.  The "Maturity Date" shall be March 15, 2011,
as may be extended at the option of the Holder (i) in the event that, and for so
long as, an Event of Default (as defined in Section 4(a)) shall have occurred
and be continuing on the Maturity Date (as may be extended pursuant to this
Section 1) or any event shall have occurred and be continuing on the Maturity
Date (as may be extended pursuant to this Section 1) that with the passage of
time and the failure to cure would result in an Event of Default and (ii)
through the date that is ten (10) Business Days after the consummation of a
Change of Control in the event that a Change of Control is publicly announced or
a Change of Control Notice (as defined in Section 5(b)) is delivered prior to
the Maturity Date.  Other than as specifically permitted by this Note,
the Company may not prepay any portion of the outstanding Principal, accrued and
unpaid Interest or accrued and unpaid Late Charges on Principal and Interest, if
any.

     

    (2)           INTEREST; INTEREST
RATE.  (a) Interest on this Note shall commence accruing on the
Issuance Date and shall be computed on the basis of a 360-day year and twelve
30-day months and shall be payable in arrears on December 31, 2010 and on the
Maturity Date (each, an "Interest Date").  Interest
shall be payable on each Interest Date, to the record holder of this Note on the
applicable Interest Date, in cash.  Prior to the payment of Interest
on an Interest Date, Interest on this Note shall accrue at the Interest Rate and
be payable in cash.  From and after the occurrence and during the
continuance of an Event of Default, the Interest Rate shall be increased to
twenty-nine percent 29.0%).  In the event that such Event of Default
is subsequently cured, the adjustment referred to in the preceding sentence
shall cease to be effective as of the date of such cure; provided that the
Interest as calculated and unpaid at such increased rate during the continuance
of such Event of Default shall continue to apply to the extent relating to the
days after the occurrence of such Event of Default through and including the
date of cure of such Event of Default.

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

    (b)           It
is the intention of the Holder and the Company that each of them shall conform
strictly to usury laws applicable to it.  Accordingly, if the
transactions contemplated hereby or by any other Transaction Document would be
usurious as to the Holder under laws applicable to it (including the laws of the
United States of America and the State of New York or any other jurisdiction
whose laws may be mandatorily applicable to the Holder notwithstanding the other
provisions of this Note), then, in that event, notwithstanding anything to the
contrary in this Note or any other Transaction Document or any agreement entered
into in connection with or as security for the obligations owing by the Company
hereunder, it is agreed as follows:  (i) the aggregate of all
consideration which constitutes Interest under law applicable to the Holder that
is contracted for, taken, reserved, charged or received by the Holder under this
Note or otherwise in connection with the obligations of the Company under this
Note shall under no circumstances exceed the maximum amount allowed by such
applicable law, any excess shall be canceled automatically and if theretofore
paid shall be credited by the Holder on the Principal (or, to the extent that
the Principal shall have been or would thereby be paid in full, refunded by the
Holder to the Company).  If at any time and from time to time (x) the
amount of Interest payable to the Holder on any date shall be computed at the
highest lawful rate applicable to the Holder pursuant to this Section 2(b) and
(y) in respect of any subsequent Interest computation period the amount of
Interest otherwise payable to the Holder would be less than the amount of
Interest payable to the Holder computed at the highest lawful rate applicable to
the Holder, then the amount of Interest payable to the Holder in respect of such
subsequent Interest computation period shall continue to be computed at the
highest lawful rate applicable to the Holder until the total amount of Interest
payable to the Holder shall equal the total amount of Interest which would have
been payable to the Holder if the total amount of Interest had been computed
without giving effect to this Section 2(b).

     

    (3)           CONVERSION OF
NOTES.  This Note shall be convertible into shares of the
Company's common stock, par value $0.0001 per share (the "Common Stock"), on the terms
and conditions set forth in this Section 3.

     

    (a)           Conversion
Right.  Subject to the provisions of Section 3(d), at any time
or times on or after the Issuance Date, the Holder shall be entitled to convert
any portion of the outstanding and unpaid Conversion Amount (as defined below)
into fully paid and nonassessable shares of Common Stock in accordance with
Section 3(c), at the Conversion Rate (as defined below).  The Company
shall not issue any fraction of a share of Common Stock upon any
conversion.  If the issuance would result in the issuance of a
fraction of a share of Common Stock, the Company shall round such fraction of a
share of Common Stock to the nearest whole share.  The Company shall
pay any and all transfer, stamp and similar taxes that may be payable with
respect to the issuance and delivery of Common Stock upon conversion of any
Conversion Amount.

     

    (b)           Conversion
Rate.  The number of shares of Common Stock issuable upon
conversion of any Conversion Amount pursuant to Section 3(a) shall be determined
by dividing (x) such Conversion Amount by (y) the Conversion Price (the "Conversion
Rate").

     

    (i)           "Conversion Amount" means the
sum of (A) the portion of the Principal to be converted, redeemed or otherwise
with respect to which this determination is being made, (B) accrued and unpaid
Interest with respect to such Principal and (C) accrued and unpaid Late Charges
with respect to such Principal and Interest.

     

    (ii)           "Conversion Price" means, as of
any Conversion Date (as defined below) or other date of determination, $20.00,
subject to adjustment as provided herein.

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

    

     

    (c)           Mechanics of
Conversion.

     

    (i)           Optional
Conversion.  To convert any Conversion Amount into shares of
Common Stock on any date (a "Conversion Date"), the Holder
shall (A) transmit by facsimile (or otherwise deliver), for receipt on or prior
to 11:59 p.m., New York Time, on such date, a copy of an executed notice of
conversion in the form attached hereto as Exhibit I (the "Conversion Notice") to the
Company and (B) if required by Section 3(c)(iii), surrender this Note to a
common carrier for delivery to the Company as soon as practicable on or
following such date (or an indemnification undertaking with respect to this Note
in the case of its loss, theft or destruction).  On or before the
first (1st)
Business Day following the date of receipt of a Conversion Notice, the Company
shall transmit by facsimile a confirmation of receipt of such Conversion Notice
to the Holder and the Company's transfer agent (the "Transfer
Agent").  On or before the third (3rd)
Business Day following the date of receipt of a Conversion Notice (the "Share Delivery Date"), the Company shall (1)
(x) provided that the Transfer Agent is participating in the Depository Trust
Company's ("DTC") Fast
Automated Securities Transfer Program, credit such aggregate number of shares of
Common Stock to which the Holder shall be entitled to the Holder's or its
designee's balance account with DTC through its Deposit/Withdrawal at Custodian
system or (y) if the Transfer Agent is not participating in the DTC Fast
Automated Securities Transfer Program, issue and deliver to the address as
specified in the Conversion Notice, a certificate, registered in the name of the
Holder or its designee, for the number of shares of Common Stock to which the
Holder shall be entitled and (2) pay to the Holder in cash, by wire transfer of
immediately available funds, an amount equal to the accrued and unpaid Interest
on the Conversion Amount and Late Charges, if any, on such Conversion Amount and
Interest.  If this Note is physically surrendered for conversion as
required by Section 3(c)(iii) and the outstanding Principal of this Note is
greater than the Principal portion of the Conversion Amount being converted,
then the Company shall as soon as practicable and in no event later than three
(3) Business Days after receipt of this Note and at its own expense, issue and
deliver to the holder a new Note (in accordance with Section 18(d)) representing
the outstanding Principal not converted.  The Person or Persons
entitled to receive the shares of Common Stock issuable upon a conversion of
this Note shall be treated for all purposes as the record holder or holders of
such shares of Common Stock on the Conversion Date.

    
      
         

      

      
        - 4
-

        
          

        

      

      
         

      

    

    (ii)          Company's Failure to Timely
Convert.  If the Company shall fail to issue a certificate to
the Holder or credit the Holder's balance account with DTC, as applicable, for
the number of shares of Common Stock to which the Holder is entitled upon
conversion of any Conversion Amount on or prior to the date which is three (3)
Trading Days after the Conversion Date (a "Conversion Failure"), then the
Holder, upon written notice to the Company, may void its Conversion Notice with
respect to, and retain or have returned, as the case may be, any portion of this
Note that has not been converted pursuant to such Conversion Notice; provided that the
voiding of a Conversion Notice shall not affect the Company's obligations to
make any payments which have accrued prior to the date of such notice pursuant
to this Section 3(c)(ii) or otherwise.  In addition to the foregoing,
if within three (3) Trading Days after the Company's receipt of the facsimile
copy of a Conversion Notice the Company shall fail to issue and deliver a
certificate to the Holder or credit the Holder's balance account with DTC for
the number of shares of Common Stock to which the Holder is entitled upon such
holder's conversion of any Conversion Amount or on any date of the Company's
obligation to deliver shares of Common Stock as contemplated pursuant to clause
(y) below, and if on or after such Trading Day the Holder purchases (in an open
market transaction or otherwise) Common Stock to deliver in satisfaction of a
sale by the Holder of Common Stock issuable upon such conversion that the Holder
anticipated receiving from the Company (a "Buy-In"), then the Company
shall, within three (3) Trading Days after the Holder's request and in the
Holder's discretion, either (x) pay cash to the Holder in an amount equal to the
Holder's total purchase price (including brokerage commissions and other out of
pocket expenses, if any) for the shares of Common Stock so purchased (the "Buy-In Price"), at which point
the Company's obligation to deliver such certificate (and to issue such Common
Stock) shall terminate and the applicable portion of the Note will be deemed to
have been converted, or (y) promptly honor its obligation to deliver to the
Holder a certificate or certificates representing such Common Stock and pay cash
to the Holder in an amount equal to the excess (if any) of the Buy-In Price over
the product of (I) such number of shares of Common Stock, times (II) the Closing
Bid Price on the Conversion Date.

     

    (iii)         Registration;
Book-Entry.  The Company shall maintain a register (the "Register") for the recordation
of the names and addresses of the holders of each Note and the principal amount
of the Notes held by such holders (the "Registered
Notes").  The entries in the Register shall be conclusive and
binding for all purposes absent manifest error.  The Company and the
holders of the Notes shall treat each Person whose name is recorded in the
Register as the owner of a Note for all purposes, including, without limitation,
the right to receive payments of Principal and Interest, if any, hereunder,
notwithstanding notice to the contrary.  A Registered Note may be
assigned or sold in whole or in part only by registration of such assignment or
sale on the Register.  Upon its receipt of a request to assign or sell
all or part of any Registered Note by a Holder, the Company shall record the
information contained therein in the Register and issue one or more new
Registered Notes in the same aggregate principal amount as the principal amount
of the surrendered Registered Note to the designated assignee or transferee
pursuant to Section 18.  Notwithstanding anything to the contrary in
this Section 3(c)(iii), a Holder may assign any Note or any portion thereof to
an Affiliate of such Holder or a Related Fund of such Holder without delivering
a request to assign or sell such Note to the Company and the recordation of such
assignment or sale in the Register (a "Related Party Assignment");
provided, that
(x) the Company may continue to deal solely with such assigning or selling
Holder unless and until such Holder has delivered a request to assign or sell
such Note or portion thereof to the Company for recordation in the Register; (y)
the failure of such assigning or selling Holder to deliver a request to assign
or sell such Note or portion thereof to the Company shall not affect the
legality, validity, or binding effect of such assignment or sale and (z) such
assigning or selling Holder shall, acting solely for this purpose as a
non-fiduciary agent of the Company, maintain a register (the "Related Party Register")
comparable to the Register on behalf of the Company, and any such assignment or
sale shall be effective upon recordation of such assignment or sale in the
Related Party Register.  Notwithstanding anything to the contrary set
forth herein, upon conversion of any portion of this Note in accordance with the
terms hereof, the Holder shall not be required to physically surrender this Note
to the Company unless (A) the full Conversion Amount represented by this Note is
being converted or (B) the Holder has provided the Company with prior written
notice (which notice may be included in a Conversion Notice) requesting physical
surrender and reissue of this Note.  The Holder and the Company shall
maintain records showing the Principal and Interest and Late Charges, if any,
converted and the dates of such conversions or shall use such other method,
reasonably satisfactory to the Holder and the Company, so as not to require
physical surrender of this Note upon conversion.

    
      
         

      

      
        - 5
-

        
          

        

      

      
         

      

    

     

    (iv)         Pro Rata Conversion;
Disputes.  In the event that the Company receives a Conversion
Notice from more than one holder of Notes for the same Conversion Date and the
Company can convert some, but not all, of such portions of the Notes submitted
for conversion, the Company, subject to Section 3(d), shall convert from each
holder of Notes electing to have Notes converted on such date a pro rata amount
of such holder's portion of its Notes submitted for conversion based on the
principal amount of Notes submitted for conversion on such date by such holder
relative to the aggregate principal amount of all Notes submitted for conversion
on such date.  In the event of a dispute as to the number of shares of
Common Stock issuable to the Holder in connection with a conversion of this
Note, the Company shall issue to the Holder the number of shares of Common Stock
not in dispute and resolve such dispute in accordance with Section
23.

     

    (v)         Mandatory
Conversion.

     

    (1)           General.  If
at any time from and after the Issuance Date (the "Mandatory Conversion Eligibility
Date"), (1) the arithmetic average of the Weighted Average Price of the
Common Stock for any thirty (30) consecutive Trading Days following the
Mandatory Conversion Eligibility Date (the "Mandatory Conversion Measuring
Period") equals or exceeds 200% of the Conversion Price (subject to
appropriate adjustments for any stock dividend, stock split, stock combination,
reclassification or similar transaction after the Subscription Date) and (2)
there is not then an Equity Conditions Failure, the Company shall have the right
to require the Holder to convert all or any portion of the Company Conversion
Amount then remaining under this Note, in each case as designated in the
Mandatory Conversion Notice (as defined below) into fully paid, validly issued
and nonassessable shares of Common Stock in accordance with Section 3(c)
hereof at the Conversion Rate as of the Mandatory Conversion Date (as defined
below) (a "Mandatory
Conversion").  The Company may exercise its right to require
conversion under this Section 3(c)(v) by delivering within not more than five
(5) Trading Days following the end of such Mandatory Conversion Measuring Period
a written notice thereof by facsimile and overnight courier to all, but not less
than all, of the holders of Notes and the Transfer Agent (the "Mandatory Conversion Notice"
and the date all of the holders received such notice by facsimile is referred to
as the "Mandatory Conversion
Notice Date").  The Mandatory Conversion Notice shall be
irrevocable.  The Mandatory Conversion Notice shall (y) state (I) the
Trading Day selected for the Mandatory Conversion, which Trading Day shall be no
sooner than twenty (20) Trading Days nor later than sixty (60) Trading Days
following the Mandatory Conversion Notice Date (the "Mandatory Conversion Date"),
(II) the aggregate Conversion Amount of the Notes subject to Mandatory
Conversion from the Holder and all of the holders of the Notes pursuant to this
Section 3(c)(v) (and analogous provisions under the Other Notes), (III) the
number of shares of Common Stock to be issued to the Holder on the Mandatory
Conversion Date and (z) certify that there
has been no Equity Conditions Failure.  The mechanics of conversion
set forth in Section 3(c) shall apply to any Mandatory Conversion as if the
Company and the Transfer Agent had received from the Holder on the Mandatory
Conversion Date a Conversion Notice with respect to the Conversion Amount being
converted pursuant to the Mandatory Conversion.  Notwithstanding the
foregoing, the Company may not effect a Mandatory Conversion until a minimum of
five (5) consecutive Trading Days have elapsed after any prior Mandatory
Conversion Date.

    
      
         

      

      
        - 6
-

        
          

        

      

      
         

      

    

     

    (2)           Pro Rata Conversion
Requirement.  If the Company elects to cause a conversion of
any Conversion Amount of this Note pursuant to Section 3(c)(v)(A), then it must
simultaneously take the same action in the same proportion with respect to the
Other Notes.  If the Company elects a Mandatory Conversion of this
Note pursuant to Section 3(c)(v)(A) (or similar provisions under the Other
Notes) with respect to less than all of the Conversion Amounts of the Notes then
outstanding, then the Company shall require conversion of a Conversion Amount
from each of the holders of the Notes equal to the product of (1) the aggregate
Conversion Amount of Notes which the Company has elected to cause to be
converted pursuant to Section 3(c)(v)(A), multiplied by (2) the fraction, the
numerator of which is the sum of the aggregate Original Principal Amount of the
Notes purchased by such holder of outstanding Notes and the denominator of which
is the sum of the aggregate Original Principal Amount of the Notes purchased by
all holders holding outstanding Notes (such fraction with respect to each holder
is referred to as its "Conversion Allocation Percentage," and
such amount with respect to each holder is referred to as its "Pro Rata Conversion Amount");
provided, however, that in the event that any holder's Pro Rata Conversion
Amount exceeds the outstanding Principal amount of such holder's Note, then such
excess Pro Rata Conversion Amount shall be allocated amongst the remaining
holders of Notes in accordance with the foregoing formula.  In the
event that the initial holder of any Notes shall sell or otherwise transfer any
of such holder's Notes, the transferee shall be allocated a pro rata portion of
such holder's Conversion Allocation Percentage and the Pro Rata Conversion
Amount.

    
      
         

      

      
        - 7
-

        
          

        

      

      
         

      

    

    (d)           Limitations on Conversions;
Beneficial Ownership.  The Company shall not effect any
conversion of this Note, and the Holder of this Note shall not have the right to
convert any portion of this Note pursuant to Section 3(a), to the extent that
after giving effect to such conversion, the Holder (together with the Holder's
affiliates) would beneficially own in excess of 4.99% (the "Maximum Percentage") of the
number of shares of Common Stock outstanding immediately after giving effect to
such conversion.  For purposes of the foregoing sentence, the number
of shares of Common Stock beneficially owned by the Holder and its affiliates
shall include the number of shares of Common Stock issuable upon conversion of
this Note with respect to which the determination of such sentence is being
made, but shall exclude the number of shares of Common Stock which would be
issuable upon (A) conversion of the remaining, nonconverted portion of this Note
beneficially owned by the Holder or any of its affiliates and (B) exercise or
conversion of the unexercised or nonconverted portion of any other securities of
the Company (including, without limitation, any Other Notes or warrants) subject
to a limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by the Holder or any of its
affiliates.  Except as set forth in the preceding sentence, for
purposes of this Section 3(d)(i), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange
Act").  For purposes of this Section 3(d)(i), in determining
the number of outstanding shares of Common Stock, the Holder may rely on the
number of outstanding shares of Common Stock as reflected in (1) the Company's
most recent Form 10-K, Form 10-Q, Form 8-K or other public filing with the SEC,
as the case may be, (2) a more recent public announcement by the Company or (3)
any other notice by the Company or the Transfer Agent setting forth the number
of shares of Common Stock outstanding.  For any reason at any time,
upon the written or oral request of the Holder, the Company shall within one (1)
Business Day confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding.  In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Note, by the Holder or
its affiliates since the date as of which such number of outstanding shares of
Common Stock was reported.  By written notice to the Company, the
Holder may increase or decrease the Maximum Percentage to any other percentage
not in excess of 9.99% specified in such notice; provided that (x) any such
increase will not be effective until the sixty-first (61st) day
after such notice is delivered to the Company, and (y) any such increase or
decrease will apply only to the Holder and not to any other holder of
Notes.

     

    (4)           RIGHTS UPON EVENT OF
DEFAULT.

     

    (a)           Event of
Default.  Each of the following events shall constitute an
"Event of
Default":

     

    (i)           [Intentionally
omitted];

     

    (ii)          the
suspension from trading or failure of the Common Stock to be listed on an
Eligible Market for a period of five (5) consecutive Trading Days or for more
than an aggregate of fifteen (15) Trading Days in any 365-day
period;

     

    (iii)         the
Company's (A) failure to cure a Conversion Failure by delivery of the required
number of shares of Common Stock within ten (10) Business Days after the
applicable Conversion Date or (B) notice, written or oral, to any holder of the
Notes, including by way of public announcement or through any of its agents, at
any time, of its intention not to comply with a request for conversion of any
Notes into shares of Common Stock that is tendered in accordance with the
provisions of the Notes, other than pursuant to Section 3(d);

     

    (iv)        [Intentionally
omitted];

     

    (v)         the
Company's failure to pay to the Holder any amount of Principal, Interest, Late
Charges or other amounts when and as due under this Note (including, without
limitation, the Company's failure to pay any redemption amounts hereunder) or
any other Transaction Document or any other agreement, document, certificate or
other instrument delivered in connection with the transactions contemplated
hereby and thereby to which the Holder is a party, except, in the case of a
failure to pay Interest and/or Late Charges when and as due, in which case only
if such failure continues for a period of at least seven (7) Business
Days;

    
      
         

      

      
        - 8
-

        
          

        

      

      
         

      

    

     

    (vi)         any
default under, redemption of or acceleration prior to maturity of any
Indebtedness in excess of $250,000, individually or in the aggregate, of the
Company or any of its Subsidiaries (as defined in Section 3(a) of the Securities
Purchase Agreement) other than with respect to any Other Notes;

     

    (vii)        the
Company or any of its Subsidiaries, pursuant to or within the meaning of Title
11, U.S. Code, or any similar Federal, foreign or state law for the relief of
debtors (collectively, "Bankruptcy Law"), (A)
commences a voluntary case, (B) consents to the entry of an order for relief
against it in an involuntary case, (C) consents to the appointment of a
receiver, trustee, assignee, liquidator or similar official (a "Custodian"), (D) makes a
general assignment for the benefit of its creditors or (E) admits in writing
that it is generally unable to pay its debts as they become due;

     

    (viii)      a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that (A) is for relief against the Company or any of its Subsidiaries in an
involuntary case, (B) appoints a Custodian of the Company or any of its
Subsidiaries or (C) orders the liquidation of the Company or any of its
Subsidiaries;

     

    (ix)         a
final judgment or judgments for the payment of money aggregating in excess of
$250,000 are rendered against the Company or any of its Subsidiaries and which
judgments are not, within sixty (60) days after the entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged within sixty (60)
days after the expiration of such stay; provided, however, that (a) any judgment
which is covered by insurance or an indemnity from a credit worthy party shall
not be included in calculating the $250,000 amount set forth above so long as
the Company provides the Holder a written statement from such insurer or
indemnity provider (which written statement shall be reasonably satisfactory to
the Holder) to the effect that such judgment is covered by insurance or an
indemnity and the Company will receive the proceeds of such insurance or
indemnity within thirty (30) days of the issuance of such judgment and (b) the
calculation of the $250,000 amount set forth above shall exclude any judgments
that have been accrued on the Company's balance sheet as of the Subscription
Date, but only to the extent of such accrual, as set forth on Schedule 3(pp) of
the Securities Purchase Agreement.

     

    (x)          the
Company breaches any representation, warranty, covenant or other term or
condition of any Transaction Document, except, in the case of a breach of a
covenant or other term or condition of any Transaction Document which is
curable, only if such breach continues for a period of at least ten (10)
consecutive Business Days;

     

    (xi)         any
breach or failure in any respect to comply with any covenant contained in
Section 14 of this Note;

    
      
         

      

      
        - 9
-

        
          

        

      

      
         

      

    

     

    (xii)        any
material provision of any Security Document (as determined by the Collateral
Agent) shall at any time for any reason (other than pursuant to the express
terms thereof) cease to be valid and binding on or enforceable against the
Company or any Subsidiary intended to be a party thereto, or the validity or
enforceability thereof shall be contested by the Company or any Subsidiary or a
proceeding shall be commenced by the Company or any Subsidiary or any
governmental authority having jurisdiction over any of them, seeking to
establish the invalidity or unenforceability thereof, or the Company or any
Subsidiary shall deny in writing that it has any liability or obligation
purported to be created under any Security Document;

     

    (xiii)       any
Security Document, after delivery thereof pursuant hereto, shall for any reason
fail or cease to create a valid and perfected and, except to the extent
permitted by the terms hereof or thereof, first priority Lien in favor of the
Collateral Agent for the benefit of the holders of the Notes on any Collateral
(as defined in the Security Documents) purported to be covered
thereby;

     

    (xiv)       [Intentionally
omitted];

     

    (xv)        (i)
any material damage to, or loss, theft or destruction of, a material amount of
Collateral, whether or not insured, (ii) or any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other casualty which
causes, for more than fifteen (15) consecutive days, the cessation or
substantial curtailment of revenue producing activities at any facility of the
Company or any Subsidiary, if any such damage, loss, theft, destruction, event
or circumstance discussed in clauses (i) or (ii) above could reasonably be
expected to have a Material Adverse Effect (as defined in the Securities
Purchase Agreement); or

     

    (xvi)       any
Event of Default (as defined in the Other Notes) occurs with respect to any
Other Notes or any of the Initial Notes.

