Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Electrum Mining Limited - Exhibit 10.1

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

     This Securities Purchase Agreement
  (this “Agreement”) is dated as of June 30, 2006, among CrossPoint
  Energy, LLC, a Texas limited liability company (the “Company”)
  and each purchaser identified on the signature pages hereto (each, including
  its successors and assigns, a “Purchaser” and collectively
  the “Purchasers”).

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

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

ARTICLE I 

  DEFINITIONS

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

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

          “Affiliate”
  means any Person that, directly or indirectly through one or more intermediaries,
  controls or is controlled by or is under common control with a Person as such
  terms are used in and construed under Rule 144 under the Securities Act. With
  respect to a Purchaser, any investment fund or managed account that is managed
  on a discretionary basis by the same investment manager as such Purchaser will
  be deemed to be an Affiliate of such Purchaser.

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

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

          “Closing
  Date” means the Business Day when all of the Transaction Documents
  have been executed and delivered by the applicable parties thereto, and all
  conditions precedent to (i) the Purchasers’ obligations to pay the Subscription
  Amount and (ii) the Company’s obligations to deliver the Securities have
  been satisfied or waived.

          “Closing
  Price” means on any particular date (a) the last reported closing bid
  price per unit of Common Units on such date on the Trading Market (as reported
  by Bloomberg L.P. at 4:15 PM (New York time)), or (b) if there is no such price
  on such date, then the closing bid price on the Trading Market on the date nearest
  preceding such date (as reported by Bloomberg L.P. at 4:15 PM (New York time)),
  or (c) if the Common Units are not then listed or quoted on the Trading Market
  and if prices for the Common Units are then reported in the “pink sheets”
  published by Pink Sheets LLC (or a similar organization or agency succeeding
  to its functions of reporting prices), the most recent bid price per unit of
  the Common Units so reported, or (d) if the Common Units are not then publicly
  traded the fair market value of one Common Unit as determined by an appraiser
  selected in good faith by the Purchasers of a majority in interest of the Units
  then outstanding.

          “Commission”
  means the Securities and Exchange Commission.

          “Common
  Unit” means the common units of the Company, having the rights, privileges
  and preferences set forth in the Regulations and any other class of securities
  into which such securities may hereafter be reclassified or changed into or
  exchanged for, including, after the Merger, the Merger Stock. 

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

          “Company
  Counsel” means Patton Boggs LLP.

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

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

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

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

          “Exempt
  Issuance” means the issuance of (a) Common Units or options to employees,
  officers or directors of the Company pursuant to any stock or option plan duly
  adopted by a majority of the non-employee members of the Board of Directors
  of the Company or a majority of the members of a committee of non-employee directors
  established for such purpose, (b) securities upon the exercise or exchange of
  or conversion of any Securities issued hereunder and/or other securities exercisable
  or exchangeable for or convertible into Common Units issued and outstanding
  on the date of this Agreement, provided that such securities have not been amended
  since the date of 

2

this Agreement to increase the number
  of such securities or to decrease the exercise, exchange or conversion price
  of any such securities, and (c) securities issued pursuant to acquisitions or
  strategic transactions approved by a majority of the disinterested directors,
  provided any such issuance shall only be to a Person which is, itself or through
  its subsidiaries, an operating company in a business synergistic with the business
  of the Company and in which the Company receives benefits in addition to the
  investment of funds, but shall not include a transaction in which the Company
  is issuing securities primarily for the purpose of raising capital or to an
  entity whose primary business is investing in securities.

           “FW”
  means Feldman Weinstein LLP with offices located at 420 Lexington Avenue, Suite
  2620, New York, New York 10170-0002.

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

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

          “knowledge
  of the Company” means the actual knowledge, after reasonable investigation,
  of Daniel F. Collins.

          “Legend
  Removal Date” shall have the meaning ascribed to such term in Section
  4.1(c) . 

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

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

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

          “Merger”
  shall have the meaning set forth in Section 2.3(b) .

          “Merger
  Securities” means the Merger Stock and the Merger Warrants.

          “Merger
  Stock” means the shares of common stock of Pubco issued to the Purchasers
  upon exchange of the Common Units pursuant to the Merger.

          “Merger
  Warrants” means the warrants to purchase Common Stock of Pubco issued
  upon exchange of the Warrants pursuant to the Merger.

          “Note”
  means a convertible note issued by the Company in the form of Exhibit A as
  attached hereto.

          “Note
  Units” means the Common Units issuable upon conversion of any Note.

3

          “Participation
  Maximum” shall have the meaning ascribed to such term in Section 4.13.

          “Per
  Unit Purchase Price” equals $1.25.

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

          “Pre-Notice”
  shall have the meaning ascribed to such term in Section 4.13. 

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

          “Purchaser
  Party” shall have the meaning ascribed to such term in Section 4.9.

          “Registration
  Rights Agreement” means the Registration Rights Agreement, to be entered
  into pursuant to the Merger, among Pubco and the Purchasers, in the form of
  Exhibit B attached hereto.

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

          “Regulations”
  means the Regulations of the Company as in effect on the date hereof. 

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

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

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

          “Securities”
  means the Units, the Notes, the Note Units, the Warrants and the Warrant Units.

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

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

4

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

          “Subsequent
  Financing” shall have the meaning ascribed to such term in Section
  4.13.

          “Subsequent
  Financing Notice” shall have the meaning ascribed to such term in Section
  4.13. 

          “Subsidiary”
  means any subsidiary of the Company as set forth on Schedule 3.1(a).

          “Trading
  Market” means the following markets or exchanges: the Nasdaq Capital
  Market, the American Stock Exchange, the New York Stock Exchange, the Nasdaq
  National Market or the OTC Bulletin Board.

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

          “Units”
  means the Common Units issued or issuable to each Purchaser pursuant to this
  Agreement, and any other class of securities into which such securities may
  hereafter be reclassified or changed into or exchanged for, including, after
  the Merger, the Merger Stock.

          “Warrants”
  means collectively the Common Unit purchase warrants, in the form of Exhibit
  C delivered to the Purchasers at the Closing in accordance with Section
  2.2(a) hereof, which Warrants shall be exercisable immediately and have a term
  of exercise equal to 5 years.

          “Warrant
  Units” means the Common Units issuable upon exercise of the Warrants.

ARTICLE II 

  PURCHASE AND SALE

          2.1      Closing.

          (a)      On
  the Closing Date, upon the terms and subject to the conditions set forth herein,
  substantially concurrent with the execution and delivery of this Agreement by
  the parties hereto, the Company agrees to sell, and each Purchaser agrees to
  purchase in the aggregate, severally and not jointly, not less than $15,000,000
  and up to $22,000,000 of Units, Notes and Warrants. The purchase price for one
  Unit, a Note in the principal amount of $1.75 and a Warrant to purchase 0.25
  Units shall be $3.00. Each Purchaser shall deliver to the Company via wire transfer
  or a certified check immediately available funds equal to their Subscription
  Amount and the Company shall deliver to each Purchaser their respective Units,
  Notes and Warrants as 

5

determined pursuant to Section 2.2(a)
  and the other items set forth in Section 2.2 issuable at the Closing. Upon satisfaction
  of the conditions set forth in Sections 2.2 and 2.3, the Closing shall occur
  at the offices of FW, or such other location as the parties shall mutually agree.

          (b)      Subsequent
  to the Closing Date and prior to July 30, 2006, subject to the terms and conditions
  of this Agreement, the Company may sell up to $10,000,000 of Units, Notes and
  Warrants at a purchase price equal to the terms set forth in Section 2.1(a)
  to such other persons and entities as are determined by the Company. Any such
  sale shall be upon the same terms and conditions as those contained herein,
  and such persons or entities, by delivery of the appropriate executed signature
  pages, shall become parties to this Agreement.

          2.2      Deliveries.

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

          (i)      this
  Agreement duly executed by the Company and Pubco;

          (ii)      a
  legal opinion of Company Counsel, in the form of Exhibit D attached hereto;

          (iii)      a
  certificate evidencing a number of Units equal to 41.6666666% of such Purchaser’s
  Subscription Amount divided by the Per Unit Purchase Price (rounded to the nearest
  whole unit), registered in the name of such Purchaser;

          (iv)     
  a Note in the principal amount equal to 58.3333333% of such Purchaser’s
  Subscription Amount (rounded to the nearest whole cent), registered in the name
  of such Purchaser; and

          (v)     
  a Warrant registered in the name of such Purchaser to purchase up to a number
  of Common Units equal to 25% of the Units and the Note Units to be purchased
  by such Purchaser hereunder, with an exercise price equal to $1.95, subject
  to adjustment therein.

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

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

          (ii)      such
  Purchaser’s Subscription Amount by wire transfer to the account designated
  in writing by the Company.

