Document:

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                                  Exhibit 10.1

                      SOUTHWEST BANCORP, INC AND AFFILIATES
                AMENDED AND RESTATED SEVERANCE COMPENSATION PLAN

         The Stillwater National Bank and Trust Company Severance Compensation
Plan originally was made and entered into by Stillwater National Bank and Trust
Company, for the benefit of certain officers, key management and highly
compensated employees effective June 24, 1993, and was amended and restated
effective July 24, 1997. It is hereby further amended and restated as of August
26, 2004. The purpose of the Plan as amended and restated is to protect and
retain certain officers, key management and highly compensated employees of
Southwest Bancorp, Inc. ("Southwest") and its affiliates in the event of a
Change in Control and to reward those employees for loyal service to Southwest
by providing for severance compensation to them upon their termination of
employment after a Change in Control as provided herein.

                                    ARTICLE I
                                   DEFINITIONS

         The terms defined in this Article shall have the meanings given below:

         1.1      Affiliate means any corporation, partnership, business trust,
                  or other business entity of which Southwest has or acquires
                  direct or indirect voting power over 50 percent or more of the
                  outstanding common shares or equivalent voting interests, and
                  shall include, without limitation, SNB-Stillwater and
                  SNB-Wichita.

         1.2      Annual Earnings means one-year's Earnings at the higher of the
                  rate in effect;

                  (a) upon the Change in Control; or

                  (b) immediately prior to the Participant's Qualified
                      Termination of Service.

         1.3      Board means:

                  (a)      the Board of Directors of Southwest; and

                  (b)      the Board of Directors of the Southwest Company that
                           employs, or intends to employ, the Participant at the
                           date the Participant is selected for participation in
                           the Plan, unless that Southwest Company does not
                           execute the Plan.

         1.4      Change in Control means:

                  (a)      the date any entity or person, including a group as
                           defined in Section l3(d)(iii) of the Securities
                           Exchange Act of 1934 shall become the beneficial
                           owner of, or shall have obtained voting control over,
                           50 percent or more of the outstanding common shares
                           of either Southwest or SNB-Stillwater;

                  (b)      the date the shareholders of either Southwest or
                           SNB-Stillwater approve a definitive agreement (i) to
                           merge or consolidate either Southwest or
                           SNB-Stillwater with or into another corporation in
                           which either Southwest or SNB-Stillwater,
                           respectively, is not the continuing or surviving
                           corporation or pursuant to which any common shares of
                           either Southwest or SNB-Stillwater would be converted
                           into cash, securities, or other property of another
                           other than a merger of either Southwest or
                           SNB-Stillwater in which holders of common shares
                           immediately prior to the merger have the same
                           proportionate interest of common stock of the
                           surviving corporation immediately after the merger as
                           immediately before, or (ii) to sell or otherwise
                           dispose of substantially all of the assets of either
                           Southwest or SNB-Stillwater; or

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                  (c)      the date there shall have been change in a majority
                           of the Board of either Southwest or SNB-Stillwater
                           within a 12 month period unless the nomination of
                           each new director was approved by the vote of
                           two-thirds (2/3) of directors then still in office
                           who were in office at the beginning of the 12 month
                           period.

         1.5      Code means the Internal Revenue Code of 1986, as amended.

         1.6      Committee means the Committee appointed by the respective
                  Board to administer this Plan. Any function exercisable by
                  such Committee may also be exercised by the Board.

         1.7      Earnings means only the annual rate of salary (base cash
                  compensation) payable to the Participant by Southwest and any
                  Affiliates of the Bank, and shall not include overtime, bonus,
                  commissions, or any non-cash amounts (including amounts
                  attributable to stock options). Earnings shall not be reduced
                  by amounts excluded from gross income under Sections 125,
                  402(a)(8) or 402(h) or limited as provided under Section
                  401(a)(17) of the Internal Revenue Code of 1986, as amended
                  ("Code").

         1.8      Effective Date means June 24, 1993.

         1.9      Good Reason shall mean:

                  (a)      a reduction in Participant's Earnings in effect
                           immediately prior to a Change in Control or as
                           increased thereafter;

                  (b)      the assignment of Participant without Participant's
                           consent to (i) a location outside of the metropolitan
                           statistical area ("MSA") in which such Participant
                           was assigned at the date of the Change in Control, or
                           (ii) if Participant was not assigned in an MSA at
                           such date, a location more than 75 miles from the
                           location to which Participant was assigned at the
                           date of the Change in Control;

                  (c)      a material reduction in the authority or
                           responsibility that Participant had immediately prior
                           to the Change in Control; or

                  (d)      a material reduction in the level of incentive
                           compensation or benefits of a Participant from those
                           in effect immediately prior to a Change in Control
                           except such reductions as are applicable to all
                           employees or key executives generally and which do
                           not have a disproportionate effect on Participant.

         1.10     Participant  means an employee of a Southwest Company selected
                  for participation in the Plan by the Board or Committee.

         1.11     Plan means this Amended and Restated Severance Compensation
                  Plan and amendments hereto.

         1.12     Principal Employer means the Southwest Company that provided
                  the majority of earnings to a Participant during the twelve
                  months prior to a Qualifying Termination of Service,
                  Termination for Cause, or request for arbitration, as the case
                  may be, and any successor thereto that is a Southwest Company.

         1.13     Qualifying Termination of Service means either:

                  (a)      a Participant's involuntary termination of employment
                           with the Bank and its subsidiaries or their
                           successors; or

                  (b)      a Participant's voluntary termination of employment
                           with the Bank and its subsidiaries for Good Reason,

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                  in either case within two (2) years following the first Change
                  in Control occurring after the Effective Date. Qualifying
                  Termination of Service does not include any change in the
                  Participant's employment status due to disability or death or
                  a Termination for Cause.

         1.14     SNB-Stillwater means Stillwater National Bank and Trust
                  Company and any successor corporation.

         1.15     SNB-Wichita means SNB Bank of Wichita and any successor
                  corporation.

         1.16     Southwest means Southwest Bancorp, Inc., and any successor
                  corporation.

         1.17     Southwest Company means Southwest Bancorp, Inc. or any of its
                  Affiliates.

         1.18     Termination for Cause means a Participant's  termination of
                  employment with any Southwest Company because of:

                  (a)      the continued failure by the Participant to devote
                           reasonable time and effort to the performance of
                           Participant's duties (other than a failure resulting
                           from the Participant's incapacity due to physical or
                           mental illness) after written demand for improved
                           performance has been delivered to the employee by the
                           Participant's Principal Employer which specifically
                           identifies:

                           (i)      how the Participant has not devoted
                                    reasonable time and effort to the
                                    performance of Participant's duties; or

                           (ii)     the willful engaging by Participant in
                                    misconduct that is materially injurious to
                                    any Southwest Company, monetarily or
                                    otherwise; or

                           (iii)    the Participant's ineligibility for coverage
                                    under a banker's blanket bond policy
                                    maintained on or on behalf of any Southwest
                                    Company that is a depository institution.

                  Unless such acts caused the Participant to be ineligible for
                  coverage under a banker's blanket bond policy, a Termination
                  for Cause shall not include a termination attributable to: (i)
                  bad judgment or negligence on the part of the Participant
                  other than habitual negligence; or (ii) an act or omission
                  believed by the Participant in good faith to have been in or
                  not opposed to the best interests of the Southwest Companies
                  and reasonably believed by the Participant to be lawful; or
                  (iii) the good faith conduct of a Participant in connection
                  with a Change in Control (including Participant's opposition
                  to or support of the Change in Control).

                                   ARTICLE II
                                    BENEFITS

         2.1      Designation or Participants. The Participants shall be those
                  employees of Southwest or its Affiliates listed on Exhibit A
                  and others designated by the Board or the Committee from time
                  to time as Participants in the Plan.

         2.2      Severance Compensation.

                  (a)      Upon the Qualifying Termination of Service of any
                           Participant, the terminated Participant shall be
                           entitled to severance compensation equal to the
                           percentage of the Participant's Annual Earnings
                           designated on Exhibit A or by the Board or the
                           Committee at the time the employee is selected for
                           participation in the Plan, but in no event greater
                           than 150% of a Participant's Annual Earnings or the
                           amount which would be deductible by the Southwest
                           Companies under Code Section 280(G), after taking
                           into consideration all payments to such Participant
                           covered by such section. The Severance Compensation
                           shall be paid to the Participant by its Principal
                           Employer in a single, lump sum payment promptly after
                           Participant's Qualifying Termination of Service. All
                           payments of severance benefits shall be reduced by
                           the amount of applicable Federal, State, and local
                           withholding taxes, and FICA and FUTA taxes.

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                  (b)      If the Principal Employer of a Participant
                           designated by the Board or the Committee has not
                           executed this Plan, any obligation to that
                           Participant under this Plan not paid by Affiliates
                           of Southwest shall be paid by Southwest.

         2.3      No Funding or Payments. All compensation due a Participant
                  under this Plan is unfunded and unsecured and is payable out
                  of general funds of the respective Southwest Company or
                  Companies.

         2.4      Timing of Payments. If severance compensation is not paid
                  within thirty (30) days of the Qualifying Termination of
                  Service, there shall be paid, in addition to such amount,
                  interest on the amount due at a rate of 5% in excess of the
                  prime rate as published in the Wall Street Journal-Southwest
                  Edition from time to time (or at the highest of such rates if
                  a range is published) from the date which is thirty (30) days
                  following the Qualifying Termination of Service to the date of
                  payment.

                                   ARTICLE III
                            MISCELLANEOUS PROVISIONS

         3.1      Plan Administration. The general administration of this Plan
                  shall be the responsibility of the Committee. The good faith
                  determination of the Committee with respect to the
                  administration of this Plan shall be final and conclusive.

         3.2      No Guarantee of Employment. Nothing contained herein shall be
                  construed as a contract of employment or be deemed to give any
                  Participant the right to be retained in the employ of any
                  Southwest Company, or to interfere with the rights of any such
                  employer to discharge any individual at any time, with or
                  without cause. No severance compensation shall be payable
                  hereunder as a result of any termination of employment
                  occurring prior to a Change in Control.

         3.3      Amendment and Termination. The Board may at any time, or from
                  time to time, amend this Plan in any respect or terminate this
                  Plan without restriction and without consent of any
                  Participant or beneficiary, provided, that any such amendment
                  or termination shall not impair the rights of any Participant
                  hereunder without the consent of such Participant. Once a
                  Participant has been selected by the Board, this Plan shall
                  constitute a contract between the Participant and the
                  Southwest Company or Companies that employed participant at
                  the later of the date of such selection or the Participant's
                  first day of employment thereafter by a Southwest Company.

         3.4      Non-Alienation of Benefits. No benefit payable hereunder may
                  be assigned, pledged, mortgaged or hypothecated and, except to
                  the extent required by applicable law, no such benefit shall
                  be subject to legal process or attachment for the payment of
                  any claims of a creditor of a Participant.

         3.5      Payment to Representatives. If any Participant dies after a
                  Qualifying Termination of Service and before receipt of
                  payment hereunder, the severance compensation otherwise due to
                  such Participant shall be payable to Participant's estate. If
                  any individual entitled to receive any benefits hereunder is
                  determined by the Committee or is adjudged to be legally
                  incapable of giving valid receipt and discharge for such
                  benefits, they shall be paid to the duly appointed and acting
                  guardian, if any, and if no such guardian is appointed and
                  acting, to such persons as the Committee may designate. Such
                  payment shall, to the extent made, be deemed a complete
                  discharge for such payments under this Plan.

         3.6      Governing  Law. The  provisions  of this Plan shall be
                  construed under the laws of the State of Oklahoma except as
                  preempted by federal law.

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         3.7      Titles and Headings. The titles to articles and headings of
                  sections of this Plan are for convenience of reference and, in
                  case of any conflict, the text of the Plan, rather than such
                  titles and headings, shall control.