     

    (b)           Redemption
Right.  Upon the occurrence of an Event of Default with respect
to this Note or any Other Note, the Company shall within one (1) Business Day
deliver written notice thereof via facsimile and overnight courier (an "Event of Default Notice") to
the Holder.  At any time after the earlier of the Holder's receipt of
an Event of Default Notice and the Holder becoming aware of an Event of Default,
the Required Holders may require the Company to redeem all or any portion of
this Note (and a pro rata portion of all Other Notes) by delivering written
notice thereof (the "Event of
Default Redemption Notice") to the Company, which Event of Default
Redemption Notice shall indicate the Conversion Amount of this Note the Required
Holders are electing to require the Company to redeem.  Each portion
of this Note subject to redemption by the Company pursuant to this Section 4(b)
shall be redeemed by the Company at a price equal to the greater of (i) the
product of (A) the Conversion Amount to be redeemed and (B) the Redemption
Premium and (ii) the product of (A) the Conversion Rate with respect to such
Conversion Amount in effect at such time as the Holder delivers an Event of
Default Redemption Notice and (B) the greatest Closing Sale Price of the Common
Stock on any Trading Day during the period commencing on the date immediately
preceding such Event of Default and ending on the date the Holder delivers the
Event of Default Redemption Notice (the "Event of Default Redemption
Price").  Redemptions required by this Section 4(b) shall be
made in accordance with the provisions of Section 12.  To the extent
redemptions required by this Section 4(b) are deemed or determined by a court of
competent jurisdiction to be prepayments of the Note by the Company, such
redemptions shall be deemed to be voluntary prepayments.  The parties
hereto agree that in the event of the Company's redemption of any portion of the
Note under this Section 4(b), the Holder's damages would be uncertain and
difficult to estimate because of the parties' inability to predict future
interest rates and the uncertainty of the availability of a suitable substitute
investment opportunity for the Holder.  Accordingly, any Redemption
Premium due under this Section 4(b) is intended by the parties to be, and shall
be deemed, a reasonable estimate of the Holder's actual loss of its investment
opportunity and not as a penalty.

    
      
         

      

      
        - 10
-

        
          

        

      

      
         

      

    

     

    (5)           RIGHTS UPON FUNDAMENTAL
TRANSACTION AND CHANGE OF CONTROL.

     

    (a)           Assumption.  The
Company shall not enter into or be party to a Fundamental Transaction unless
(i)  the Successor Entity assumes in writing all of the obligations of the
Company under this Note and the other Transaction Documents in accordance with
the provisions of this Section 5(a) pursuant to written agreements in form and
substance reasonably satisfactory to the Required Holders and approved by the
Required Holders prior to such Fundamental Transaction, including agreements to
deliver to each holder of Notes in exchange for such Notes a security of the
Successor Entity evidenced by a written instrument substantially similar in form
and substance to the Notes, including, without limitation, having a principal
amount and interest rate equal to the principal amounts and the interest rates
of the Notes then outstanding held by such holder, having similar conversion
rights and having similar ranking to the Notes, and satisfactory to the Required
Holders and (ii) the Successor Entity (including its Parent Entity) is a
publicly traded corporation whose common stock is quoted on or listed for
trading on an Eligible Market (a "Public Successor
Entity").  Upon the occurrence of any Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and
after the date of such Fundamental Transaction, the provisions of this Note
referring to the "Company" shall refer instead to the Successor Entity), and may
exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Note with the same effect as if such
Successor Entity had been named as the Company herein.  Upon
consummation of the Fundamental Transaction, the Successor Entity shall deliver
to the Holder confirmation that there shall be issued upon conversion of this
Note at any time after the consummation of the Fundamental Transaction, in lieu
of the shares of the Company's Common Stock (or other securities, cash, assets
or other property) issuable upon the conversion of the Notes prior to such
Fundamental Transaction, such shares of the publicly traded common stock (or
their equivalent) of the Successor Entity (including its Parent Entity), as
adjusted in accordance with the provisions of this Note.  The
provisions of this Section shall apply similarly and equally to successive
Fundamental Transactions and shall be applied without regard to any limitations
on the conversion or redemption of this Note.

    
      
         

      

      
        - 11
-

        
          

        

      

      
         

      

    

    (b)           Redemption
Right.  No sooner than fifteen (15) days nor later than ten
(10) days prior to the consummation of a Change of Control, but not prior to the
public announcement of such Change of Control, the Company shall deliver written
notice thereof via facsimile and overnight courier to the Holder (a "Change of Control Notice").  At any
time during the period commencing on the earlier to occur of (x) any oral or
written agreement by the Company or any of its Subsidiaries, which upon
consummation of the transaction contemplated thereby would reasonably be
expected to result in a Change of Control and (y) the Holder's receipt of a
Change of Control Notice and ending twenty (20) Trading Days after the date of
the consummation of such Change of Control, the Required Holders may require the
Company to redeem all or any portion (and a pro rata portion of all Other Notes)
of this Note by delivering written notice thereof ("Change of Control Redemption
Notice") to the Company, which Change of Control Redemption Notice shall
indicate the Conversion Amount the Holder is electing to require the Company to
redeem.  The portion of this Note subject to redemption pursuant to
this Section 5(b) shall be redeemed by the Company in cash at a price equal to
the greater of (i) 115% of the Conversion Amount being redeemed  and
(ii) the product of (A) the Conversion Amount being redeemed multiplied by (B)
the quotient determined by dividing (1) the greatest Closing Sale Price of the
shares of Common Stock during the period beginning on the date immediately
preceding the earlier to occur of (x) the consummation of the Change of Control
and (y) the public announcement of such Change of Control and ending on the date
the Holder delivers the Change of Control Redemption Notice by (2) the
Conversion Price (the "Change
of Control Redemption Price").  Redemptions required by this
Section 5 shall be made in accordance with the provisions of Section 14 and
shall have priority to payments to stockholders in connection with a Change of
Control.  To the extent redemptions required by this Section 5(b) are
deemed or determined by a court of competent jurisdiction to be prepayments of
the Note by the Company, such redemptions shall be deemed to be voluntary
prepayments.  Notwithstanding anything to the contrary in this Section
5, but subject to Section 3(d), until the Change of Control Redemption Price
(together with any interest thereon) is paid in full, the Conversion Amount
submitted for redemption under this Section 5(c) (together with any interest
thereon) may be converted, in whole or in part, by the Holder into Common Stock
pursuant to Section 3.  The parties hereto agree that in the event of
the Company's redemption of any portion of the Note under this Section 5(b), the
Holder's damages would be uncertain and difficult to estimate because of the
parties' inability to predict future interest rates and the uncertainty of the
availability of a suitable substitute investment opportunity for the
Holder.  Accordingly, any Change of Control redemption premium due
under this Section 5(b) is intended by the parties to be, and shall be deemed, a
reasonable estimate of the Holder's actual loss of its investment opportunity
and not as a penalty.

     

    (6)           RIGHTS UPON ISSUANCE OF
PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.

     

    (a)           Purchase
Rights.  If at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of
Common Stock (the "Purchase
Rights"), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common
Stock acquirable upon complete conversion of this Note (without taking into
account any limitations or restrictions on the convertibility of this Note)
immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date as of
which the record holders of Common Stock are to be determined for the grant,
issue or sale of such Purchase Rights.

    
      
         

      

      
        - 12
-

        
          

        

      

      
         

      

    

     

    (b)           Other Corporate
Events.  In addition to and not in substitution for any other
rights hereunder, prior to the consummation of any Fundamental Transaction
pursuant to which holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for shares of Common
Stock (a "Corporate
Event"), the Company shall make appropriate provision to insure that the
Holder will thereafter have the right to receive upon a conversion of this Note,
at the Holder's option, in lieu of the shares of Common Stock otherwise
receivable upon such conversion, such securities or other assets received by the
holders of shares of Common Stock in connection with the consummation of such
Corporate Event in such amounts as the Holder would have been entitled to
receive had this Note initially been issued with conversion rights for the form
of such consideration (as opposed to shares of Common Stock) at a conversion
rate for such consideration commensurate with the Conversion
Rate.  Provision made pursuant to the preceding sentence shall be in a
form and substance satisfactory to the Required Holders.  The
provisions of this Section shall apply similarly and equally to successive
Corporate Events and shall be applied without regard to any limitations on the
conversion or redemption of this Note.

     

    (7)           RIGHTS UPON ISSUANCE OF
OTHER SECURITIES.

     

    (a)            [Intentionally
omitted]

     

    (b)           Adjustment of Conversion
Price upon Subdivision or Combination of Common Stock.  If the
Company at any time on or after the Subscription Date subdivides (by any stock
dividend, stock split, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the
Conversion Price in effect immediately prior to such subdivision will be
proportionately reduced.  If the Company at any time on or after the
Subscription Date combines (by combination, reverse stock split or otherwise)
one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, the Conversion Price in effect immediately prior to such
combination will be proportionately increased.

     

    (c)           Other
Events.  If any event occurs of the type contemplated by the
provisions of this Section 7 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then the Company's
Board of Directors will make an appropriate adjustment in the Conversion Price
so as to protect the rights of the Holder under this Note; provided that no such
adjustment will increase the Conversion Price as otherwise determined pursuant
to this Section 7.

     

    (d)           Voluntary
Decrease.  The Company may at any time during the term of this
Note reduce the then current Conversion Price to any amount and for any period
of time deemed appropriate by the Board of Directors.

     

    
      
        
        

      

      
        - 13
-

        
          

        

      

      
        
        

      

    

     

    (8)           OPTIONAL REDEMPTION AT THE
COMPANY'S ELECTION.

    (a)           General.  At
any time after the Issuance Date, the Company shall have the right without
notice to redeem all or any portion of the Company Conversion Amount then
remaining under this Note (the "Company Optional Redemption
Amount").  The portion of this Note subject to redemption
pursuant to this Section 8(a) shall be redeemed by the Company in cash at a
price equal to the sum of (i) 102% of the Conversion Amount being redeemed plus
(ii) any accrued and unpaid Interest on the Conversion Amount and Late Charges,
if any, on such Conversion Amount and Interest (the "Company Optional Redemption
Price").  Contemporaneously with any redemption pursuant to
this Section 8(a), the Company shall provide a written notice to all of the
holders of Notes, setting forth the aggregate Conversion Amount of the Notes
which the Company has elected to be subject to Company Optional Redemption from
the Holder and all of the other holders of the Notes pursuant to this Section
8(a) (and analogous provisions under the Other Notes).  Upon payment
of the Company Optional Redemption Price, the Holder’s right to convert the
Company Optional Redemption Amount shall cease and
terminate.  Redemptions made pursuant to this Section 8 shall be made
in accordance with Section 14.

     

    (b)           Pro Rata Redemption
Requirement.  If the Company elects to cause a Company Optional
Redemption pursuant to Section 8(a), then it must simultaneously take the same
action in the same proportion with respect to the Other Notes.  If the
Company elects to cause a Company Optional Redemption pursuant to Section 8(a)
(or similar provisions under the Other Notes) with respect to less than all of
the Conversion Amounts of the Notes then outstanding, then the Company shall
require redemption of a Conversion Amount from each of the holders of the Notes
equal to the product of (i) the aggregate Conversion Amount of Notes which the
Company has elected to cause to be redeemed pursuant to Section 8(a), multiplied
by (ii) the fraction, the numerator of which is the sum of the aggregate
Original Principal Amount of the Notes purchased by such holder of outstanding
Notes and the denominator of which is the sum of the aggregate Original
Principal Amount of the Notes purchased by all holders holding outstanding Notes
(such fraction with respect to each holder is referred to as its "Company Redemption Allocation
Percentage", and such amount with respect to each holder is referred to
as its "Pro Rata Company
Redemption Amount"); provided, however that in the event that any
holder's Pro Rata Company Redemption Amount exceeds the outstanding Principal
amount of such holder's Note, then such excess Pro Rata Company Redemption
Amount shall be allocated amongst the remaining holders of Notes in accordance
with the foregoing formula.  In the event that the initial holder of
any Notes shall sell or otherwise transfer any of such holder's Notes, the
transferee shall be allocated a pro rata portion of such holder's Company
Redemption Allocation Percentage and Pro Rata Company Redemption
Amount.

     

    (9)           [Intentionally
omitted.]

     

    (10)         NONCIRCUMVENTION.  The
Company hereby covenants and agrees that the Company will not, by amendment of
its Certificate of Incorporation, Bylaws or through any reorganization, transfer
of assets, consolidation, merger, scheme of arrangement, dissolution, issue or
sale of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Note, and will at all
times in good faith carry out all of the provisions of this Note and take all
action as may reasonably be required to protect the rights of the Holder of this
Note.

     

    
      (11)         [Intentionally
omitted.]

    

    
      
         

      

      
        - 14
-

        
          

        

      

      
         

      

    

     

    (12)         REDEMPTIONS.

     

    (a)           Mechanics.  The
Company shall deliver the applicable Event of Default Redemption Price to the
Holder within five (5) Business Days after the Company's receipt of the Holder's
Event of Default Redemption Notice.  If the Holder has submitted a
Change of Control Redemption Notice in accordance with Section 5(b), the Company
shall deliver the applicable Change of Control Redemption Price to the Holder
(i) concurrently with the consummation of such Change of Control if such notice
is received prior to the consummation of such Change of Control and (ii) within
five (5) Business Days after the Company's receipt of such notice
otherwise.  In the event of a redemption of less than all of the
Conversion Amount of this Note, the Company shall promptly cause to be issued
and delivered to the Holder a new Note (in accordance with Section 18(d))
representing the outstanding Principal which has not been
redeemed.  In the event that the Company does not pay the applicable
Redemption Price to the Holder within the time period required, at any time
thereafter and until the Company pays such unpaid Redemption Price in full, the
Holder shall have the option, in lieu of redemption, to require the Company to
promptly return to the Holder all or any portion of this Note representing the
Conversion Amount that was submitted for redemption and for which the applicable
Redemption Price (together with any Late Charges thereon) has not been
paid.  Upon the Company's receipt of such notice, (x) the applicable
Redemption Notice shall be null and void with respect to such Conversion Amount,
(y) the Company shall immediately return this Note, or issue a new Note (in
accordance with Section 18(d)) to the Holder representing such Conversion Amount
to be redeemed and (z) the Conversion Price of this Note or such new Notes shall
be adjusted to the lesser of (A) the Conversion Price as in effect on the date
on which the applicable Redemption Notice is voided and (B) the lowest Closing
Bid Price of the Common Stock during the period beginning on and including the
date on which the applicable Redemption Notice is delivered to the Company and
ending on and including the date on which the applicable Redemption Notice is
voided.  The Holder's delivery of a notice voiding a Redemption Notice
and exercise of its rights following such notice shall not affect the Company's
obligations to make any payments of Late Charges which have accrued prior to the
date of such notice with respect to the Conversion Amount subject to such
notice.

     

    (b)           Redemption by Other
Holders.  Upon the Company's receipt of notice from any of the
holders of the Other Notes for redemption or repayment as a result of an event
or occurrence substantially similar to the events or occurrences described in
Section 4(b), Section 5(b) or Section 9 (each, an "Other Redemption Notice"), the
Company shall immediately, but no later than one (1) Business Day of its receipt
thereof, forward to the Holder by facsimile a copy of such notice.  If
the Company receives a Redemption Notice and one or more Other Redemption
Notices, during the seven (7) Business Day period beginning on and including the
date which is three (3) Business Days prior to the Company's receipt of the
Holder's Redemption Notice and ending on and including the date which is three
(3) Business Days after the Company's receipt of the Holder's Redemption Notice
and the Company is unable to redeem all principal, interest and other amounts
designated in such Redemption Notice and such Other Redemption Notices received
during such seven (7) Business Day period, then the Company shall redeem a pro
rata amount from each holder of the Notes (including the Holder) based on the
principal amount of the Notes submitted for redemption pursuant to such
Redemption Notice and such Other Redemption Notices received by the Company
during such seven Business Day period.

    
      
         

      

      
        - 15
-

        
          

        

      

      
         

      

    

     

    (13)         VOTING
RIGHTS.  The Holder shall have no voting rights as the holder
of this Note, except as required by law, including, but not limited to, the
General Corporation Law of the State of Delaware, and as expressly provided in
this Note.

     

    (14)         COVENANTS.

     

    (a)           Rank &
Security.  All payments due under this Note (A) shall rank
pari passu with all
Other Notes and all Initial Notes and (B) shall be senior to all other
Indebtedness of the Company and its Subsidiaries.  Additionally, all
Indebtedness evidenced by this Note shall pursuant to the terms of the Security
Documents be secured by a perfected first priority lien on and security interest
in the properties and assets of the Company.

     

    (b)           Incurrence of
Indebtedness.  So long as this Note is outstanding, the Company
shall not, and the Company shall not permit any of its Subsidiaries to, directly
or indirectly, incur or guarantee, assume or suffer to exist any Indebtedness,
other than Permitted Indebtedness.

     

    (c)           Existence of
Liens.  So long as this Note is outstanding, the Company shall
not, and the Company shall not permit any of its Subsidiaries to, directly or
indirectly, allow or suffer to exist any mortgage, lien, pledge, charge,
security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by the Company or any of its
Subsidiaries (collectively, "Liens") other than Permitted
Liens.

     

    (d)           Restricted
Payments.  The Company shall not, and the Company shall not
permit any of its Subsidiaries to, directly or indirectly, redeem, defease,
repurchase, repay or make any payments in respect of, by the payment of cash or
cash equivalents (in whole or in part, whether by way of open market purchases,
tender offers, private transactions or otherwise), all or any portion of any
Permitted Indebtedness (other than this Note and Other Notes), whether by way of
payment in respect of principal of (or premium, if any) or interest on such
Indebtedness, if at the time such payment is due or is otherwise made or, after
giving effect to such payment, an event constituting, or that with the passage
of time and without being cured would constitute, an Event of Default has
occurred and is continuing.

     

    (e)           Restriction on Redemption
and Cash Dividends.  Until all of the Notes have been
converted, redeemed or otherwise satisfied in accordance with their terms, the
Company shall not, directly or indirectly, redeem, repurchase or declare or pay
any cash dividend or distribution on its capital stock without the prior express
written consent of the Required Holders.

     

    (f)           [Intentionally
omitted.]

     

    (g)           Change in Nature of
Business.  The Company shall not make, or permit any of its
Subsidiaries to make, any change in the nature of its business as described in
the Company's most recent annual report filed on Form 10-K with the
SEC.  The Company shall not modify its corporate structure or
purpose.

    
      
         

      

      
        - 16
-

        
          

        

      

      
         

      

    

    (h)           Preservation of Existence,
Etc.  The Company shall maintain and preserve, and cause each
of its Subsidiaries to maintain and preserve, its existence, rights and
privileges, and become or remain, and cause each of its Subsidiaries to become
or remain, duly qualified and in good standing in each jurisdiction in which the
character of the properties owned or leased by it or in which the transaction of
its business makes such qualification necessary.

     

    (i)           Maintenance of Properties,
Etc.  The Company shall maintain and preserve, and cause each
of its Subsidiaries to maintain and preserve, all of its properties which are
necessary or useful in the proper conduct of its business in good working order
and condition, ordinary wear and tear excepted, and comply, and cause each of
its Subsidiaries to comply, at all times with the provisions of all leases to
which it is a party as lessee or under which it occupies property, so as to
prevent any loss or forfeiture thereof or thereunder.

     

    (j)           Maintenance of
Insurance.  The Company shall maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations (including, without limitation, comprehensive general
liability, hazard, rent and business interruption insurance) with respect to its
properties (including all real properties leased or owned by it) and business,
in such amounts and covering such risks as is required by any governmental
authority having jurisdiction with respect thereto or substantially similar to
the Company's insurance coverage as of the date hereof.

     

    (k)           Transactions with
Affiliates.  The Company shall not, nor shall it permit any of
its Subsidiaries to, enter into, renew, extend or be a party to, any transaction
or series of related transactions (including, without limitation, the purchase,
sale, lease, transfer or exchange of property or assets of any kind or the
rendering of services of any kind) with any Affiliate, except in the ordinary
course of business in a manner and to an extent consistent with past practice
and necessary or desirable for the prudent operation of its business, for fair
consideration and on terms no less favorable to it or its Subsidiaries than
would be obtainable in a comparable arm's length transaction with a Person that
is not an Affiliate thereof.

     

    (15)         [Intentionally
omitted.]

     

    (16)         VOTE TO ISSUE, OR CHANGE THE
TERMS OF, NOTES.  This Note may not be amended without the
written consent of the Required Holders and the Company.

     

    (17)         TRANSFER.  This
Note and any shares of Common Stock issued upon conversion of this Note may be
offered, sold, assigned or transferred by the Holder without the consent of the
Company, subject only to the provisions of Section 2(f) of the Securities
Purchase Agreement.

     

    (18)         REISSUANCE OF THIS
NOTE.

     

    (a)           Transfer.  If
this Note is to be transferred, the Holder shall surrender this Note to the
Company, whereupon the Company will forthwith issue and deliver upon the order
of the Holder a new Note (in accordance with Section 18(d)), registered as the
Holder may request, representing the outstanding Principal being transferred by
the Holder and, if less then the entire outstanding Principal is being
transferred, a new Note (in accordance with Section 18(d)) to the Holder
representing the outstanding Principal not being transferred.  The
Holder and any assignee, by acceptance of this Note, acknowledge and agree that,
by reason of the provisions of Section 3(c)(iii) following conversion or
redemption of any portion of this Note, the outstanding Principal represented by
this Note may be less than the Principal stated on the face of this
Note.

    
      
         

      

      
        - 17
-

        
          

        

      

      
         

      

    

     

    (b)           Lost, Stolen or Mutilated
Note.  Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Note, and, in the case of loss, theft or destruction, of any
indemnification undertaking by the Holder to the Company in customary form and,
in the case of mutilation, upon surrender and cancellation of this Note, the
Company shall execute and deliver to the Holder a new Note (in accordance with
Section 18(d)) representing the outstanding Principal.

     

    (c)           Note Exchangeable for
Different Denominations.  This Note is exchangeable, upon the
surrender hereof by the Holder at the principal office of the Company, for a new
Note or Notes (in accordance with Section 18(d) and in principal amounts of at
least $100,000) representing in the aggregate the outstanding Principal of this
Note, and each such new Note will represent such portion of such outstanding
Principal as is designated by the Holder at the time of such
surrender.

     

    (d)           Issuance of New
Notes.  Whenever the Company is required to issue a new Note
pursuant to the terms of this Note, such new Note (i) shall be of like tenor
with this Note, (ii) shall represent, as indicated on the face of such new Note,
the Principal remaining outstanding (or in the case of a new Note being issued
pursuant to Section 18(a) or Section 18(c), the Principal designated by the
Holder which, when added to the principal represented by the other new Notes
issued in connection with such issuance, does not exceed the Principal remaining
outstanding under this Note immediately prior to such issuance of new Notes),
(iii) shall have an issuance date, as indicated on the face of such new Note,
which is the same as the Issuance Date of this Note, (iv) shall have the same
rights and conditions as this Note, and (v) shall represent accrued and unpaid
Interest and Late Charges, if any, on the Principal and Interest of this Note,
from the Issuance Date.