          2.3      Closing
  Conditions.

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

6

          (i)      the
  accuracy in all material respects when made and on the Closing Date of the representations
  and warranties of the Purchasers contained herein; 

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

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

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

          (i)     
  the accuracy in all material respects on the Closing Date of the representations
  and warranties of the Company contained herein;

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

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

          (iv)      the
  Company, Electrum Mining Limited (“Pubco”) and all other parties
  thereto shall, on or before July 7, 2006, enter into and deliver that certain
  Merger Agreement dated July 7, 2006 whereby CrossPoint Acquisition Company,
  a wholly-owned subsidiary of Pubco will merge into the Company, and pursuant
  to which all outstanding securities of the Company will be exchanged for securities
  of Pubco (the “Merger”), which agreement (the “Merger Agreement”)
  shall have such terms and conditions as are acceptable to the Purchasers and
  shall require as conditions to the closing of the Merger (which conditions may
  not be waived without the prior written consent of each Purchaser): (i) that
  Pubco assume all obligations of the Company hereunder, including, without limitation,
  all obligations of the Company under Article IV hereof, (ii) that Pubco execute
  and deliver the Registration Rights Agreement, (iii) that Pubco issue each Purchaser
  a warrant, in substantially the form of the Warrants issued hereunder in exchange
  for the Warrants, (iv) that the Purchasers own, in the aggregate, a percentage
  of the fully diluted capital stock of Pubco immediately following the Merger
  (including the capital stock of Pubco issuable upon conversion of the Notes
  but excluding the warrants issuable pursuant to the Merger upon exchange of
  the Warrants for such purpose), such percentage being equal to the aggregate
  shares of Merger Stock divided by the sum of the aggregate shares of Merger
  Stock and 11,400,000, that sum divided by 94% (e.g. for $20,000,000 of Units
  sold, the percentage is equal to 13,333,333 divided by the sum of 13,333,333
  and 11,400,000, that sum divided by 94%, or approximately 50.7%), and (v) that
  each Purchaser shall be a third party beneficiary of the representations, warranties
  and covenants of the parties thereunder;

7

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

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

ARTICLE III

  REPRESENTATIONS AND WARRANTIES

          3.1      Representations
  and Warranties of the Company. Except as set forth under the corresponding section
  of the Disclosure Schedules which Disclosure Schedules shall be deemed a part
  hereof and to qualify any representation or warranty otherwise made herein to
  the extent of such disclosure, the Company hereby makes the representations
  and warranties set forth below to each Purchaser:

          (a)     
  Subsidiaries. All of the direct and indirect subsidiaries of the Company
  are set forth on Schedule 3.1(a). The Company owns, directly or indirectly,
  all of the capital stock or other equity interests of each Subsidiary free and
  clear of any Liens, and all the issued and outstanding shares of capital stock
  of each Subsidiary are validly issued and are fully paid, non-assessable and
  free of preemptive and similar rights to subscribe for or purchase securities.
  If the Company has no subsidiaries, then all other references in the Transaction
  Documents to the Subsidiaries or any of them will be disregarded.

          Organization
  and Qualification. The Company and each of the Subsidiaries is an entity
  duly organized or incorporated, validly existing and in good standing under
  the laws of the jurisdiction of its organization or incorporation (as applicable),
  with the requisite power and authority to own and use its properties and assets
  and to carry on its business as currently conducted. Neither the Company nor
  any Subsidiary is in violation or default of any of the provisions of its respective
  certificate or articles of organization, regulations, bylaws or other organizational
  or charter documents. Each of the Company and the Subsidiaries is duly qualified
  to conduct business and is in good standing as a foreign entity in each jurisdiction
  in which the nature of the business conducted or property owned by it makes
  such qualification necessary, except where the failure to be so qualified or
  in good standing, as the case may be, would not have or reasonably be expected
  to result in (i) a material adverse effect on the legality, validity or enforceability
  of any Transaction Document, (ii) a material adverse effect on the results of
  operations, assets, business, prospects or condition (financial or otherwise)
  of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
  effect on the Company’s ability to perform in any material respect on a
  timely basis its obligations under any Transaction 

8

Document, other than the following, which
  shall not be taken into account in determining whether there has been or will
  be a Material Adverse Effect: (A) any adverse effect attributable solely to
  the failure of the Company and its Subsidiaries to meet internal projections
  or forecasts; (B) any adverse effect attributable solely to conditions generally
  affecting the industry in which the Company and its Subsidiaries participate,
  the US economy as a whole or the capital markets in general; and (C) adverse
  effects resulting solely from any change in accounting requirements or applicable
  laws and regulations, (any of (i), (ii) or (iii), a “Material Adverse
  Effect”) and no Proceeding has been instituted in any such jurisdiction
  revoking, limiting or curtailing or seeking to revoke, limit or curtail such
  power and authority or qualification.

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

          (c)      No
  Conflicts. The execution, delivery and performance of the Transaction Documents
  by the Company, the issuance and sale of the Units and the consummation by the
  Company of the other transactions contemplated hereby and thereby do not and
  will not (i) conflict with or violate any provision of the Company’s or
  any Subsidiary’s certificate or articles of incorporation, bylaws or other
  organizational or charter documents, or (ii) conflict with, or constitute a
  default (or an event that with notice or lapse of time or both would become
  a default) under, result in the creation of any Lien upon any of the properties
  or assets of the Company or any Subsidiary, or give to others any rights of
  termination, amendment, acceleration or cancellation (with or without notice,
  lapse of time or both) of, any agreement, credit facility, debt or other instrument
  (evidencing a Company or Subsidiary debt or otherwise) or other understanding
  to which the Company or any Subsidiary is a party or by which any property or
  asset of the Company or any Subsidiary is bound or affected, or (iii) subject
  to the Required Approvals, conflict with or result in a violation of any law,
  rule, regulation, order, judgment, injunction, decree or other restriction of
  any court or governmental authority to which the Company or a Subsidiary is
  subject (including federal and state securities laws and regulations), or by
  which any property or asset of the Company or a Subsidiary is 

9

bound or affected; except in the case
  of each of clauses (ii) and (iii), such as would not have or reasonably be expected
  to result in a Material Adverse Effect.

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

          (e)     
  Issuance of the Securities. The Securities are duly authorized and, when
  issued and paid for in accordance with the applicable Transaction Documents,
  will be duly and validly issued, fully paid and nonassessable, free and clear
  of all Liens imposed by the Company other than restrictions on transfer provided
  for in the Transaction Documents and the Regulations. The Company is authorized
  to issue an unlimited number of Common Units.

          (f)      Capitalization.
  The issued and outstanding capitalization of the Company immediately prior to
  the Closing and on a pro-forma basis (assuming the consummation of the Merger)
  is as set forth on Schedule 3.1(g). The Company has not issued any Common
  Units or other securities other than as set forth on Schedule 3.1(g).
  Except as set forth on Schedule 3.1(g), the Company has not created or authorized
  the issuance of any “preferred units” having special rights or preferences
  as contemplated by Section 7.1 of the Regulations. No Person has any right of
  first refusal, preemptive right, right of participation, or any similar right
  to participate in the transactions contemplated by the Transaction Documents.
  Except as a result of the purchase and sale of the Securities or as set forth
  on Schedule 3.1(g), there are no outstanding options, warrants, script
  rights to subscribe to, calls or commitments of any character whatsoever relating
  to, or securities, rights or obligations convertible into or exercisable or
  exchangeable for, or giving any Person any right to subscribe for or acquire,
  any Common Units, or contracts, commitments, understandings or arrangements
  by which the Company or any Subsidiary is or may become bound to issue additional
  Common Units or Common Unit Equivalents. The issuance and sale of the Securities
  will not obligate the Company to issue Common Units or other securities to any
  Person (other than the Purchasers) and will not result in a right of any holder
  of Company securities to adjust the exercise, conversion, exchange or reset
  price under any of such securities. All of the outstanding securities of the
  Company are validly issued, fully paid and nonassessable, have been issued in
  compliance with all federal and state securities laws, and none of such outstanding
  securities was issued in violation of any preemptive rights or similar rights
  to subscribe for or purchase securities. No further approval or authorization
  of any member, the Board of Managers of the Company or others is required for
  the issuance and sale of the Securities. There are no membership agreements,
  voting agreements or other similar agreements with respect to the governance
  of the Company’s affairs to which the 

10

Company is a party or, to the knowledge
  of the Company, between or among any of the holders of the Company’s Common
  Units.