         3.8      Legality. No Southwest Company shall have any obligation to
                  make any payments under this plan to the extent such payments
                  would be in violation of Section 18(k)(j) of the Federal
                  Deposit Insurance Act or any other law or regulation directly
                  applicable to the Southwest Company.

         3.9      Resolution or Disputes. Any dispute between a Participant or a
                  Southwest Company or any successor, shall be first submitted
                  to mediation under the Commercial Mediation Rules of the
                  American Arbitration Association, which may be initiated by a
                  written request by Participant or the Participant's Principal
                  Employer. If such dispute is not resolved within sixty days of
                  the written request for mediation, it shall be submitted to
                  arbitration in accordance with the Commercial Arbitration
                  Rules of the American Arbitration Association and judgment
                  upon the award rendered by the arbitrator may be entered in
                  any court having jurisdiction thereof. In connection with such
                  mediation and arbitration, the following rules shall apply:

                  (a)      Any mediation shall be held in the city in which the
                           Participant resides at the time of Submission to
                           mediation;

                  (b)      Any mediation or arbitration shall be conducted by a
                           single person who shall serve as both mediator and
                           arbitrator; and

                  (c)      The costs of any mediation and arbitration shall be
                           borne by the Principal Employer or, if the Principal
                           Employer of a Participant designated by the Board or
                           the Committee has not executed this Plan, any
                           obligation to that Participant under this Plan for
                           such costs not paid by Affiliates of Southwest shall
                           be paid by Southwest.

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
this 26th day of August, 2004.

<TABLE>
<S>                                                           <C>
Attest: [seal]                                                SOUTHWEST BANCORP, INC.

By:      /s/Kerby E. Crowell                                  By:      /s/Rick Green
         ---------------------------                                   ----------------------------
         Secretary                                                     President and Chief Executive Officer

                                                                       STILLWATER NATIONAL BANK AND
Attest: [seal]                                                         AND TRUST COMPANY

By:      /s/Kerby E. Crowell                                  By:      /s/Rick Green
         ---------------------------                                   ----------------------------
         Secretary                                                     President and Chief Executive Officer
</TABLE>

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                                    EXHIBIT A

                                            Severance Compensation Expressed
Participants                                as a Percentage of Annual Earnings
------------                                ----------------------------------

Kerby E. Crowell                                     100%

Rick J. Green                                        100%

Rex Horning                                          100%

Jerry Lanier                                         100%

Leonard M. McLaughlin                                100%

Steve M. Peterson                                    100%

Joseph P. Root                                       100%

Kimberly G. Sinclair                                 100%

Charles Westerheide                                  100%

David L. York                                        100%

[Names and participation percentages of other participants omitted.]

                                    * * *

Date:    August 26, 2004
        ----------------

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<H1 ALIGN=right><font size="2">Exhibit 4.4</font></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SECURITIES PURCHASE
AGREEMENT </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Securities Purchase Agreement (this &#147;<B>Agreement</B>&#148;) is dated as of August
11, 2004 among MCF Corporation, a Delaware corporation (the &#147;<B>Company</B>&#148;),
and the purchasers identified on the signature pages hereto (each, a
&#147;<B>Purchaser</B>&#148; and collectively, the &#147;<B>Purchasers</B>&#148;). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
subject to the terms and conditions set forth in this Agreement, 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. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, severally and not jointly, agrees as
follows: </FONT></P>

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<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE I <br>
DEFINITIONS </FONT></P>

<FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">1.1      Definitions.  In addition to the terms defined  elsewhere in this Agreement,  the following terms have the
meanings indicated:

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</font>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Advice</b>" has the meaning set forth in <u>
  Section 6.5</u>.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Agreement</b>" has the meaning set forth in
  the preamble.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Affiliate</b>" 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.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" color="#000000" size="2">"<b>Benefit Plans</b>"
  means (i) all "employee pension benefit plans," as defined in section 3(2) of
  ERISA, established, maintained, or contributed to by the Company or its
  Subsidiaries for the benefit of any employees or agents of the Company or its
  Subsidiaries; (ii) all "employee welfare benefit plans," as defined in section
  3(1) of ERISA, established, maintained, or contributed to by the Company or
  its Subsidiaries for the benefit of any employees or agents of the Company or
  its Subsidiaries; and (iii) to the knowledge of the Company, all other
  material incentive, employment, supplemental retirement, severance, deferred
  compensation and other employee benefit plans, programs, agreements and
  arrangements established, maintained, or contributed to by the Company or its
  Subsidiaries for the benefit of any employees or agents of the Company or its
  Subsidiaries, without regard to the coverage of any such plan, program,
  agreement or arrangement by ERISA or any provision of the Code.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" color="#000000" size="2">"<b>Board</b>" means the
  board of directors of the Company.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Business Day</b>" means any day other than
  Saturday, Sunday or other day on which commercial banks in the City of New
  York are authorized or required by law to remain closed.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Closing</b>" means the closing of the purchase
  and sale of the Shares and the Warrants pursuant to <u>Section 2.1</u>.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Closing Date</b>" means the date of the
  Closing.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Code</b>" means the Internal Revenue Code of
  1986, as amended.</font><p>&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font size="1"><hr style="PAGE-BREAK-AFTER: always" noShade SIZE="1"></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Commission</b>" means the Securities and
  Exchange Commission.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Common Stock</b>" means the common stock of
  the Company, par value $0.0001 per share.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Common Stock Equivalents</b>" means,
  collectively, Options and Convertible Securities.<b> </b></font>
  <br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Company</b>" has the meaning set forth in the
  preamble.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Convertible Securities</b>" means any stock or
  securities (other than Options) convertible into or exercisable or
  exchangeable for Common Stock.<b> </b></font>
  <br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Effective Date</b>" means the date that the
  Registration Statement is first declared effective by the Commission.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Effectiveness Period</b>" has the meaning set
  forth in <u>Section 6.1(b)</u>.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Eligible Market</b>" means any of the New York
  Stock Exchange, the American Stock Exchange, the NASDAQ National Market or the
  NASDAQ SmallCap Market.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>ERISA</b>" means</font><font face="serif" color="#000000" size="2"><u>
  the Employee Retirement Income Security Act of 1974, as amended.</u></font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" color="#000000" size="2"><u>"</u><u><b>Event</b>" has the
  meaning set forth in Section 6.1(d)(i) through (v).</u></font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" color="#000000" size="2"><u>"</u><u><b>Event Payments</b>"
  has the meaning set forth in Section 6.1(d).</u></font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Exchange Act</b>" means the Securities
  Exchange Act of 1934, as amended.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Excluded Stock</b>" means Common Stock,
  Options, or any equity or equity equivalent securities, including, without
  limitation, any debt, preferred stock or other instrument or security that is,
  at any time during its life and under any circumstances, convertible into or
  exchangeable or exercisable for Common Stock or Common Stock Equivalents and
  that is issued or issuable: (A) upon exercise or conversion of any options or
  other securities described in <u>Schedule 3.1(f)</u> (provided that such
  exercise or conversion occurs in accordance with the terms thereof, without
  amendment or modification, and that the applicable exercise or conversion
  price or ratio is described in such schedule) or otherwise pursuant to any
  employee benefit plan described in <u>Schedule 3.1(f)</u> or hereafter adopted
  by the Company and approved by its stockholders, (B) in connection with any
  issuance of shares or grant of options to employees, officers, directors or
  consultants of the Company pursuant to a stock option plan, employee stock
  purchase plan or other incentive stock plan duly adopted by the Board or in
  respect of the issuance of Common Stock upon exercise of any such options, (C)
  pursuant to the Company's bona fide acquisition of another corporation, or all
  or a portion of its assets, by merger, purchase of assets or stock or other
  corporate reorganization in each case, as approved by the Board and not for
  the principal purpose of raising capital or (D) in connection with a bona fide
  joint venture or development agreement or strategic partnership, in either
  case not for the principal purpose of raising capital.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Filing Date</b>" means the date that is 30
  days after the Closing Date, with respect to the initial Registration
  Statement required to be filed hereunder, and, with respect to any additional
  Registration Statements that may be required pursuant to <u>Section 6.1</u>,
  the 30th day following the date on which the Company first knows, or
  reasonably should have known, that such additional Registration Statement is
  required under such Section.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>GAAP</b>" has the meaning set forth in <u>
  Section 3.1(g)</u>.</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font size="1"><hr style="PAGE-BREAK-AFTER: always" noShade SIZE="1"></font>
  <br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Gunderson Dettmer</b>" has the meaning set
  forth in <u>Section 6.2(a)</u>.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" color="#000000" size="2"><u>"</u><u><b>Indemnified Party</b>"
  has the meaning set forth in Section 6.4(c).</u></font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" color="#000000" size="2"><u>"</u><u><b>Indemnifying Party</b>"
  has the meaning set forth in Section 6.4(c).</u></font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Intellectual Property Rights</b>" has the
  meaning set forth in <u>Section 3.1(t)</u>.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Lien</b>" means any lien, charge, claim,
  security interest, encumbrance, right of first refusal or other restriction.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>LMS</b>" has the meaning set forth in <u>
  Section 4.5(b)</u>.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Losses</b>" means any and all losses, claims,
  damages, liabilities, settlement costs and expenses, including, without
  limitation, costs of preparation and reasonable attorneys' fees.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Material Adverse Effect</b>" has the meaning
  set forth in <u>Section 3.1(b)</u>.</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Material Permits</b>" has the meaning set
  forth in <u>Section 3.1(u)</u>.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>NASD</b>" has the meaning set forth in <u>
  Section 3.1(i)</u>.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Options</b>" means any rights, warrants or
  options to subscribe for or purchase Common Stock or Convertible Securities.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Person</b>" means any 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 any court or other federal, state, local
  or other governmental authority or other entity of any kind.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Proceeding</b>" means an action, claim, suit,
  investigation or proceeding (including, without limitation, an investigation
  or partial proceeding, such as a deposition), whether commenced or threatened.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Prospectus</b>" means the prospectus included
  in the Registration Statement (including, without limitation, a prospectus
  that includes any information previously omitted from a prospectus filed as
  part of an effective registration statement in reliance upon Rule 430A
  promulgated under the Securities Act), as amended or supplemented by any
  prospectus supplement, with respect to the terms of the offering of any
  portion of the Registrable Securities covered by the Registration Statement,
  and all other amendments and supplements to the Prospectus including post
  effective amendments, and all material incorporated by reference or deemed to
  be incorporated by reference in such Prospectus.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Purchaser</b>" or "<b>Purchasers</b>" has the
  meaning set forth in the preamble.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Purchaser Counsel</b>" has the meaning set
  forth in <u>Section 6.2(a)</u>.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Registrable Securities</b>" means any Common
  Stock (including the Shares and Underlying Shares) issued or issuable pursuant
  to the Transaction Documents, together with any securities issued or issuable
  upon any stock split, dividend or other distribution, recapitalization or
  similar event with respect to the foregoing.</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font size="1"><hr style="PAGE-BREAK-AFTER: always" noShade SIZE="1"></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Registration Statement</b>" means each
  registration statement required to be filed under Article VI, including (in
  each case) the Prospectus, amendments and supplements to such registration
  statement or Prospectus, including pre- and post-effective amendments, all
  exhibits thereto, and all material incorporated by reference or deemed to be
  incorporated by reference in such registration statement.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Regulatory Order</b>" has the meaning set
  forth in <u>Section 3.1(i)</u>.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Related Person</b>"<b> </b>has the meaning set
  forth in <u>Section 4.8</u>.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Required Effectiveness Date</b>" means 135
  days from the Closing Date.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Rule 144</b>," "<b>Rule 415</b>," and <b>"Rule
  424</b>" means Rule 144, Rule 415 and Rule 424, respectively, promulgated by
  the Commission pursuant to the Securities Act, as such Rules 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.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Schedule</b>" means the section numbers of the
  Disclosure Schedule that correspond to the first, or principal, section of the
  Agreement to which the disclosures relate.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>SEC Reports</b>" has the meaning set forth in
  <u>Section 3.1(g)</u>.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Securities</b>" means the Shares, the Warrants
  and the Underlying Shares.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Securities Act</b>" means the Securities Act
  of 1933, as amended.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Self-Regulatory Organization</b>" has the
  meaning set forth in <u>Section 3.1(i)</u>.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Shares</b>" means an aggregate of 4,615,385
  shares of Common Stock, which are being issued and sold to the Purchasers at
  the Closing.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Short Sales</b>" has the meaning set forth in
  <u>Section 3.2(h)</u>.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Subsequent Placement</b>" has the meaning set
  forth in <u>Section 4.5</u>.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Subsidiary</b>" means any Person in which the
  Company, directly or indirectly, owns at least 20% of the capital stock or
  holds an equity or similar interest.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" color="#000000" size="2">"<b>Taxes</b>" means any federal,
  state, county, local, or foreign taxes, charges, fees, levies, imposts,
  duties, or other assessments, including income, gross receipts, excise,
  employment, sales, use, transfer, license, payroll, franchise, severance,
  stamp, occupation, windfall profits, environmental, federal highway use,
  commercial rent, customs duties, capital stock, paid-up capital, profits,
  withholding, Social Security, single business and unemployment, disability,
  real property, personal property, registration, ad valorem, value added,
  alternative or add-on minimum, estimated, or other tax or governmental fee of
  any kind whatsoever, imposes or required to be withheld by the United States
  or any state, county, local or foreign government or subdivision or agency
  thereof, including any interest, penalties, and additions imposed thereon or
  with respect thereto.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" color="#000000" size="2">"<b>Tax Return</b>" means any
  report, return, information return, or other information required to be
  supplied to a governmental authority in connection with Taxes, including any
  return of an affiliated or combined or unitary group that includes the Company
  and any amendments thereof.</font><font size="1"><hr style="PAGE-BREAK-AFTER: always" noShade SIZE="1"></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Trading Market</b>" means the American Stock
  Exchange or any other Eligible Market, or any national securities exchange,
  market or trading or quotation facility on which the Common Stock is then
  listed or quoted.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Transaction Documents</b>" means this
  Agreement, the Warrants and any other documents or agreements executed in
  connection with the transactions contemplated hereunder.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">"<b>Underlying Shares</b>" means the shares of
  Common Stock issuable upon exercise of the Warrants.</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" color="#000000" size="2">"<b>Warrants</b>" means,
  collectively, the warrants to purchase Common Stock that are issued and sold
  pursuant to this Agreement, in the form of <u>Exhibit A</u>, and any warrants
  or replacement warrants issued upon exercise, transfer, exchange or partial
  exercise of such warrants.</font></div>
<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE II <br>
PURCHASE AND SALE </FONT></P>