     

    (19)         REMEDIES, CHARACTERIZATIONS,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.  The
remedies provided in this Note shall be cumulative and in addition to all other
remedies available under this Note and any of the other Transaction Documents at
law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the Holder's right to pursue
actual and consequential damages for any failure by the Company to comply with
the terms of this Note.  Amounts set forth or provided for herein with
respect to payments, conversion and the like (and the computation thereof) shall
be the amounts to be received by the Holder and shall not, except as expressly
provided herein, be subject to any other obligation of the Company (or the
performance thereof).  The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the
remedy at law for any such breach may be inadequate.  The Company
therefore agrees that, in the event of any such breach or threatened breach, the
Holder shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.

    
      
         

      

      
        - 18
-

        
          

        

      

      
         

      

    

    (20)         PAYMENT OF COLLECTION,
ENFORCEMENT AND OTHER COSTS.  If (a) this Note is placed in the
hands of an attorney for collection or enforcement or is collected or enforced
through any legal proceeding or the Holder otherwise takes action to collect
amounts due under this Note or to enforce the provisions of this Note or (b)
there occurs any bankruptcy, reorganization, receivership of the Company or
other proceedings affecting Company creditors' rights and involving a claim
under this Note, then the Company shall pay the costs incurred by the Holder for
such collection, enforcement or action or in connection with such bankruptcy,
reorganization, receivership or other proceeding, including, but not limited to,
attorneys' fees and disbursements.

     

    (21)         CONSTRUCTION;
HEADINGS.  This Note shall be deemed to be jointly drafted by
the Company and all the Purchasers and shall not be construed against any person
as the drafter hereof.  The headings of this Note are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Note.

     

    (22)         FAILURE OR INDULGENCE NOT
WAIVER.  No failure or delay on the part of the Holder in the
exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege.

     

    (23)         DISPUTE
RESOLUTION.  In the case of a dispute as to the determination
of the Closing Bid Price, the Closing Sale Price or the Weighted Average Price
or the arithmetic calculation of the Conversion Rate, the Conversion Price or
any Redemption Price, the Company shall submit the disputed determinations or
arithmetic calculations via facsimile within one (1) Business Day of receipt, or
deemed receipt, of the Conversion Notice or Redemption Notice or other event
giving rise to such dispute, as the case may be, to the Holder.  If
the Holder and the Company are unable to agree upon such determination or
calculation within one (1) Business Day of such disputed determination or
arithmetic calculation being submitted to the Holder, then the Company shall,
within one Business Day submit via facsimile (a) the disputed determination of
the Closing Bid Price, the Closing Sale Price or the Weighted Average Price to
an independent, reputable investment bank selected by the Company and approved
by the Holder or (b) the disputed arithmetic calculation of the Conversion Rate,
Conversion Price or any Redemption Price to the Company's independent, outside
accountant.  The Company, at the Company's expense, shall cause the
investment bank or the accountant, as the case may be, to perform the
determinations or calculations and notify the Company and the Holder of the
results no later than five (5) Business Days from the time it receives the
disputed determinations or calculations.  Such investment bank's or
accountant's determination or calculation, as the case may be, shall be binding
upon all parties absent demonstrable error.

     

    (24)         NOTICES;
PAYMENTS.

     

    (a)           Notices.  Whenever
notice is required to be given under this Note, unless otherwise provided
herein, such notice shall be given in accordance with Section 10(f) of the
Securities Purchase Agreement.  The Company shall provide the Holder
with prompt written notice of all actions taken pursuant to this Note, including
in reasonable detail a description of such action and the reason
therefore.  Without limiting the generality of the foregoing, the
Company will give written notice to the Holder (i) immediately upon any
adjustment of the Conversion Price, setting forth in reasonable detail, and
certifying, the calculation of such adjustment and (ii) at least twenty (20)
days prior to the date on which the Company closes its books or takes a record
(A) with respect to any dividend or distribution upon the Common Stock, (B) with
respect to any pro rata subscription offer to holders of Common Stock or (C) for
determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation, provided in each case that such information shall be
made known to the public prior to or in conjunction with such notice being
provided to the Holder.

    
      
         

      

      
        - 19
-

        
          

        

      

      
         

      

    

     

    (b)           Payments.  Whenever
any payment of cash is to be made by the Company to any Person pursuant to this
Note, such payment shall be made in lawful money of the United States of America
by a check drawn on the account of the Company and sent via overnight courier
service to such Person at such address as previously provided to the Company in
writing (which address, in the case of each of the Purchasers, shall initially
be as set forth on the Schedule of Buyers attached to the Securities Purchase
Agreement); provided that the Holder may elect to receive a payment of cash via
wire transfer of immediately available funds by providing the Company with prior
written notice setting out such request and the Holder's wire transfer
instructions.  Whenever any amount expressed to be due by the terms of
this Note is due on any day which is not a Business Day, the same shall instead
be due on the next succeeding day which is a Business Day and, in the case of
any Interest Date which is not the date on which this Note is paid in full, the
extension of the due date thereof shall not be taken into account for purposes
of determining the amount of Interest due on such date.  Any amount of
Principal or other amounts due under the Transaction Documents which is not paid
when due shall result in a late charge being incurred and payable by the Company
in an amount equal to interest on such amount at the rate of ten percent (10%)
per annum from the date such amount was due until the same is paid in full
("Late
Charge").

     

    (25)         CANCELLATION.  After
all Principal, accrued Interest and other amounts at any time owed on this Note
have been paid in full, this Note shall automatically be deemed canceled, shall
be surrendered to the Company for cancellation and shall not be
reissued.

     

    (26)         WAIVER OF
NOTICE.  To the extent permitted by law, the Company hereby
waives demand, notice, protest and all other demands and notices in connection
with the delivery, acceptance, performance, default or enforcement of this Note
and the Securities Purchase Agreement.

     

    (27)         GOVERNING
LAW.  This Note shall be construed and enforced in accordance
with, and all questions concerning the construction, validity, interpretation
and performance of this Note shall be governed by, the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York.  The Company 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, 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 brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law.  In the
event that any provision of this Note is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law.  Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of this
Note.  Nothing contained herein shall be deemed or operate to preclude
the Holder from bringing suit or taking other legal action against the Company
in any other jurisdiction to collect on the Company's obligations to the Holder,
to realize on any collateral or any other security for such obligations, or to
enforce a judgment or other court ruling in favor of the
Holder.  THE COMPANY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A
JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED
HEREBY.

    
      
         

      

      
        - 20
-

        
          

        

      

      
         

      

    

     

    (28)   
     CERTAIN
DEFINITIONS.  For purposes of this Note, the following terms
shall have the following meanings:

     

    (a)           "Additional Closing Date" shall have the
meaning set forth in the Securities Purchase Agreement, which date is the date
the Company initially issued Additional Notes (as defined in the Securities
Purchase Agreement) pursuant to the terms of the Securities Purchase
Agreement.

     

    (b)           "Affiliate" means, with respect
to any Person, any other Person that directly or indirectly controls, is
controlled by, or is under common control with, such Person, it being understood
for purposes of this definition that "control" of a Person means the power
directly or indirectly either to vote 10% or more of the stock having ordinary
voting power for the election of directors of such Person or direct or cause the
direction of the management and policies  of such Person whether by
contract or otherwise.

     

    (c)           "Approved Stock Plan" means any
employee benefit plan which has been approved by the Board of Directors of the
Company, pursuant to which the Company's securities may be issued to any
employee, officer or director for services provided to the Company; provided
that the issuance price, conversion price or exercise price, as the case may be,
may not be less than the Closing Sale Price of the Company's Common Stock on the
date of any such issuance.

     

    (d)           "Bloomberg" means Bloomberg
Financial Markets.

     

    (e)           "Business Day" means any day
other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed.

     

    (f)           "Change of Control" means any
Fundamental Transaction other than (i) any reorganization, recapitalization or
reclassification of the Common Stock in which holders of the Company's voting
power immediately prior to such reorganization, recapitalization or
reclassification continue after such reorganization, recapitalization or
reclassification to hold publicly traded securities and, directly or indirectly,
are, in all material respect, the holders of the voting power of the surviving
entity (or entities with the authority or voting power to elect the members of
the board of directors (or their equivalent if other than a corporation) of such
entity or entities) after such reorganization, recapitalization or
reclassification.

    
      
         

      

      
        - 21
-

        
          

        

      

      
         

      

    

     

    (g)           "Closing Bid Price" and "Closing Sale Price" means, for
any security as of any date, the last closing bid price and last closing trade
price, respectively, for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an extended hours
basis and does not designate the closing bid price or the closing trade price,
as the case may be, then the last bid price or last trade price, respectively,
of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg,
or, if the Principal Market is not the principal securities exchange or trading
market for such security, the last closing bid price or last trade price,
respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if
the foregoing do not apply, the last closing bid price or last trade price,
respectively, of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid
price or last trade price, respectively, is reported for such security by
Bloomberg, the average of the bid prices, or the ask prices, respectively, of
any market makers for such security as reported in the "pink sheets" by Pink
Sheets LLC (formerly the National Quotation Bureau, Inc.).  If the
Closing Bid Price or the Closing Sale Price cannot be calculated for a security
on a particular date on any of the foregoing bases, the Closing Bid Price or the
Closing Sale Price, as the case may be, of such security on such date shall be
the fair market value as mutually determined by the Company and the
Holder.  If the Company and the Holder are unable to agree upon the
fair market value of such security, then such dispute shall be resolved pursuant
to Section 25.  All such determinations to be appropriately adjusted
for any stock dividend, stock split, stock combination, reclassification or
similar transaction during the applicable calculation period.

     

    (h)           "Collateral Agent" shall have
the meaning set forth in the Securities Purchase Agreement.

     

    (i)           "Company Conversion Amount"
means as of any date of determination, the lesser of (i) the Conversion Amount
then remaining under the Note and (ii) the product of (A) Holder Pro Rata Amount
and (B) five percent (5.0%) of Daily Dollar Trading Volume during the applicable
Mandatory Conversion Measuring Period.

     

    (j)           "Contingent Obligation" means,
as to any Person, any direct or indirect liability, contingent or otherwise, of
that Person with respect to any Indebtedness, lease, dividend or other
obligation of another Person if the primary purpose or intent of the Person
incurring such liability, or the primary effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the
holders of such liability will be protected (in whole or in part) against loss
with respect thereto.

     

    (k)           "Convertible Securities" means
any stock or securities (other than Options) directly or indirectly convertible
into or exercisable or exchangeable for Common Stock.

    
      
         

      

      
        - 22
-

        
          

        

      

      
         

      

    

     

    (l)           "Daily Dollar Trading Volume"
means, on any date of determination, the product of (i) the daily trading volume
of the Common Stock as reported by Bloomberg on such Trading Day and (ii) the
Weighted Average Price of the Common Stock on such Trading Day.

     

    (m)           "Eligible Market" means the
Principal Market, The New York Stock Exchange, Inc., the NYSE Amex, The Nasdaq
Global Select Market, The Nasdaq Capital Market or The Nasdaq Global
Market.

     

    (n)           "Equity Conditions" means that
each of the following conditions is satisfied:  (i) on each day during
the period beginning six (6) month prior to the applicable date of determination
and ending on and including the applicable date of determination (the "Equity Conditions Measuring
Period"), either (x) the Registration Statement filed pursuant to the
Registration Rights Agreement shall be effective and available for the resale of
all remaining Registrable Securities in accordance with the terms of the
Registration Rights Agreement and there shall not have been any Grace
Periods (as defined in the Registration Rights Agreement) or (y) all shares
of Common Stock issuable upon conversion of the Notes shall be eligible for sale
without restriction or limitation and without the requirement to be in
compliance with Rule 144(c)(1) and without the need for registration under any
applicable federal or state securities laws; (ii) on each day during the Equity
Conditions Measuring Period, the Common Stock is designated for quotation on the
Principal Market or any other Eligible Market and shall not have been suspended
from trading on such exchange or market (other than suspensions of not more than
two (2) days and occurring prior to the applicable date of determination due to
business announcements by the Company) nor shall delisting or suspension by such
exchange or market been threatened or pending either (A) in writing by such
exchange or market or (B) by falling below the then effective minimum listing
maintenance requirements of such exchange or market; (iii) during the one (1)
year period ending on and including the date immediately preceding the
applicable date of determination, the Company shall have delivered shares of
Common Stock upon conversion of the Notes to the holders on a timely basis as
set forth in Section 3(c)(ii) hereof (and analogous provisions under the Other
Notes); (iv) any applicable shares of Common Stock to be issued in connection
with the event requiring determination may be issued in full without violating
Section 3(d) hereof and the rules or regulations of the Principal Market or any
applicable Eligible Market; (v) the Company shall not have failed to timely make
any payments within five (5) Business Days of when such payment is due pursuant
to any Transaction Document; (vi) during the Equity Conditions Measuring Period,
there shall not have occurred either (A) the public announcement of a pending,
proposed or intended Fundamental Transaction which has not been abandoned,
terminated or consummated, or (B) an Event of Default or (C) an event that with
the passage of time or giving of notice would constitute an Event of Default;
(vii) the Company shall have no knowledge of any fact that would cause (x) the
Registration Statements required pursuant to the Registration Rights Agreement
not to be effective and available for the resale of all remaining Registrable
Securities in accordance with the terms of the Registration Rights Agreement or
(y) any shares of Common Stock issuable upon conversion of the Notes not to be
eligible for sale without restriction or limitation pursuant to Rule 144 and
without the requirement to be in compliance with Rule 144(c)(1) and any
applicable state securities laws; and (viii) the Company otherwise shall not
have breached any material provision, covenant, representation or warranty of
any Transaction Document.

    
      
         

      

      
        - 23
-

        
          

        

      

      
         

      

    

     

    (o)           "Equity Conditions Failure"
means that on any day during the period commencing ten (10) Trading Days prior
to the applicable Mandatory Conversion Notice Date through the applicable
Mandatory Conversion Notice Date, the Equity Conditions have not been satisfied
(or waived in writing by the Holder).

     

    (p)           "Excluded Securities" means the
shares of Common Stock issued or issuable: (i) in connection with any Approved
Stock Plan; provided that the option term, exercise price or similar provisions
of any issuances pursuant to such Approved Stock Plan are not amended, modified
or changed on or after the Subscription Date (ii) upon exercise of the Warrants
or conversion of the Notes or the Initial Notes, and (iii) upon conversion of
any Options or Convertible Securities which are outstanding on the day
immediately preceding the Subscription Date, provided that the terms of such
Options or Convertible Securities are not amended, modified or changed on or
after the Subscription Date.

     

    (q)           "Fundamental Transaction" means
that (A) the Company or any of its Subsidiaries shall, directly or indirectly,
in one or more related transactions, (i) consolidate or merge with or into
(whether or not the Company or any of its Subsidiaries is the surviving
corporation) another Person or Persons, or (ii) sell, assign, transfer, convey
or otherwise dispose of all or substantially all of the properties or assets of
the Company to another Person, or (iii) allow another Person to make a purchase,
tender or exchange offer that is accepted by the holders of more than 50% of the
outstanding shares of Voting Stock of the Company (not including any shares of
Voting Stock of the Company held by the Person or Persons making or party to, or
associated or affiliated with the Persons making or party to, such purchase,
tender or exchange offer), or (iv) consummate a stock purchase agreement or
other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby
such other Person acquires more than the 50% of the outstanding shares of Voting
Stock of the Company (not including any shares of Voting Stock of the Company
held by the other Person or other Persons making or party to, or associated or
affiliated with the other Persons making or party to, such stock purchase
agreement or other business combination), or (v) reorganize, recapitalize or
reclassify the Voting Stock of the Company or (B) any "person" or "group" (as
these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange
Act) is or shall become the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 50% of the aggregate Voting Stock
of the Company.

     

    (r)           "GAAP" means United States
generally accepted accounting principles, consistently applied.

     

    (s)           "Holder Pro Rata Amount" means
a fraction (i) the numerator of which is the Principal amount of this Note on
the Additional Closing Date and (ii) the denominator of which is the aggregate
principal amount of all Notes issued to the initial purchasers pursuant to the
Securities Purchase Agreement on the Additional Closing Date.

    
      
         

      

      
        - 24
-

        
          

        

      

      
         

      

    

    (t)           "Indebtedness" of any Person
means, without duplication (i) all indebtedness for borrowed money, (ii) all
obligations issued, undertaken or assumed as the deferred purchase price of
property or services, including (without limitation) "capital leases" in
accordance with GAAP (other than trade payables entered into in the ordinary
course of business), (iii) all reimbursement or payment obligations with respect
to letters of credit, surety bonds and other similar instruments, (iv) all
obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (v) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with
the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (vi) all monetary obligations under any
leasing or similar arrangement which, in connection with GAAP, consistently
applied for the periods covered thereby, is classified as a capital lease, (vii)
all indebtedness referred to in clauses (i) through (vi) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of
such indebtedness, and (viii) all Contingent Obligations in respect of
indebtedness or obligations of others of the kinds referred to in clauses (i)
through (vii) above.

     

    (u)           "Initial Notes" shall have the
meaning set forth in the Securities Purchase Agreement.

     

    (v)           "Interest Rate" means twenty four
percent (24.0%) per annum, subject to adjustment as set forth in Section
2.

     

    (w)           "Options" means any rights,
warrants or options to subscribe for or purchase shares of Common Stock or
Convertible Securities.

     

    (x)           "Parent Entity" of a Person
means an entity that, directly or indirectly, controls the applicable Person and
whose common stock or equivalent equity security is quoted or listed on an
Eligible Market, or, if there is more than one such Person or Parent Entity, the
Person or Parent Entity with the largest public market capitalization as of the
date of consummation of the Fundamental Transaction.

     

    (y)           "Permitted Indebtedness" means
(i) Indebtedness incurred by the Company that is made expressly subordinate in
right of payment to the Indebtedness evidenced by this Note, as reflected in a
written agreement acceptable to the Required Holders and approved by the
Required Holders in writing, and which Indebtedness does not provide at any time
for (1) the payment, prepayment, repayment, repurchase or defeasance, directly
or indirectly, of any principal or premium, if any, thereon until ninety-one
(91) days after the Maturity Date or later and (2) total interest and fees at a
rate in excess of eight percent (8.00%) per annum, (ii) Indebtedness to trade
creditors incurred in the ordinary course of business; (iii) Indebtedness
secured by Permitted Liens described in clauses (iv) and (v) of the definition
of Permitted Liens; (iv) any other
indebtedness listed on Schedule 28(gg) attached hereto, and (v) extensions,
refinancings and renewals of any items in clauses (i) through (iv) above,
provided that the principal amount is not increased or the terms modified to
impose more burdensome terms upon the Company or its Subsidiary, as the case may
be.

    
      
         

      

      
        - 25
-

        
          

        

      

      
         

      

    

     

    (z)           "Permitted Liens" means (i) any
Lien for taxes not yet due or delinquent or being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with GAAP, (ii) any statutory Lien arising in the ordinary course of
business by operation of law with respect to a liability that is not yet due or
delinquent, (iii) any Lien created by operation of law, such as materialmen's
liens, mechanics' liens and other similar liens, arising in the ordinary course
of business with respect to a liability that is not yet due or delinquent or
that are being contested in good faith by appropriate proceedings, (iv) Liens
securing the Company's obligations under the Notes and the Initial Notes; (v)
Liens (A) upon or in any equipment acquired or held by the Company or any of its
Subsidiaries to secure the purchase price of such equipment or indebtedness
incurred solely for the purpose of financing the acquisition or lease of such
equipment, or (B) existing on such equipment at the time of its acquisition,
provided that the Lien is confined solely to the property so acquired and
improvements thereon, and the proceeds of such equipment; (vi) Liens incurred in
connection with the extension, renewal or refinancing of the indebtedness
secured by Liens of the type described in clauses (i) and (v) above, provided
that any extension, renewal or replacement Lien shall be limited to the property
encumbered by the existing Lien and the principal amount of the Indebtedness
being extended, renewed or refinanced does not increase, (vii) leases or
subleases and licenses and sublicenses granted to others in the ordinary course
of the Company's business, not interfering in any material respect with the
business of the Company and its Subsidiaries taken as a whole, (viii) Liens
in favor of customs and revenue authorities arising as a matter of law to secure
payments of custom duties in connection with the importation of goods, and (ix)
Liens arising from judgments, decrees or attachments in circumstances not
constituting an Event of Default under Section 3(a)(ix) and (xii) Liens
described on Schedule 28(hh) attached hereto, but not the extension of coverage
thereof to other property or assets (other than to replacements, substitutions,
attachments, accessions and proceeds thereof, to the extent covered
thereby).

     

    (aa)         "Person" means an individual, a
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity and a government or any
department or agency thereof.

     

    (bb)         "Principal Market" means the
OTC Bulletin Board.

     

    (cc)         "Redemption Notices" means,
collectively, the Event of Default Redemption Notices, the Change of Control
Redemption Notices and the Company Option Redemption Notice, and each of the
foregoing, individually, a Redemption Notice.

     

    (dd)         "Redemption Premium" means (i)
in the case of the Events of Default described in Section 4(a)(i) - (vi) and
(ix) - (xv) or, in the case of (xvi), if such Event of Default is an Event of
Default described in Section 4(a)(i) - (vi) and (ix) - (vx) of such Other Note),
125% or (ii) in the case of the Events of Default described in Section 4(a)(vii)
- (viii) or, in the case of (xvi), if such Event of Default is an Event of
Default described in Section 4(a)(vii) - (viii) of such Other Note),
100%.

     

    (ee)         "Redemption Prices" means,
collectively, the Event of Default Redemption Price, Change of Control
Redemption Price and the Company Optional Redemption Price, and each of the
foregoing, individually, a Redemption Price.

    
      
         

      

      
        - 26
-

        
          

        

      

      
         

      

    

     

    (ff)           "Registration Rights Agreement"
means that certain registration rights agreement dated as of July 16, 2010 by
and among the Company and the initial holders of the Initial Notes relating to,
among other things, the registration of the resale of the Common Stock issuable
upon conversion of the Initial Notes and exercise of the Warrants.

     

    (gg)         "Related Fund" means, with
respect to any Person, a fund or account managed by such Person or an Affiliate
of such Person.

     

    (hh)         "Required Holders" means the
holders of Notes representing at least a majority of the aggregate principal
amount of the Notes then outstanding.

     

    (ii)           "SEC" means the United States
Securities and Exchange Commission.

     

    (jj)           "Securities Purchase Agreement"
means that certain amended and restated securities purchase agreement dated as
of the Subscription Date by and among the Company and the initial holders of the
Notes pursuant to which the Company issued, on the Additional Closing Date, the
Notes.

     

    (kk)         "Subscription Date" means
August __, 2010.

     

    (ll)           "Successor Entity" means the
Person, which may be the Company, formed by, resulting from or surviving any
Fundamental Transaction or the Person with which such Fundamental Transaction
shall have been made, provided that if such Person is not a publicly traded
entity whose common stock or equivalent equity security is quoted or listed for
trading on an Eligible Market, Successor Entity shall mean such Person's Parent
Entity.

     

    (mm)       "Trading Day" means any day on
which the Common Stock is traded on the Principal Market, or, if the Principal
Market is not the principal trading market for the Common Stock, then on the
principal securities exchange or securities market on which the Common Stock is
then traded; provided that "Trading Day" shall not include any day on which the
Common Stock is scheduled to trade on such exchange or market for less than 4.5
hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market
does not designate in advance the closing time of trading on such exchange or
market, then during the hour ending at 4:00:00 p.m., New York
Time).