          (g)      SEC
  Reports; Financial Statements. To the Company’s knowledge, Pubco has
  filed all reports, schedules, forms, statements and other documents required
  to be filed by it under the Securities Act and the Exchange Act, including pursuant
  to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof
  (or such shorter period as the Company was required by law or regulation to
  file such material) (the foregoing materials, including the exhibits thereto
  and documents incorporated by reference therein, being collectively referred
  to herein as the “SEC Reports”) on a timely basis or has received
  a valid extension of such time of filing and has filed any such SEC Reports
  prior to the expiration of any such extension. To the Company’s knowledge,
  as of their respective dates, the SEC Reports complied in all material respects
  with the requirements of the Securities Act and the Exchange Act and the rules
  and regulations of the Commission promulgated thereunder, as applicable, and
  none of the SEC Reports, when filed, contained any untrue statement of a material
  fact or omitted to state a material fact required to be stated therein or necessary
  in order to make the statements therein, in the light of the circumstances under
  which they were made, not misleading. The audited financial statements of the
  Company for the fiscal year ended December 31, 2005 and unaudited financial
  statements for the fiscal quarter ended March 31, 2006 are attached hereto as
  Schedule 3.1(h). The financial statements attached hereto as Schedule
  3.1(h) have been prepared in accordance with United States generally accepted
  accounting principles applied on a consistent basis during the periods involved
  (“GAAP”), except as may be otherwise specified in such financial
  statements or the notes thereto and except that unaudited financial statements
  may not contain all footnotes required by GAAP, and fairly present in all material
  respects the financial position of the Company and its consolidated subsidiaries
  as of and for the dates thereof and the results of operations and cash flows
  for the periods then ended, subject, in the case of unaudited statements, to
  normal, immaterial, year-end audit adjustments.

          (h)     
  Material Changes; Undisclosed Events, Liabilities or Developments. Since
  March 31, 2006, (i) there has been no event, occurrence or development that
  has had or that would reasonably be expected to result in a Material Adverse
  Effect (provided, however, it being understood that for purposes of this Section
  3.1(i) only, the entering into the Merger Agreement by the Company and performing
  its obligations thereunder shall not be taken into account in determining whether
  or not a Material Adverse Effect has occurred since March 31, 2006), (ii) the
  Company has not incurred any liabilities (contingent or otherwise) other than
  (A) trade payables and accrued expenses incurred in the ordinary course of business
  consistent with past practice and (B) liabilities not required to be reflected
  in the Company’s financial statements pursuant to GAAP or disclosed in
  filings made with the Commission, (iii) the Company has not altered its method
  of accounting, (iv) the Company has not declared or made any distribution of
  cash or other property to its equity holders or purchased, redeemed or made
  any agreements to purchase or redeem any of its securities and (v) the Company
  has not issued any securities to any officer, manager, director or Affiliate.

11

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

          (j)      Labor
  Relations. No material labor dispute exists or, to the knowledge of the
  Company, is imminent with respect to any of the employees of the Company which
  could reasonably be expected to result in a Material Adverse Effect. None of
  the Company’s or its Subsidiaries’ employees is a member of a union
  that relates to such employee’s relationship with the Company, and neither
  the Company or any of its Subsidiaries is a party to a collective bargaining
  agreement, and the Company and its Subsidiaries believe that their relationships
  with their employees are acceptable. No executive officer, to the knowledge
  of the Company, is, or is now expected to be, in violation of any material term
  of any employment contract, confidentiality, disclosure or proprietary information
  agreement or non-competition agreement, or any other contract or agreement or
  any restrictive covenant, and the continued employment of each such executive
  officer does not subject the Company or any of its Subsidiaries to any liability
  with respect to any of the foregoing matters. The Company and its Subsidiaries
  are in compliance with all U.S. federal, state, local and foreign laws and regulations
  relating to employment and employment practices, terms and conditions of employment
  and wages and hours, except where the failure to be in compliance would not,
  individually or in the aggregate, reasonably be expected to have a Material
  Adverse Effect.

          (k)     
  Compliance. Neither the Company nor any Subsidiary (i) is in default
  under or in violation of (and no event has occurred that has not been waived
  that, with notice or lapse of time or both, would result in a default by the
  Company or any Subsidiary under), nor has the Company or any Subsidiary received
  notice of a claim that it is in default under or that it is in violation of,
  any indenture, loan or credit agreement or any other agreement or instrument
  to which it is a party or by which it or any of its properties is bound (whether
  or not such default or violation has been waived), (ii) is in violation of any
  order of any court, arbitrator or governmental body, or (iii) is or has been
  in violation of any statute, rule or regulation of any governmental authority,
  including without limitation all foreign, federal, state and local laws applicable
  to its business and all such laws that affect the environment, except in each
  case as would not have or reasonably be expected to result in a Material Adverse
  Effect.

          (l)     
  Regulatory Permits. The Company and the Subsidiaries possess all certificates,
  authorizations and permits issued by the appropriate federal, state, local or

12

foreign regulatory authorities necessary
  to conduct their respective businesses, except where the failure to possess
  such permits would not have or reasonably be expected to result in a Material
  Adverse Effect (“Material Permits”), and neither the Company
  nor any Subsidiary has received any notice of proceedings relating to the revocation
  or modification of any Material Permit.

          (m)     Title
  to Assets. The Company does not own any real property. Except as set forth
  in Schedule 3.1(n), the Company and the Subsidiaries have good and marketable
  title in all personal property owned by them that is material to the business
  of the Company and the Subsidiaries, in each case free and clear of all Liens,
  except for Liens as do not materially affect the value of such property and
  do not materially interfere with the use made and proposed to be made of such
  property by the Company and the Subsidiaries and Liens for the payment of federal,
  state or other taxes, the payment of which is neither delinquent nor subject
  to penalties. Any real property and facilities held under lease by the Company
  and the Subsidiaries are held by them under valid, subsisting and enforceable
  leases with which the Company and the Subsidiaries are in compliance.

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

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

          (p)     
  Transactions With Affiliates and Employees. Except as set forth on Schedule
  3.1(q), none of the officers or directors of the Company and, to the
  knowledge of the Company, none of the employees of the Company is presently
  a party to any transaction with the Company or any Subsidiary (other than for
  services as employees, officers and directors), including any contract, agreement
  or other arrangement providing for the 

13

furnishing of services to or by, providing
  for rental of real or personal property to or from, or otherwise requiring payments
  to or from any officer, director or such employee or, to the knowledge of the
  Company, any entity in which any officer, director, or any such employee has
  a substantial interest or is an officer, director, trustee or partner, in each
  case in excess of $60,000 other than (i) for payment of salary or consulting
  fees for services rendered, (ii) reimbursement for expenses incurred on behalf
  of the Company and (iii) for other employee benefits, including option agreements
  under any stock option plan of the Company.

          (q)     
  Internal Accounting Controls. The Company and the Subsidiaries maintain
  a system of internal accounting controls sufficient to provide reasonable assurance
  that (i) transactions are executed in accordance with management’s general
  or specific authorizations, (ii) transactions are recorded as necessary to permit
  preparation of financial statements in conformity with GAAP and to maintain
  asset accountability, (iii) access to assets is permitted only in accordance
  with management’s general or specific authorization, and (iv) the recorded
  accountability for assets is compared with the existing assets at reasonable
  intervals and appropriate action is taken with respect to any differences.

          (r)     
  Certain Fees. No brokerage or finder’s fees or commissions are or
  will be payable by the Company to any broker, financial advisor or consultant,
  finder, placement agent, investment banker, bank or other Person with respect
  to the transactions contemplated by the Transaction Documents. The Purchasers
  shall have no obligation with respect to any fees or with respect to any claims
  made by or on behalf of other Persons for fees of a type contemplated in this
  Section that may be due in connection with the transactions contemplated by
  the Transaction Documents.

          (s)     
  Private Placement. Assuming the accuracy of the Purchasers representations
  and warranties set forth in Section 3.2, no registration under the Securities
  Act is required for the offer and sale of the Securities by the Company to the
  Purchasers as contemplated hereby. 

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

          (u)     
  Registration Rights. Other than each of the Purchasers, no Person has
  any right to cause the Company to effect the registration under the Securities
  Act of any securities of the Company.

          (v)     
  [RESERVED].

          Application
  of Takeover Protections. 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 

14

agreement) or other similar anti-takeover
  provision under the Company’s Articles of Organization (or similar charter
  documents) or the laws of its state of organization that is or could become
  applicable to the Purchasers as a result of the Purchasers and the Company fulfilling
  their obligations or exercising their rights under the Transaction Documents,
  including without limitation as a result of the Company’s issuance of the
  Securities and the Purchasers’ ownership of the Securities.

          (w)     Disclosure.
  All written disclosure furnished by or on behalf of the Company to the Purchasers
  regarding the Company, its business and the transactions contemplated hereby,
  including the Disclosure Schedules to this Agreement, with respect to the representations
  and warranties made herein are true and correct with respect to such representations
  and warranties and do not contain any untrue statement of a material fact or
  omit to state any material fact necessary in order to make the statements made
  therein, in light of the circumstances under which they were made, not misleading.
  The Company acknowledges and agrees that no Purchaser makes or has made any
  representations or warranties with respect to the transactions contemplated
  hereby other than those specifically set forth in Section 3.2 hereof. Except
  with respect to information that will be included in Pubco’s Definitive
  Information Statement in accordance with Schedule 14C regarding the Merger and
  the related transactions and Pubco’s Current Report on Form 8-K regarding
  the Merger and the related transactions, the Company represents that it has
  not provided any Purchaser with any information that the Company believes constitutes
  material non-public information.