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<P dir="ltr"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <U>Closing</U>. Subject to the
terms and conditions set forth in this Agreement, at the Closing the Company shall issue
and sell to each Purchaser, and each Purchaser shall, severally and not jointly, purchase
from the Company, such number of Shares and a Warrant to purchase such number of
Underlying Shares, each as indicated below such Purchaser&#146;s name on the signature
page of this Agreement, for an aggregate purchase price for such Purchaser as indicated
below such Purchaser&#146;s name on the signature page of this Agreement. The Closing
shall take place at the offices of Cooley Godward LLP, One Maritime Plaza, 20<SUP>th</SUP>
Floor, San Francisco, California, immediately following the execution hereof, or at such
other location or time as the parties may agree. </FONT></P>

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<A NAME=A008><font size="2"></font></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 Closing Deliveries. </FONT></P>

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          <div align="right">
          <TABLE WIDTH="90%" CELLPADDING=0 CELLSPACING=0 style="border-collapse: collapse" bordercolor="#111111">
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT></TD>
               <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               At the Closing, the Company shall deliver or cause to be delivered to each
               Purchaser the following: </FONT></P></TD>
               </TR>
               </TABLE>
               </div>
               <font size="2">
               <BR>

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          </font>
          <div align="right">
          <TABLE WIDTH="75%" CELLPADDING=0 CELLSPACING=0 style="border-collapse: collapse" bordercolor="#111111">
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(i) </FONT></TD>
               <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               a copy of one or more stock certificates, free and clear of all restrictive and
               other legends (except as expressly provided in <U>Section 4.1(b)</U> hereof),
               evidencing such number of Shares equal to the number of Shares indicated below
               such Purchaser&#146;s name on the signature page of this Agreement, registered
               in the name of such Purchaser; </FONT></P></TD>
               </TR>
               </TABLE>
               </div>
               <font size="2">
               <BR>

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          </font>
          <div align="right">
          <TABLE WIDTH="75%" CELLPADDING=0 CELLSPACING=0 style="border-collapse: collapse" bordercolor="#111111">
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(ii) </FONT></TD>
               <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               a copy of a Warrant, registered in the name of such Purchaser, pursuant to which
               such Purchaser shall have the right to acquire such number of Underlying Shares
               indicated below such Purchaser&#146;s name on the signature page of this
               Agreement, on the terms set forth therein; and </FONT></P></TD>
               </TR>
               </TABLE>
               </div>
               <font size="2">
               <BR>

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          </font>
          <div align="right">
          <TABLE WIDTH="75%" CELLPADDING=0 CELLSPACING=0 style="border-collapse: collapse" bordercolor="#111111">
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(iii) </FONT></TD>
               <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               a legal opinion of Cooley Godward LLP, counsel to the Company, in the form of
               <U>Exhibit B</U>, executed by such counsel. </FONT></P></TD>
               </TR>
               </TABLE>
               </div>
               <font size="2">
               <BR>

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</font>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 At the Closing, each Purchaser
shall deliver or cause to be delivered to the Company the purchase price indicated below
such Purchaser&#146;s name on the signature page of this Agreement, in United States
dollars and in immediately available funds, by wire transfer to an account designated in
writing to such Purchaser by the Company for such purpose. </FONT></P>

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<A NAME=A009><font size="2"></font></A>
<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE III<br>
REPRESENTATIONS AND
WARRANTIES </FONT></P>

<FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><font size="2">3.1      Representations  and  Warranties of the Company.  The Company  hereby  represents  and warrants to each of
the Purchasers as follows:

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     </font>
     <font size="1"><hr style="PAGE-BREAK-AFTER: always" noShade SIZE="1"></font>
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Subsidiaries</U>. Other than as set forth in the SEC Reports (as defined in
          <U>Section 3.1(g)</U>) the Company has no Subsidiaries. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Organization and Qualification</U>. Each of the Company and the Subsidiaries
          is an entity duly organized, validly existing and in good standing under the
          laws of the jurisdiction of its incorporation or organization (as applicable),
          with the requisite power and authority to own and use its properties and assets
          and to carry on its business as currently conducted. Neither the Company nor any
          Subsidiary is in violation of any of the provisions of its respective
          certificate or articles of incorporation, bylaws or other organizational or
          charter documents. Each of the Company and the Subsidiaries is duly qualified to
          do business and is in good standing as a foreign corporation or other entity in
          each jurisdiction in which the nature of the business conducted or property
          owned by it makes such qualification necessary, except where the failure to be
          so qualified or in good standing, as the case may be, would not, individually or
          in the aggregate, (i) adversely affect the legality, validity or enforceability
          of any Transaction Document, (ii) have or result in a material adverse effect on
          the results of operations, assets, business or condition (financial or
          otherwise) of the Company and the Subsidiaries, taken as a whole on a
          consolidated basis, or (iii) adversely impair the Company&#146;s ability to
          perform fully on a timely basis its obligations under any of the Transaction
          Documents (any of (i), (ii) or (iii), a <B>&#147;Material Adverse
          Effect&#148;</B>). </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Authorization; Enforcement</U>. The Company has the requisite corporate power
          and authority to enter into and to consummate the transactions contemplated by
          each of the Transaction Documents and otherwise to carry out its obligations
          hereunder and thereunder. The execution and delivery of each of the Transaction
          Documents by the Company and the consummation by it of the transactions
          contemplated hereby and thereby have been duly authorized by all necessary
          action on the part of the Company, its officers, Board and stockholders and no
          further consent or action is required by the Company, its officers, Board or its
          stockholders. Each of the Transaction Documents has been (or upon delivery will
          be) duly executed by the Company and is, or when delivered in accordance with
          the terms hereof, will constitute, the legal, valid and binding obligation of
          the Company enforceable against the Company in accordance with its terms, except
          (i) as may be limited by (1) applicable bankruptcy, insolvency, reorganization
          or others laws of general application relating to or affecting the enforcement
          of creditors&#146; rights generally and (2) the effect of rules of law governing
          the availability of equitable remedies and (ii) as rights to indemnity or
          contribution may be limited under federal or state securities laws or by
          principles of public policy thereunder. The Board has taken all action
          reasonably necessary to render inapplicable, as such provisions may relate to
          any such Purchaser&#146;s purchase of the Shares and Underlying Shares, the
          provisions of Section 203 of the General Corporation Law of the State of
          Delaware. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>No Conflicts</U>. The execution, delivery and performance of the Transaction
          Documents by the Company and the consummation by the Company of the transactions
          contemplated hereby and thereby do not and will not (i) conflict with or violate
          any provision of the Company&#146;s or any Subsidiary&#146;s certificate or
          articles of incorporation, bylaws or other organizational or charter documents,
          (ii) conflict with, or constitute a default (or an event that with notice or
          lapse of time or both would become a default) under, or give to others any
          rights of termination, amendment, acceleration or cancellation (with or without
          notice, lapse of time or both) of, any material agreement, credit facility, debt
          or other instrument (whether evidencing a Company or Subsidiary debt or
          otherwise) or other understanding to which the Company or any of its
          Subsidiaries is a party or by which any property or asset of the Company or any
          of its Subsidiaries is bound or affected or (iii) 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 and the
          rules and regulations of the principal market, system or exchange on which the
          Common Stock is traded, quoted or listed), or by which any property or asset of
          the Company or a Subsidiary is bound or affected. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Issuance of the Securities</U>. The Securities are duly authorized and, when
          issued and paid for in accordance with the Transaction Documents, will be duly
          and validly issued, fully paid and nonassessable, free and clear of all Liens
          and shall not be subject to preemptive rights or similar rights of stockholders.
          The Company has reserved from its duly authorized capital stock the maximum
          number of Underlying Shares issuable upon exercise of the Warrants. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Capitalization</U>. The number of shares and type of all authorized, issued
          and outstanding capital stock, options and other securities of the Company
          (whether or not presently convertible into or exercisable or exchangeable for
          shares of capital stock of the Company) is set forth in Schedule 3.1(f). All
          outstanding shares of capital stock are duly authorized, validly issued, fully
          paid and nonassessable and have been issued in compliance with all applicable
          securities laws, and none of such issuances were, and the issuance of the
          Securities will not be, made in violation of any preemptive rights or other
          rights. Except as disclosed in Schedule 3.1(f), 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 shares of Common Stock, or contracts,
          commitments, understandings or arrangements by which the Company or any
          Subsidiary is or may become bound to issue additional shares of Common Stock, or
          securities or rights convertible or exchangeable into shares of Common Stock.
          There are no anti-dilution or price adjustment provisions contained in any
          security issued by the Company (or in any agreement providing rights to security
          holders) and the issue and sale of the Securities (including the Underlying
          Shares) will not obligate the Company to issue shares of Common Stock or other
          securities to any Person (other than the Purchasers) and will not result in a
          right of any holder of Company securities to adjust the exercise, conversion,
          exchange or reset price under such securities. To the knowledge of the Company
          and except as specifically disclosed in the SEC Reports or in any Schedule 13D
          or Schedule 13G filed with the Commission, no Person or group of related Persons
          beneficially owns (as determined pursuant to Rule 13d-3 under the Exchange Act),
          or has the right to acquire, by agreement with or by obligation binding upon the
          Company, beneficial ownership of in excess of 5% of the outstanding Common
          Stock, ignoring for such purposes any limitation on the number of shares of
          Common Stock that may be owned at any single time. The Shares and the Underlying
          Shares, when issued, will conform in all material respects to the description of
          the Company&#146;s Common Stock contained in the Company&#146;s SEC Reports and
          other filings with the SEC. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>SEC Reports; Financial Statements</U>. The Company has filed all reports
          required to be filed by it under 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 to file such material) (the
          foregoing materials (together with any materials filed by the Company under the
          Exchange Act, whether or not required) being collectively referred to herein as
          the <B>&#147;SEC Reports&#148;</B>) on a timely basis or has received a valid
          extension of such time of filing and has filed any such SEC Reports prior to the
          expiration of any such extension. As of their respective dates, the SEC Reports
          complied in all material respects with the requirements of the Securities Act
          and the Exchange Act and the rules and regulations of the Commission promulgated
          thereunder, and none of the SEC Reports, when filed, contained any untrue
          statement of a material fact or omitted to state a material fact required to be
          stated therein or necessary in order to make the statements therein, in the
          light of the circumstances under which they were made, not misleading. The
          financial statements of the Company included in the SEC Reports comply in all
          material respects with applicable accounting requirements and the rules and
          regulations of the Commission with respect thereto as in effect at the time of
          filing. Such financial statements have been prepared in accordance with United
          States generally accepted accounting principles applied on a consistent basis
          during the periods involved (<B>&#147;GAAP&#148;</B>), except as may be
          otherwise specified in such financial statements or the notes thereto, 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.
          All material agreements to which the Company or any Subsidiary is a party or to
          which the property or assets of the Company or any Subsidiary are subject are
          included as part of or specifically identified in the SEC Reports. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Material Changes</U>. Since March 31, 2004 (i) there has been no event,
          occurrence or development that, individually or in the aggregate, has had or
          that would result in a Material Adverse Effect, (ii) the Company has not
          incurred any liabilities (contingent or otherwise) other than (A) trade payables
          and accrued expenses incurred in the ordinary course of business and (B)
          liabilities not required to be reflected in the Company&#146;s financial
          statements pursuant to GAAP or required to be disclosed in filings made with the
          Commission, (iii) the Company has not altered its method of accounting or the
          identity of its auditors, except as disclosed in its SEC Reports or as required
          by changes in GAAP, (iv) the Company has not declared or made any dividend or
          distribution of cash or other property to its stockholders or purchased,
          redeemed or made any agreements to purchase or redeem any shares of its capital
          stock (other than pursuant to written agreements with employees to repurchase
          stock upon the termination of such employee&#146;s employment) and (v) the
          Company has not issued any equity securities to any officer, director or
          Affiliate, except pursuant to existing Company stock-based plans or as disclosed
          in the SEC Reports. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Absence of Litigation</U>. Except as set forth in the SEC Reports,
          (A)&nbsp;there are no actions, suits, claims, proceedings, inquiries or
          investigations before or by any court, public board, government agency,
          self-regulatory organization or body pending or, to the knowledge of the
          Company, threatened against or affecting the Company or any of its Subsidiaries
          or any of their respective assets that could (i)&nbsp;adversely affect or
          challenge the legality, validity or enforceability of any of the Transaction
          Documents, individually or in the aggregate, (ii) have a Material Adverse Effect
          or (iii) if adversely decided, would have a Material Adverse Effect on, or delay
          the issuance of, the Securities or the consummation of the transactions
          contemplated by the Agreement, (B)&nbsp;n<U>o action, suit, proceeding, claim,
          investigation or inquiry by the Company or any Subsidiary is currently pending
          nor does the Company intend to initiate any action, suit, proceeding, claim,
          investigation or inquiry, in each case, that if resolved in a manner adverse to
          the Company, would<B> </B>have a Material Adverse Effect, (C)&nbsp;n</U>either
          the Company nor any Subsidiary (i) is subject to any order, decree, agreement,
          memorandum of understanding or similar arrangement with, or commitment letter or
          similar submission to, or (ii) has received any extraordinary supervisory letter
          from, or adopted any board resolutions at the request of, any Self-Regulatory
          Organization or governmental entity charged with the supervision or regulation
          of broker-dealers or the supervision or regulation of its business (each such
          item referred to in clauses &#147;(i)&#148; and &#147;(ii)&#148; of this
          <U>Section 3.1(i)</U>, a &#147;<B>Regulatory Order</B>&#148;), including any
          such Regulatory Order that restricts materially the conduct of the business of
          the Company or any Subsidiary, or in any manner relates to the capital adequacy,
          credit policies or management of the Company or any Subsidiary, and
          (D)&nbsp;neither the Company nor any Subsidiary has received written notice from
          any governmental entity or Self-Regulatory Organization that such organization
          or authority is contemplating issuing or requesting any such Regulatory Order.
          For purposes of this Agreement, the term &#147;<B>Self-Regulatory
          Organization</B>&#148; shall mean the National Association of Securities
          Dealers, Inc. (or any successor entity thereto) (&#147;<B>NASD</B>&#148;), the
          American Stock Exchange, the National Futures Association, the Chicago Board of
          Trade, the New York Stock Exchange, any national securities exchange (as defined
          in the Exchange Act), any other securities exchange, futures exchange, contract
          market, commodities market, any other such exchange, clearinghouse or
          corporation or other similar federal, state or foreign self-regulatory body or
          organization. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Compliance</U>. Neither the Company nor any Subsidiary (i) is in default
          under or in violation of (and no event has occurred that has not been waived
          that, with notice or lapse of time or both, would result in a default by the
          Company or any Subsidiary under), nor has the Company or any Subsidiary received
          notice of a claim that it is in default under or that it is in violation of, any
          indenture, loan or credit agreement or any other agreement or instrument to
          which it is a party or by which it or any of its properties is bound, (ii) is in
          violation of any order of any court, arbitrator or governmental body or (iii) to
          the Company&#146;s knowledge, is in violation of any statute, rule or regulation
          of any governmental authority, including without limitation all foreign,
          federal, state and local laws relating to taxes, environmental protection,
          occupational health and safety, product quality and safety and employment and
          labor matters, except in each case as would not, individually or in the
          aggregate, have or result in a Material Adverse Effect. None of the Company or
          any Subsidiary is in default under, or in violation of any of the listing or
          quotation requirements of the American Stock Exchange (or of any other Eligible
          Market on which the Common Stock is currently traded, listed or quoted) as in
          effect on the date hereof, and the Company is not aware of any facts which could
          reasonably lead to de-listing or suspension of trading in the Common Stock by
          the American Stock Exchange (or any other Eligible Market on which the Common
          Stock is then traded, listed or quoted) in the foreseeable future. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Title to Assets</U>. The Company and the Subsidiaries have good and
          marketable title in fee simple to all real property owned by them that is
          material to the business of the Company and the Subsidiaries and good and
          marketable title in all personal property owned by them that is material to the
          business of the Company and the Subsidiaries, in each case free and clear of all
          Liens, except for Liens 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. Any real property and
          facilities held under lease by the Company and the Subsidiaries are held by them
          under valid, subsisting and enforceable leases of which the Company and the
          Subsidiaries are in compliance. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Certain Fees</U>. No brokerage or finder&#146;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 this Agreement, and the Company has not taken
          any action that would cause any Purchaser to be liable for any such fees or
          commissions. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Private Placement</U>. Neither the Company nor any Person acting on the
          Company&#146;s behalf has sold or offered to sell or solicited any offer to buy
          the Securities by means of any form of general solicitation or advertising.
          Neither the Company nor any of its Affiliates nor any Person acting on the
          Company&#146;s behalf has, directly or indirectly, at any time within the past
          six months, made any offer or sale of any security or solicitation of any offer
          to buy any security under circumstances that would (i) eliminate the
          availability of the exemption from registration under Regulation D under the
          Securities Act in connection with the offer and sale of the Securities as
          contemplated hereby or (ii) cause the offering of the Securities pursuant to the
          Transaction Documents to be integrated with prior offerings by the Company for
          purposes of any applicable law, regulation or stockholder approval provisions,
          including, without limitation, under the rules and regulations of any Trading
          Market. The Company is not a United States real property holding corporation
          within the meaning of the Foreign Investment in Real Property Tax Act of 1980. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Form S-3 Eligibility</U>. The Company is eligible to register its Common
          Stock for resale by the Purchasers using Form S-3 promulgated under the
          Securities Act. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Listing and Maintenance Requirements</U>. The Company has not, in the two
          years preceding the date hereof, received notice (written or oral) from any
          Trading Market on which the Common Stock is or has been listed or quoted to the
          effect that the Company is not in compliance with the listing or maintenance
          requirements of such Trading Market. The Company is, and has no reason to
          believe that it will not in the foreseeable future continue to be, in compliance
          with all such listing and maintenance requirements. The approval of the
          Company&#146;s stockholders is not required under the listing or maintenance
          requirements of the American Stock Exchange or any Trading Market for the
          consummation of the transactions contemplated herein. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Registration Rights</U>. The Company has not granted or agreed to grant to
          any Person any rights (including &#147;piggy-back&#148; registration rights) to
          have any securities of the Company registered with the Commission or any other
          governmental authority that have not been satisfied. No Person, including
          current or former stockholders of the Company, underwriters, brokers or agents,
          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 or to require that the Company include any such securities in the
          registration of Securities as contemplated herein. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Application of Takeover Protections</U>. There is no control share
          acquisition, business combination, poison pill (including any distribution under
          a rights agreement) or other similar anti-takeover provision under the
          Company&#146;s charter documents or the laws of its state of incorporation that
          is or could become applicable to any of 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&#146;s issuance of the Securities and the Purchasers&#146;
          ownership of the Securities. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Disclosure</U>. The Company confirms that it has not provided to the
          Purchasers any material non-public information other than information related to
          the transactions contemplated by the Transaction Documents. The Company
          understands and confirms that each of the Purchasers will rely on the foregoing
          representations in effecting the transactions in securities of the Company. All
          disclosure provided to the Purchasers regarding the Company, its business and
          the transactions contemplated hereby, including the Schedules to this Agreement,
          furnished by or on behalf of the Company are true and correct and do not contain
          any untrue statement of a material fact or omit to state any material fact
          necessary in order to make the statements made therein, in the light of the
          circumstances under which they were made, not misleading. No event or
          circumstance has occurred or information exists with respect to the Company or
          any of its Subsidiaries or its or their business, properties, prospects,
          operations or financial conditions, which, under applicable law, rule or
          regulation, requires public disclosure or announcement by the Company but which
          has not been so publicly announced or disclosed. The Company acknowledges and
          agrees that no Purchaser makes or has made (i) any representations or warranties
          with respect to the transactions contemplated hereby other than those
          specifically set forth in <U>Section 3.2</U> or (ii) any statement, commitment
          or promise to the Company or, to its knowledge, any of its representatives which
          is or was an inducement to the Company to enter into this Agreement or
          otherwise. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Acknowledgment Regarding Purchasers&#146; Purchase of Securities</U>. The
          Company acknowledges and agrees that each of the Purchasers is acting solely in
          the capacity of an arm&#146;s length purchaser with respect to the Company and
          to this Agreement and the transactions contemplated hereby. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Patents and Trademarks</U>. The Company and the Subsidiaries have, or have
          rights to use, all patents, patent applications, trademarks, trademark
          applications, service marks, trade names, copyrights, licenses and other similar
          rights that are necessary or material for use in connection with their
          respective businesses as described in the SEC Reports and which the failure to
          do so would have a Material Adverse Effect (collectively, the
          &#147;<B>Intellectual Property Rights</B>&#148;). Except as disclosed in the SEC
          Reports, there is no Proceeding that is pending, or to the Company&#146;s
          knowledge, is threatened against, the Company regarding the infringement of any
          of the Intellectual Property Rights. Neither the Company nor any Subsidiary has
          knowledge that, or has received, a notice 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, (i) all such Intellectual Property
          Rights are enforceable and (ii) there is no existing infringement by another
          Person of any of the Intellectual Property Rights. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Insurance</U>. The Company and the Subsidiaries are insured by insurers of
          recognized financial responsibility against such losses and risks and in such
          amounts as the Company believes to be prudent and customary in the businesses in
          which the Company and the Subsidiaries are engaged. The Company has no reason to
          believe that it or any of the Subsidiaries will not be able to renew their
          respective existing insurance coverage as and when such coverage expires or to
          obtain similar coverage from similar insurers as may be necessary to continue
          their respective businesses without a significant increase in cost. The Company
          has in full force and effect D&amp;O insurance in amounts that are commercially
          reasonable. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Regulatory Permits</U>. The Company and the Subsidiaries possess all
          certificates, authorizations and permits issued by the appropriate federal,
          state, local or foreign regulatory authorities necessary to conduct their
          respective businesses as described in the SEC Reports, except where the failure
          to possess such permits would not, individually or in the aggregate, have a
          Material Adverse Effect (<B>&#147;Material Permits&#148;</B>), and neither the
          Company nor any Subsidiary has received any notice of proceedings relating to
          the revocation or modification of any Material Permit. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Transactions With Affiliates and Employees</U>. Except as set forth in the
          SEC Reports, none of the officers or directors of the Company and, to the
          knowledge of the Company, none of the employees of the Company is presently a
          party to any transaction with the Company or any Subsidiary (other than for
          services as employees, officers and directors), including any contract,
          agreement or other arrangement providing for the furnishing of services to or
          by, providing for rental of real or personal property to or from, or otherwise
          requiring payments to or from any officer, director or such employee or, to the
          knowledge of the Company, any entity in which any officer, director, or any such
          employee has a substantial interest or is an officer, director, trustee or
          partner. </FONT></P>