     

    (nn)         “Transaction Document” has the
meaning set forth in the Securities Purchase Agreement.

     

    (oo)         "Voting Stock" of a Person
means capital stock of such Person of the class or classes pursuant to which the
holders thereof have the general voting power to elect, or the general power to
appoint, at least a majority of the board of directors, managers or trustees of
such Person (irrespective of whether or not at the time capital stock of any
other class or classes shall have or might have voting power by reason of the
happening of any contingency).

    
      
         

      

      
        - 27
-

        
          

        

      

      
         

      

    

     

    (pp)         "Warrants" has the meaning
ascribed to such term in the Securities Purchase Agreement, and shall include
all warrants issued in exchange therefor or replacement thereof.

     

    (qq)         "Weighted Average Price" means,
for any security as of any date, the dollar volume-weighted average price for
such security on the Principal Market during the period beginning at 9:30:01
a.m., New York Time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
Time (or such other time as the Principal Market publicly announces is the
official close of trading) as reported by Bloomberg through its "Volume at
Price" functions, or, if the foregoing does not apply, the dollar
volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at
9:30:01 a.m., New York Time (or such other time as such market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
Time (or such other time as such market publicly announces is the official close
of trading) as reported by Bloomberg, or, if no dollar volume-weighted average
price is reported for such security by Bloomberg for such hours, the average of
the highest closing bid price and the lowest closing ask price of any of the
market makers for such security as reported in the "pink sheets" by Pink Sheets
LLC (formerly the National Quotation Bureau, Inc.).  If the Weighted
Average Price cannot be calculated for a security on a particular date on any of
the foregoing bases, the Weighted Average Price of such security on such date
shall be the fair market value as mutually determined by the Company and the
Holder.  If the Company and the Holder are unable to agree upon the
fair market value of such security, then such dispute shall be resolved pursuant
to Section 25.  All such determinations to be appropriately adjusted
for any stock dividend, stock split, stock combination, reclassification or
similar transaction during the applicable calculation period.

     

    (29)         DISCLOSURE. Upon
receipt or delivery by the Company of any notice in accordance with the terms of
this Note, unless the Company has in good faith determined that the matters
relating to such notice do not constitute material, nonpublic information
relating to the Company or its Subsidiaries, the Company shall within one (1)
Business Day after any such receipt or delivery publicly disclose such material,
nonpublic information on a Current Report on Form 8-K or
otherwise.  In the event that the Company believes that a notice
contains material, nonpublic information relating to the Company or its
Subsidiaries, the Company so shall indicate to such Holder contemporaneously
with delivery of such notice, and in the absence of any such indication, the
Holder shall be allowed to presume that all matters relating to such notice do
not constitute material, nonpublic information relating to the Company or its
Subsidiaries.

     

    [Signature
Page Follows]

    
      
         

      

      
        - 28
-

        
          

        

      

      
         

      

    

    

    IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the
Issuance Date set out above.

    

    
      
        	
                SOUTHPEAK
      INTERACTIVE CORPORATION

              
	 
      	 
      
	
                By:

              	
                  

              
	 
      	
                Name:  Reba
      L. McDermott

              
	 
      	
                Title:  Chief
      Financial Officer

              

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    EXHIBIT
I

    

    SOUTHPEAK
INTERACTIVE CORPORATION

    CONVERSION
NOTICE

     

    Reference
is made to the Senior Secured Convertible Note (the "Note") issued to the
undersigned by SouthPeak Interactive Corporation (the "Company").  In
accordance with and pursuant to the Note, the undersigned hereby elects to
convert the Conversion Amount (as defined in the Note) of the Note indicated
below into shares of Common Stock par value $0.0001 per share (the "Common Stock") of the Company,
as of the date specified below.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      	
                                                                              Date
      of Conversion: 

                                                                            	 
      

                                                                       

                                                                      
                                                                        	
                                                                                Aggregate
      Conversion Amount to be converted:  

                                                                              	 
      

                                                                      

                                                                       

                                                                      
                                                                        	
                                                                                Please
      confirm the following information:

                                                                              

                                                                         

                                                                        
                                                                          	
                                                                                  Conversion
      Price:

                                                                                	 
      

                                                                           

                                                                          
                                                                            	
                                                                                    Number
      of shares of Common Stock to be issued:

                                                                                  	 
      

                                                                             

                                                                            
                                                                              	
                                                                                      Please
      issue the Common Stock into which the Note is being converted in the
      following name and to the following address:

                                                                                    
	 	 
	
                                                                                      Issue
      to:

                                                                                    	 
      
	 	 
	 
      	 
      
	 	 
	 
      	 
      

                                                                               

                                                                              
                                                                                
                                                                                  	
                                                                                          Facsimile
      Number:

                                                                                        	 
      

                                                                                

                                                                                 

                                                                                
                                                                                  
                                                                                    	
                                                                                            Authorization:

                                                                                          	 
      

                                                                                  

                                                                                

                                                                                 

                                                                                
                                                                                  	
                                                                                          By:

                                                                                        	 
      

                                                                                

                                                                                 

                                                                                
                                                                                  
                                                                                    	
                                                                                            Title:

                                                                                          	 
      

                                                                                  

                                                                                   

                                                                                  
                                                                                    	
                                                                                            Dated:

                                                                                          	 
      

                                                                                     

                                                                                    
                                                                                      	
                                                                                              Account
      Number:

                                                                                            	 
      
	
                                                                                                (if
      electronic book entry transfer)

                                                                                            	 
      

                                                                                       

                                                                                      
                                                                                        	
                                                                                                Transaction
      Code Number:

                                                                                              	 
      
	
                                                                                                  (if
      electronic book entry transfer)

                                                                                              	 
      

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    ACKNOWLEDGMENT

     

    The
Company hereby acknowledges this Conversion Notice and hereby directs American
Stock Transfer & Trust Company, LLC to issue the above indicated number of
shares of Common Stock in accordance with the Transfer Agent Instructions dated
_______________ from the Company and acknowledged and agreed to by American
Stock Transfer & Trust Company, LLC.

    

    
      
        
          	
                  SOUTHPEAK
      INTERACTIVE CORPORATION

                
	 
      	 
      
	
                  By:

                	 
      
	 
      	
                  Name:

                
	 
      	
                  Title:

                

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Schedule
28(gg)

    Permitted
Indebtedness

    

    Indebtedness
to Rosenthal & Rosenthal, Inc., pursuant to the Factoring Agreement, dated
as of July 7, 2010, by and between Rosenthal & Rosenthal, Inc. and the
Company.

    

    Indebtedness
to SouthWest Securities FSB, a Federal Savings Bank, pursuant to the Loan
Agreement, dated January 28, 2009, by and between SouthWest Securities FSB and
the Company.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Schedule
28(hh)

    Permitted
Liens

    

    Lien in
favor of Southwest Securities, FSB, as evidenced by U.C.C. Financing
Statement  #2009 0896628 filed with Delaware Department of State on
March 20, 2009.

    

    Lien in
favor of Rosenthal & Rosenthal, Inc., as evidenced by U.C.C. Financing
Statement #2010 2421331 filed with Delaware Department of State on July 12,
2010.AMENDED
AND RESTATED SECURITIES PURCHASE AGREEMENT

     

    AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT
(the "Agreement"), dated
as of August 31, 2010, by and among SouthPeak Interactive Corporation, a
Delaware corporation, with headquarters located at 2900 Polo Parkway,
Midlothian, Virginia 23113 (the "Company"), and the investors
listed on the Schedule of Buyers attached hereto (individually, a "Buyer" and collectively, the
"Buyers").

     

    WHEREAS:

     

    A.     The
Company and each Buyer is executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(2) of the
Securities Act of 1933, as amended (the "1933 Act"), and Rule 506 of
Regulation D ("Regulation
D") as promulgated by the United States Securities and Exchange
Commission (the "SEC")
under the 1933 Act.

     

    B.      The
Company has previously authorized a new series of senior secured convertible
notes of the Company, in the form attached hereto as Exhibit A-1 (the
"Initial Notes"), which Initial Notes
shall be convertible into the Company's common stock, par value $0.0001 per
share (the "Common
Stock"), in accordance with the terms of the Initial Notes.

     

    C.      The
Company has authorized an additional new series of senior secured convertible
notes of the Company, in the form attached hereto as Exhibit A-2 (the
“Additional Notes” and,
together with the Initial Notes, the “Notes”), which Additional
Notes shall be convertible into Common Stock, in accordance with the terms of
the Additional Notes.

     

    D.      The
Company entered into a Securities Purchase Agreement dated as of July 16, 2010
(as amended by the Waiver and First Amendment to Securities Purchase Agreement
dated as of August 17, 2010, the “Original Agreement”) with the
Buyers set forth therein, pursuant to which each Buyer purchased, and the
Company sold, upon the terms and conditions stated in the Original Agreement,
(i) that aggregate principal amount of the Initial Notes set forth opposite such
Buyer's name in column (3) on the Schedule of Buyers attached hereto (which
aggregate amount for all Buyers together shall be $5,500,000 (as converted,
collectively, the "Initial
Conversion Shares"), (ii) warrants, in substantially the form attached
hereto as Exhibit
B-1 (the "Series
A Warrants"), to
acquire that number of shares of Common Stock set forth opposite such Buyer's
name in column (4) on the Schedule of Buyers, and (iii) warrants in
substantially the form attached hereto as Exhibit B-2 (the
"Series B Warrants") to
acquire that number of shares of Common Stock set forth opposite such Buyer's
name in column (5) on the Schedule of Buyers (collectively with the Series A
Warrants, the "Warrants") (as exercised,
collectively, the "Warrant
Shares").

     

    E.      The
Company and each Buyer wish to amend and restate the Original Agreement in its
entirety to incorporate the issuance of the Additional Notes, and in connection
therewith, each Buyer wishes to purchase, and the Company wishes to sell, upon
the terms and conditions stated in this Agreement that aggregate principal
amount of the Additional Notes set forth opposite such Buyer’s name in Column
(7) on the Schedule of Buyers attached hereto, which aggregate amount for all
Buyers together shall be $2,000,000 (as converted, collectively the “Additional Conversion Shares”
and, together with the Initial Conversion Shares, the “Conversion
Shares”).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    F.      Contemporaneously
with the execution and delivery of the Original Agreement, the parties hereto
executed and delivered a Registration Rights Agreement, substantially in the
form attached hereto as Exhibit C (as
amended, the "Registration
Rights Agreement") pursuant to which the Company has agreed to provide
certain registration rights with respect to Registrable Securities (as defined
in the Registration Rights Agreement) under the 1933 Act and the rules and
regulations promulgated thereunder, and applicable state securities
laws.

     

    G.      The
Notes, the Conversion Shares, the Warrants and the Warrant Shares collectively
are referred to herein as the "Securities".

     

    H.      The Notes will rank senior to all
outstanding and future indebtedness of the Company, other than Permitted
Indebtedness (as defined in the Notes), and will be secured by a first priority
perfected security interest in all of the assets of the Company other than
collateral secured pursuant to that certain Factoring Agreement, dated July 7,
2010, by and between Rosenthal & Rosenthal, Inc. and the Company, and the
stock, equity interests and assets of each of the Company's subsidiaries, as
evidenced by certain security documents, including without limitation (i) a
pledge and security agreement, in the form attached hereto as Exhibit
D-1 (as amended or
modified from time to time in accordance with its terms, the "Security
Agreement") and (ii)
guarantees of certain Subsidiaries of the Company in the form attached hereto as
Exhibit
D-2 (as amended or
modified in accordance with its terms, the "Guarantees" and, together with the Security
Agreement and ancillary documents related to the Security Agreement and the
Guarantees, collectively the "Security
Documents").

     

    NOW, THEREFORE, the Company
and each Buyer hereby agree to amend and restate the Original Agreement in its
entirety as follows:

     

    
      	
               
      

            	
              1.

            	
              PURCHASE AND SALE
      OF NOTES AND WARRANTS.

            

    

     

    (a) Purchase of Notes and
Warrants.  Subject to the satisfaction (or waiver) of the
conditions set forth in Sections 6 and 7 below, the Company shall issue and sell
to each Buyer, and each Buyer severally, but not jointly, agrees to purchase
from the Company (i) on the Initial Closing Date (as defined below) a principal
amount of Initial Notes as is set forth opposite such Buyer's name in column (3)
on the Schedule of Buyers, along with Series A
Warrants to acquire up to that number of Warrant Shares as is set forth opposite
such Buyer's name in column (4) on the Schedule of Buyers and Series B Warrants
to acquire up to that number of Warrant Shares as is set forth opposite such
Buyer's name in column (5) on the Schedule of Buyers (the " Initial Closing") and (ii) on the
Additional Closing Date (as defined below) a principal amount of Additional
Notes as is set forth opposite such Buyer’s name in column (7) on the Schedule
of Buyers (the “Additional
Closing”; each of the Initial Closing and the Additional Closing, a
“Closing”).  The
Initial Closing shall occur on the Initial Closing Date and the Additional
Closing shall occur on the Additional Closing Date, in each case at the offices
of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New York
10022.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (b) Purchase
Price.  (i)  The aggregate purchase price for the
Initial Notes and related Warrants to be purchased by each Buyer at the Initial
Closing shall be the amount set forth opposite such Buyer’s name in column (6)
of the Schedule of Buyers (the "Initial Purchase
Price").  The purchase price for the Additional Notes to be
purchased by each Buyer at the Additional Closing shall be the amount set forth
opposite such Buyer’s name in column (8) of the Schedule of Buyers (the “Additional Purchase Price”
and, together with the Initial Purchase Price, the “Purchase
Price”).  Each Buyer shall pay $1,000 for each $1,000 of
principal amount of Notes and related Warrants, if any, to be purchased by such
Buyer at the applicable Closing.

     

    (ii) The Buyers and the Company agree
that the Initial Notes and the Warrants constitute an "investment unit" for
purposes of Section 1273(c)(2) of the Internal Revenue Code of 1986, as amended
(the "Code").  The Buyers
and the Company mutually agree that the allocation of the issue price of such
investment unit between the Initial Notes and the Warrants in accordance with
Section 1273(c)(2) of the Code and Treasury Regulation Section 1.1273-2(h) shall
be an aggregate amount of $1,627,031 allocated to the Warrants and the balance
of the Initial Purchase Price allocated to the Initial Notes, and neither the
Buyers nor the Company shall take any position inconsistent with such allocation
in any tax return or in any judicial or administrative proceeding in respect of
taxes.

     

    (c)           Closing
Date.  The date and time of the Initial Closing (the "Initial Closing Date") was 10:00 a.m.,
New York City time, on July 19, 2010.  The date and time of the
Additional Closing (the “Additional Closing Date”)
shall be 10:00 a.m., New York City time, on the date hereof (or such other date
and time as is mutually agreed to by the Company and each Buyer) after
notification of satisfaction (or waiver) of the conditions to the Additional
Closing set forth in Sections 6(b) and 7(b) below.

     

    (d)           Form of
Payment.  On each Closing Date, (i) each Buyer shall pay its
respective Initial Purchase Price or Additional Purchase Price, as applicable
(less in the case of CNH Diversified Opportunities Master Account, L.P. (“CNH”), the amounts withheld
pursuant to Section 4(g)) to the Company for the Notes and Warrants, if any, to
be issued and sold to such Buyer at such Closing, by wire transfer of
immediately available funds in accordance with the Company's written wire
instructions, and (ii) the Company shall deliver to each Buyer the Notes
(allocated in the principal amounts as such Buyer shall request) which such
Buyer is then purchasing hereunder along with the Warrants, if any, (allocated
in the amounts as such Buyer shall request) which such Buyer is purchasing, in
each case duly executed on behalf of the Company and registered in the name of
such Buyer or its designee.

     

    
      	
               
      

            	
              2.

            	
              BUYER'S
      REPRESENTATIONS AND
WARRANTIES.

            

    

     

    Each
Buyer, severally and not jointly, represents and warrants with respect to only
itself that, as of the date of the Original Agreement, the date hereof, and as
of the Initial Closing Date and the Additional Closing Date:

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (a)           No Public Sale or
Distribution.  Such Buyer is (i) acquiring the Notes and the
Warrants and (ii) upon conversion of the Notes and exercise of the Warrants will
acquire the Conversion Shares issuable upon conversion of the Notes and the
Warrant Shares issuable upon exercise of the Warrants (other than Warrant Shares
surrendered in a Cashless Exercise (as defined in the Warrants) in the ordinary
course of business for its own account and not with a view towards, or for
resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempted under the 1933 Act and such Buyer does
not have a present arrangement to effect any distribution of the Securities to
or through any person or entity; provided, however, that by
making the representations herein, such Buyer does not agree to hold any of the
Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act.  Such Buyer
is acquiring the Securities hereunder in the ordinary course of its
business.  Such Buyer does not presently have any agreement or
understanding, directly or indirectly, with any Person (as defined in Section
3(s)) to distribute any of the Securities.

     

    (b)           Accredited Investor
Status.  Such Buyer is an "accredited investor" as that term is
defined in Rule 501(a) of Regulation D.

     

    (c)           Reliance on
Exemptions.  Such Buyer understands that the Securities are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of such Buyer
to acquire the Securities.

     

    (d)           Information.  Such
Buyer and its advisors, if any, have been furnished with all materials relating
to the business, finances and operations of the Company and materials relating
to the offer and sale of the Securities which have been requested by such
Buyer.  Such Buyer and its advisors, if any, have been afforded the
opportunity to ask questions of the Company.  Neither such inquiries
nor any other due diligence investigations conducted by such Buyer or its
advisors, if any, or its representatives shall modify, amend or affect such
Buyer's right to rely on the Company's representations and warranties contained
herein.  Such Buyer understands that its investment in the Securities
involves a high degree of risk and is able to afford a complete loss of such
investment.  Such Buyer has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment decision
with respect to its acquisition of the Securities.

     

    (e)           No Governmental
Review.  Such Buyer understands that no United States federal
or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities or the fairness or
suitability of the investment in the Securities nor have such authorities passed
upon or endorsed the merits of the offering of the Securities.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (f)           Transfer or
Resale.  Such Buyer understands that except as provided in the
Registration Rights Agreement: (i) the Securities have not been and are not
being registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) such Buyer shall have delivered to the Company an
opinion of counsel, in a generally acceptable form, to the effect that such
Securities to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration, or (C) such Buyer
provides the Company with reasonable assurance that such Securities can be sold,
assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the
1933 Act, as amended, (or a successor rule thereto) (collectively, "Rule 144"); (ii) any sale of
the Securities made in reliance on Rule 144 may be made only in accordance with
the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of
the Securities under circumstances in which the seller (or the Person through
whom the sale is made) may be deemed to be an underwriter (as that term is
defined in the 1933 Act) may require compliance with some other exemption under
the 1933 Act or the rules and regulations of the SEC thereunder; and (iii)
neither the Company nor any other Person is under any obligation to register the
Securities under the 1933 Act or any state securities laws or to comply with the
terms and conditions of any exemption thereunder.  Notwithstanding the
foregoing, the Securities may be pledged in connection with a bona fide margin
account or other loan or financing arrangement secured by the Securities and
such pledge of Securities shall not be deemed to be a transfer, sale or
assignment of the Securities hereunder, and no Buyer effecting a pledge of
Securities shall be required to provide the Company with any notice thereof or
otherwise make any delivery to the Company pursuant to this Agreement or any
other Transaction Document (as defined in Section 3(b)), including, without
limitation, this Section 2(f); provided, that in order to make any sale,
transfer or assignment of Securities, such Buyer and its pledgee makes such
disposition in accordance with or pursuant to a registration statement or an
exemption under the 1933 Act.

     

    (g)           Legends.  Such
Buyer understands that the certificates or other instruments representing the
Notes and the Warrants and, until such time as the resale of the Conversion
Shares and the Warrant Shares have been registered under the 1933 Act as
contemplated by the Registration Rights Agreement, the stock certificates
representing the Conversion Shares and the Warrant Shares, except as set forth
below, shall bear any legend as required by the "blue sky" laws of any state and
a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):

     

    [NEITHER THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH
THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE] HAVE BEEN][THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    The
legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped or issue to such holder by electronic delivery at the applicable balance
account at DTC, if, unless otherwise required by state securities laws, (i) such
Securities are registered for resale under the 1933 Act, (ii) in connection with
a sale, assignment or other transfer, such holder provides the Company with an
opinion of counsel, in a generally acceptable form, to the effect that such
sale, assignment or transfer of the Securities may be made without registration
under the applicable requirements of the 1933 Act and that such legend is no
longer required, or (iii) such holder provides the Company with reasonable
assurances that the Securities can be sold, assigned or transferred pursuant to
Rule 144 or Rule 144A.  The Company shall be responsible for the fees
of its transfer agent and all DTC fees associated with such
issuance.

    

    (h)           Validity;
Enforcement.  This Agreement, the Registration Rights Agreement
and the Security Documents to which such Buyer is a party have been duly and
validly authorized, executed and delivered on behalf of such Buyer and shall
constitute the legal, valid and binding obligations of such Buyer enforceable
against such Buyer in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.

     

    (i)           No
Conflicts.  The execution, delivery and performance by such
Buyer of this Agreement, the Registration Rights Agreement and the Security
Documents to which such Buyer is a party and the consummation by such Buyer of
the transactions contemplated hereby and thereby will not (i) result in a
violation of the organizational documents of such Buyer or (ii) conflict with,
or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which such Buyer is a party, or (iii) result in a violation of any
law, rule, regulation, order, judgment  or decree (including federal
and state securities laws) applicable to such Buyer, except in the case of
clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations
which would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of such Buyer to perform its
obligations hereunder.

     

    (j)           Residency.  Such
Buyer is a resident of that jurisdiction specified below its address on the
Schedule of Buyers.

     

    (k)           Organization.  Such
Buyer is an entity duly organized and validly existing in good standing under
the laws of the jurisdiction in which it is formed, and has the requisite power
and authority to enter into and perform its obligations under this Agreement and
the other Transaction Documents to which it is a party and otherwise to carry
out its obligations hereunder and thereunder.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              3.

            	
              REPRESENTATIONS AND
      WARRANTIES OF THE COMPANY.

            

    

     

    The
Company represents and warrants to each of the Buyers that, as of the date of
the Original Agreement (as such representations and warranties are qualified by
reference to the schedules attached to the Original Agreement), the date hereof
(as such representations and warranties are qualified by reference to the
schedules attached to this Agreement), and as of the Initial Closing Date and
the Additional Closing Date:

     

    (a)           Organization and
Qualification.  Except as set forth on Schedule
3(a)(i),  each of the Company and its "Subsidiaries" (which for
purposes of this Agreement means any entity in which the Company, directly or
indirectly, owns any of the capital stock or holds an equity or similar
interest) are entities duly organized and validly existing in good standing
under the laws of the jurisdiction in which they are formed, and have the
requisite power and authorization to own their properties and to carry on their
business as now being conducted.  Each of the Company and its
Subsidiaries is duly qualified as a foreign entity to do business and is in good
standing in every jurisdiction in which its ownership of property or the nature
of the business conducted by it makes such qualification necessary, except to
the extent that the failure to be so qualified or be in good standing would not
have a Material Adverse Effect.  As used in this Agreement, "Material Adverse Effect" means
any material adverse effect on the business, properties, assets, operations,
results of operations, condition (financial or otherwise) or prospects of the
Company and its Subsidiaries, individually or taken as a whole, or on the
transactions contemplated hereby and the other Transaction Documents or by the
agreements and instruments to be entered into in connection herewith or
therewith, or on the authority or ability of the Company to perform its
obligations under the Transaction Documents (as defined below).  The
Company has no Subsidiaries except as set forth on Schedule
3(a)(ii).