          (x)      No
  Integrated Offering. Assuming the accuracy of the Purchasers’ representations
  and warranties set forth in Section 3.2, neither the Company, nor any of its
  affiliates, nor any Person acting on its or their behalf has, directly or indirectly,
  made any offers or sales of any security or solicited any offers to buy any
  security, under circumstances that would cause this offering of the Securities
  to be integrated with prior offerings by the Company for purposes of the Securities
  Act.

          (y)      Solvency.
  Based on the financial condition of the Company as of the Closing Date after
  giving effect to the receipt by the Company of the proceeds from the sale of
  the Securities hereunder, (i) the fair saleable value of the Company’s
  assets exceeds the amount that will be required to be paid on or in respect
  of the Company’s existing debts and other liabilities (including known
  contingent liabilities) as they mature; (ii) the Company’s assets do not
  constitute unreasonably small capital to carry on its business as now conducted
  and as proposed to be conducted including its capital needs taking into account
  the particular capital requirements of the business conducted by the Company,
  and projected capital requirements and capital availability thereof; and (iii)
  the current cash flow of the Company, together with the proceeds the Company
  would receive, were it to liquidate all of its assets, after taking into account
  all anticipated uses of the cash, would be sufficient to pay all amounts on
  or in respect of its liabilities when such amounts are required to be paid.
  The Company does not intend to incur debts beyond its ability to pay such debts
  as they mature (taking into account the timing and amounts of cash to be payable
  on or in respect of its debt). The Company has no knowledge of any facts or
  circumstances which lead it to believe that it will file for reorganization
  or liquidation under the bankruptcy or reorganization laws of any jurisdiction
  within one 

15

year from the Closing Date. The financial
  statements attached hereto as Schedule 3.1(h) set forth as of the dates thereof
  all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary,
  or for which the Company or any Subsidiary has commitments. For the purposes
  of this Agreement, “Indebtedness” shall mean (a) any liabilities
  for borrowed money or amounts owed in excess of $50,000 (other than trade accounts
  payable incurred in the ordinary course of business), (b) all guaranties, endorsements
  and other contingent obligations in respect of Indebtedness of others, whether
  or not the same are or should be reflected in the Company’s balance sheet
  (or the notes thereto), except guaranties by endorsement of negotiable instruments
  for deposit or collection or similar transactions in the ordinary course of
  business; and (c) the present value of any lease payments in excess of $50,000
  due under leases required to be capitalized in accordance with GAAP. Neither
  the Company nor any Subsidiary is in default with respect to any Indebtedness.

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

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

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

          (cc)      Accountants.
  The Company’s accountants are set forth on Schedule 3.1(ee)
  of the Disclosure Schedule. To the knowledge of the Company, such accountants,
  who the Company expects will express their opinion with respect to the financial
  statements to be included in the Registration Statement, are a registered public
  accounting firm as required by the Securities Act.

          (dd)     
  Acknowledgment Regarding Purchasers’ Purchase of Securities. The
  Company acknowledges and agrees that each of the Purchasers is acting solely
  in the capacity of an arm’s length purchaser with respect to the Transaction
  Documents and the transactions contemplated thereby. The Company further acknowledges
  that no 

16

Purchaser is acting as a financial advisor
  or fiduciary of the Company (or in any similar capacity) with respect to the
  Transaction Documents and the transactions contemplated thereby and any advice
  given by any Purchaser or any of their respective representatives or agents
  in connection with the Transaction Documents and the transactions contemplated
  thereby is merely incidental to the Purchasers’ purchase of the Securities.
  The Company further represents to each Purchaser that the Company’s decision
  to enter into this Agreement and the other Transaction Documents has been based
  solely on the independent evaluation of the transactions contemplated hereby
  by the Company and its representatives.

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

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

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

          (c)     
  Purchaser Status. At the time such Purchaser was offered the Securities,
  it was, and at the date hereof it is, and on each date on which it exercises
  any Warrants, it 

17

will be either: (i) an “accredited
  investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8)
  under the Securities Act or (ii) a “qualified institutional buyer”
  as defined in Rule 144A(a) under the Securities Act. Such Purchaser is not required
  to be registered as a broker-dealer under Section 15 of the Exchange Act.

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

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

          (f)     
  Confidentiality Prior To The Date Hereof. Other than to other Persons
  party to this Agreement, such Purchaser has maintained the confidentiality of
  all disclosures made to it in connection with this transaction (including the
  existence and terms of this transaction).

ARTICLE IV

  OTHER AGREEMENTS OF THE PARTIES

          4.1     
  Transfer Restrictions.

          (a)      The
  Securities may only be disposed of in compliance with state and federal securities
  laws. In connection with any transfer of Securities other than pursuant to an
  effective registration statement or Rule 144, to the Company or to an affiliate
  of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b),
  the Company may require the transferor thereof to provide to the Company an
  opinion of counsel selected by the transferor and reasonably acceptable to the
  Company, the form and substance of which opinion shall be reasonably satisfactory
  to the Company, to the effect that such transfer does not require registration
  of such transferred Securities under the Securities Act. As a condition of transfer,
  any such transferee shall agree in writing to be bound by the terms of this
  Agreement and shall have the rights of a Purchaser under this Agreement and
  the Registration Rights Agreement.

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

  
    
      
        THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE
          SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
          STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
          ACT OF 1933, AS AMENDED (THE 

      

    

  

18

  
    
      
        “SECURITIES ACT”), AND, ACCORDINGLY, MAY
          NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
          STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
          FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
          OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
          LAWS. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
          MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A
          FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS
          DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED
          BY SUCH SECURITIES.

      

           The Company acknowledges
        and agrees that a Purchaser may from time to time pledge pursuant to a
        bona fide margin agreement with a registered broker-dealer or grant a
        security interest in some or all of the Securities to a financial institution
        that is an “accredited investor” as defined in Rule 501(a) under
        the Securities Act and who agrees to be bound by the provisions of this
        Agreement and the Registration Rights Agreement and, if required under
        the terms of such arrangement, such Purchaser may transfer pledged or
        secured Securities to the pledgees or secured parties. Such a pledge or
        transfer would not be subject to approval of the Company and no legal
        opinion of legal counsel of the pledgee, secured party or pledgor shall
        be required in connection therewith. Further, no notice shall be required
        of such pledge. At the appropriate Purchaser’s expense, the Company
        will execute and deliver such reasonable documentation as a pledgee or
        secured party of Securities may reasonably request in connection with
        a pledge or transfer of the Securities, including, after the Merger and
        if the Merger Securities are subject to registration pursuant to the Registration
        Rights Agreement, the preparation and filing of any required prospectus
        supplement under Rule 424(b)(3) under the Securities Act or other applicable
        provision of the Securities Act to appropriately amend the list of Selling
        Stockholders thereunder.

    

  

          (c)      After
  the Merger, certificates evidencing the Merger Stock shall not contain any legend
  (including the legend set forth in Section 4.1(b)), (i) while a registration
  statement (including the Registration Statement) covering the resale of such
  security is effective under the Securities Act, or (ii) following any sale of
  such Merger Stock pursuant to Rule 144, unless sold to an Affiliate of Pubco,
  or (iii) if such Merger Stock is eligible for sale under Rule 144(k), or (iv)
  if such legend is not commercially reasonable under applicable requirements
  of the Securities Act (including judicial interpretations and pronouncements
  issued by the staff of the Commission). After the Merger, Pubco shall issue
  an instruction to Pubco’s transfer agent promptly after the Effective Date
  to effect the removal of the legend hereunder. After the Merger, if all or any
  portion of a Merger 

19

Warrant is exercised at a time when there
  is an effective registration statement to cover the resale of the Merger Stock,
  the Merger Stock issuable upon exercise of such Merger Warrant shall be issued
  free of all legends. After the Merger and the Effective Date, or at such time
  as such legend is no longer allowed under this Section 4.1(c), Pubco will, no
  later than five Business Days following the delivery by a Purchaser to Pubco
  or Pubco’s transfer agent of a certificate representing Merger Stock, as
  the case may be, issued with a restrictive legend (such fifth Business Day,
  the “Legend Removal Date”), deliver or cause to be delivered
  to such Purchaser a certificate representing such securities that is free from
  all restrictive and other legends. So long as no Purchaser is an Affiliate of
  Pubco, Pubco may not make any notation on its records or give instructions to
  any transfer agent of Pubco that enlarge the restrictions on transfer set forth
  in this Section. Certificates for Merger Stock subject to legend removal hereunder
  shall be transmitted by Pubco’s transfer agent to the Purchasers by crediting
  the account of the Purchaser’s prime broker with the Depository Trust Company
  System.

          (d)      After
  the Merger, in addition to such Purchaser’s other available remedies, Pubco
  shall pay to a Purchaser, in cash, as partial liquidated damages and not as
  a penalty, for each $1,000 of Merger Stock (based on the Closing Price of the
  Merger Stock on the date such Merger Stock are submitted to the Company’s
  transfer agent) delivered for removal of the restrictive legend and subject
  to Section 4.1(c), $10 per Business Day (increasing to $20 per Business Day
  five (5) Business Days after such damages have begun to accrue) for each Business
  Day after the Legend Removal Date until such certificate is delivered without
  a legend. Nothing herein shall limit such Purchaser’s right to pursue actual
  damages for the Company’s failure to deliver certificates representing
  any Merger Stock as required by the Transaction Documents, and such Purchaser
  shall have the right to pursue all remedies available to it at law or in equity
  including, without limitation, a decree of specific performance and/or injunctive
  relief.