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     <P dir="ltr"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Employee Benefits.  </U>Each of the Benefit Plans has been administered in
          accordance with its terms and any federal, state or local statute, law,
          ordinance, regulation, order, writ, injunction, directive, judgment or decree
          applicable to the Company, the Subsidiaries, or any of their respective
          properties, or assets, as the case may be (including, where applicable, ERISA
          and the Code), except where the failure to so administer such Benefit Plan would
          not have a Material Adverse Effect. Each of the Benefit Plans intended to be
          &#147;qualified&#148; within the meaning of section 401(a) of the Code has been
          determined by the United States Internal Revenue Service to be so qualified,
          except where the failure to so qualify such Benefit Plan would not have a
          Material Adverse Effect. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Taxes.</U> (i) The Company has filed (or joined in the filing of) when due
          all Tax Returns required by applicable law to be filed with respect to the
          Company and all Taxes shown to be due on such Tax Returns have been paid; (ii)
          all such Tax Returns were true, correct and complete in all material respects as
          of the time of such filing; or (iii) any liability of the Company for Taxes not
          yet due and payable, or which are being contested in good faith, in each case as
          of July 31, 2004, has been accrued or reserved for on the financial statements
          of the Company in accordance with GAAP, in each case except in the case that any
          such failure to file or pay Taxes would not result in a Material Adverse Effect. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Customer Complaints.</U> Neither the Company nor any of the
     Subsidiaries has received any customer complaints concerning such entity's
     services, other than immaterial, nonrecurring problems. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>No Manipulation of Stock.  </U>The Company has not taken, in violation of
          applicable law, any action designed to or that might cause or result in
          stabilization or manipulation of the price of the Common Stock to facilitate the
          transactions contemplated hereby or the sale or resale of the shares of Common
          Stock<B>.</B> </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Internal Accounting Controls</U>. 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&#146;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&#146;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. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Sarbanes-Oxley Act</U>. The Company is in compliance with applicable
          requirements of the Sarbanes-Oxley Act of 2002 and applicable rules and
          regulations promulgated by the&nbsp;Commission thereunder in effect as of the
          date of this Agreement. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Registrations</U>. The Company, each of the Subsidiaries and each of their
          respective employees which are or who are required to be registered as a
          broker-dealer, a principal, a registered representative or a salesperson (or any
          limited subcategory thereof) with the Commission, the securities commission or
          similar authority of any state or foreign governmental entity, or any
          Self-Regulatory Organization, are duly registered as such and such registrations
          are in full force and effect. In this regard, Merriman Curhan Ford &amp; Co. is
          registered as a broker dealer with the Commission and with all states, exchanges
          and entities where so required to be registered, except for such states,
          exchanges and entities where the failure to be so registered would not have a
          Material Adverse Effect, and is admitted to membership in the NASD. All federal,
          self-regulatory and state registration requirements have been complied with in
          all material respects, and such registrations as currently filed, and all
          periodic and other reports, including notice filings, required to be filed with
          respect thereto, are accurate and complete in all material respects. The
          information contained in such registrations, forms and reports was true and
          complete in all material respects as of the date of the filing thereof, and
          timely amendments were filed, as necessary, to correct or update any information
          reflected in such registrations, forms or reports. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>None of the Company or the
Subsidiaries is subject to registration under the Investment Advisers Act of 1940, as
amended, or the Investment Company Act of 1940, as amended, or similar laws of any
governmental entity. Except for MCF Asset Management, LLC, none of the Company or the
Subsidiaries is or has been during the past five (5) years, an &#147;investment
adviser&#148; within the meaning of Section 202(a)(11) of the Investment Advisers Act of
1940, as amended, and giving full effect to the exclusion from such definition provided in
paragraph (C) of Section 202(a)(11) of such Act, required to be registered, licensed or
qualified as an investment adviser under the Investment Advisers Act or any similar
applicable state law or subject to any material liability or disability by reason of any
failure to be so registered, licensed or qualified. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Other than Merriman Curhan Ford &amp;
Co., neither the Company nor any other Subsidiary is required to register as a
broker-dealer with any governmental entity or any Self-Regulatory Organization. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Except where so registered, none of
the activities of the Company or any Subsidiary require any of them to be registered as an
exchange or transfer agent, a clearing agency, a municipal securities dealer, a government
securities dealer, a futures commission merchant, a commodity trading advisory or
commodity pool operator. </FONT></P>

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<P dir="ltr"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <U>Representations, Warranties
and Certain Agreements of the Purchasers</U>. Each Purchaser hereby, as to itself only and
for no other Purchaser, represents and warrants to the Company and agrees that: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Organization; Authority</U>. Such Purchaser is an entity duly organized,
          validly existing and in good standing under the laws of the jurisdiction of its
          organization with the requisite corporate or partnership power and authority to
          enter into and to consummate the transactions contemplated by the Transaction
          Documents and otherwise to carry out its obligations hereunder and thereunder.
          The purchase by such Purchaser of the Shares and the Warrants hereunder has been
          duly authorized by all necessary action on the part of such Purchaser. This
          Agreement has been duly executed and delivered by such Purchaser and constitutes
          the valid and binding obligation of such Purchaser, enforceable against it in
          accordance with its terms. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Investment Intent</U>. Such Purchaser is acquiring the Securities for
          investment purposes only and not with a view to or for distributing or reselling
          such Securities or any part thereof, without prejudice, however, to such
          Purchaser&#146;s right, subject to the provisions of this Agreement, at all
          times to sell or otherwise dispose of all or any part of such Securities
          pursuant to an effective registration statement under the Securities Act or
          under an exemption from such registration and in compliance with applicable
          federal and state securities laws. Nothing contained herein shall be deemed a
          representation or warranty by such Purchaser to hold Securities for any period
          of time. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Purchaser Status</U>. At the time such Purchaser was offered the Shares and
          the Warrants, it was, and at the date hereof it is, an &#147;accredited
          investor&#148; as defined in Rule 501(a) under the Securities Act. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Reliance on Exemptions</U>. Such Purchaser understands that the Securities
          are being offered and sold to it in reliance on specific exemptions from the
          registration requirements of United States federal and state securities laws and
          that the Company is relying in part upon the truth and accuracy of, and such
          Purchaser&#146;s compliance with, the representations, warranties, agreements,
          acknowledgments and understandings of such Purchaser set forth herein in order
          to determine the availability of such exemptions and the eligibility of such
          Purchaser to acquire such securities. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Experience of such Purchaser</U>. 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. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Information</U>. Such Purchaser and its advisors, if any, have been furnished
          with all materials relating to the business, finances and operations of the
          Company and materials relating to the offer and sale of the Securities that have
          been requested by such Purchaser. Such Purchaser and its advisors, if any, have
          been afforded the opportunity to ask questions of the Company. Such Purchaser
          understands that its investment in the Securities involves a high degree of
          risk. Neither such inquiries nor any other investigation conducted by or on
          behalf of such Purchaser or its advisors shall modify, amend or affect such
          Purchaser&#146;s right to rely on the truth, accuracy and completeness of the
          disclosure made to such Persons in respect of the Company or this transaction
          and the Company&#146;s representations and warranties contained in this
          Agreement. Each Purchaser acknowledges and agrees that the Company has not made
          (i) any representations or warranties to such Purchaser with respect to the
          transactions contemplated hereby other than those specifically set forth in the
          Transaction Documents or (ii) any oral statement, commitment or promise that is
          or was an inducement to such Purchaser to enter into this Agreement or
          otherwise. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Purchaser Questionnaire</U>. Each Purchaser has completed or caused to be
          completed the Purchaser Questionnaire in the form as set forth on <U>Exhibit
          B</U>, and the information provided by each Purchaser in such Purchaser&#146;s
          Purchaser Questionnaire is true and correct as of the date of this Agreement;
          <I>provided,</I> that the Purchasers shall be entitled to update such
          information by providing written notice thereof to the Company before the
          Effective Date. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Restrictions on Short Sales</U>. Each Purchaser represents, warrants and
          covenants that neither Purchaser nor any Affiliate of such Purchaser that (i)
          had knowledge of the transactions contemplated hereby, (ii) has or shares
          discretion relating to such Purchaser&#146;s investments or trading or
          information concerning such Purchaser&#146;s investments, including in respect
          of the Securities or (iii) is subject to such Purchaser&#146;s review or input
          concerning such Affiliate&#146;s investments or trading, has or will, directly
          or indirectly, during the period beginning on the date on which the Company or
          any representative of the Company, first contacted such Purchaser regarding the
          transactions contemplated by this Agreement and ending on the date that is 120
          days after the Closing Date, engage in (x) any &#147;short sales&#148; (as such
          term is defined in Rule 3b-3 promulgated under the Exchange Act) of the Common
          Stock, including, without limitation, the maintaining of any short position with
          respect to, establishing or maintaining a &#147;put equivalent position&#148;
          (within the meaning of Rule 16a-1(h) under the Exchange Act) with respect to,
          entering into any swap, derivative transaction or other arrangement (whether any
          such transaction is to be settled by delivery of Common Stock, other securities,
          cash or other consideration) that transfers to another, in whole or in part, any
          economic consequences or ownership, or otherwise dispose of, any of the
          Securities by the Purchaser or (y) any hedging transaction that establishes a
          net short position with respect to the Securities (clauses &#147;(x)&#148; and
          &#147;(y)&#148; together, a &#147;<B>Short Sale</B>&#148;); except for (1) Short
          Sales by the Purchaser or Affiliate of such Purchaser which was, prior to the
          date on which such Purchaser was first contacted by the Company or a
          representative of the Company regarding the transactions contemplated by this
          Agreement, a market maker for the Common Stock, provided that such Short Sales
          are in the ordinary course of business of such Purchaser or Affiliate of such
          Purchaser and are in compliance with the Securities Act, the rules and
          regulations of the Securities Act and such other securities laws as may be
          applicable, (2) Short Sales by the Purchaser or an Affiliate of such Purchaser
          which by virtue of the procedures of such Purchaser are made without knowledge
          of the transactions contemplated by this Agreement, (3) Short Sales by the
          Purchaser or an Affiliate of such Purchaser to the extent that such Purchaser or
          Affiliate of such Purchaser is acting in the capacity of a broker-dealer
          executing unsolicited third-party transactions or (4) Short Sales <U>of the
          Underlying Shares </U>in connection with the Automatic Exercise as defined in
          Section 4(c) of the Warrants. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Acknowledgement Regarding Purchasers&#146; Purchase of Securities</U>. Each
          Purchaser acknowledges and agrees that it is acting solely in the capacity of an
          arm&#146;s length purchaser with respect to the Company and to this Agreement
          and the transactions contemplated hereby. </FONT></P>