     

    (b)           Authorization; Enforcement;
Validity.  The Company has the requisite corporate power and
authority to enter into and perform its obligations under the Original
Agreement, this Agreement, the Notes, the Registration Rights Agreement, the
Security Documents, the Irrevocable Transfer Agent Instructions (as defined in
Section 5), the Warrants, the Lock-Up Agreements (as defined below) and each of
the other agreements entered into by the parties hereto in connection with the
transactions contemplated by this Agreement (collectively, the "Transaction Documents") and to
issue the Securities in accordance with the terms hereof and
thereof.  The execution and delivery of the Transaction Documents by
the Company and the consummation by the Company of the transactions contemplated
hereby and thereby, including, without limitation, the issuance of the Notes and
the Warrants, the reservation for issuance and the issuance of the Conversion
Shares issuable upon conversion of the Notes, the reservation for the issuance
of Warrant Shares issuable upon exercise of the Warrants and the granting of a
security interest in the Collateral (as defined in the Security Documents) have
been duly authorized by the Company's Board of Directors and other than (i) the
filing of appropriate UCC financing statements with the appropriate states and
other authorities pursuant to the Security Agreement, (ii) appropriate filings
with the United States Patent and Trademark Office, (iii) the filing of a Form D
pursuant to Regulation D under the 1933 Act and any required notices or filings
under applicable state securities or Blue Sky laws of the United States ("Blue Sky Laws") with respect
to the transactions contemplated hereby, (iv) the filing with the SEC of one or
more Registration Statements in accordance with the requirements of the
Registration Rights Agreement and (v) as contemplated pursuant to Section 4(m)
hereof, no further filing, consent or authorization is required by the Company,
its Board of Directors or its stockholders.  This Agreement and the
other Transaction Documents have been duly executed and delivered by the
Company, and constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    (c)           Issuance of
Securities.  The issuance of the Notes and the Warrants are
duly authorized and, upon issuance in accordance with the terms hereof, shall be
validly issued and free from all taxes, liens and charges with respect to the
issue thereof.  As of the Initial Closing, subject to the provisions
of Section 4(m) hereof, a number of shares of Common Stock shall have been duly
authorized and reserved for issuance which equals or exceeds 130% of the sum of
the maximum number of shares of Common Stock (i) issuable upon conversion of the
Initial Notes and (ii) upon exercise of the Warrants (without taking into
account any limitations on the conversion of the Initial Notes or exercise of
the Warrants set forth in the Initial Notes and Warrants,
respectively).  Upon conversion or payment in accordance with the
Notes or exercise in accordance with the Warrants, as the case may be, the
Conversion Shares and the Warrant Shares, respectively, will be validly issued,
fully paid and nonassessable and free from all preemptive or similar rights,
taxes, liens and charges with respect to the issue thereof, with the holders
being entitled to all rights accorded to a holder of Common
Stock.  Assuming the accuracy of the representations and warranties
set forth in Section 2 of this Agreement, the offer and issuance by the Company
of the Securities is exempt from registration under the 1933 Act.

     

    (d)           No
Conflicts.  The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance of the Notes and the Warrants, the granting of a security interest in
the Collateral and, subject to the provisions of Section 4(m) hereof,
reservation for issuance and issuance of the Conversion Shares and the Warrant
Shares) will not (i) result in a violation of any certificate of incorporation,
certificate of formation, any certificate of designations or other constituent
documents of the Company or any of its Subsidiaries, any capital stock of the
Company or any of its Subsidiaries or the bylaws of the Company or any of its
Subsidiaries or (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) in any respect
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its Subsidiaries is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including foreign, federal and
state securities laws and regulations and the rules and regulations of The OTC
Bulletin Board (the "Principal
Market") applicable to the Company or any of its Subsidiaries or by which
any property or asset of the Company or any of its Subsidiaries is bound or
affected, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (e)           Consents.  Except
for the filing of a Form D pursuant to Regulation D under the 1933 Act and any
required notices or filings under applicable Blue Sky Laws, neither the Company
nor any of its Subsidiaries is required to obtain any consent, authorization or
order of, or make any filing or registration with, any court, governmental
agency or any regulatory or self-regulatory agency or any other Person in order
for it to execute, deliver or perform any of its obligations under or
contemplated by the Transaction Documents, in each case in accordance with the
terms hereof or thereof.  All consents, authorizations, orders,
filings and registrations which the Company is required to obtain pursuant to
the preceding sentence have been obtained or will be effected on or prior to
each applicable Closing Date, except for the filing of Form D and any required
notices or filings under applicable Blue Sky Laws.  The Company and
its Subsidiaries are unaware of any facts or circumstances that could reasonably
be expected to prevent the Company from obtaining or effecting any of the
registration, application or filings pursuant to the preceding
sentence.  The Company is not in violation of the listing requirements
of the Principal Market and has no knowledge of any facts that could reasonably
be expected to lead to delisting or suspension of the Common Stock in the
foreseeable future.

     

    (f)           Acknowledgment Regarding
Buyer's Purchase of Securities.  The Company acknowledges and
agrees that each Buyer is acting solely in the capacity of arm's length
purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby and that, other than Terry Phillips, no Buyer is
(i) an officer or director of the Company or any of its Subsidiaries, (ii) an
"affiliate" of the Company or any of its Subsidiaries (as defined in Rule 144)
or (iii) to the knowledge of the Company, a "beneficial owner" of more than 10%
of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended (the "1934 Act")).  The
Company further acknowledges that no Buyer is acting as a financial advisor or
fiduciary of the Company or any of its Subsidiaries (or in any similar capacity)
with respect to the Transaction Documents and the transactions contemplated
hereby and thereby, and any advice given by a Buyer or any of its
representatives or agents in connection with the Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental to such
Buyer's purchase of the Securities.  The Company further represents to
each Buyer that the Company's decision to enter into the Transaction Documents
has been based solely on the independent evaluation by the Company and its
representatives.

     

    (g)           No General Solicitation;
Placement Agent’s and Financial Advisor's Fees.  Neither the
Company, nor any of its Subsidiaries or affiliates, nor any Person acting on its
or their behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with the offer or
sale of the Securities.  The Company shall be responsible for the
payment of any placement agent’s fees, financial advisory fees, or brokers'
commissions (other than for persons engaged by any Buyer or its investment
advisor) relating to or arising out of the transactions contemplated
hereby.  The Company shall pay, and hold each Buyer harmless against,
any liability, loss or expense (including, without limitation, attorney's fees
and out-of-pocket expenses) arising in connection with any such
claim.  The Company acknowledges that it has engaged Roth Capital
Partners LLC as placement agent for the Initial Notes and Warrants and as
financial advisor (the "Financial Advisor") in
connection with the sale of the Securities.  Other than the Financial
Advisor, neither the Company nor any of its Subsidiaries has engaged any agent
or advisor in connection with the sale of the Securities.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (h)           No Integrated
Offering.  None of the Company, its Subsidiaries, any of their
affiliates, and any Person acting on 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 require registration of any of the
Securities under the 1933 Act, whether through integration with prior offerings
or otherwise, or cause this offering of the Securities to require the approval
of stockholders of the Company for purposes of the 1933 Act or any applicable
stockholder approval provisions, including, without limitation, under the rules
and regulations of any exchange or automated quotation system on which any of
the securities of the Company are listed or designated.  None of the
Company, its Subsidiaries, their affiliates and any Person acting on their
behalf will take any action or steps referred to in the preceding sentence that
would require registration of any of the Securities under the 1933 Act or cause
the offering of the Securities to be integrated with other offerings for
purposes of any such applicable stockholder approval provisions.

     

    (i)           Dilutive
Effect.  The Company understands and acknowledges that the
number of Conversion Shares issuable upon conversion of the Initial Notes and
the Warrant Shares issuable upon exercise of the Warrants will increase in
certain circumstances.  The Company further acknowledges that its
obligation to issue Conversion Shares upon conversion of the Notes in accordance
with this Agreement and the Notes and its obligation to issue the Warrant Shares
upon exercise of the Warrants in accordance with this Agreement and the Warrants
is, in each case, is absolute and unconditional regardless of the dilutive
effect that such issuance may have on the ownership interests of other
stockholders of the Company.

     

    (j)           Application of Takeover
Protections; Rights Agreement.  The Company and its 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 Certificate of Incorporation or the laws of
the State of Delaware which is or could become applicable to any Buyer as a
result of the transactions contemplated by this Agreement, including, without
limitation, the Company's issuance of the Securities and any Buyer's ownership
of the Securities.  Neither the Company nor its Board of Directors has
adopted a stockholder rights plan or similar arrangement relating to
accumulations of beneficial ownership of Common Stock or a change in control of
the Company.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (k)           SEC Documents; Financial
Statements.  Since the date that is two years prior to date of
the Original Agreement, the Company has timely filed all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC
pursuant to the reporting requirements of the 1934 Act (all of the foregoing
filed prior to the date of the Original Agreement or prior to the date of the
Additional Closing, and all exhibits included therein and financial statements,
notes and schedules thereto and documents incorporated by reference therein
being hereinafter referred to as the "SEC
Documents").  The Company has delivered to the Buyers or their
respective representatives true, correct and complete copies of the SEC
Documents not available on the EDGAR system.  Except as set forth in
Schedule 3(k),
as of their respective filing dates, the SEC Documents complied in all material
respects with the requirements of the 1934 Act and the rules and regulations of
the SEC promulgated thereunder applicable to the SEC Documents, and none of the
SEC Documents, at the time they were filed with the SEC, 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.  As of their respective filing dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto.  Such financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).  No other information provided by or on behalf of the
Company to the Buyers which is not included in the SEC Documents, including,
without limitation, information referred to in Section 2(d) of this Agreement or
in the disclosure schedules to this Agreement, contains any untrue statement of
a material fact or omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstance under which they are or
were made, not misleading.

     

    (l)           Absence of Certain
Changes.  Except as disclosed in Schedule 3(l), since
June 30, 2009, there has been no material adverse change and no material adverse
development in the business, assets, properties, operations, condition
(financial or otherwise), results of operations or prospects of the Company or
its Subsidiaries.  Except as disclosed in Schedule 3(l), since
June 30, 2009, neither the Company nor any of its Subsidiaries has (i) declared
or paid any dividends, (ii) sold any assets, individually or in the aggregate,
in excess of $100,000 outside of the ordinary course of business or (iii) had
capital expenditures, individually or in the aggregate, in excess of
$100,000.  Neither the Company nor any of its Subsidiaries has taken
any steps to seek protection pursuant to any bankruptcy law nor does the Company
have any knowledge or reason to believe that its creditors intend to initiate
involuntary bankruptcy proceedings or any actual knowledge of any fact which
would reasonably lead a creditor to do so.  The Company and its
Subsidiaries, individually and on a consolidated basis, were not, as of the date
of the Original Agreement, are not as of the date hereof, and after giving
effect to the transactions contemplated hereby to occur at the Closings, will
not be Insolvent (as defined below).  For purposes of this Section
3(l), "Insolvent" means,
with respect to any Person (i) the present fair saleable value of such Person's
assets is less than the amount required to pay such Person's total Indebtedness
(as defined in Section 3(s)), (ii) such Person is unable to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured, (iii) such Person intends to incur or
believes that it will incur debts that would be beyond its ability to pay as
such debts mature or (iv) such Person has unreasonably small capital with which
to conduct the business in which it is engaged as such business is now conducted
and is proposed to be conducted.

     

    (m)           No Undisclosed Events,
Liabilities, Developments or Circumstances.  Since June 30,
2009, no event, liability, development or circumstance has occurred or exists,
or is contemplated to occur, with respect to the Company or its Subsidiaries or
their respective business, properties, prospects, operations or financial
condition, that would be required to be disclosed by the Company under
applicable securities laws on a registration statement on Form S-1 filed with
the SEC relating to an issuance and sale by the Company of its Common Stock and
which has not been publicly announced.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (n)           Conduct of Business;
Regulatory Permits.  Neither the Company nor its Subsidiaries
is in violation of any term of or in default under any certificate of
designations of any outstanding series of preferred stock of the Company, the
Certificate of Incorporation or Bylaws or their organizational charter or
articles of incorporation or bylaws, respectively.  Neither the
Company nor any of its Subsidiaries is in violation of any judgment, decree or
order or any statute, ordinance, rule or regulation applicable to the Company or
any of its Subsidiaries, and neither the Company nor any of its Subsidiaries
will conduct its business in violation of any of the foregoing, except for
possible violations which would not, individually or in the aggregate, have a
Material Adverse Effect.  Without limiting the generality of the
foregoing, the Company is not in violation of any of the rules, regulations or
requirements of the Principal Market and has no knowledge of any facts or
circumstances that would reasonably lead to delisting or suspension of the
Common Stock by the Principal Market in the foreseeable future.  Since
the date two years prior to the date of the Original Agreement, (i) the Common
Stock has been designated for quotation or listed on the Principal Market, (ii)
trading in the Common Stock has not been suspended by the SEC or the Principal
Market and (iii) the Company has received no communication, written or oral,
from the SEC or the Principal Market regarding the suspension or delisting of
the Common Stock from the Principal Market.  The Company and its
Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, except where the failure to possess such
certificates, authorizations or permits would not have, individually or in the
aggregate, a Material Adverse Effect, and neither the Company nor any such
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit.

     

    (o)           Foreign Corrupt
Practices.  Neither the Company, nor any of its Subsidiaries,
nor any director, officer, agent, employee or other Person acting on behalf of
the Company or any of its Subsidiaries has, in the course of its actions for, or
on behalf of, the Company or any of its Subsidiaries (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee.

     

    (p)           Sarbanes-Oxley
Act.  The Company is in compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date
of the Original Agreement, and any and all applicable rules and regulations
promulgated by the SEC thereunder that are effective as of the date hereof,
except where such noncompliance would not have, individually or in the
aggregate, a Material Adverse Effect.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    (q)           Transactions With
Affiliates.  Except as set forth on Schedule 3(q), none
of the officers, directors or employees of the Company or any of its
Subsidiaries is presently a party to any transaction with the Company or any of
its Subsidiaries (other than for ordinary course services as employees, officers
or directors), including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or from any
such officer, director or employee or, to the knowledge of the Company or any of
its Subsidiaries, any corporation, partnership, trust or other entity in which
any such officer, director, or employee has a substantial interest or is an
officer, director, trustee or partner.

     

    (r)           Equity
Capitalization.  As of the date of the Original Agreement and
as of the date hereof, the authorized capital stock of the Company consists of
(y) 90,000,000 shares of Common Stock, of which as of the date hereof,
60,795,538 shares are issued and outstanding and (z) 20,000,000 shares of
preferred stock, of which as of the date hereof, 5,503,833 shares of Series A
Convertible Preferred Stock are issued and outstanding.  All of such
outstanding shares have been, or upon issuance will be, validly issued and are
fully paid and nonassessable.  Except as set forth on Schedule 3(r): (i) no
shares of the Company's capital stock are subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the
Company; (ii) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, or exercisable or exchangeable for, any
shares of capital stock of the Company or any of its Subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional shares of capital stock
of the Company or any of its Subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, or exercisable or exchangeable for, any
shares of capital stock of the Company or any of its Subsidiaries; (iii) there
are no outstanding debt securities, notes, credit agreements, credit facilities
or other agreements, documents or instruments evidencing Indebtedness of the
Company or any of its Subsidiaries or by which the Company or any of its
Subsidiaries is or may become bound; (iv) there are no financing statements
securing obligations in any material amounts, either singly or in the aggregate,
filed in connection with the Company or any of its Subsidiaries; (v) there are
no agreements or arrangements under which the Company or any of its Subsidiaries
is obligated to register the sale of any of their securities under the 1933 Act
(except the Registration Rights Agreement); (vi) there are no outstanding
securities or instruments of the Company or any of its Subsidiaries which
contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries; (vii) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities; (viii) the Company does not have any stock appreciation rights
or "phantom stock" plans or agreements or any similar plan or agreement; and
(ix) the Company and its Subsidiaries have no liabilities or obligations
required to be disclosed in the SEC Documents but not so disclosed in the SEC
Documents, other than those incurred in the ordinary course of the Company's or
any Subsidiary's respective businesses and which, individually or in the
aggregate, do not or would not have a Material Adverse Effect.  The
Company has furnished or made available to the Buyer upon such Buyer's request,
true, correct and complete copies of the Company's Certificate of Incorporation,
as amended and as in effect on the date hereof (the "Certificate of
Incorporation"), and the Company's Bylaws, as amended and as in effect on
the date hereof (the "Bylaws"), and the terms of all
securities convertible into, or exercisable or exchangeable for, shares of
Common Stock and the material rights of the holders thereof in respect
thereto.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    (s)           Indebtedness and Other
Contracts.  Except as disclosed in Schedule 3(s),
neither the Company nor any of its Subsidiaries (i) has any outstanding
Indebtedness (as defined below), (ii) is a party to any contract, agreement or
instrument, the violation of which, or default under which, by the other
party(ies) to such contract, agreement or instrument would result in a Material
Adverse Effect, (iii) is in violation of any term of or in default under any
contract, agreement or instrument relating to any Indebtedness, except where
such violations and defaults would not result, individually or in the aggregate,
in a Material Adverse Effect, or (iv) is a party to any contract, agreement or
instrument relating to any Indebtedness, the performance of which, in the
judgment of the Company's officers, has or is expected to have a Material
Adverse Effect.  Schedule 3(s) provides a detailed description of the
material terms of any such outstanding Indebtedness.  For purposes of
this Agreement: (x) "Indebtedness" of any Person
means, without duplication (A) all indebtedness for borrowed money, (B) all
obligations issued, undertaken or assumed as the deferred purchase price of
property or services, including, without limitation, "capital leases" in
accordance with United States generally accepted accounting principles (other
than trade payables entered into in the ordinary course of business), (C) all
reimbursement or payment obligations with respect to letters of credit, surety
bonds and other similar instruments, (D) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or businesses,
(E) all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case with respect
to any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property), (F) all
monetary obligations under any leasing or similar arrangement which, in
connection with generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, (G) all
indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of
such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (A) through (G)
above; (y) "Contingent
Obligation" means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent
of the Person incurring such liability, or the primary effect thereof, is to
provide assurance to the obligee of such liability that such liability will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such liability will be protected (in whole or in
part) against loss with respect thereto; and (z) "Person" means an individual,
a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or
agency thereof.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    (t)           Absence of
Litigation.  Except as set forth on Schedule 3(t), there
is no action, suit, proceeding, inquiry or investigation before or by the
Principal Market, any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the Company, threatened
against or affecting the Company, the Common Stock or any of its Subsidiaries or
any of the Company's or the Company's Subsidiaries' officers or directors,
whether of a civil or criminal nature or otherwise.  The matters set
forth on Schedule
3(t) would not have a Material Adverse Effect.

     

    (u)           Insurance.  The
Company and each of its Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
management of the Company believes to be prudent and customary in the businesses
in which the Company and its Subsidiaries are engaged.  Except as set
forth on Schedule
3(u), neither the Company nor any Subsidiary has been refused any
insurance coverage sought or applied for. 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 at a
cost that would not have a Material Adverse Effect.

     

    (v)           Employee
Relations.  (i) Neither the Company nor any of its Subsidiaries
is a party to any collective bargaining agreement or employs any member of a
union.  The Company and its Subsidiaries believe that their relations
with their employees are good.  No executive officer of the Company or
any of its Subsidiaries (as defined in Rule 501(f) of the 1933 Act) has notified
the Company or any such Subsidiary that such officer intends to leave the
Company or any such Subsidiary or otherwise terminate such officer's employment
with the Company or any such Subsidiary.  No executive officer of the
Company or any of its Subsidiaries, to the knowledge of the Company or any of
its Subsidiaries, is now expected to be, in violation of any material term of
any employment contract, confidentiality, disclosure or proprietary information
agreement, non-competition agreement, or any other contract or agreement or any
restrictive covenant, and, to the knowledge of the Company or any of its
Subsidiaries, 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.

     

    (ii)           The
Company and its Subsidiaries are in compliance with all federal, state, local
and foreign laws and regulations respecting labor, employment and employment
practices and benefits, terms and conditions of employment and wages and hours,
except where failure to be in compliance would not, either individually or in
the aggregate, reasonably be expected to result in a Material Adverse
Effect.

     

    (w)           Title.  The
Company and its Subsidiaries have good and marketable title in fee simple to all
real property and good and marketable title to all personal property owned by
them which is material to the business of the Company and its Subsidiaries, in
each case free and clear of all liens, encumbrances and defects except such as
do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company and any of
its Subsidiaries.  Any real property and facilities held under lease
by the Company and any of its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    (x)           Intellectual Property
Rights.  (i) The Company and its Subsidiaries own, or are
licensed, or otherwise possess legally enforceable rights, to use, sell or
license, as applicable, all Intellectual Property that is reasonably necessary
for the operation of their respective businesses as currently
conducted.  The Company and its Subsidiaries possess or have access to
the original (or, if owned by a third party, copies) of all documentation and
all source code, as applicable, for all of the Business Intellectual Property
consisting of software.  Schedule 3(x)(i)(a) sets forth a true and
complete list of all (i) Registered or otherwise material Owned Intellectual
Property; and (ii) Intellectual Property Contracts.  Except as set
forth on Schedule 3(x)(i)(b), all such rights are free of all Liens and are
fully assignable by the Company and its Subsidiaries to any Person, without
payment, consent of any Person or other condition or
restriction.  Except as set forth on Schedule 3(x)(i)(c), there exists
no event, condition or occurrence which, with the giving of notice or lapse of
time, or both, would constitute a breach or default by the Company, its
Subsidiaries or another Person under any Intellectual Property
Contract.

     

    (ii)           Except
as set forth on Schedule 3(x)(ii), no
Owned Intellectual Property has expired or terminated or has been abandoned, or
is expected to expire or terminate or be abandoned, within three years from the
date of this Agreement.  All Owned Intellectual Property (and to the
knowledge of the Company all Licensed Intellectual Property) is subsisting, has
been used by the Company and its Subsidiaries and made available to their
distributors and customers with all patent, trademark, copyright, confidential,
proprietary, and other Intellectual Property notices and legends prescribed by
law or otherwise permitted, and, to the knowledge of the Company, is valid and
enforceable.  No Owned Intellectual Property (and to the knowledge of
the Company, no Licensed Intellectual Property), is subject to any outstanding
order, judgment or decree restricting its use by the Company or its Subsidiaries
or their distributors and customers or adversely affecting the Company's or any
Subsidiary's rights thereto.

     

    (iii)          The
Company does not have any knowledge of any infringement by the Company or its
Subsidiaries of Intellectual Property of others.  There is no claim,
action or proceeding being made or brought, or to the knowledge of the Company,
being threatened in writing, against the Company or any of its Subsidiaries
regarding any Business Intellectual Property, except for claims, actions or
proceedings set forth on Schedule
3(x)(iii).  The Company is unaware of any facts or
circumstances which could reasonably be expected to give rise to any of the
foregoing infringements or claims, actions or proceedings.