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

          4.2      Furnishing
  of Information. Following the Merger, as long as any Purchaser owns Securities,
  Pubco covenants to timely file (or obtain extensions in respect thereof and
  file within the applicable grace period) all reports required to be filed by
  Pubco after the date hereof pursuant to the Exchange Act. As long as any Purchaser
  owns Securities, if Pubco is not required to file reports pursuant to the Exchange
  Act, it will prepare and furnish to the Purchasers and make publicly available
  in accordance with Rule 144(c) such information as is required for the Purchasers
  to sell the Securities under Rule 144. The Company and Pubco each further covenants
  that each will take such further action as any holder of Securities may reasonably
  request, to the extent required from time to time to enable such Person to sell
  such Securities 

20

without registration under the Securities Act within the requirements
  of the exemption provided by Rule 144.

          4.3     
  Integration. Neither the Company nor Pubco shall sell, offer for sale
  or solicit offers to buy or otherwise negotiate in respect of any security (as
  defined in Section 2 of the Securities Act) that would be integrated with the
  offer or sale of the Securities in a manner that would require the registration
  under the Securities Act of the sale of the Securities to the Purchasers.

          4.4     
  Securities Laws Disclosure; Publicity. The Company shall, by 6:30 p.m.
  Eastern time on July 13, 2006, cause Pubco to issue a Current Report on Form
  8-K, disclosing the material terms of the transactions contemplated hereby,
  and shall attach the Transaction Documents thereto. The Company and each Purchaser
  shall consult with each other in issuing any other press releases with respect
  to the transactions contemplated hereby, and neither the Company nor any Purchaser
  shall issue any such press release or otherwise make any such public statement
  without the prior consent of the Company, with respect to any press release
  of any Purchaser, or without the prior consent of each Purchaser, with respect
  to any press release of the Company, which consent shall not unreasonably be
  withheld or delayed, except if such disclosure is required by law, in which
  case the disclosing party shall promptly provide the other party with prior
  notice of such public statement or communication. Notwithstanding the foregoing,
  the Company shall not publicly disclose the name of any Purchaser, or include
  the name of any Purchaser in any filing with the Commission or any regulatory
  agency or Trading Market, without the prior written consent of such Purchaser,
  except (i) as required by federal securities law in connection with (A) any
  registration statement contemplated by the Registration Rights Agreement and
  (B) the filing of final Transaction Documents (including signature pages thereto)
  with the Commission and (ii) to the extent such disclosure is required by law
  or Trading Market regulations, in which case the Company shall provide the Purchasers
  with prior notice of such disclosure permitted under this subclause (ii).

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

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

          4.7      Use
  of Proceeds. Except for up to $8,500,000 as set forth on Schedule 4.7 attached
  hereto, the Company shall use the first $20,000,000 of the net proceeds from
  the sale of the 

21

Securities hereunder for working capital purposes and not for
  the satisfaction of any portion of the Company’s debt (other than payment
  of trade payables in the ordinary course of the Company’s business and
  prior practices), to redeem any outstanding securities or to settle any outstanding
  litigation.

          Reimbursement.
  If any Purchaser becomes involved in any capacity in any Proceeding by or against
  any Person who is a member or stockholder of the Company (except as a result
  of any Transaction Document or sales, pledges, margin sales and similar transactions
  by such Purchaser to or with any other member or stockholder), solely as a result
  of such Purchaser’s acquisition of the Securities under this Agreement,
  the Company will reimburse such Purchaser for its reasonable legal and other
  expenses (including the cost of any investigation preparation and travel in
  connection therewith) incurred in connection therewith, as such expenses are
  incurred. The reimbursement obligations of the Company under this paragraph
  shall be in addition to any liability which the Company may otherwise have,
  shall extend upon the same terms and conditions to any Affiliates of the Purchasers
  who are actually named in such action, proceeding or investigation, and partners,
  directors, agents, employees and controlling persons (if any), as the case may
  be, of the Purchasers and any such Affiliate, and shall be binding upon and
  inure to the benefit of any successors, assigns, heirs and personal representatives
  of the Company, the Purchasers and any such Affiliate and any such Person. The
  Company also agrees that neither the Purchasers nor any such Affiliates, partners,
  directors, agents, employees or controlling persons shall have any liability
  to the Company or any Person asserting claims on behalf of or in right of the
  Company solely as a result of acquiring the Securities under this Agreement,
  except if such claim arises primarily from a breach of such Purchaser’s
  representations, warranties or covenants under the Transaction Documents or
  any agreements or understandings such Purchaser may have with any such member
  or stockholder or any violations by the Purchaser of state or federal securities
  laws or any conduct by such Purchaser which constitutes fraud, gross negligence,
  willful misconduct or malfeasance.

          4.8     
  Indemnification of Purchasers. Subject to the provisions of this Section
  4.9, the Company will indemnify and hold each Purchaser and its directors, officers,
  shareholders, members, partners, employees and agents (and any other Persons
  with a functionally equivalent role of a Person holding such titles notwithstanding
  a lack of such title or any other title), each Person who controls such Purchaser
  (within the meaning of Section 15 of the Securities Act and Section 20 of the
  Exchange Act), and the directors, officers, shareholders, agents, members, partners
  or employees (and any other Persons with a functionally equivalent role of a
  Person holding such titles notwithstanding a lack of such title or any other
  title) of such controlling persons (each, a “Purchaser Party”) harmless
  from any and all losses, liabilities, obligations, claims, contingencies, damages,
  costs and expenses, including all judgments, amounts paid in settlements, court
  costs and reasonable attorneys’ fees and costs of investigation that any
  such Purchaser Party may suffer or incur as a result of or relating to (a) any
  breach of any of the representations, warranties, covenants or agreements made
  by the Company in this Agreement or in the other Transaction Documents or (b)
  any action instituted against a Purchaser, or any of them or their respective
  Affiliates, by any member or stockholder of the Company who is not an Affiliate
  of such Purchaser, with respect to any of the transactions contemplated by the
  Transaction Documents (unless such action is based upon a breach of such Purchaser’s
  representations, warranties or covenants under the Transaction Documents or
  any agreements or understandings such Purchaser may have with any such member
  or stockholder or any violations 

22

by the Purchaser of state or federal securities laws or any conduct
  by such Purchaser which constitutes fraud, gross negligence, willful misconduct
  or malfeasance). If any action shall be brought against any Purchaser Party
  in respect of which indemnity may be sought pursuant to this Agreement, such
  Purchaser Party shall promptly notify the Company in writing, and the Company
  shall have the right to assume the defense thereof with counsel of its own choosing
  reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have
  the right to employ separate counsel in any such action and participate in the
  defense thereof, but the fees and expenses of such counsel shall be at the expense
  of such Purchaser Party except to the extent that (i) the employment thereof
  has been specifically authorized by the Company in writing, (ii) the Company
  has failed after a reasonable period of time to assume such defense and to employ
  counsel or (iii) in such action there is, in the reasonable opinion of such
  separate counsel, a material conflict on any material issue between the position
  of the Company and the position of such Purchaser Party, in which case the Company
  shall be responsible for the reasonable fees and expenses of no more than one
  such separate counsel. The Company will not be liable to any Purchaser Party
  under this Agreement (i) for any settlement by a Purchaser Party effected without
  the Company’s prior written consent, which shall not be unreasonably withheld
  or delayed; or (ii) to the extent, but only to the extent that a loss, claim,
  damage or liability is attributable to any Purchaser Party’s breach of
  any of the representations, warranties, covenants or agreements made by such
  Purchaser Party in this Agreement or in the other Transaction Documents.

          4.9      Reservation
  of Common Units. The Company shall continue to reserve and keep available at
  all times, free of preemptive rights, a sufficient number of Common Units for
  the purpose of enabling the Company to issue Units pursuant to this Agreement,
  Note Units pursuant to the any conversion of any Note, and Warrant Units pursuant
  to any exercise of the Warrants.

          4.10      Listing
  of Common Units. After the Merger, Pubco will maintain the listing of its common
  stock on a Trading Market, and as soon as reasonably practicable following the
  Closing (but not later than the earlier of the Effective Date and the first
  anniversary of the Closing Date) to list all of the Merger Stock and the common
  stock underlying the Merger Warrants on such Trading Market. After the Merger,
  Pubco, if it applies to have its common stock traded on any other Trading Market,
  it will include in such application all of the Merger Stock and the common stock
  underlying the Merger Warrants, and will take such other action as is necessary
  to cause all of the Merger Stock to be listed on such other Trading Market as
  promptly as possible. Pubco will take all action reasonably necessary to continue
  the listing and trading of its common stock on a Trading Market and to cause
  Pubco to comply in all respects with its reporting, filing and other obligations
  under the bylaws or rules of the Trading Market.