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<A NAME=A011><font size="2"></font></A>
<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE IV<br>
OTHER AGREEMENTS OF THE
PARTIES </FONT></P>

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<A NAME=A013><font size="2"></font></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 Transfer Restrictions. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;
          Securities may only be disposed of pursuant to an effective registration
          statement under the Securities Act or pursuant to an available exemption from
          the registration requirements of the Securities Act, and in compliance with any
          applicable state securities laws. In connection with any transfer of Securities
          other than pursuant to an effective registration statement or to the Company or
          pursuant to Rule 144(k), except as otherwise set forth herein, the Company may
          require the transferor to provide to the Company an opinion of counsel selected
          by the transferor, the form and substance of which opinion shall be reasonably
          satisfactory to the Company, to the effect that such transfer does not require
          registration under the Securities Act. Notwithstanding the foregoing, the
          Company hereby consents to and agrees to register on the books of the Company
          and with its transfer agent, without any such legal opinion, any transfer of
          Securities by a Purchaser to an Affiliate of such Purchaser, provided that the
          transferee certifies to the Company that it is an &#147;accredited
          investor&#148; as defined in Rule 501(a) under the Securities Act. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;
          The Purchasers agree to the imprinting, so long as is required by this
          <U>Section 4.1(b)</U>, of the following legend on any certificate evidencing
          Securities: </FONT></P>

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                    <TR VALIGN=TOP>
                    <TD ALIGN=RIGHT WIDTH=6%>&nbsp;</TD>
                    <TD ALIGN=LEFT WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[NEITHER]

                     THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
                    EXERCISABLE] 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
                    &#147;SECURITIES ACT&#148;), 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 COMPLIANCE WITH
                    APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS. </FONT></TD>
                    </TR>
                    </TABLE>
                    <font size="2">
                    <BR>

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</font>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certificates evidencing Securities
shall not be required to contain such legend (i) following any sale of such Securities
pursuant to Rule 144, or (ii) if such Securities are eligible for sale under Rule 144(k)
or (iii)&nbsp;if such legend is not required under applicable requirements of the
Securities Act (including judicial interpretations and pronouncements issued by the Staff
of the Commission). Until a Registration Statement covering the resale of the Securities
is effective under the Securities Act, the Company will not effect or publicly announce
its intention to effect any exchange, recapitalization or other transaction that
effectively requires or rewards physical delivery of certificates evidencing the Common
Stock. </FONT>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <U>Furnishing of Information</U>.
As long as any Purchaser owns Securities, the Company covenants to timely file all reports
required to be filed by the Company after the date hereof pursuant to the Exchange Act.
Upon the request of any Purchaser, the Company shall deliver to such Purchaser a written
certification of a duly authorized officer as to whether it has complied with the
preceding sentence. As long as any Purchaser owns Securities, if the Company is not
required to file reports pursuant to such laws, it will prepare and furnish to the
Purchasers and make publicly available in accordance with paragraph (c) of Rule 144 such
information as is required for the Purchasers to sell the Securities under Rule 144. The
Company further covenants that it will take such further action as any holder of
Securities may reasonably request to satisfy the provisions of Rule 144 applicable to the
issuer of securities relating to transactions for the sale of securities pursuant to Rule
144. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <U>Integration</U>. The Company
shall not, and shall use commercially reasonable efforts to ensure that no Affiliate of
the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in Section 2 of the Securities Act) that would be
integrated with the offer or sale of the Securities in a manner that would require the
registration under the Securities Act of the sale of the Securities to the Purchasers or
that would be integrated with the offer or sale of the Securities for purposes of the
rules and regulations of any Trading Market. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <U>Reservation of Securities</U>.
The Company shall maintain a reserve from its duly authorized shares of Common Stock for
issuance pursuant to the Transaction Documents in such amount as may be required to
fulfill its obligations in full under the Transaction Documents. In the event that at any
time the then authorized shares of Common Stock are insufficient for the Company to
satisfy its obligations in full under the Transaction Documents, the Company shall
promptly take such actions as may be required to increase the number of authorized shares. </FONT></P>

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<A NAME=A014><font size="2"></font></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 Subsequent Placements. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;
          From the date hereof until the Effective Date, the Company will not, directly or
          indirectly, offer, sell, grant any option to purchase, or otherwise dispose of
          (or announce any offer, sale, grant or any option to purchase or other
          disposition of) any of its or the Subsidiaries&#146; equity or equity equivalent
          securities, including without limitation any debt, preferred stock or other
          instrument or security that is, at any time during its life and under any
          circumstances, convertible into or exchangeable or exercisable for Common Stock
          or Common Stock Equivalents, but not including any Excluded Stock (any such
          offer, sale, grant, disposition or announcement being referred to as a
          &#147;<B>Subsequent Placement</B>&#148;); unless the effective price per share
          of a share of Common Stock or Common Stock Equivalent sold in such Subsequent
          Placement is in excess of 1.2 times the Exercise Price (as defined in the
          Warrant). </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;
          LMS Capital (Bermuda) Limited (&#147;<B>LMS</B>&#148;) shall have the right to
          participate as an investor in all Subsequent Placements for which a definitive,
          binding agreement is entered into during the 12-month period following the
          Closing Date. This right of participation shall be on a pro rata basis based on
          the number of shares of Common Stock held by LMS immediately prior to the
          effectiveness of such Subsequent Placement as compared to the aggregate number
          of shares of Common Stock outstanding immediately prior to the effectiveness of
          such Subsequent Placement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 <U>Securities Laws Disclosure;
Publicity</U>. The Company shall, no later than 5:30 a.m., Pacific Time, on the first
Business Day following the Closing Date, issue a press release (a copy of which will be
provided to LMS or its counsel for review as early as practicable prior to its filing)
disclosing the material terms of the transactions contemplated hereby (the &#147;<B>Press
Release</B>&#148;). Thereafter, the Company shall timely file any filings and notices
required by the Commission or applicable law with respect to the transactions contemplated
hereby and provide copies thereof to LMS or its counsel for review. The Company and LMS
shall consult with each other in issuing any press releases or otherwise making public
statements or filings and other communications with the Commission or any regulatory
agency or Trading Market with respect to the transactions contemplated hereby.
Notwithstanding the foregoing, the Company shall not publicly disclose the name of LMS, or
include the name of LMS in any filing with the Commission or any regulatory agency or
Trading Market, without the prior consent of LMS, except to the extent such disclosure
(but not any disclosure as to the controlling Persons thereof) is required by subpoena,
applicable law or Trading Market regulations, in which case the Company shall provide LMS
with prior notice of such disclosure. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 <U>Board Representation</U>. At
the first meeting of the Board following the Closing, the Board will act to fill the
current vacancy on the Board with a representative of LMS that is reasonably acceptable to
the Company and the Board. The Company shall provide D&amp;O insurance in commercially
reasonable amounts for the representative of LMS at such time as the representative from
LMS is elected to the Board. If at any time no LMS representative is serving on the Board,
so long as LMS continues to hold at least 2,307,692 shares of the Common Stock purchased
by LMS in connection with this Agreement, LMS shall have the right, at LMS&#146;s expense,
to designate a representative to attend all meetings of the Board in a non-voting observer
capacity, and in this respect, the Company shall give such observer copies of all notices,
minutes, consents and other materials that it provides to directors; provided, however,
that such observer shall agree to hold in confidence and trust all information so
provided. Notwithstanding the foregoing, the Company may exclude the LMS observer from any
portion of a meeting of the Board in order to preserve the Company&#146;s attorney-client
privilege or if the Company reasonably believes that the subject matter being discussed
may result in a conflict of interest between the Company and LMS. Other than the person
named on <U>Schedule 4.7</U> hereto, the Company shall have the right to approve
LMS&#146;s observer, such approval not to be unreasonably withheld. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 <U>Reimbursement</U>. If any
Purchaser or any of its Affiliates or any officer, director, partner, controlling Person,
employee or agent of a Purchaser or any of its Affiliates (a &#147;<B>Related
Person</B>&#148;) becomes involved in any capacity in any Proceeding brought by or against
any Person in connection with or as a result of the transactions contemplated by the
Transaction Documents, the Company will indemnify and hold harmless such Purchaser or
Related Person for its reasonable legal and other expenses (including the costs of any
investigation, preparation and travel) and for any Losses incurred in connection
therewith, as such expenses or Losses are incurred, excluding only Losses that result
directly from such Purchaser&#146;s or Related Person&#146;s gross negligence or willful
misconduct. In addition, the Company shall indemnify and hold harmless each Purchaser and
Related Person from and against any and all Losses, as incurred, arising out of or
relating to any breach by the Company of any of the representations, warranties or
covenants made by the Company in this Agreement or any other Transaction Document, or any
allegation by a third party that, if true, would constitute such a breach. The conduct of
any Proceedings for which indemnification is available under this paragraph shall be
governed by <U>Section 6.4(c) </U>below. The indemnification obligations of the Company
under this paragraph shall be in addition to any liability that the Company may otherwise
have and shall be binding upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of the Purchasers and any such Related Persons. The Company
also agrees that neither the Purchasers nor any Related Persons shall have any liability
to the Company or any Person asserting claims on behalf of or in right of the Company in
connection with or as a result of the transactions contemplated by the Transaction
Documents, except to the extent that any Losses incurred by the Company result from the
gross negligence or willful misconduct of the applicable Purchaser or Related Person in
connection with such transactions. If the Company breaches its obligations under any
Transaction Document, then, in addition to any other liabilities the Company may have
under any Transaction Document or applicable law, the Company promptly shall pay or
reimburse the Purchasers for all costs of collection and enforcement, including the
indemnification obligations under this paragraph and reasonable attorneys&#146; fees and
expenses. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9 <U>Delivery of Certificates and
Warrants</U>. Within three Business Days following the Closing Date, the Company shall
deliver or cause to be delivered to each Purchaser the following: (a) one or more stock
certificates, free and clear of all restrictive and other legends (except as expressly
provided in Section 4.1(b) hereof), evidencing the number of Shares indicated below such
Purchaser&#146;s name on the signature page of this Agreement, registered in the name of
such Purchaser; and (b) a Warrant, registered in the name of such Purchaser, pursuant to
which such Purchaser shall have the right to acquire such number of Underlying Shares
indicated below such Purchaser&#146;s name on the signature page of this Agreement, on the
terms set forth therein. </FONT></P>