     

    (iv)          Each
employee who in the regular course of his employment may create programs,
modifications, enhancements or other inventions, improvements, discoveries,
methods or works of authorship and all consultants have signed an assignment or
similar agreement with the Company and/or its Subsidiaries confirming the
Company's or a Subsidiary's ownership or, in the alternate, transferring and
assigning to the Company or a Subsidiary all right, title and interest in and to
such programs, modifications, enhancements or other inventions including
copyright and other intellectual property rights therein.  No Person
(other than the Company and/or its Subsidiaries) has any reasonable basis for
claiming any right, title or interest in and to any such Intellectual
Property.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    (v)         Except
as set forth on Schedule 3(x)(v), (1)
no Product contains, and no Product is derived from Public Software, (2) neither
the Company nor any Subsidiary has distributed Public Software in conjunction
with any Products, or (3) used Public Software in the development of a
derivative work of any Intellectual Property.  The Company and the
Subsidiaries are in compliance with all agreements and other terms and
conditions governing the use of Public Software and there exists no event,
condition or occurrence which, with the giving of notice or lapse of time, or
both, would constitute a breach or default by the Company or a Subsidiary of
such agreements, terms and conditions.  Neither the Company nor any
Subsidiary has received any notice of any alleged breach or other violation of
any such agreement, term or condition.  No Product or any other
Intellectual Property is required to be (a) disclosed or distributed in source
code form; (b) licensed for the purpose of making derivative works; or (c)
redistributable at no charge, in each case, as a result of the Company's or a
Subsidiary's use, modification or distribution of Public Software.

     

    (vi)        Each
of the Company and its Subsidiaries have taken reasonable security measures to
protect the secrecy, confidentiality and value of all material Trade Secrets
used in or on behalf of its business.  To the Company's knowledge, no
unauthorized disclosure of any of the Business Intellectual Property consisting
of Trade Secrets has occurred within the last three (3) years.

     

    (vii)       The
use by or on behalf of the Company and its Subsidiaries of the Data in
connection with their business does not infringe or violate the rights of any
Person or otherwise violate any applicable law.  The Company has a
published privacy policy (the "Privacy Policy") regarding the
collection and use of "nonpublic personal information" (as defined in the
Privacy Policy in effect on the date hereof) ("Customer Information"), that
discloses the manner by which it collects, uses and transfers Customer
Information.  The Company and its Subsidiaries are and have been in
compliance with the Privacy Policy since its adoption by the
Company.

     

    (viii)     
The IT Systems of the Company and its Subsidiaries are adequate in all material
respects for their intended use and for the operation of such businesses as are
currently operated by the Company and its Subsidiaries, and are in good working
condition (normal wear and tear excepted).

     

    (ix)         For
purposes of this Section 3(x), the following definitions shall
apply.

     

    (1)           "Ancillary Product Materials"
shall mean all documentation currently used or distributed by the Company or a
Subsidiary concerning the Products, including customer support materials such as
support and training materials, support bulletins, and any and all data
contained in the customer support organization computer system of the Company or
a Subsidiary; and marketing materials relating to the Products, including sales
and marketing material, white papers, performance benchmark reports, customer
training materials, sales training materials and sales presentation
materials.

    

    (2)           "Business Intellectual
Property" means the Owned Intellectual Property and the Licensed
Intellectual Property.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

    (3)           "Data" means all information
and data, whether in printed or electronic form and whether contained in a
database or otherwise.

    

    (4)           "Intellectual Property"
means  (i) foreign and domestic trademarks, trade names, service
marks, service names, brand names, certification marks, collective marks,
d/b/a's, Internet domain names, logos, symbols, trade dress, assumed names,
fictitious names, and other indicia of origin, all applications and
registrations for all of the foregoing, and all goodwill associated therewith
and symbolized thereby, including without limitation all extensions,
modifications and renewals of same; (ii) foreign and domestic inventions,
discoveries and ideas, whether patentable or not, and all patents,
registrations, and applications therefor, including without limitation
divisions, continuations, continuations-in-part and renewal applications, and
including without limitation renewals, extensions and reissues; (iii) foreign
and domestic published and unpublished works of authorship, whether
copyrightable or not (including, but not limited to, computer software),
copyrights therein and thereto, and registrations and applications therefor, and
all renewals, extensions, restorations and reversions thereof; (iv) confidential
and proprietary information, trade secrets and know-how, including without
limitation processes, schematics, databases, formulae, drawings, specifications,
prototypes, models, designs, research and development, manufacturing and
production processes and techniques, technical data, and customer and supplier
lists, pricing and cost information and business and marketing plans and
proposals (collectively, "Trade
Secrets"); (v) rights of publicity, name and likeness rights; (vi)
electronic data processing, information, recordkeeping, communications,
telecommunications, networking, account management, inventory management and
other such applications, software, and hardware, equipment and services
(including, but not limited to, all applications and software installed on all
hardware and equipment, and all databases, firmware, and related documentation),
and Internet websites and related content (collectively, "IT Systems"); and (vii) all
other intellectual property or proprietary rights and claims or causes of action
arising out of or related to any infringement, misappropriation or other
violation of any of the foregoing, including without limitation rights to
recover for past, present and future violations thereof.

    

    (5)           "Intellectual Property
Contracts" means all agreements concerning the Business Intellectual
Property, including without limitation agreements granting the Company rights to
use the Licensed Intellectual Property, agreements granting rights to use Owned
Intellectual Property, confidentiality agreements, reseller agreements,
consulting agreements, trademark coexistence agreements, Trademark consent
agreements and nonassertion agreements.

    

    (6)           "Licensed Intellectual
Property" means Intellectual Property that the Company and its
Subsidiaries is licensed or otherwise permitted by other Persons to
use.

    

    (7)           "Owned Intellectual Property"
means Intellectual Property owned by the Company or its Subsidiaries, directly
or indirectly, jointly or individually.

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    (8)           "Products" shall mean the
software products marketed, sold, licensed, supported, serviced or maintained by
the Company or a Subsidiary, together with the inventory of the Products, the
Ancillary Product Materials, any and all such software related to, comprising or
constituting such products, any and all supplements, modifications, updates,
corrections and enhancements to past and current versions of such products,
shipping versions of such products, versions of such products currently under
development, and any and all English and foreign language versions of current
and past versions of such products, shipping versions of such products and
versions of such products currently under development; and any and all
documentation, back-up tapes and archival tapes relating to the
foregoing.

    

    (9)           "Public Software" means
software which creates, or purports to create, obligations for the user or
grants, or purports to grant, to any third party any rights or immunities under
the user's intellectual property or proprietary rights in its software
(including, without limitation, open source software and any other software that
requires as a condition of use, modification and/or distribution of the software
that other software incorporated into, derived from or distributed with that
software be (1) disclosed or distributed in source code form, (2) licensed for
the purpose of making derivative works, or (3) redistributable at no charge),
shareware, "copyleft" software, or similar software.

    

    (10)           "Registered" means issued,
registered, renewed or the subject of a pending application.

     

    (y)           Environmental
Laws.  The Company and its Subsidiaries (i) are in compliance
with any and all applicable Environmental Laws (as hereinafter defined), (ii)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or
approval where, in each of the foregoing clauses (i), (ii) and (iii), the
failure to so comply could be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect.  The term "Environmental Laws" means all
federal, state, local or foreign laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, "Hazardous Materials") into the environment, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations issued, entered, promulgated or approved thereunder.

     

    (z)           Subsidiary
Rights.  The Company or one of its Subsidiaries has the
unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its
Subsidiaries as owned by the Company or such Subsidiary.

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    (aa)           Tax
Status.  The Company and each of its Subsidiaries (i) has made
or filed all federal, foreign and state income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and charges that are
material in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and (iii) has set aside
on its books provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply.  There are no unpaid taxes in any material amount claimed to be
due by the taxing authority of any jurisdiction, and the officers of the Company
know of no basis for any such claim.

     

    (bb)           Internal Accounting and
Disclosure Controls.  Except as set forth on Schedule 3(bb), the
Company and each of its Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management's
general or specific authorization and (iv) the recorded accountability for
assets and liabilities is compared with the existing assets and liabilities at
reasonable intervals and appropriate action is taken with respect to any
difference.  Except as set forth on Schedule 3(bb),
Company maintains disclosure controls and procedures (as such term is defined in
Rule 13a-14 under the 1934 Act) that are effective in ensuring that information
required to be disclosed by the Company in the reports that it files or submits
under the 1934 Act is recorded, processed, summarized and reported, within the
time periods specified in the rules and forms of the SEC, including, without
limitation, controls and procedures designed in to ensure that information
required to be disclosed by the Company in the reports that it files or submits
under the 1934 Act is accumulated and communicated to the Company’s management,
including its principal executive officer or officers and its principal
financial officer or officers, as appropriate, to allow timely decisions
regarding required disclosure.  Except as set forth on Schedule 3(bb),
during the twelve months prior to the date hereof, neither the Company nor any
of its Subsidiaries has received any notice or correspondence from any
accountant relating to any potential material weakness in any part of the system
of internal accounting controls of the Company or any of its
Subsidiaries.

     

    (cc)           Form S-1
Eligibility.  The Company is eligible to register the
Conversion Shares and the Warrant Shares for resale by the Buyers using Form S-1
promulgated under the 1933 Act.

     

    (dd)           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 United States generally accepted accounting principles
consistently applied and applicable law.  No stock option granted
under the Company's stock option plan has been backdated.  The Company
has not knowingly granted, and there is no and has been no Company policy or
practice to knowingly grant, stock options prior to, or otherwise knowingly
coordinate the grant of stock options with, the release or other public
announcement of material information regarding the Company or its Subsidiaries
or their financial results or prospects.

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    (ee)           Off Balance Sheet
Arrangements.  There is no transaction, arrangement, or other
relationship between the Company and an unconsolidated or other off balance
sheet entity that is required to be disclosed by the Company in its Exchange Act
filings and is not so disclosed or that otherwise would be reasonably likely to
have a Material Adverse Effect.

     

    (ff)            Ranking of
Notes.  Except as set forth on Schedule 3(ff), no
Indebtedness of the Company is senior to or ranks pari passu with the Notes in
right of payment, whether with respect of payment of redemptions, interest,
damages or upon liquidation or dissolution or otherwise.

     

    (gg)          Manipulation of
Price.  The Company has not, and to its knowledge no one acting
on its behalf has, (i) taken, directly or indirectly, any action designed to
cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities, (ii) other than the Agent sold, bid for, purchased, or paid any
compensation for soliciting purchases of, any of the Securities, or (iii) other
than the Agent paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.

     

    (hh)          Transfer
Taxes.  On the Closing Date, all stock transfer or other taxes
(other than income or similar taxes) which are required to be paid in connection
with the sale and transfer of the Securities to be sold to each Buyer hereunder
will be, or will have been, fully paid or provided for by the Company, and all
laws imposing such taxes will be or will have been complied with.

     

    (ii)            
Investment Company
Status.  The Company is not, and upon consummation of the sale
of the Securities, and for so long any Buyer holds any Securities, will not be,
an "investment company," a company controlled by an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company" as such terms are defined in the Investment Company Act
of  1940, as amended.

     

    (jj)            
No Disagreements with
Accountants and Lawyers.  There are no material disagreements
of any kind presently existing, or reasonably anticipated by the Company to
arise, between the Company and the accountants and lawyers 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.

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    (kk)           Acknowledgement Regarding
Buyers' Trading Activity.  The Company understands and
acknowledges (i) that none of the Buyers have been asked by the Company or its
Subsidiaries to agree, nor has any Buyer agreed with the Company or its
Subsidiaries, to desist from purchasing or selling, long and/or short,
securities of the Company, or "derivative" securities based on securities issued
by the Company or to hold the Securities for any specified term; (ii) that any
Buyer, and counterparties in "derivative" transactions to which any such Buyer
is a party, directly or indirectly, presently may have a "short" position in the
Common Stock, and (iii) that each Buyer shall not be deemed to have any
affiliation with or control over any arm's length counterparty in any
"derivative" transaction.  The Company further understands and
acknowledges that (a) one or more Buyers may engage in hedging and/or trading
activities at various times during the period that the Securities are
outstanding, including, without limitation, during the periods that the value of
the Conversion Shares and/or the Warrant Shares are being determined, and (b)
such hedging and/or trading activities, if any, can reduce the value of the
existing stockholders' equity interest in the Company both at and after the time
the hedging and/or trading activities are being conducted.  The
Company acknowledges that such aforementioned hedging and/or trading activities
do not constitute a breach of this Agreement, the Notes, the Warrants or any of
the documents executed in connection herewith.

     

    (ll)    
       U.S. Real Property Holding
Corporation.  The Company is not, has never been, and so long
as any Securities remain outstanding, shall not become, a U.S. real property
holding corporation within the meaning of Section 897 of the Internal Revenue
Code of 1986, as amended, and the Company shall so certify upon any Buyer's
request.

     

    (mm)        
Bank Holding Company
Act.  Neither the Company nor any of its Subsidiaries or
affiliates is subject to the Bank Holding Company Act of 1956, as amended (the
"BHCA") and to
regulation by the Board of Governors of the Federal Reserve System (the "Federal
Reserve").  Neither the Company nor any of its Subsidiaries or
affiliates owns or controls, directly or indirectly, five percent (5%) or more
of the outstanding shares of any class of voting securities or twenty-five
percent (25%) or more of the total equity of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve.  Neither
the Company nor any of its Subsidiaries or affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve.

     

    (nn)          Shell Company Status.
The Company is not, and has not been at any time since the date that was 12
months prior to the date of the Original Agreement, an issuer identified in Rule
144(i)(1).

     

    (oo)          No Additional
Agreements.  The Company does not have any agreement or
understanding with any Buyer with respect to the transactions contemplated by
the Transaction Documents other than as specified in the Transaction
Documents.

     

    (pp)          Judgments.  Schedule 3(pp)
contains a list of certain judgments outstanding against the Company that have
been properly accrued on the Company's balance sheet in accordance with
GAAP.

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    (qq)         Disclosure.  The
Company confirms that neither it nor any other Person acting on its behalf has
provided any of the Buyers or their respective agents or counsel with any
information that constitutes or could reasonably be expected to constitute
material, nonpublic information.  The Company understands and confirms
that each of the Buyers will rely on the foregoing representations in effecting
transactions in securities of the Company.  All disclosure provided to
the Buyers regarding the Company, its business and the transactions contemplated
hereby, including the Schedules to this Agreement, furnished by or on behalf of
the Company are true and correct and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.  Each press release issued by the Company or any
of its Subsidiaries since the date that was twelve (12) months prior to the date
of the Original Agreement did not at the time of release contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.  No event or circumstance has occurred or information
exists with respect to the Company or any Subsidiary or either of its or their
respective business, properties, prospects, operations or financial conditions,
which, under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed (assuming for this purpose that the Company's reports filed under the
1934 Act, as amended, are being incorporated into an effective registration
statement filed by the Company under the 1933 Act).  The Company
acknowledges and agrees that no Buyer makes or has made any representations or
warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 2.

     

    
      	
               
      

            	
              4.

            	
              COVENANTS.

            

    

     

    (a)           Best
Efforts.  Each party shall use its best efforts timely to
satisfy each of the covenants and the conditions to be satisfied by it as
provided in Sections 5, 6 and 7 of this Agreement.

     

    (b)           Form D and Blue
Sky.  The Company agrees to file a Form D with respect to the
Securities as required under Regulation D and to provide a copy thereof to each
Buyer promptly after such filing.  The Company, on or before each
Closing Date, 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 Buyers at such Closing pursuant to this Agreement under
applicable securities or "Blue Sky" laws of the states of the United States (or
to obtain an exemption from such qualification), and shall provide evidence of
any such action so taken to the Buyers on or prior to the Closing
Date.  The Company shall make all filings and reports relating to the
offer and sale of the Securities required under applicable securities or "Blue
Sky" laws of the states of the United States following the Closing
Date.

     

    (c)           Reporting
Status.  Until the date on which the Investors (as defined in
the Registration Rights Agreement) shall have sold all the Conversion Shares and
Warrant Shares and
none of the Notes or Warrants is outstanding (the "Reporting Period"), the
Company shall timely file all reports required to be filed with the SEC pursuant
to the 1934 Act, and the Company shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would otherwise permit such termination.

     

    (d)           Use of
Proceeds.  The Company will use the proceeds from the sale of
the Securities for general corporate purposes, including general and
administrative expenses and not for (i) the repayment of any outstanding
Indebtedness of the Company or any of its Subsidiaries other than as set forth
on Schedule
4(d)(i) or (ii) the redemption or repurchase of any of its or its
Subsidiaries' equity securities.

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    (e)           Financial
Information.  The Company agrees to send the following to each
Investor during the Reporting Period (i) unless the following are filed with the
SEC through EDGAR and are available to the public through the EDGAR system,
within one (1) Business Day after the filing thereof with the SEC, a copy of its
Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q, any Current
Reports on Form 8-K and any registration statements (other than on Form S-8) or
amendments filed pursuant to the 1933 Act, (ii) on the same day as the release
thereof, facsimile copies of all press releases issued by the Company or any of
its Subsidiaries, and (iii) copies of any notices and other information made
available or given to the stockholders of the Company generally,
contemporaneously with the making available or giving thereof to the
stockholders.  As used herein, "Business Day" means any day
other than Saturday, Sunday or other day on which commercial banks in the City
of New York are authorized or required by law to remain closed.

     

    (f)           Listing.  The
Company shall promptly secure the listing of all of the Registrable Securities
(as defined in the Registration Rights Agreement) upon each national securities
exchange and automated quotation system, if any, upon which the Common Stock is
then listed (subject to official notice of issuance) and shall maintain such
listing of all Registrable Securities from time to time issuable under the terms
of the Transaction Documents.  The Company shall maintain the Common
Stock's authorization for listing on the Principal Market.  Neither
the Company nor any of its Subsidiaries shall take any action which would be
reasonably expected to result in the delisting or suspension of the Common Stock
on the Principal Market. The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section 4(f).

     

    (g)           Fees.  The
Company shall reimburse CNH or its designee(s) (in addition to any other expense
amounts paid to any Buyer prior to the date of this Agreement) for all
reasonable costs and expenses incurred in connection with the transactions
contemplated by the Transaction Documents (including (i) all reasonable legal
fees and disbursements in connection therewith, documentation and implementation
of the transactions contemplated by the Transaction Documents and due diligence
in connection therewith, and (ii) all reasonable legal fees and disbursements in
connection with the amendment and restatement of the Original Agreement and
implementation of the transactions contemplated hereby, including the purchase
and sale of the Additional Notes), which amounts may be withheld by such Buyer
from its Initial Purchase Price or Additional Purchase Price, as applicable, at
the applicable Closing.  The Company shall be responsible for the
payment of any placement agent’s fees, financial advisory fees, or broker's
commissions (other than for Persons engaged by or on behalf of any Buyer)
relating to or arising out of the transactions contemplated hereby and by the
Original Agreement, including, without limitation, any fees or commissions
payable to the Financial Advisor.  The Company shall pay, and hold
each Buyer harmless against, any liability, loss or expense (including, without
limitation, reasonable attorney's fees and out-of-pocket expenses) arising in
connection with any claim relating to any such payment.

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    (h)           Pledge of
Securities.  The Company acknowledges and agrees that the
Securities may be pledged by an Investor in connection with a bona fide margin
agreement or other loan or financing arrangement that is secured by the
Securities.  The pledge of Securities shall not be deemed to be a
transfer, sale or assignment of the Securities hereunder, and no Investor
effecting a pledge of Securities shall be required to provide the Company with
any notice thereof or otherwise make any delivery to the Company pursuant to
this Agreement or any other Transaction Document, including, without limitation,
Section 2(f) of this Agreement; provided that an Investor and its pledgee shall
be required to comply with the provisions of Section 2(f) of this Agreement in
order to effect a sale, transfer or assignment of Securities to such
pledgee.  The Company hereby agrees to execute and deliver such
documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by an
Investor.

     

    (i)           Disclosure of Transactions
and Other Material Information.  The Company has, on or before
8:30 a.m., New York City time, on the fourth Business Day after the
Original Agreement was executed, issued a press release reasonably acceptable to
the Buyers disclosing all material terms of the transactions contemplated hereby
and filed a Current Report on Form 8-K describing the terms of the transactions
contemplated by the Transaction Documents in the form required by the 1934 Act,
and attaching the material Transaction Documents (including, without limitation,
this Agreement (and all schedules to this Agreement), the form of the Initial
Notes, the form of Warrant, the form of Registration Rights Agreement, the form
of Lock-Up Agreements, the form of Security Documents) as exhibits to such
filing (including all attachments, the "Initial 8-K Filing").  The
Company shall, on or before 8:30 a.m., New York City time, on the fourth
Business Day after this Agreement is executed, issue a press release reasonably
acceptable to the Buyers, disclosing all material terms of the transactions
contemplated hereby and file a Current Report on Form 8-K describing the terms
of the transactions contemplated hereby in the form required by the 1934 Act,
and attaching this Agreement (and all schedules to this Agreement) and the form
of the Additional Notes as exhibits to such filing (including all attachments,
the “Additional 8-K
Filing” and, together with the Initial 8-K Filing, the “8-K Filings”). From and after
each of the 8-K Filings, no Buyer shall be in possession of any material,
nonpublic information received from the Company, any of its Subsidiaries or any
of its respective officers, directors, employees or agents, that is not
disclosed in the 8-K Filings.  The Company shall not, and shall cause
each of its Subsidiaries and each of their respective officers, directors,
employees and agents, not to, provide any Buyer with any material, nonpublic
information regarding the Company or any of its Subsidiaries from and after the
8-K Filings without the express written consent of such Buyer.  In the
event of a breach of the foregoing covenant by the Company, any Subsidiary, or
its each of respective officers, directors, employees and agents, in addition to
any other remedy provided herein or in the Transaction Documents, a Buyer shall
have the right to make a public disclosure, in the form of a press release,
public advertisement or otherwise, of such material, nonpublic information
without the prior approval by the Company, its Subsidiaries, or any of its or
their respective officers, directors, employees or agents.  No Buyer
shall have any liability to the Company, its Subsidiaries, or any of its or
their respective officers, directors, employees, stockholders or agents for any
such disclosure.  Subject to the foregoing, neither the Company, its
Subsidiaries nor any Buyer shall issue any press releases or any other public
statements with respect to the transactions contemplated hereby; provided, however, that the
Company shall be entitled, without the prior approval of any Buyer, to make any
press release or other public disclosure with respect to such transactions (i)
in substantial conformity with the 8-K Filings and contemporaneously therewith
and (ii) as is required by applicable law and regulations, including the
applicable rules and regulations of the Principal Market (provided that in the
case of clause (i) each Buyer shall be consulted by the Company in connection
with any such press release or other public disclosure prior to its
release).  Without the prior written consent of any applicable Buyer,
neither the Company nor any of its Subsidiaries or affiliates shall disclose the
name of such Buyer in any filing, announcement, release or otherwise except
where such disclosure is required by applicable law and regulations (including
the rules and regulations of  any applicable Eligible Market),
provided the Company agrees that unless otherwise required by such law or
regulations, it shall disclose any such names only through a Transaction
Document that is filed as an exhibit to a report or other filing made with the
SEC; provided
further, that
such Buyer shall be consulted by the Company in connection with any such filing,
announcement, release or other public disclosure prior to its
release.

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

     

    (j)           Additional Registration
Statements.  Until the date that is ninety (90) calendar days
from the earlier of (i) the Initial Effective Date (as defined in the
Registration Rights Agreement) and (ii) the date all of the Registrable
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, the Company shall not file a registration statement under
the 1933 Act relating to securities that are not the Securities.

     

    (k)           Additional Notes; Variable
Securities; Dilutive Issuances.  So long as any Buyer
beneficially owns any Securities, the Company will not issue any Notes other
than to the Buyers as contemplated hereby and the Company shall not issue any
other securities that would cause a breach or default under the
Notes.  For so long as any Notes or Warrants remain outstanding, the
Company shall not, in any manner, issue or sell any rights, warrants or options
to subscribe for or purchase Common Stock or directly or indirectly convertible
into or exchangeable or exercisable for Common Stock at a price which varies or
may vary with the market price of the Common Stock, including by way of one or
more reset(s) to any fixed price unless the conversion, exchange or exercise
price of any such security cannot be less than the then applicable Conversion
Price (as defined in the Notes) with respect to the Common Stock into which any
Initial Note is convertible or the then applicable Exercise Price (as defined in
the Warrants) with respect to the Common Stock into which any Warrant is
exercisable.