          4.11     
  Equal Treatment of Purchasers. 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 is also offered
  to all of the parties to the Transaction Documents. For clarification purposes,
  this provision constitutes a separate right granted to each Purchaser by the
  Company and negotiated separately by each Purchaser, and is intended to treat
  for the Company the Purchasers as a class and shall not in any way be construed
  as the Purchasers acting in concert or as a group with respect to the purchase,
  disposition or voting of Securities or otherwise.

23

Participation in Future Financing.

          (a)     
  From the date hereof until the date that is the 6 month anniversary of the Effective
  Date, upon any issuance by the Company or any of its Subsidiaries of Common
  Units or Common Unit Equivalents (a “Subsequent Financing”),
  each Purchaser shall have the right to participate in up to an amount of the
  Subsequent Financing equal to 50% of the Subsequent Financing (the “Participation
  Maximum”) on the same terms, conditions and price provided for in the
  Subsequent Financing.

          (b)     
  At least 5 Business Days prior to the closing of the Subsequent Financing, the
  Company shall deliver to each Purchaser a written notice of its intention to
  effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice
  shall ask such Purchaser if it wants to review the details of such financing
  (such additional notice, a “Subsequent Financing Notice”).
  Upon the request of a Purchaser, and only upon a request by such Purchaser,
  for a Subsequent Financing Notice, the Company shall promptly, but no later
  than 1 Business Day after such request, deliver a Subsequent Financing Notice
  to such Purchaser. The Subsequent Financing Notice shall describe in reasonable
  detail the proposed terms of such Subsequent Financing, the amount of proceeds
  intended to be raised thereunder, the Person or Persons through or with whom
  such Subsequent Financing is proposed to be effected, and attached to which
  shall be a term sheet or similar document relating thereto.

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

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

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

24

Purchaser participating under this Section
  4.13 and (y) the sum of the aggregate Subscription Amounts of Securities purchased
  on the Closing Date by all Purchasers participating under this Section 4.13.

          (f)      The
  Company must provide the Purchasers with a second Subsequent Financing Notice,
  and the Purchasers will again have the right of participation set forth above
  in this Section 4.13, if the Subsequent Financing subject to the initial Subsequent
  Financing Notice is not consummated for any reason on the terms set forth in
  such Subsequent Financing Notice within 60 Business Days after the date of the
  initial Subsequent Financing Notice.

          (g)      Notwithstanding
  the foregoing, this Section 4.13 shall not apply in respect of an Exempt Issuance.

          4.12      Subsequent
  Equity Sales.

          (a)      Except
  as set forth in Sections 2.1(b) and 5.20, from the date hereof until 90 days
  after the Effective Date, neither the Company nor any Subsidiary shall issue
  Common Units or Common Unit Equivalents; provided, however, the 90 day period
  set forth in this Section 4.14 shall be extended for the number of Business
  Days during such period in which (i) trading in the Common Units is suspended
  by any Trading Market, or (ii) following the Effective Date, the Registration
  Statement is not effective or the prospectus included in the Registration Statement
  may not be used by the Purchasers for the resale of the Units, the Note Units
  and Warrant Units.

          (b)      From
  the date hereof until such time as no Purchaser holds any of the Securities,
  the Company shall be prohibited from effecting or entering into an agreement
  to effect any Subsequent Financing involving a “Variable Rate Transaction”.
  The term “Variable Rate Transaction” shall mean a transaction
  in which the Company issues or sells (i) any debt or equity securities that
  are convertible into, exchangeable or exercisable for, or include the right
  to receive additional Common Units either (A) at a conversion, exercise or exchange
  rate or other price that is based upon and/or varies with the trading prices
  of or quotations for the Common Units at any time after the initial issuance
  of such debt or equity securities, or (B) with a conversion, exercise or exchange
  price that is subject to being reset at some future date after the initial issuance
  of such debt or equity security or upon the occurrence of specified or contingent
  events directly or indirectly related to the business of the Company or the
  market for the Common Stock or (ii) enters into any agreement, including, but
  not limited to, an equity line of credit, whereby the Company may sell securities
  at a future determined price. Any Purchaser shall be entitled to obtain injunctive
  relief against the Company to preclude any such issuance, which remedy shall
  be in addition to any right to collect damages. 

          (c)      Notwithstanding
  the foregoing, this Section 4.14 shall not apply in respect of an Exempt Issuance,
  except that no Variable Rate Transaction shall be an Exempt Issuance.

25

          4.13      Short
  Sales and Confidentiality After The Date Hereof. Each Purchaser severally and
  not jointly with the other Purchasers covenants that neither it nor any Affiliate
  acting on its behalf or pursuant to any understanding with it will execute any
  Short Sales in the common stock of Pubco during the period commencing at the
  time such Purchaser was first contacted by the Company regarding an investment
  in the Company and ending at the time that the transactions contemplated by
  this Agreement are first publicly announced as described in Section 4.4. Each
  Purchaser, severally and not jointly with the other Purchasers, covenants that
  until such time as the transactions contemplated by this Agreement are publicly
  disclosed by Pubco as described in Section 4.4, such Purchaser will maintain
  the confidentiality of all disclosures made to it in connection with this transaction
  (including the existence and terms of this transaction). Each Purchaser understands
  and acknowledges, severally and not jointly with any other Purchaser, that the
  Commission currently takes the position that coverage of short sales of shares
  of Common Stock “against the box” prior to the Effective Date of the
  Registration Statement with the Securities is a violation of Section 5 of the
  Securities Act, as set forth in Item 65, Section A, of the Manual of Publicly
  Available Telephone Interpretations, dated July 1997, compiled by the Office
  of Chief Counsel, Division of Corporation Finance. Notwithstanding the foregoing,
  no Purchaser makes any representation, warranty or covenant hereby that it will
  not engage in Short Sales in the securities of Pubco after the time that the
  transactions contemplated by this Agreement are first publicly announced as
  described in Section 4.4. Notwithstanding the foregoing, in the case of a Purchaser
  that is a multi-managed investment vehicle whereby separate portfolio managers
  manage separate portions of such Purchaser's assets and the portfolio managers
  have no direct knowledge of the investment decisions made by the portfolio managers
  managing other portions of such Purchaser's assets, the covenant set forth above
  shall only apply with respect to the portion of assets managed by the portfolio
  manager that made the investment decision to purchase the Securities covered
  by this Agreement.

          4.14      Delivery
  of Securities After Closing. The Company shall deliver, or cause to be delivered,
  the respective Securities purchased by each Purchaser to such Purchaser within
  3 Business Days of the Closing Date.

          4.15     
  Form D; Blue Sky Filings. The Company agrees to timely file a Form
  D with respect to the Securities as required under Regulation D and to provide
  a copy thereof, promptly upon request of any Purchaser. The Company shall take
  such action as the Company shall reasonably determine is necessary in order
  to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers
  at the Closing under applicable securities or “Blue Sky” laws of the
  states of the United States, and shall provide evidence of such actions promptly
  upon request of any Purchaser.

          4.16      Capital
  Changes. Until the one year anniversary of the Effective Date, other than pursuant
  to the terms of the Merger, the Company shall not undertake a reverse or forward
  combination of outstanding Common Units or reclassification of the Common Units
  without the prior written consent of the Purchasers holding a majority in interest
  of the Units.

          4.17     
  Most Favored Nation Provision. If the Company or Pubco effects a Subsequent
  Financing at any time prior to the 6 month anniversary of the Effective Date,
  each Purchaser may elect, in its sole discretion, to exchange all or some of
  the Units then held by such Purchaser for any securities issued in a Subsequent
  Financing based on the Per Unit Purchase Price multiplied 

26

by the number of Units so exchanged and otherwise on the same
  terms and conditions at which such securities are to be issued. The Company
  shall provide, and shall cause Pubco to provide, each Purchaser notice of any
  such Subsequent Financing in the manner provided in Section 4.13.