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<A NAME=A015><font size="2"></font></A>
<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE V<br>
CONDITIONS </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <U>Conditions Precedent to the
Obligations of the Purchasers</U>. The obligation of each Purchaser to acquire Securities
at the Closing is subject to the satisfaction or waiver by such Purchaser, at or before
the Closing, of each of the following conditions: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Representations and Warranties</U>. The representations and warranties of the
          Company contained herein shall be true and correct in all material respects as
          of the date when made and as of the Closing as though made on and as of such
          date; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Performance</U>. The Company and each other Purchaser shall have performed,
          satisfied and complied in all material respects with all covenants, agreements
          and conditions required by the Transaction Documents to be performed, satisfied
          or complied with by it at or prior to the Closing; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Securities Exemptions</U>. The offer and sale of the Securities to the
          Purchasers pursuant to this Agreement shall be exempt from the registration
          requirements of the Securities Act and the registration and/or qualification
          requirements of all applicable state securities laws; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>No Statute or Rule Challenging Transaction</U>. No statute, rule, regulation,
          executive order, decree, ruling, injunction, action, proceeding or
          interpretation shall have been enacted, entered, promulgated, endorsed or
          adopted by any court or governmental authority of competent jurisdiction or any
          self-regulatory organization or the staff of any of the foregoing, having
          authority over the matters contemplated hereby which questions the validity of,
          or challenges or prohibits the consummation of, any of the transactions
          contemplated by this Agreement; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>No Suspensions of Trading in Common Stock</U>. The trading in the Common
          Stock shall not be restricted or suspended by the Commission or the Trading
          Market (except for any restriction or suspension of trading of limited duration
          solely to permit dissemination of material information regarding the Company); </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Litigation</U>. No Proceeding shall have been instituted or threatened
          against the Company that would, individually or in the aggregate, have a
          Material Adverse Effect; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Compliance Certificate</U>. The Company shall have delivered to the
          Purchasers a certificate of the Company executed by the President of the
          Company, dated as of the Closing, certifying to the fulfillment of the
          conditions specified in <U>Sections 5.1(a)</U> and <U>5.1(b)</U> of this
          Agreement; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Secretary&#146;s Certificate</U>. The Company shall have delivered to the
          Purchasers a certificate of the Company executed by an officer of the Company,
          dated as of the Closing, certifying (i)&nbsp;resolutions adopted by the Board
          authorizing the execution of the Transaction Documents, the issuance of the
          Securities, the filing of the Registration Statement, and the transactions
          contemplated hereby; and (ii) the Certificate of Incorporation and Bylaws of the
          Company, each as amended, and copies of any required third party consents,
          approvals and filings required in connection with the consummation of the
          transactions contemplated by this Agreement; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Other Documents</U>. The Company shall have delivered to each Purchaser such
          other documents relating to the transactions contemplated by this<B>
          </B>Agreement as the Purchasers or their counsel may reasonably request;
          and </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Listing Approvals.</U> The Company shall have undertaken to obtain
     any necessary approvals for the listing of the Shares on the American Stock
     Exchange. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <U>Conditions Precedent to the
Obligations of the Company</U>. The obligation of the Company to sell Shares and Warrants
at the Closing is subject to the satisfaction or waiver by the Company, at or before the
Closing, of each of the following conditions: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Representations and Warranties</U>. The representations and warranties of the
          Purchasers contained herein shall be true and correct in all material respects
          as of the date when made and as of the Closing Date as though made on and as of
          such date; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Performance</U>. The Purchasers shall have performed, satisfied and complied
          in all material respects with all covenants, agreements and conditions required
          by the Transaction Documents to be performed, satisfied or complied with by the
          Purchasers at or prior to the Closing; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Securities Exemptions</U>. The offer and sale of the Securities to the
          Purchasers pursuant to this Agreement shall be exempt from the registration
          requirements of the Securities Act and the registration and/or qualification
          requirements of all applicable state securities laws; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Payment of Purchase Price</U>. Each Purchaser shall have delivered to the
          Company by wire transfer of immediately available funds, full payment of the
          purchase price for the Shares and Warrants as indicated below each
          Purchaser&#146;s name on such Purchaser&#146;s signature page; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Receipt of Purchaser Questionnaires</U>. Each Purchaser shall have delivered
          to the Company a completed Purchaser Questionnaire in the form attached hereto
          as <U>Exhibit C</U>; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>No Statute or Rule Challenging Transaction</U>. No statute, rule, regulation,
          executive order, decree, ruling, injunction, action, proceeding or
          interpretation shall have been enacted, entered, promulgated, endorsed or
          adopted by any court or governmental authority of competent jurisdiction or any
          self-regulatory organization or the staff of any of the foregoing, having
          authority over the matters contemplated hereby which questions the validity of,
          or challenges or prohibits the consummation of, any of the transactions
          contemplated by this Agreement; and </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Other Documents</U>. The Purchasers shall have delivered to the Company such
          other documents relating to the transactions contemplated by this Agreement as
          the Company or counsel may reasonably request. </FONT></P>

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<A NAME=A017><font size="2"></font></A>
<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE VI<br>
REGISTRATION RIGHTS </FONT></P>

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<A NAME=A019><font size="2"></font></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 Registration. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;
          As promptly as possible, the Company shall prepare and file with the Commission
          a Registration Statement covering the resale of all Registrable Securities for
          an offering to be made on a continuous basis pursuant to Rule 415. The
          Registration Statement shall be on Form S-3. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;
          The Company shall use all commercially reasonable efforts to cause the
          Registration Statement to be filed with the Commission by the Filing Date, and
          declared effective on or before the Required Effectiveness Date. The Company
          shall use all commercially reasonable efforts to keep the Registration Statement
          continuously effective under the Securities Act from the date such Registration
          Statement becomes effective until the later of (i) the first anniversary of the
          Effective Date or such earlier date when all Registrable Securities have been
          resold under such Registration Statement, and (ii) the date on which all
          Registrable Securities may be resold without restriction or limitation under the
          federal securities laws or may be sold pursuant to paragraph (k) of Rule 144
          (the <B>&#147;Effectiveness Period&#148;</B>). </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;
          The Company shall notify each Purchaser in writing promptly (and in any event
          within one Business Day) after receiving notification from the Commission that
          the Registration Statement has been declared effective. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;
          On every monthly anniversary of any Event (as defined below) until the
          applicable Event is cured, as partial relief for the damages suffered therefrom
          by the Purchasers (which remedy shall not be exclusive of any other remedies
          available under this Agreement, at law or in equity), the Company shall pay to
          each Purchaser an amount in cash, as liquidated damages and not as a penalty,
          equal to 1.0% of the aggregate purchase price paid by such Purchaser hereunder
          for every month, prorated for any partial month. The payments to which a
          Purchaser shall be entitled pursuant to this <U>Section 6.1(d)</U> are referred
          to herein as &#147;<B>Event Payments</B>&#148;. Any Event Payments payable
          pursuant to the terms hereof shall apply on a pro-rata basis for any portion of
          a month prior to the cure of an Event. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For such purposes, each of the
following shall constitute an <B>&#147;Event&#148;</B>: </FONT></P>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(i) </FONT></TD>
               <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the Registration Statement is not declared effective by the Required
               Effectiveness Date; </FONT></P></TD>
               </TR>
               </TABLE>
               <font size="2">
               <BR>

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          </font>
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(ii) </FONT></TD>
               <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               subject to <U>Section 6.1(e)</U>, after the Effective Date, a Purchaser is not
               permitted to sell Registrable Securities under the Registration Statement (or a
               subsequent Registration Statement filed in replacement thereof) for any reason
               (other than for any reason that is within the control of such Purchaser) for 20
               consecutive Business Days, unless such Purchaser may sell the Registrable
               Securities pursuant to Rule 144(k); </FONT></P></TD>
               </TR>
               </TABLE>
               <font size="2">
               <BR>

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          </font>
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(iii) </FONT></TD>
               <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               after the Effective Date, any Registrable Securities covered by such
               Registration Statement are not listed on an Eligible Market directly or
               indirectly due to an action or inaction of the Company; </FONT></P></TD>
               </TR>
               </TABLE>
               <font size="2">
               <BR>

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          </font>
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(iv) </FONT></TD>
               <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the Common Stock is not listed or quoted, or is suspended from trading, on an
               Eligible Market for a period of five consecutive Trading Days; or </FONT></P></TD>
               </TR>
               </TABLE>
               <font size="2">
               <BR>

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          </font>
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(v) </FONT></TD>
               <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the Company fails to have available a sufficient number of authorized but
               unissued and otherwise unreserved shares of Common Stock available to issue
               Underlying Shares upon any exercise of the Warrants. </FONT></P></TD>
               </TR>
               </TABLE>
               <font size="2">
               <BR>

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          </font>
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH="100%">
               <p align="left" dir="ltr"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
               The Company shall not, prior to the Effective Date of the Registration
               Statement, prepare and file with the Commission a registration statement (other
               than a Registration Statement filed on a Form S-4 or S-8) relating to an
               offering for its own account or the account of others under the Securities Act
               of any of its equity securities. </FONT></TD>
               </TR>
               </TABLE>
               <font size="2">
               <BR>

&nbsp;&nbsp;&nbsp;&nbsp;6.2      <u>Registration  Procedures</u>.  In  connection  with the  Company's  registration  obligations  hereunder,  the
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</font>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>Company shall: </FONT>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;
          Not less than three Business Days prior to the filing of a Registration
          Statement or any related Prospectus or any amendment, or not less than one
          Business Day for any supplement thereto (including any document that would be
          incorporated or deemed to be incorporated therein by reference), the Company
          shall furnish to each Purchaser and any counsel designated by any Purchaser
          (each, a &#147;<B>Purchaser Counsel</B>&#148;, and LMS, a Purchaser, has
          initially designated Gunderson Dettmer Stough Villeneuve Franklin &amp;
          Hachigian, LLP (&#147;<B>Gunderson Dettmer</B>&#148;) as its Purchaser Counsel)
          copies of all such documents proposed to be filed. The Company shall not file a
          Registration Statement or any such Prospectus or any amendments or supplements
          thereto to which Purchasers holding a majority of the Registrable Securities
          shall reasonably object in writing. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;
          (i) Prepare and file with the Commission such amendments, including
          post-effective amendments, to each Registration Statement and the Prospectus
          used in connection therewith as may be necessary to keep the Registration
          Statement continuously effective as to the applicable Registrable Securities for
          the Effectiveness Period and prepare and file with the Commission such
          additional Registration Statements in order to register for resale under the
          Securities Act all of the Registrable Securities; (ii) cause the related
          Prospectus to be amended or supplemented by any required Prospectus supplement,
          and as so supplemented or amended to be filed pursuant to Rule 424; (iii)
          respond as promptly as reasonably possible, and in any event within ten Business
          Days, to any comments received from the Commission with respect to the
          Registration Statement or any amendment thereto and, at the request of any
          Purchaser, as promptly as reasonably possible provide such Purchaser true and
          complete copies of all correspondence from and to the Commission relating to the
          Registration Statement; and (iv) comply in all material respects with the
          provisions of the Securities Act and the Exchange Act with respect to the
          disposition of all Registrable Securities covered by the Registration Statement
          during the applicable period in accordance with the intended methods of
          disposition by the Purchasers thereof set forth in the Registration Statement as
          so amended or in such Prospectus as so supplemented. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;
          Notify the Purchasers of Registrable Securities to be sold and each Purchaser
          Counsel as promptly as reasonably possible, and (if requested by any such
          Person) confirm such notice in writing no later than one Business Day
          thereafter, of any of the following events: (i) the initial filing of the
          Registration Statement with the Commission; (ii) the Commission notifies the
          Company whether there will be a &#147;review&#148; of any Registration
          Statement; (iii) any Registration Statement or any post-effective amendment is
          declared effective; (iv) the Commission issues any stop order suspending the
          effectiveness of any Registration Statement or initiates any Proceedings for
          that purpose; (v) the Company receives notice of any suspension of the
          qualification or exemption from qualification of any Registrable Securities for
          sale in any jurisdiction, or the initiation of any Proceeding; or (vi) the
          financial statements included in any Registration Statement become ineligible
          for inclusion therein or any statement made in any Registration Statement or
          Prospectus or any document incorporated or deemed to be incorporated therein by
          reference is untrue in any material respect or any revision to a Registration
          Statement, Prospectus or other document is required so that it will not contain
          any untrue statement of a material fact or omit to state any material fact
          required to be stated therein or necessary to make the statements therein, in
          the light of the circumstances under which they were made, not misleading. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;
          Use commercially reasonable efforts to avoid the issuance of or, if issued,
          obtain the withdrawal of (i) any order suspending the effectiveness of any
          Registration Statement, or (ii) any suspension of the qualification (or
          exemption from qualification) of any of the Registrable Securities for sale in
          any jurisdiction, as soon as possible. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;
          Promptly deliver to each Purchaser and Purchaser Counsel, without charge, as
          many copies of the Prospectus or Prospectuses (including each form of
          prospectus) and each amendment or supplement thereto as such Persons may
          reasonably request. The Company hereby consents to the use of such Prospectus
          and each amendment or supplement thereto by each of the selling Purchasers in
          connection with the offering and sale of the Registrable Securities covered by
          such Prospectus and any amendment or supplement thereto. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;
          (i) In the time and manner required by each Trading Market, prepare and file
          with such Trading Market an additional shares listing application covering all
          of the Registrable Securities; (ii) take all steps necessary to cause such
          Registrable Securities to be approved for listing on each Trading Market as soon
          as possible thereafter; and (iii) maintain the listing of such Registrable
          Securities on each such Trading Market. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;
          Use commercially reasonable efforts to register or qualify or cooperate with the
          selling Purchasers and respective Purchaser Counsel in connection with the
          registration or qualification (or exemption from such registration or
          qualification) of such Registrable Securities for offer and sale under the
          securities or blue sky laws of such jurisdictions within the United States as
          any Purchaser reasonably requests in writing, to keep each such registration or
          qualification (or exemption therefrom) effective during the Effectiveness Period
          and to do any and all other acts or things necessary or advisable to enable the
          disposition in such jurisdictions of the Registrable Securities covered by a
          Registration Statement; <I>provided, however</I>, that the Company shall not be
          required to qualify to do business or consent to service of process in any
          jurisdiction in which it is not now so qualified or has not so consented. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;
          Cooperate with the Purchasers to facilitate the timely preparation and delivery
          of certificates representing Registrable Securities to be delivered to a
          transferee pursuant to a Registration Statement, which certificates shall be
          free, to the extent permitted by law, of all restrictive legends, and to enable
          such Registrable Securities to be in such denominations and registered in such
          names as any such Purchasers may request. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;
          Upon the occurrence of any event described in <U>Section 6.2(c)(vii)</U>, as
          promptly as reasonably possible, prepare a supplement or amendment, including a
          post-effective amendment, to the Registration Statement or a supplement to the
          related Prospectus or any document incorporated or deemed to be incorporated
          therein by reference, and file any other required document so that, as
          thereafter delivered, neither the Registration Statement nor such Prospectus
          will contain an untrue statement of a material fact or omit to state a material
          fact required to be stated therein or necessary to make the statements therein,
          in the light of the circumstances under which they were made, not misleading. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;
          Cooperate with any due diligence investigation undertaken by the Purchasers in
          connection with the sale of Registrable Securities, including, without
          limitation, by making available any documents and information; provided that the
          Company will not deliver or make available to any Purchaser material, nonpublic
          information unless such Purchaser specifically requests in advance to receive
          material, nonpublic information in writing. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;
          Comply with all applicable rules and regulations of the Commission. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <U>Registration Expenses</U>. The
Company shall pay (or reimburse the Purchasers for) all fees and expenses incident to the
performance of or compliance with this Agreement by the Company, including without
limitation (a) all registration and filing fees and expenses, including without limitation
those related to filings with the Commission, any Trading Market and in connection with
applicable state securities or blue sky laws, (b) printing expenses (including without
limitation expenses of printing certificates for Registrable Securities and of printing
prospectuses requested by the Purchasers), (c)&nbsp;messenger, telephone and delivery
expenses, (d) fees and disbursements of counsel for the Company, (e) fees and expenses of
all other Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement and (f) all listing fees to be paid by the
Company to the Trading Market. </FONT></P>