     

    (l)           Corporate
Existence.  So long as any Buyer beneficially owns any Notes or
Warrants, the Company shall maintain its corporate existence and shall not be
party to any Fundamental Transaction (as defined in the Warrants) unless the
Company is in compliance with the applicable provisions governing Fundamental
Transactions set forth in the Notes and Warrants.

     

    (m)         Reservation of
Shares.

     

    (i)           So
long as any Buyer owns any Initial Notes or Warrants, the Company shall take all
action necessary to at all times have authorized, and reserved for the purpose
of issuance no less than 130% of the sum of the maximum number of shares of
Common Stock issuable (the "Required Reserved Amount")
(i) upon conversion of the Initial Notes and (ii) upon exercise of the Warrants
then outstanding (without taking into account any limitations on the conversion
of the Initial Notes or exercise of the Warrants set forth in the Initial Notes
and Warrants, respectively).  If at any time the number of shares of
Common Stock authorized and reserved for issuance is not sufficient to meet the
Required Reserved Amount, the Company will promptly take all corporate action
necessary to authorize and reserve a sufficient number of shares, including,
without limitation, calling a special meeting of stockholders to authorize
additional shares to meet the Company's obligations under Section 3(c), in the
case of an insufficient number of authorized shares, obtain stockholder approval
of an increase in such authorized number of shares, and voting the management
shares of the Company in favor of an increase in the authorized shares of the
Company to ensure that the number of authorized shares is sufficient to meet the
Required Reserved Amount.

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    (ii)           The
parties hereto acknowledge that, as of the date of the Original Agreement, the
Company does not have the number of authorized shares of Common Stock sufficient
to satisfy the Required Reserved Amount.  The Company represents and
warrants that its Board of Directors and stockholders have duly authorized an
amendment to the Company’s Certificate of Incorporation (the “Charter
Amendment”) to increase its authorized shares of Common Stock to 190,000,000
shares, which amount will be sufficient to permit the Company to satisfy the
then Required Reserved Amount when accepted for filing by the Secretary of State
of the State of Delaware (“Delaware Secretary of State”).  The Company
covenants and agrees to: (1) prepare a preliminary Information Statement
regarding the Charter Amendment and file the same with the SEC no later than
fourteen (14) calendar days following the date of the Original Agreement, (2)
promptly respond to any comments by the SEC thereon and use its best efforts to
cause such Information Statement to be approved for distribution to stockholders
by the SEC, (3) promptly following either the approval of the Information
Statement for distribution to all stockholders by the SEC, after addressing all
SEC comments, or the elapse of 10 calendar days from the filing of the
Information Statement without notification from the SEC that the Information
Statement will be reviewed, prepare, file with the SEC and mail to all Company
stockholders a definitive copy of the Information Statement, and (4) promptly
following the elapse of 20 calendar days from such mailing, file the Charter
Amendment with the Delaware Secretary of State and deliver to the Company's then
transfer agent (with a copy to the Buyers) the Irrevocable Transfer Agent
Instructions, in the form of Exhibit E attached hereto.  The Company
further covenants and agrees that until such time as the Charter Amendment is
accepted for filing by the Delaware Secretary of State, it shall not take any
action that would decrease the number of shares of authorized, unissued and
unreserved Common Stock available to meet its obligations in Section 4(m)(i)
above or issue any shares of Common Stock or issue any securities convertible,
exchangeable or exercisable into shares of Common Stock, other than pursuant to
(A) the exercise of options under the Company's Approved Stock Plan, provided
that no option term, exercise price or similar provisions of any issuances
pursuant to such Approved Stock Plan are amended, modified or changed on or
after the date hereof, (B) the conversion or exercise of any preferred stock or
warrants of the Company, respectively, outstanding as of the date hereof,
provided that the terms of such preferred Stock or warrants are not amended,
modified or changed on or after the date hereof, or (B) the vesting of shares of
Common Stock outstanding as of the date hereof, provided that the terms of such
unvested shares are not amended, modified or changed on or after the date
hereof.

     

    (n)          Additional Issuances of
Securities.

     

    (i)           For
purposes of this Section 4(n), the following definitions shall
apply.

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

     

    (2)           "Approved Stock Plan" means any
employee benefit plan which has been approved by the Board of Directors of the
Company, pursuant to which the Company's securities may be issued to any
employee, officer or director for services provided to the Company.

    

    (3)           "Common Stock Equivalents"
means, collectively, Options and Convertible Securities.

     

    (4)           "Convertible Securities" means
any stock or securities (other than Options) convertible into or exercisable or
exchangeable for Common Shares.

     

    (5)           "Options" means any rights,
warrants or options to subscribe for or purchase Common Stock or Convertible
Securities.

     

    (6)           "Trading Day" means any day on
which the Common Stock is traded on the Principal Market, or, if the Principal
Market is not the principal trading market for the Common Stock, then on the
principal securities exchange or securities market on which the Common Stock is
then traded; provided that "Trading Day" shall not include any day on which the
Common Stock is scheduled to trade on such exchange or market for less than 4.5
hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market
does not designate in advance the closing time of trading on such exchange or
market, then during the hour ending at 4:00 p.m., New York City
time).

     

    (ii)           From
the date of the Original Agreement until the date that no Notes are outstanding,
other than as contemplated hereby the Company will not, directly or indirectly,
(A) offer, sell, grant any option to purchase, or otherwise dispose of (or
announce any offer, sale, grant or any option to purchase or other disposition
of) any of its or its Subsidiaries' equity or equity equivalent securities,
including without limitation any debt, preferred stock or other instrument or
security that is, at any time during its life and under any circumstances,
convertible into or exchangeable or exercisable for shares of Common Stock or
Common Stock Equivalents or (B) be a party to any solicitations, negotiations or
discussions with regard to the foregoing.

     

    (iii)           The
restrictions contained in subsection (ii) of this Section 4(n) shall not apply
in connection with the issuance of any Excluded Securities.  As used
herein, "Excluded
Securities" means shares of Common Stock: (i) issued or issuable in
connection with any Approved Stock Plan; provided that the option term, exercise
price or similar provisions of any issuances pursuant to such Approved Stock
Plan are not amended, modified or changed on or after the date hereof, (ii)
issued or issuable upon conversion of the Notes, (iii) issued or issuable upon
exercise of the Warrants, (iv) issued or issuable upon conversion of any Options
or Convertible Securities which are outstanding on the day immediately preceding
the date hereof, provided that the terms of such Options or Convertible
Securities are not amended, modified or changed on or after the date hereof, (v)
issued in a public or private offering which generates gross proceeds to the
Company of at least $100,000 with a price per share of Common Stock no less than
95% of the arithmetic average of the Weighted Average Price (as defined in the
Notes) of the Common Stock on the thirty (30) Trading Days immediately preceding
the date of execution of a definitive agreement with respect to the issuance of
such Common Stock, or (vi) as the consideration issued to the stockholders of
the target entity in a merger transaction or stock acquisition or to the
partners in strategic business partnerships or joint ventures, in each case with
non-affiliated third parties in a bona fide transaction and otherwise on an
arm's length basis, the purpose of which is not to raise additional capital,
which for purposes of clarity shall not include securities issued to any other
party in connection with any such transaction.

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

     

     
 
(o)           Collateral
Agent.

     

    (i)           Each
Buyer hereby (a) appoints CNH as the collateral agent hereunder and under the
Security Documents (in such capacity, the "Collateral Agent"), and (b)
authorizes the Collateral Agent (and its officers, directors, employees and
agents) to take such action on such Buyer's behalf in accordance with the terms
hereof and thereof.  The Collateral Agent shall not have, by reason
hereof or the Security Documents, a fiduciary relationship in respect of any
Buyer.  Neither the Collateral Agent nor any of its officers,
directors, employees and agents shall have any liability to any Buyer for any
action taken or omitted to be taken in connection hereof or the Security
Documents except to the extent caused by its own gross negligence or willful
misconduct, and each Buyer agrees to defend, protect, indemnify and hold
harmless the Collateral Agent and all of its officers, directors, employees and
agents (collectively, the "Collateral Agent Indemnitees") from and against
any losses, damages, liabilities, obligations, penalties, actions, judgments,
suits, fees, costs and expenses (including, without limitation, reasonable
attorneys' fees, costs and expenses) incurred by such Collateral Agent
Indemnitee, whether direct, indirect or consequential, arising from or in
connection with the performance by such Collateral Agent Indemnitee of the
duties and obligations of Collateral Agent pursuant hereto or the Security
Documents.  The Collateral Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the holders of at least a majority in principal amount
of the Notes then outstanding, and such instructions shall be binding upon all
holders of Notes; provided, however, that the
Collateral Agent shall not be required to take any action which, in the
reasonable opinion of the Collateral Agent, exposes the Collateral Agent to
liability or which is contrary to this Agreement or any other Transaction
Document or applicable law.

     

    (ii)           The
Collateral Agent shall be entitled to rely upon any written notices, statements,
certificates, orders or other documents or any telephone message believed by it
in good faith to be genuine and correct and to have been signed, sent or made by
the proper Person, and with respect to all matters pertaining to this Agreement,
the Security Agreement or any of the Transaction Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it.

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    (iii)           The
Collateral Agent may resign from the performance of all its functions and duties
hereunder and under the Notes and the Security Documents at any time by giving
at least ten (10) Business Days prior written notice to the Company and each
holder of the Notes.  Such resignation shall take effect upon the
acceptance by a successor Collateral Agent of appointment as provided
below.  Upon any such notice of resignation, the holders of a majority
of the outstanding principal under the Notes shall appoint a successor
Collateral Agent.  Upon the acceptance of the appointment as
Collateral Agent, such successor Collateral Agent shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent, and the retiring Collateral Agent shall be discharged from its
duties and obligations under this Agreement, the Notes and the Security
Documents.  After any Collateral Agent's resignation hereunder, the
provisions of this Section 4(o) shall inure to its benefit.  If a
successor Collateral Agent shall not have been so appointed within said ten (10)
Business Day period, the retiring Collateral Agent shall then appoint a
successor Collateral Agent who shall serve until such time, if any, as the
holders of a majority of the outstanding principal under the Notes appoint a
successor Collateral Agent as provided above.

     

    (p)          Restriction on Redemption
and Cash Dividends.  So long as any Notes are outstanding, the
Company shall not, directly or indirectly, redeem, or declare or pay any cash
dividend or distribution on, the Common Stock without the prior express written
consent of the holders of Notes representing not less than a majority of the
aggregate principal amount of the then outstanding Notes.

     

    (q)           Public
Information.  At any time during the period commencing from the
six (6) month anniversary of the Initial Closing Date and ending at such time
that all of the Securities (other than the Additional Notes and Additional
Conversion Shares) can be sold either pursuant to a registration statement, or
if a registration statement is not available for the resale of all of the
Securities (other than the Additional Notes and Additional Conversion Shares),
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, as partial relief for the damages to any holder of Securities by reason of
any such delay in or reduction of its ability to sell the Securities (which
remedy shall not be exclusive of any other remedies available at law or in
equity), the Company shall pay to each such holder an amount in cash equal to
one percent (1.0%) of the aggregate Purchase Price of such holder's Securities
on the day of a Public Information Failure and on every thirtieth day (pro rated
for periods totaling less than thirty days) thereafter until the earlier of (i)
the date such Public Information Failure is cured and (ii) such time that such
public information is no longer required pursuant to Rule 144.  The
payments to which a holder shall be entitled pursuant to this Section 4(q) 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 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 1.5% per month (prorated for partial months) until paid
in full.

     

    (r)           Conduct of
Business.  For so long as any Buyers owns Notes or Warrants,
the business of the Company and its Subsidiaries shall not be conducted in
violation of any law, ordinance or regulation of any governmental entity, except
where such violations would not result, either individually or in the aggregate,
in a Material Adverse Effect.

     

    (s)           Lock-Up.  The
Company shall not amend or waive any provision of any of the Lock-Up Agreements
except to extend the term of the lock-up period and shall enforce such Lock-Up
Agreements in accordance with their terms.

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

     

    (t)           Security Surrender
Agreements.  The Company shall not amend or waive any provision
of the Securities Surrender Agreement (as defined below) and shall enforce such
Securities Surrender Agreement in accordance with their terms.  The
Company shall use the shares of Common Stock surrendered by the Covering
Stockholders pursuant to the Securities Surrender Agreement solely to satisfy
its conversion obligations under the Notes and its exercise obligations under
the Warrants, as applicable.

     

    (u)           Good
Standing.  On or prior to October 1, 2010, the Company shall
cause Gamecock Media Europe Limited (UK) to be in good standing with the
Companies House.

     

    (v)           Closing
Documents.  On or prior to fourteen (14) calendar days after
the Closing Date, the Company agrees to deliver, or cause to be delivered, to
each Buyer and Schulte Roth & Zabel LLP a complete closing set of the
Transaction Documents, Securities and any other document required to be
delivered to any party pursuant to Section 7 hereof or otherwise, in each case
to the extent not delivered on a prior Closing Date.

     

    (w)           Registration Rights
Agreement.  The Company and each Buyer hereby agree that the
Registration Rights Agreement shall be deemed to be amended such that (i) all
references to “Securities Purchase Agreement” contained therein shall instead
refer to this Agreement; (ii) all references to “Conversion Shares” contained
therein shall instead refer to Initial Conversion Shares; and (iii) all
references to “Notes” contained therein shall instead refer to Initial
Notes.  This Section 4(w) shall constitute an amendment as
contemplated by Section 10 of the Registration Rights Agreement.  All
other terms of the Registration Rights Agreement shall remain in full force and
effect as set forth therein.

     

    
      	
               
      

            	
              5.

            	
              REGISTER; TRANSFER
      AGENT INSTRUCTIONS.

            

    

     

    (a)           Register.  The
Company shall maintain at its principal executive offices (or such other office
or agency of the Company as it may designate by notice to each holder of
Securities), a register for the Notes and the Warrants, in which the Company
shall record the name and address of the Person in whose name the Notes and the Warrants have
been issued (including the name and address of each transferee), the principal
amount of Notes held by such  Person, the number of Conversion Shares
issuable upon conversion of the Notes, the number of Warrant Shares issuable
upon exercise of the Warrants held by such Person.  The Company shall
keep the register open and available at all times during business hours for
inspection of any Buyer or its legal representatives.

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

     

    (b)           Transfer Agent
Instructions.  The Company shall issue irrevocable instructions
to its transfer agent, and any subsequent transfer agent, to issue certificates
or credit shares to the applicable balance accounts at DTC, registered in the
name of each Buyer or its respective nominee(s), for the Conversion Shares and
the Warrant Shares issuable upon conversion of the Notes or exercise of the
Warrants in such amounts as specified from time to time by each Buyer to the
Company upon conversion of the Notes or exercise of the Warrants in the form of
Exhibit E
attached hereto (the "Irrevocable Transfer Agent
Instructions").  The Company warrants that no instruction other
than the Irrevocable Transfer Agent Instructions referred to in this Section
5(b), and stop transfer instructions to give effect to Section 2(f) hereof, will
be given by the Company to its transfer agent, and that the Securities shall
otherwise be freely transferable on the books and records of the Company as and
to the extent provided in this Agreement and the other Transaction
Documents.  If a Buyer effects a sale, assignment or transfer of the
Securities in accordance with Section 2(f), the Company shall permit the
transfer and shall promptly instruct its transfer agent to issue one or more
certificates or credit shares to the applicable balance accounts at DTC in such
name and in such denominations as specified by such Buyer to effect such sale,
transfer or assignment.  In the event that such sale, assignment or
transfer involves Conversion Shares or Warrant Shares sold, assigned or
transferred pursuant to an effective registration statement or pursuant to Rule
144, the transfer agent shall issue such Securities to the Buyer, assignee or
transferee, as the case may be, without any restrictive legend.  The
Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to a Buyer.  Accordingly, the Company acknowledges
that the remedy at law for a breach of its obligations under this Section 5(b)
will be inadequate and agrees, in the event of a breach or threatened breach by
the Company of the provisions of this Section 5(b), that a Buyer shall be
entitled, in addition to all other available remedies, to an order and/or
injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other
security being required.

     

    
      	
               
      

            	
              6.

            	
              CONDITIONS TO THE
      COMPANY'S OBLIGATION TO
SELL.

            

    

     

    (a)   The
obligation of the Company hereunder to issue and sell the Initial Notes and the
related Warrants to each Buyer at the Initial Closing is subject to the
satisfaction, at or before the Initial Closing Date, of each of the following
conditions, provided that these conditions are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion by providing
each Buyer with prior written notice thereof:

     

    (i)           Such
Buyer shall have executed each of the Transaction Documents to which it is a
party and delivered the same to the Company.

     

    (ii)          Such
Buyer shall have delivered to the Company the Initial Purchase Price (less, in
the case of CNH, the amounts withheld pursuant to Section 4(g)) for the Initial
Notes and the related Warrants being purchased by such Buyer and each other
Buyer at the Initial Closing by wire transfer of immediately available funds
pursuant to the wire instructions provided by the Company.

     

    (iii)         The
representations and warranties of such Buyer shall be true and correct in all
material respects as of the date when made and as of the Initial Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date which shall be true and correct as of such specified
date), and such Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Buyer at or prior
to the Initial Closing Date.

     

    (b)  The
obligation of the Company hereunder to issue and sell the Additional Notes to
each Buyer at the Additional Closing is subject to the satisfaction, at or
before the Additional Closing Date, of each of the following conditions,
provided that these conditions are for the Company's sole benefit and may be
waived by the Company at any time in its sole discretion by providing each Buyer
with prior written notice thereof:

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

     

    (i)           Such
Buyer shall have executed this Agreement and delivered the same to the
Company.

     

    (ii)          Such
Buyer shall have delivered to the Company the Additional Purchase Price (less,
in the case of CNH, the amounts withheld pursuant to Section 4(g)) for the
Additional Notes being purchased by such Buyer and each other Buyer at the
Additional Closing by wire transfer of immediately available funds pursuant to
the wire instructions provided by the Company.

     

    (iii)         The
representations and warranties of such Buyer shall be true and correct in all
material respects as of the date when made and as of the Additional Closing Date
as though made at that time (except for representations and warranties that
speak as of a specific date which shall be true and correct as of such specified
date), and such Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Buyer at or prior
to the Additional Closing Date.

     

    
      	
               
      

            	
              7.

            	
              CONDITIONS TO EACH
      BUYER'S OBLIGATION TO
PURCHASE.

            

    

     

    (a)   The
obligation of each Buyer hereunder to purchase the Initial Notes and the
Warrants at the Initial Closing is subject to the satisfaction, at or before the
Initial Closing Date, of each of the following conditions, provided that these
conditions are for each Buyer's sole benefit and may be waived by such Buyer at
any time in its sole discretion by providing the Company with prior written
notice thereof:

     

    (i)           The
Company shall have duly executed and delivered to such Buyer (i) each of the
Transaction Documents contemplated pursuant to the Original Agreement and (ii)
the Initial Notes (in such principal amounts as such Buyer shall request), being
purchased by such Buyer at the Initial Closing pursuant to this Agreement and
(iii) the Warrants (in such amounts as such Buyer shall request) being purchased
by such Buyer at the Initial Closing pursuant to this Agreement.

     

    (ii)          Such
Buyer shall have received the opinion of Greenberg Traurig, LLP, the Company's
outside counsel ("Company
Counsel"), dated as of the Initial Closing Date, in substantially the
form of Exhibit
F-1 attached hereto.

     

    (iii)         [Intentionally
omitted]

     

    (iv)         The
Company shall have delivered to such Buyer a certificate evidencing the
formation and good standing of the Company and each of its operating
Subsidiaries in such corporation's state of incorporation issued by the
Secretary of State of such state of incorporation as of a date within 10 days of
the Initial Closing Date.

     

    (v)          The
Company shall have delivered to such Buyer a certificate evidencing the
Company's qualification as a foreign corporation and good standing issued by the
Secretary of State (or comparable office) of each jurisdiction in which the
Company conducts business and is required to so qualify, as of a date within ten
(10) days of the Initial Closing Date.

     

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

     

    (vi)        The
Common Stock (I) shall be listed on the Principal Market and (II) shall not have
been suspended, as of the Initial Closing Date, by the SEC or the Principal
Market from trading on the Principal Market nor shall suspension by the SEC or
the Principal Market have been threatened, as of the Initial Closing Date,
either (A) in writing by the SEC or the Principal Market or (B) by falling below
the minimum listing maintenance requirements of the Principal
Market.

     

    (vii)       The
Company shall have delivered to such Buyer a certified copy of the Certificate
of Incorporation as certified by the Secretary of State of the State of Delaware
within 10 days of the Initial Closing Date.

     

    (viii)      The
Company shall have delivered to such Buyer a certificate, executed by the
Secretary of the Company and dated as of the Initial Closing Date, as to (i) the
resolutions consistent with Section 3(b) as adopted by the Company's Board of
Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate of
Incorporation and (iii) the Bylaws, each as in effect at the Initial Closing, in
the form attached hereto as Exhibit
G.

     

    (ix)         The
representations and warranties of the Company shall be true and correct as of
the date when made and shall be true and correct in all material respects as of
the Initial Closing Date (except, that any representation or warranty that is
qualified by materiality or Material Adverse Effect shall be true and correct in
all respects as of the Initial Closing Date) as though made at that time (except
for representations and warranties that speak as of a specific date which shall
be true and correct as of such specified date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Initial Closing
Date.  Such Buyer shall have received a certificate, executed by the
Chief Executive Officer of the Company, dated as of the Initial Closing Date, to
the foregoing effect and as to such other matters as may be reasonably requested
by such Buyer in the form attached hereto as Exhibit
H.

     

    (x)          The
Company shall have delivered to such Buyer a letter from the Company's transfer
agent certifying the number of shares of Common Stock outstanding as of a date
within five days of the Initial Closing Date.

     

    (xi)         The
Company shall have obtained all governmental, regulatory or third party consents
and approvals, if any, necessary for the sale of the Securities.

     

    (xii)        All
officers, directors, employees and affiliates of the Company set forth on Schedule 7(xii) shall
have entered into a lock-up agreement with the Company in the form attached
hereto as Exhibit
I (the "Lock-Up
Agreements").

     

    (xiii)       Each
of Terry Phillips, Gregory Phillips and Melanie Mroz (the "Covering Shareholders") shall
have entered into a securities surrender agreement with the Company in the form
attached hereto as Exhibit J (the "Securities Surrender
Agreements").

     

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

     

    (xiv)      In
accordance with the terms of the Security Documents, the Company shall have
delivered to the Collateral Agent (i) certificates representing the
Subsidiaries' shares of capital stock, along with duly executed blank stock
powers and (ii) appropriate financing statements on Form UCC-1 to be duly filed
in such office or offices as may be necessary or, in the opinion of the
Collateral Agent, desirable to perfect the security interests purported to be
created by each Security Document.

     

    (xv)       Within
six (6) Business Days prior to the Initial Closing, the Company shall have
delivered or caused to be delivered to each Buyer (A) certified copies of UCC
search results, listing all effective financing statements which name as debtor
the Company or any of its Subsidiaries filed in the prior five years to perfect
an interest in any assets thereof, together with copies of such financing
statements, none of which, except as otherwise agreed in writing by the Buyers,
shall cover any of the Collateral (as defined in the Security Documents) and the
results of searches for any tax lien and judgment lien filed against such Person
or its property, which results, except as otherwise agreed to in writing by the
Buyers shall not show any such Liens (as defined in the Security Documents); and
(B) a perfection certificate, duly completed and executed by the Company and
each of its Subsidiaries, in form and substance satisfactory to the
Buyers.