          4.18      Option
  Plan. From the date hereof until the 24 month anniversary of the Closing Date,
  if the Company or any Subsidiary thereof, or, following the Merger, Pubco shall
  issue or reserve for issuance more than a number of Common Units equal to 20%
  of the outstanding Common Units immediately following the closing of the Merger
  (such outstanding number of Common Units shall be as set forth on Schedule 3.1(g)
  hereto) under any option or similar employee equity compensation or benefit
  plan, the Company shall issue each Purchaser, on a pro-rata basis (based on
  each Purchaser’s Subscription Amount and the aggregate Subscription Amounts
  hereunder), additional Common Units such that the Purchasers own, in the aggregate,
  a percentage of the outstanding Common Units (on a fully diluted basis including
  the Note Units, but excluding the Warrants), such percentage being equal to
  the total Units sold pursuant to this Agreement divided by the sum of the total
  Units sold pursuant to this Agreement and 11,400,000, that sum divided by 94%
  and further divided by 80% (e.g. for $20,000,000 of units sold, the percentage
  is equal to 13,333,333 divided by the sum of 13,333,333 and 11,400,000, that
  sum divided by 94% and further divided by 80%, or approximately 40.54%), immediately
  following such issuance or reservation less any Common Units sold by the Purchasers
  prior to such issuance or reservation. The Company may not refuse to issue a
  Purchaser additional Common Units hereunder based on any claim that such Purchaser
  or any one associated or affiliated with such Purchaser has been engaged in
  any violation of law, agreement or for any other reason, unless, an injunction
  from a court, on notice, restraining and or enjoining an issuance hereunder
  shall have been sought and obtained and the Company posts a surety bond for
  the benefit of such Purchaser in the amount of 150% of the market value of such
  Common Units (based on the Closing Price of the Common Units on the date of
  the event giving rise to the Company’s obligation hereunder), which is
  subject to the injunction, which bond shall remain in effect until the completion
  of litigation of the dispute and the proceeds of which shall be payable to the
  Purchaser to the extent it obtains judgment. Nothing herein shall limit a Purchaser’s
  right to pursue actual damages for the Company's failure to deliver Common Units
  hereunder and such Purchaser shall have the right to pursue all remedies available
  to it at law or in equity including, without limitation, a decree of specific
  performance and/or injunctive relief.

          4.19      Registration
  Rights. In the event that the Merger Agreement is terminated and the Company
  enters into a merger agreement with another entity whose common stock or other
  equity securities are publicly traded, the consummation of such merger agreement
  shall have substantially similar closing conditions as those set forth in Section
  2.3(b)(iv) of this Agreement. In addition, in the event the Merger Agreement
  is terminated and if, in connection with an initial public offering or at any
  other time, the Company shall determine to proceed with the preparation and
  filing of a registration statement, in connection with the proposed offer and
  sale of any of its securities by it or any of its security holders (other than
  a registration statement on Form S-4, S-8 or other similar limited purpose form),
  the Company will give written notice of its determination to the Purchasers.
  Upon receipt of a written request from the Purchasers within thirty calendar
  days after receipt of any such notice from the Company, the Company will cause
  all the Common Units issued hereunder or issuable upon exercise of the Warrants,
  to the extent requested by the Purchasers, to be included in such registration
  statement, all to the extent required to permit the sale or other disposition
  by the Purchasers of such securities.

27

          4.20      Put
  Right. If the Merger is not completed within 120 days of the Closing Date, the
  Company will pay each Purchaser an amount equal to 0.25% of the aggregate amount
  invested by such Purchaser pursuant to this Agreement. In addition to the payment
  described in the preceding sentence, if the Merger is not completed within 150
  days of the Closing Date, the Company will pay each Purchaser an amount equal
  to 0.75% of the aggregate amount invested by such Purchaser pursuant to this
  Agreement. If the Merger is not completed within 180 days of the Closing Date,
  each Purchaser shall at such time have the option to require the Company to
  purchase from such Purchaser all or such portion as is designated by such Purchaser
  of the Units and Warrants purchased by such Purchaser pursuant to this Agreement.
  The Company shall purchase the Units and Warrants designated by such Purchaser
  for a price equal to the Subscription Amount paid by the Purchaser with respect
  to the Units and Warrants designated by such Purchaser (the “Put Price”).
  The repurchase of the Units and Warrants will be consummated and the Put Price
  will be paid by the Company to the Purchaser on a date that is not more than
  90 days after the Company’s receipt of written notice by the Purchaser
  of the exercise of the option set forth in this Section 4.22.

ARTICLE V 

  MISCELLANEOUS

          5.1      Termination.
  This Agreement may be terminated by any Purchaser, as to such Purchaser’s
  obligations hereunder only and without any effect whatsoever on the obligations
  between the Company and the other Purchasers, by written notice to the other
  parties, if the Closing has not been consummated on or before June 30, 2006;
  provided, however, that no such termination will affect the right of any party
  to sue for any breach by the other party (or parties).

          5.2      Fees
  and Expenses. At the Closing, the Company has agreed to reimburse Bonanza Master
  Fund Ltd. (“Bonanza”) the non-accountable sum of $20,000, for its
  out-of-pocket legal fees and expenses. Accordingly, in lieu of the foregoing
  payments, the aggregate amount that Bonanza is to pay for the Securities at
  the Closing shall be reduced by $20,000 in lieu thereof. The Company shall deliver,
  prior to the Closing, a completed and executed copy of the Closing Statement,
  attached hereto as Annex A. Except as expressly set forth in the Transaction
  Documents to the contrary, each party shall pay the fees and expenses of its
  advisers, counsel, accountants and other experts, if any, and all other expenses
  incurred by such party incident to the negotiation, preparation, execution,
  delivery and performance of this Agreement. The Company shall pay all transfer
  agent fees, stamp taxes and other taxes and duties levied in connection with
  the delivery of any Securities to the Purchasers.

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

          5.4     
  Notices. Any and all notices or other communications or deliveries
  required or permitted to be provided hereunder shall be in writing and shall
  be deemed given and effective on the earliest of (a) the date of transmission,
  if such notice or communication is delivered via facsimile at the facsimile
  number set forth on the signature pages attached hereto prior to 5:30 

28

p.m. (New York City time) on a Business Day, (b) the next Business
  Day after the date of transmission, if such notice or communication is delivered
  via facsimile at the facsimile number set forth on the signature pages attached
  hereto on a day that is not a Business Day or later than 5:30 p.m. (New York
  City time) on any Business Day, (c) the 2nd Business Day following
  the date of mailing, if sent by U.S. nationally recognized overnight courier
  service, or (d) upon actual receipt by the party to whom such notice is required
  to be given. The address for such notices and communications shall be as set
  forth on the signature pages attached hereto.

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

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

          5.7     
  Successors and Assigns. This Agreement shall be binding upon and inure
  to the benefit of the parties and their successors and permitted assigns and
  shall be expressly binding on Pubco upon the closing of the Merger. The Company
  may not assign this Agreement or any rights or obligations hereunder without
  the prior written consent of each Purchaser (other than by merger). Any Purchaser
  may assign any or all of its rights under this Agreement to any Person to whom
  such Purchaser assigns or transfers any Securities, provided such transferee
  agrees in writing to be bound, with respect to the transferred Securities, by
  the provisions of the Transaction Documents that apply to the “Purchasers”.

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

          5.9     
  Governing Law. All questions concerning the construction, validity,
  enforcement and interpretation of the Transaction Documents shall be governed
  by and construed and enforced in accordance with the internal laws of the State
  of New York, without regard to the principles of conflicts of law thereof. Each
  party agrees that all legal proceedings concerning the interpretations, enforcement
  and defense of the transactions contemplated by this Agreement and any other
  Transaction Documents (whether brought against a party hereto or its respective
  affiliates, directors, officers, members, managers, shareholders, employees
  or agents) shall be commenced exclusively in the state and federal courts sitting
  in the City of New York. Each party hereby irrevocably submits to the exclusive
  jurisdiction of the state and federal courts sitting in the City of New York,
  borough of Manhattan for the adjudication of any dispute hereunder or in connection
  herewith or with any transaction contemplated hereby or discussed herein (including
  with respect to the enforcement of any of the Transaction Documents), and hereby
  irrevocably waives, and agrees not to assert in any suit, action or proceeding,
  any claim 

29

that it is not personally subject to the jurisdiction of any
  such court, that such suit, action or proceeding is improper or is an inconvenient
  venue for such proceeding. Each party hereby irrevocably waives personal service
  of process and consents to process being served in any such suit, action or
  proceeding by mailing a copy thereof via registered or certified mail or overnight
  delivery (with evidence of delivery) to such party at the address in effect
  for notices to it under this Agreement and agrees that such service shall constitute
  good and sufficient service of process and notice thereof. Nothing contained
  herein shall be deemed to limit in any way any right to serve process in any
  other manner permitted by law. The parties hereby waive all rights to a trial
  by jury. If either party shall commence an action or proceeding to enforce any
  provisions of the Transaction Documents, then the prevailing party in such action
  or proceeding shall be reimbursed by the other party for its reasonable attorneys’
  fees and other costs and expenses incurred with the investigation, preparation
  and prosecution of such action or proceeding.

          5.10     
  Survival. The representations and warranties contained herein shall
  survive the Closing and the delivery of the Units, the Note Units and Warrant
  Units.

          5.11     
  Execution. This Agreement may be executed in two or more counterparts,
  all of which when taken together shall be considered one and the same agreement
  and shall become effective when counterparts have been signed by each party
  and delivered to the other party, it being understood that both parties need
  not sign the same counterpart. In the event that any signature is delivered
  by facsimile transmission or by e-mail delivery of a “.pdf” format
  data file, such signature shall create a valid and binding obligation of the
  party executing (or on whose behalf such signature is executed) with the same
  force and effect as if such facsimile or “.pdf” signature page were
  an original thereof.