     

    (b)  The
obligation of each Buyer hereunder to purchase the Additional Notes at the
Additional Closing is subject to the satisfaction, at or before the Additional
Closing Date, of each of the following conditions, provided that these
conditions are for each Buyer's sole benefit and may be waived by such Buyer at
any time in its sole discretion by providing the Company with prior written
notice thereof:

     

    (i)           The
Company shall have duly executed and delivered to such Buyer (i) this Agreement
and (ii) the Additional Notes (in such principal amounts as such Buyer shall
request), being purchased by such Buyer at the Additional Closing pursuant to
this Agreement.

     

    (ii)          Such
Buyer shall have received the opinion of Company Counsel, dated as of the
Additional Closing Date, in substantially the form of Exhibit F-2 attached
hereto.

     

    (iii)         [Intentionally
omitted]

     

    (iv)         The
Company shall have delivered to such Buyer a certificate evidencing the
formation and good standing of the Company in such corporation's state of
incorporation issued by the Secretary of State of such state of incorporation as
of a date within 10 days of the Additional Closing Date.

     

    (v)          [Intentionally
omitted]

     

    (vi)         The
Common Stock (I) shall be listed on the Principal Market and (II) shall not have
been suspended, as of the Additional Closing Date, by the SEC or the Principal
Market from trading on the Principal Market nor shall suspension by the SEC or
the Principal Market have been threatened, as of the Additional Closing Date,
either (A) in writing by the SEC or the Principal Market or (B) by falling below
the minimum listing maintenance requirements of the Principal
Market.

     

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

     

    (vii)       [Intentionally
omitted]

     

    (viii)      The
Company shall have delivered to such Buyer a certificate, executed by the
Secretary of the Company and dated as of the Additional Closing Date, as to (i)
the resolutions consistent with Section 3(b) as adopted by the Company's Board
of Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate
of Incorporation and (iii) the Bylaws, each as in effect at the Additional
Closing, in the form attached hereto as Exhibit
G.

     

    (ix)         The
representations and warranties of the Company shall be true and correct as of
the date when made and shall be true and correct in all material respects as of
the Additional Closing Date (except, that any representation or warranty that is
qualified by materiality or Material Adverse Effect shall be true and correct in
all respects as of the Additional Closing Date) as though made at that time
(except for representations and warranties that speak as of a specific date
which shall be true and correct as of such specified date) and the Company shall
have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the
Additional Closing Date.  Such Buyer shall have received a
certificate, executed by the Chief Executive Officer of the Company, dated as of
the Additional Closing Date, to the foregoing effect and as to such other
matters as may be reasonably requested by such Buyer in the form attached hereto
as Exhibit
H.

     

    (x)          The
Company shall have obtained all governmental, regulatory or third party consents
and approvals, if any, necessary for the sale of the Securities.

     

    (xi)         All
Lock-Up Agreements shall be in full force and effect and shall not have been
terminated.

     

    (xii)        All
Securities Surrender Agreements shall be in full force and effect and shall not
have been terminated.

     

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

     

    8.           TERMINATION.  In
the event that the Additional Closing shall not have occurred with respect to a
Buyer on or before five (5) Business Days from the date hereof due to the
Company's or such Buyer's failure to satisfy the conditions set forth in
Sections 6(b) and 7(b) above (and the nonbreaching party's failure to waive such
unsatisfied condition(s)), the nonbreaching party shall have the option to
terminate its obligations under Section 1 of this Agreement regarding the
purchase of the Additional Notes with respect to such breaching party at the
close of business on such date without liability of any party to any other
party; provided, however, that if a
party’s obligations under Section 1 of this Agreement regarding the Additional
Notes are terminated pursuant to this Section 8, the Company shall remain
obligated to reimburse the non-breaching Buyers for the expenses described in
Section 4(g) above.

     

    
      	
               
      

            	
              9.

            	
              MISCELLANEOUS.

            

    

     

    (a) Governing Law; Jurisdiction;
Jury Trial.  All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State 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, 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 brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper.  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 to such party at the
address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

     

    (b) Counterparts.  This
Agreement may be executed in two or more identical counterparts, all of which
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;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile signature.

     

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

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

     

    (d) Severability.  If
any provision of this Agreement is prohibited by law or otherwise determined to
be invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Agreement so long as this Agreement
as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties.  The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s).

     

    (e) Entire Agreement;
Amendments.  This Agreement and the other Transaction Documents
supersede all other prior oral or written agreements between the Buyers, the
Company, their affiliates and Persons acting on their behalf with respect to the
matters discussed herein, including the Original Agreement, and this Agreement,
the other Transaction Documents and the instruments referenced herein and
therein contain the entire understanding of the parties with respect to the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor any Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters.  No
provision of this Agreement may be amended or waived other than by an instrument
in writing signed by the Company and the holders of at least fifty percent (50%)
of the aggregate amount of Registrable Securities issued and issuable hereunder
and under the Notes and Warrants, and any amendment or waiver to this Agreement
made in conformity with the provisions of this Section 9(e) shall be binding on
all Buyers and holders of Securities.  No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
applicable Securities then outstanding.  No consideration shall be
offered or paid to any Person to amend or consent to a waiver or modification of
any provision of any of the Transaction Documents unless the same consideration
(other than the reimbursement of legal fees) also is offered to all of the
parties to the Transaction Documents, holders of Notes or holders of the
Warrants, as the case may be.  The Company has not, directly or
indirectly, made any agreements with any Buyers relating to the terms or
conditions of the transactions contemplated by the Transaction Documents except
as set forth in the Transaction Documents.  Without limiting the
foregoing, the Company confirms that, except as set forth in this Agreement, no
Buyer has made any commitment or promise or has any other obligation to provide
any financing to the Company or otherwise.

     

    (f) Notices.  Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered:  (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one Business Day after deposit with an overnight courier
service, in each case properly addressed to the party to receive the
same.  The addresses and facsimile numbers for such communications
shall be:

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

     

    If to the
Company:

     

    SouthPeak
Interactive Corporation

    2900 Polo
Parkway

    Midlothian,
VA  23113

    Telephone:      (804)
378-5100

    Facsimile:        (804)
378-6085

    Attention:        Reba
McDermott, Chief Financial Officer

     

    With a copy (for informational purposes
only) to:

     

    Greenberg
Traurig, LLP

    1750
Tysons Boulevard

    Suite
1200

    McLean,
VA  22102

    Telephone:       (703)
749-1352

    Facsimile:         (703)
714-8359

    Attention:  Mark
Wishner, Esq.

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

     

    If to the
Transfer Agent:

     

    American
Stock Transfer & Trust Company, LLC

    6201 15th
Avenue

    Brooklyn,
NY 11219

    Telephone:     (718)
921-8261

    Facsimile:       (718)
765-8712

    Attention:        Donna
Ansbro

    

    If to a
Buyer, to its address and facsimile number set forth on the Schedule of Buyers,
with copies to such Buyer's representatives as set forth on the Schedule of
Buyers,

     

    with a
copy (for informational purposes only) to:

     

    Schulte
Roth & Zabel LLP

    919 Third
Avenue

    New York,
New York  10022

    Telephone:      (212)
756-2000

    Facsimile:        (212)
593-5955

    Attention:         Eleazer
N. Klein, Esq.

     

    or to
such other address and/or facsimile number and/or to the attention of such other
Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively.

     

    (g) Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, including
any purchasers of the Notes or the Warrants.  The Company shall not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the holders of at least a majority of the aggregate number of
Registrable Securities issued and issuable hereunder, including by way of
Fundamental Transaction (unless the Company is in compliance with the applicable
provisions governing Fundamental Transactions set forth in the Notes and the
Warrants).  A Buyer may assign some or all of its rights hereunder
without the consent of the Company, in which event such assignee shall be deemed
to be a Buyer hereunder with respect to such assigned rights.

     

    (h) No Third Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

     

    (i) Survival.  Unless
this Agreement is terminated under Section 8, the representations and warranties
of the Company and the Buyers contained in Sections 2 and 3, the agreements and
covenants set forth in Sections 4, 5 and 9 shall survive each Closing and the
delivery and exercise of Securities, as applicable.  Each Buyer shall
be responsible only for its own representations, warranties, agreements and
covenants hereunder.

     

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

     

    (k) Indemnification.  In
consideration of each Buyer's execution and delivery of the Transaction
Documents and acquiring the Securities thereunder and in addition to all of the
Company's other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless each Buyer and each other holder of
the Securities and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing
Persons' agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the "Indemnitees") from and against
any and all actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys' fees
and disbursements (the "Indemnified Liabilities"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby or
(c) any cause of action, suit or claim brought or made against such Indemnitee
by a third party (including for these purposes a derivative action brought on
behalf of the Company) and arising out of or resulting from (i) the execution,
delivery, performance or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (ii) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Securities, (iii) any
disclosure made by such Buyer pursuant to Section 4(i), or (iv) the status of
such Buyer or holder of the Securities as an investor in the Company pursuant to
the transactions contemplated by the Transaction Documents.  To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.  Except as otherwise set forth herein, the mechanics
and procedures with respect to the rights and obligations under this Section
9(k) shall be the same as those set forth in Section 6 of the Registration
Rights Agreement.  Notwithstanding anything in this Agreement or in
clause (iv) of Section 6(a) of the Registration Rights Agreement to the
contrary, if the Company shall have any indemnification obligations with respect
to any Indemnified Liabilities that resulted primarily from the willful
misconduct or gross negligence of one or more Indemnitees, then the Company
shall not be obligated to indemnify such Indemnitee for such Indemnified
Liabilities.

    
      
         

      

      
        41

        
          

        

      

      
         

      

    

     

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

     

    (m)           Remedies.  Each
Buyer and each holder of the Securities shall have all rights and remedies set
forth in the Transaction Documents and all rights and remedies which such
holders have been granted at any time under any other agreement or contract and
all of the rights which such holders have under any law.  Any Person
having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law.  Furthermore, the Company
recognizes that in the event that it fails to perform, observe, or discharge any
or all of its obligations under the Transaction Documents, any remedy at law may
prove to be inadequate relief to the Buyers.  The Company therefore
agrees that the Buyers shall be entitled to seek temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages and without posting a bond or other security.

     

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

     

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

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

     

    (p)           Independent Nature of
Buyers' Obligations and Rights.  The obligations of each Buyer
under any Transaction Document are several and not joint with the obligations of
any other Buyer, and no Buyer shall be responsible in any way for the
performance of the obligations of any other Buyer under any Transaction
Document.  Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be
deemed to constitute the Buyers as, and the Company acknowledges that the Buyers
do not so constitute, a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Buyers are in any way
acting in concert or as a group, and the Company shall not assert any such claim
with respect to such obligations or the transactions contemplated by the
Transaction Documents and the Company acknowledges that the Buyers are not
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents.  The Company
acknowledges and each Buyer confirms that it has independently participated in
the negotiation of the transaction contemplated hereby with the advice of its
own counsel and advisors.  Each Buyer shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Buyer to be joined as an additional
party in any proceeding for such purpose.

     

    [Signature
Page Follows]

    
      
         

      

      
        43

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each Buyer
and the Company have caused its respective signature page to this Amended and
Restated Securities Purchase Agreement to be duly executed as of the date first
written above.

     

    
      
        
          	 	
                  COMPANY:

                
	 	 
      
	 	
                  SouthPeak
      Interactive Corporation

                
	 	 
      
	 	
                  By:

                	 
      
	 	 
      	
                  Name:
      Reba L. McDermott

                
	 	 
      	
                  Title:  Chief
      Financial Officer

                

        

      

    

    

    [Signature
Page to Amended and Restated Securities Purchase
Agreement]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Amended and
Restated Securities Purchase Agreement to be duly executed as of the date first
written above.

    

    
      
        	 	
                BUYERS:

              
	 	 
      
	 	
                CNH
      Diversified Opportunities

              
	 	
                Master
      Account, L.P.

              
	 	 
      	 
      
	 	
                By:

              	
                  

              
	 	 
      	
                Name:

              
	 	 
      	
                Title:

              

      

    

    

    [Signature
Page to Amended and Restated Securities Purchase
Agreement]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Amended and
Restated Securities Purchase Agreement to be duly executed as of the date first
written above.

    

    
      
        
          
            	 	
                    BUYERS:

                  
	 	 
      
	 	
                    CNH
      CA Master Account, L.P.

                  
	 	 
      
	 	
                    By:

                  	 
      
	 	 
      	
                    Name:

                  
	 	 
      	
                    Title:

                  

          

        

      

    

    

    [Signature
Page to Amended and Restated Securities Purchase
Agreement]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Amended and
Restated Securities Purchase Agreement to be duly executed as of the date first
written above.

    

    
      
        	 	
                BUYERS:

              
	 	 
      
	 	
                AQR
      Diversified Arbitrage Fund

              
	 	 
      	 
      
	 	
                By:

              	
                  

              
	 	 
      	
                Name:

              
	 	 
      	
                Title:

              

      

    

    

    [Signature
Page to Amended and Restated Securities Purchase
Agreement]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Amended and
Restated Securities Purchase Agreement to be duly executed as of the date first
written above.

    

    
      
        
          
            	 	
                    BUYERS:

                  
	 	 
      	 
      
	 	
                    By:

                  	
                       

                  
	 	 
      	
                    Terry
      Phillips

                  

          

        

      

    

    

    [Signature
Page to Amended and Restated Securities Purchase
Agreement]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Amended and
Restated Securities Purchase Agreement to be duly executed as of the date first
written above.

    

    
      
        
          	 	
                  BUYERS:

                
	 	 
      
	 	
                  AQR
      Opportunistic Premium Offshore

                  Fund,
      L.P.

                
	 	 
      	 
      
	 	
                  By:

                	 
      
	 	 
      	
                  Name:

                
	 	 
      	
                  Title:

                

        

      

    

    

    [Signature
Page to Amended and Restated Securities Purchase
Agreement]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Amended and
Restated Securities Purchase Agreement to be duly executed as of the date first
written above.

    

    
      
        
          
            	 	
                    BUYERS:

                  
	 	 
      
	 	
                    Advanced
      Series Trust, solely on

                  
	 	
                    behalf
      of the AST Academic

                  
	 	
                    Strategies
      Asset Allocation

                  
	 	
                    Portfolio

                  
	 	 
      	 
      
	 	
                    By:

                  	 
      
	 	 
      	
                    Name:

                  
	 	 
      	
                    Title:

                  

          

        

      

    

    

    [Signature
Page to Amended and Restated Securities Purchase
Agreement]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    SCHEDULE
OF BUYERS

    
       

      
        
          
            
              
                
                  
                    	
                            (1)

                          	 	
                            (2)

                          	 	
                            (3)

                          	 	 	
                            (4)

                          	 	 	
                            (5)

                          	 	 	
                            (6)

                          	 	 	
                            (7)

                          	 	 	
                            (8)

                          	 	
                            (9)

                          
	
                            
                              Buyer

                            

                          	 	
                            
                              Address and Facsimile Number

                            

                          	 	
                            
                              Aggregate

                              Principal

                              Amount of

                              Initial Notes

                            

                          	 	 	
                            
                              Number of Series A

                              Warrant Shares

                            

                          	 	 	
                            
                              Number of Series B

                              Warrant Shares

                            

                          	 	 	
                            
                              Initial Purchase

                              Price

                            

                          	 	 	
                            
                              Aggregate

                              Principal Amount

                              of Additional

                              Notes

                            

                          	 	 	
                            
                              Additional

                              Purchase Price

                            

                          	 	
                            
                              Legal Representative's

                              Address and Facsimile Number

                            

                          
	
                            CNH
      Diversified Opportunities Master Account, L.P.

                          	 	
                            c/o
      CNH Partners, LLC

                            2
      Greenwich Plaza, 1st Floor

                            Greenwich,
      CT  06830

                            Attention:  Rocky
      Bryant

                                              Brendan
      Kalb

                            Facsimile:

                            Telephone:
      203-742-3600

                          	 	$	500,000	 	 	 	1,160,093	 	 	 	870,070	 	 	$	500,000	 	 	$	0	 	 	$	0	 	
                            Schulte
      Roth & Zabel LLP

                            919
      Third Avenue

                            New
      York, New York  10022

                            Attention:  Eleazer
      Klein, Esq.

                            Facsimile:
      (212) 593-5955

                            Telephone:  (212)
      756-2376

                          
	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
      
	
                            CNH
      CA Master Account L.P.

                          	 	
                            c/o
      CNH Partners, LLC

                            2
      Greenwich Plaza, 1st Floor

                            Greenwich,
      CT  06830

                            Attention:  Rocky
      Bryant

                                              Brendan
      Kalb

                            Facsimile:

                            Telephone:
      203-742-3600

                          	 	$	2,000,000	 	 	 	4,640,371	 	 	 	3,480,278	 	 	$	2,000,000	 	 	$	0	 	 	$	0	 	
                            Schulte
      Roth & Zabel LLP

                            919
      Third Avenue

                            New
      York, New York  10022

                            Attention:  Eleazer
      Klein, Esq.

                            Facsimile:
      (212) 593-5955

                            Telephone:  (212)
      756-2376

                          
	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
      
	
                            AQR
      Diversified Arbitrage Fund

                          	 	
                            c/o
      AQR Capital Management

                            2
      Greenwich Plaza, 3rd Floor

                            Greenwich,
      CT  06830

                            Attention:  Rocky
      Bryant

                                              Brendan
      Kalb

                            Facsimile:

                            Telephone:
      203-742-3600

                          	 	$	2,500,000	 	 	 	5,800,464	 	 	 	4,350,348	 	 	$	2,500,000	 	 	$	0	 	 	$	0	 	
                            Schulte
      Roth & Zabel LLP

                            919
      Third Avenue

                            New
      York, New York  10022

                            Attention:  Eleazer
      Klein, Esq.

                            Facsimile:
      (212) 593-5955

                            Telephone:  (212)
      756-2376

                          

                  

                

              

            

          

        

      

    

    
    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                	
                        (1)

                      	 	
                        (2)

                      	 	
                        (3)

                      	 	 	
                        (4)

                      	 	 	
                        (5)

                      	 	 	
                        (6)

                      	 	 	
                        (7)

                      	 	 	
                        (8)

                      	 	
                        (9)

                      
	
                        
                          Buyer

                        

                      	 	
                        
                          Address and Facsimile Number

                        

                      	 	
                        
                          Aggregate

                          Principal

                          Amount of

                          Initial Notes

                        

                      	 	 	
                        
                          Number of Series A

                          Warrant Shares

                        

                      	 	 	
                        
                          Number of Series B

                          Warrant Shares

                        

                      	 	 	
                        
                          Initial Purchase

                          Price

                        

                      	 	 	
                        
                          Aggregate

                          Principal Amount

                          of Additional

                          Notes

                        

                      	 	 	
                        
                          Additional

                          Purchase Price

                        

                      	 	
                        
                          Legal Representative's

                          Address and Facsimile Number

                        

                      
	
                        Terry
      Phillips

                      	 	
                        c/o
      SouthPeak Interactive Corporation

                        2900
      Polo Parkway

                        Midlothian,
      VA  23113

                        Attention:  Terry
      Phillips

                        Facsimile:
      804- 378-5100

                        Telephone:
      804-378-6085

                      	 	$	500,000	 	 	 	1,160,093	 	 	 	870,070	 	 	$	500,000	 	 	$	200,000	 	 	$	200,000	 	 
      
	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
      
	
                        AQR
      Opportunistic Premium Offshore Fund, L.P.

                      	 	
                        c/o
      AQR Capital Management, LLC

                        2
      Greenwich Plaza, 1st Floor

                        Greenwich,
      CT  06830

                        Attention:  Rocky
      Bryant

                                          Brendan
      Kalb

                        Facsimile:

                        Telephone:
      203-742-3600

                      	 	$	0	 	 	 	0	 	 	 	0	 	 	$	0	 	 	$	1,300,000	 	 	$	1,300,000	 	
                        Schulte
      Roth & Zabel LLP

                        919
      Third Avenue

                        New
      York, New York  10022

                        Attention:  Eleazer
      Klein, Esq.

                        Facsimile:
      (212) 593-5955

                        Telephone:  (212)
      756-2376

                      
	 
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
      
	
                        Advanced
      Series Trust, solely on behalf of the AST Academic Strategies Asset
      Allocation Portfolio

                      	 	
                        c/o
      AQR Capital Management, LLC

                        2
      Greenwich Plaza, 1st Floor

                        Greenwich,
      CT  06830

                        Attention:  Rocky
      Bryant

                                          Brendan
      Kalb

                        Facsimile:

                        Telephone:
      203-742-3600

                      	 	$	0	 	 	 	0	 	 	 	0	 	 	$	0	 	 	$	500,000	 	 	$	500,000	 	
                        Schulte
      Roth & Zabel LLP

                        919
      Third Avenue

                        New
      York, New York  10022

                        Attention:  Eleazer
      Klein, Esq.

                        Facsimile:
      (212) 593-5955

                        Telephone:  (212)
      756-2376

                      

              

            

          

        

      

    

    

    [Signature
Page to Amended and Restated Securities Purchase
Agreement]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    EXHIBITS

    

    
      
        	
                Exhibit
      A-1

              	
                Form
      of Initial Notes

              
	
                Exhibit
      A-2

              	
                Form
      of Additional Notes

              
	
                Exhibit
      B-1

              	
                Form
      of Series A Warrants

              
	
                Exhibit
      B-2

              	
                Form
      of Series B Warrants

              
	
                Exhibit
      C

              	
                Form
      of Registration Rights Agreement

              
	
                Exhibit
      D-1

              	
                Security
      Agreement

              
	
                Exhibit
      D-2

              	
                Form
      of Guarantee

              
	
                Exhibit
      E

              	
                Form
      of Irrevocable Transfer Agent Instructions

              
	
                Exhibit
      F-1

              	
                Form
      of Company Counsel Opinion (Initial Closing)

              
	
                Exhibit
      F-2

              	
                Form
      of Company Counsel Opinion (Additional Closing)

              
	
                Exhibit
      G

              	
                Form
      of Secretary's Certificate

              
	
                Exhibit
      H

              	
                Form
      of Officer's Certificate

              
	
                Exhibit
      I

              	
                Form
      of Lock-Up Agreement

              
	
                Exhibit
      J

              	
                Form
      of Securities Surrender
Agreement

              

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    SCHEDULES

    

    Schedule
3(a)(i) - Good Standing

    Schedule
3(a)(ii) - List of Subsidiaries

    Schedule
3(k) - SEC Documents

    Schedule
3(l) - Absence of Certain Changes

    Schedule
3(q) - Transactions with Affiliates

    Schedule
3(r) - Equity Capitalization

    Schedule
3(s) - Indebtedness and Other Contracts

    Schedule
3(t) - Absence of Litigation

    Schedule
3(u) - Insurance

    Schedule
3(x)(i)(a) - Registered and Material Owned Intellectual Property and
Contracts

    Schedule
3(x)(i)(b) - Exceptions to Intellectual Property Assignability

    Schedule
3(x)(i)(c) - Intellectual Property Breaches or Defaults

    Schedule
3(x)(ii) - Abandoned, Expired and Terminated Owned Intellectual
Property

    Schedule
3(x)(iii) - Intellectual Property Infringement Claims, Actions and
Proceedings

    Schedule
3(x)(v) - Public Software

    Schedule
3(bb) - Internal Accounting and Disclosure Controls

    Schedule
3(ff) - Ranking of Notes

    Schedule
3(pp) - Judgments

    Schedule
4(d)(i) - Use of Proceeds

    Schedule
7(xii) - Parties to Lock-Up Agreements

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}]]