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

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

          5.14      Replacement
  of Securities. If any certificate or instrument evidencing any Securities is
  mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
  issued in exchange and substitution for and upon cancellation thereof (in the
  case of mutilation), or in lieu 

30

of and substitution therefor, a new certificate or instrument,
  but only upon receipt of evidence reasonably satisfactory to the Company of
  such loss, theft or destruction. The applicant for a new certificate or instrument
  under such circumstances shall also pay any reasonable third-party costs (including
  customary indemnity) associated with the issuance of such replacement Securities.

          5.15     
  Remedies. In addition to being entitled to exercise all rights provided
  herein or granted by law, including recovery of damages, each of the Purchasers
  and the Company will be entitled to specific performance under the Transaction
  Documents. The parties agree that monetary damages may not be adequate compensation
  for any loss incurred by reason of any breach of obligations contained in the
  Transaction Documents and hereby agrees to waive and not to assert in any action
  for specific performance of any such obligation the defense that a remedy at
  law would be adequate.

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

          5.17      Independent
  Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser
  under any Transaction Document are several and not joint with the obligations
  of any other Purchaser, and no Purchaser shall be responsible in any way for
  the performance or non-performance of the obligations of any other Purchaser
  under any Transaction Document. Nothing contained herein or in any other Transaction
  Document, and no action taken by any Purchaser pursuant thereto, shall be deemed
  to constitute the Purchasers as a partnership, an association, a joint venture
  or any other kind of entity, or create a presumption that the Purchasers are
  in any way acting in concert or as a group with respect to such obligations
  or the transactions contemplated by the Transaction Documents. Each Purchaser
  shall be entitled to independently protect and enforce its rights, including
  without limitation, the rights arising out of this Agreement or out of the other
  Transaction Documents, and it shall not be necessary for any other Purchaser
  to be joined as an additional party in any proceeding for such purpose. Each
  Purchaser has been represented by its own separate legal counsel in their review
  and negotiation of the Transaction Documents. For reasons of administrative
  convenience only, Purchasers and their respective counsel have chosen to communicate
  with the Company through FW. FW does not represent all of the Purchasers but
  only Bonanza. The Company has elected to provide all Purchasers with the same
  terms and Transaction Documents for the convenience of the Company and not because
  it was required or requested to do so by the Purchasers.

          5.18      Liquidated
  Damages. The Company’s obligations to pay any partial liquidated damages
  or other amounts owing under the Transaction Documents is a continuing obligation
  of the Company and shall not terminate until all unpaid partial liquidated damages
  and other 

31

amounts have been paid notwithstanding the fact that the instrument
  or security pursuant to which such partial liquidated damages or other amounts
  are due and payable shall have been canceled.

          5.19     
  Construction. The parties agree that each of them and/or their respective
  counsel has reviewed and had an opportunity to revise the Transaction Documents
  and, therefore, the normal rule of construction to the effect that any ambiguities
  are to be resolved against the drafting party shall not be employed in the interpretation
  of the Transaction Documents or any amendments hereto.

          5.20     
  Additional Closings. The Company may accept additional investments
  on the terms set forth in the Transaction Documents during the 30 days after
  the Closing Date in an aggregate amount not exceeding $10,000,000 (for a total
  investment pursuant to the Transaction Documents of up to $25,000,000) by accepting
  additional signature pages to the Transactions Documents from each such Purchaser
  and payment of the additional amount to be invested by each such Purchaser,
  which additional signature pages shall represent a joinder of this Agreement
  and the other Transaction Documents as if such Purchaser had delivered such
  signature pages and payment on the Closing Date. Within 3 Business Days of acceptance
  of such additional signature pages and payments, the Company will deliver to
  all Purchasers a restated Closing Statement that includes such additional Purchasers
  and payments in the form of Annex A attached hereto.

(Signature Pages Follow)

32

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

	CROSSPOINT ENERGY, LLC 	Address for Notice:
	  	 
	  	 
	By: __________________________________________ 	 
	       Name: 	 
	       Title: 	 

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

 

Acknowledged and agreed to as to representations, warranties
  and covenants of Pubco herein as of the date first indicated above:

	ELECTRUM MINING LIMITED 	Address for Notice: 
	  	  
	By: __________________________________________ 	  
	       Name: 	  
	       Title: 	  

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 

  SIGNATURE PAGE FOR PURCHASER FOLLOWS]

33

[PURCHASER SIGNATURE PAGES TO CROSSPOINT SECURITIES PURCHASE AGREEMENT]

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

Name of Purchaser: ________________________________________________________

Signature of Authorized Signatory of Purchaser: __________________________________

Name of Authorized Signatory: ____________________________________________________

Title of Authorized Signatory: _____________________________________________________

Email Address of Purchaser:________________________________________________

Fax Number of Purchaser: ________________________________________________

Address for Notice of Purchaser:

 

 

Address for Delivery of Securities for Purchaser (if not same
  as above):

 

 

 

Subscription Amount: 

  Units: 

  Notes: 

  Warrants: 

  EIN Number: 

[SIGNATURE PAGES CONTINUE]

34

Annex A 

CLOSING STATEMENT

Pursuant to the attached Securities Purchase Agreement, dated
  as of the date hereto, the purchasers shall purchase up to $22,000,000 of Common
  Units, Notes and Warrants from CrossPoint Energy, LLC (the “Company”).
  All funds will be disbursed in accordance with this Closing Statement.

Disbursement Date: June 30, 2006

  	I. PURCHASE PRICE 	  
	  	  
	           
                           
                           
                     Gross Proceeds to be
        Received 	$15,000,000.00 
	  	  
	II. DISBURSEMENTS 	  
	  	  
	           
                           
                           
                       CrossPoint Energy,
        LLC 	$15,000,000.00 
	  	$ 
	  	$ 
	  	$ 
	  	$ 
	  	  
	Total Amount Disbursed: 	$15,000,000.00 

35EXHIBIT 4.1

COMMON STOCK                                                        COMMON STOCK
PAR VALUE $.001                                                  PAR VALUE $.001

Certificate Number                                                     Shares
   ZQ 000339                                                        ***600620***

                        NAVIDEC FINANCIAL SERVICES, INC.
              INCORPORATED UNDER THE LAWS OF THE STATE OF COLORADO

THIS CERTIFIES THAT ** Mr. Alexander David Sample **

IS THE OWNER OF ** SIX HUNDRED THOUSAND SIX HUNDRED AND TWENTY **

           FULLY-PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF

Navidec  Financial   Services,   Inc.,   (hereinafter   called  the  "Company"),
transferable  on the  books  of the  Company  in  person  or by duly  authorized
attorney, upon surrender of this Certificate properly endorsed. This Certificate
and the shares  represented  hereby, are issued and shall be held subject to all
of the provisions of the Articles of Incorporation, as amended, and the By-Laws,
as  amended,  of the  Company  (copies of which are on file with the Company and
with the Transfer  Agent),  to all of which each holder,  by acceptance  hereof,
assents.  This Certificate is not valid unless  countersigned  and registered by
the Transfer Agent and Registrar.

Witness the facsimile  seal of the Company and the  facsimile  signatures of its
duly authorized officers.

President & Chief                                  DATED <<MONTH DAY YEAR>>
Executive Officer                                  COUNTERSIGNED AND REGISTERED:
                                                   COMPUTERSHARE TRUST CO., INC.
                                SEAL               (DENVER)
                                                   TRANSFER AGENT AND REGISTRAR
Secretary & Chief
Financial Officer

<PAGE>

NAVIDEC FINANCIAL SERVICES, INC.

TRANSFER FEE: $25.00 PER NEW CERTIFICATE ISSUED
________________________________________________________________________________

The following abbreviations, when used in the inscription of the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
         and not as tenants in common
UNIF GIFT MIN ACT - Custodian
                        (CUST)          (Minor)
under Uniform Gifts to Minors Act
                                        (STATE)
UNIF TRF MIN ACT        Custodian (until age...)
                        (CUST)          (MINOR)
under Uniform Transfers to Minors Act...............
                                        (STATE)

Additional abbreviations may also be used though not in the above list.
________________________________________________________________________________

For Value Received, ______________hereby sell, assign and transfer unto

PLEASE INSERT
SOCIAL SECURITY
OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE

________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF
ASSIGNEE)

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

shares of the common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

________________________________________________________________________________
Attorney to transfer the said stock on the books of the within-named Corporation
with full power of substitution in the premises.

Dated:_____________________20__                _________________________________
                                               Signature:

                                               _________________________________
                                               Signature:
                                               NOTE:  THE SIGNATURE TO THIS
                                               ASSIGNMENT MUST CORRESPOND WITH
                                               THE NAME AS WRITTEN UPON THE FACE
                                               OF THE CERTIFICATE, IN EVERY
                                               PARTICULAR, WITHOUT ALTERATION OR
                                               ENLARGEMENT, OR ANY CHANGE
                                               WHATEVER.

SIGNATURE(S) GUARANTEED:

THE SIGNATURE(S) SHOULD BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION
(Banks, Stockbrokers, Savings and Loan
Associations and Credit Unions) WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM, PURSUANT
TO S.E.C. RULE 17Ad-15.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}]]