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<A NAME=A021><font size="2"></font></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 Indemnification. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Indemnification by the Company</U>. The Company shall, notwithstanding any
          termination of this Agreement, indemnify and hold harmless each Purchaser, the
          officers, directors, partners and members and each Person who controls any such
          Purchaser (within the meaning of Section 15 of the Securities Act or Section 20
          of the Exchange Act) to the fullest extent permitted by applicable law, from and
          against any and all Losses, as incurred, arising out of or relating to any
          untrue or alleged untrue statement of a material fact contained in the
          Registration Statement, any Prospectus or any form of prospectus or in any
          amendment or supplement thereto or in any preliminary prospectus, or arising out
          of or relating to any omission or alleged omission of a material fact required
          to be stated therein or necessary to make the statements therein (in the case of
          any Prospectus or form of prospectus or supplement thereto, in the light of the
          circumstances under which they were made) not misleading, except to the extent,
          but only to the extent, that (i) such untrue statements, alleged untrue
          statements, omissions or alleged omissions are based solely upon information
          regarding such Purchaser furnished in writing to the Company by such Purchaser
          expressly for use therein, or to the extent that such information relates to
          such Purchaser or such Purchaser&#146;s proposed method of distribution of
          Registrable Securities and was reviewed and expressly approved in writing by
          such Purchaser expressly for use in the Registration Statement, such Prospectus
          or such form of Prospectus or in any amendment or supplement thereto or (ii) in
          the case of an occurrence of an event of the type specified in <U>Section
          6.2(c)(v)-(vii)</U>, the use by such Purchaser of an outdated or defective
          Prospectus after the Company has notified such Purchaser in writing that the
          Prospectus is outdated or defective and prior to the receipt by such Purchaser
          of the Advice contemplated in <U>Section 6.5</U>. The Company shall notify the
          Purchasers promptly of the institution, threat or assertion of any Proceeding of
          which the Company is aware in connection with the transactions contemplated by
          this Agreement. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Indemnification by Purchasers</U>. Each Purchaser shall, severally and not
          jointly, indemnify and hold harmless the Company, each of its directors, each of
          its officers who signed the Registration Statement and each Person who controls
          the Company (within the meaning of Section 15 of the Securities Act and Section
          20 of the Exchange Act) to the fullest extent permitted by applicable law, from
          and against all Losses (as determined by a court of competent jurisdiction in a
          final judgment not subject to appeal or review) arising primarily out of any
          untrue statement of a material fact contained in the Registration Statement, any
          Prospectus, or any form of prospectus, or in any amendment or supplement
          thereto, or arising primarily out of any omission of a material fact required to
          be stated therein or necessary to make the statements therein (in the case of
          any Prospectus or form of prospectus or supplement thereto, in the light of the
          circumstances under which they were made) not misleading to the extent, but only
          to the extent, that (i) such untrue statements or omissions are based solely
          upon information regarding such Purchaser furnished in writing to the Company by
          such Purchaser expressly for use in such Registration Statement or such
          Prospectus, or to the extent that such information relates to such Purchaser or
          such Purchaser&#146;s proposed method of distribution of Registrable Securities
          and was reviewed and expressly approved in writing by such Purchaser expressly
          for use in the Registration Statement, such Prospectus or such form of
          Prospectus or in any amendment or supplement thereto or (ii) in the case of an
          occurrence of an event of the type specified in <U>Section 6.2(c)(iv)-(vi)</U>,
          the use by such Purchaser of an outdated or defective Prospectus after the
          Company has notified such Purchaser in writing that the Prospectus is outdated
          or defective and prior to the receipt by such Purchaser of the Advice
          contemplated in <U>Section 6.5</U>. In no event shall the liability of any
          selling Purchaser hereunder be greater in amount than the dollar amount of the
          net proceeds received by such Purchaser upon the sale of the Registrable
          Securities giving rise to such indemnification obligation. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Conduct of Indemnification Proceedings</U>. If any Proceeding shall be
          brought or asserted against any Person entitled to indemnity hereunder (an
          <B>&#147;Indemnified Party&#148;</B>), such Indemnified Party shall promptly
          notify the Person from whom indemnity is sought (the &#147;<B>Indemnifying
          Party</B>&#148;) in writing, and the Indemnifying Party shall assume the defense
          thereof, including the employment of counsel reasonably satisfactory to the
          Indemnified Party and the payment of all fees and expenses incurred in
          connection with defense thereof; provided, that the failure of any Indemnified
          Party to give such notice shall not relieve the Indemnifying Party of its
          obligations or liabilities pursuant to this Agreement, except (and only) to the
          extent that it shall be finally determined by a court of competent jurisdiction
          (which determination is not subject to appeal or further review) that such
          failure shall have proximately and materially adversely prejudiced the
          Indemnifying Party. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
Indemnified Party shall have the right to employ separate counsel in any such Proceeding
and to participate in the defense thereof, but the fees and expenses of such counsel shall
be at the expense of such Indemnified Party or Parties unless: (i) the Indemnifying Party
has agreed in writing to pay such fees and expenses; or (ii) the Indemnifying Party shall
have failed promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or (iii) the
named parties to any such Proceeding (including any impleaded parties) include both such
Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been
advised in writing by counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense thereof and such counsel shall be at
the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which consent
shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such settlement
includes an unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding. Each Indemnified Party shall furnish such
information regarding itself or the claim that is the subject matter of such Proceeding in
question as an Indemnifying Party may reasonably request in writing and as shall be
reasonably required in connection with the investigation and defense of such claim. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
fees and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or preparing to
defend such Proceeding in a manner not inconsistent with this Section) shall be
paid to the Indemnified Party, as incurred, within ten (10) Business Days of
written notice thereof to the Indemnifying Party (regardless of whether it is
ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder). </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Contribution</U>. If a claim for indemnification under <U>Section 6.4(a)</U>
          or <U>(b)</U> is unavailable to an Indemnified Party (by reason of public policy
          or otherwise), then each Indemnifying Party, in lieu of indemnifying such
          Indemnified Party, shall contribute to the amount paid or payable by such
          Indemnified Party as a result of such Losses, in such proportion as is
          appropriate to reflect the relative fault of the Indemnifying Party and
          Indemnified Party in connection with the actions, statements or omissions that
          resulted in such Losses as well as any other relevant equitable considerations.
          The relative fault of such Indemnifying Party and Indemnified Party shall be
          determined by reference to, among other things, whether any action in question,
          including any untrue or alleged untrue statement of a material fact or omission
          or alleged omission of a material fact, has been taken or made by, or relates to
          information supplied by, such Indemnifying Party or Indemnified Party, and the
          parties&#146; relative intent, knowledge, access to information and opportunity
          to correct or prevent such action, statement or omission. The amount paid or
          payable by a party as a result of any Losses shall be deemed to include, subject
          to the limitations set forth in <U>Section 6.4(c)</U>, any reasonable
          attorneys&#146; or other reasonable fees or expenses incurred by such party in
          connection with any Proceeding to the extent such party would have been
          indemnified for such fees or expenses if the indemnification provided for in
          this Section was available to such party in accordance with its terms. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
parties hereto agree that it would not be just and equitable if contribution pursuant to
this <U>Section 6.4(d)</U> were determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations referred to in
the immediately preceding paragraph. Notwithstanding the provisions of this <U>Section
6.4(d)</U>, no Purchaser shall be required to contribute, in the aggregate, any amount in
excess of the amount by which the net proceeds actually received by such Purchaser from
the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any
damages that such Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. The obligations of the Purchasers under this <U>Section 6.4(d)</U>
shall be several and not joint. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 <U>Dispositions</U>. Each
Purchaser agrees that it will comply with the prospectus delivery requirements of the
Securities Act as applicable to it in connection with sales of Registrable Securities
pursuant to the Registration Statement and, upon written request of the Company, will
represent to the Company that it has so complied. Each Purchaser further agrees that, upon
receipt of a notice from the Company of the occurrence of any event of the kind described
in <U>Sections 6.2(c)(v)</U>, <U>(vi)</U> or <U>(vii)</U>, such Purchaser will discontinue
disposition of such Registrable Securities under the Registration Statement until such
Purchaser&#146;s receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement contemplated by <U>Section 6.2(j)</U>, or until it is advised in
writing (the <B>&#147;Advice&#148;</B>) by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by reference in
such Prospectus or Registration Statement. The Company may provide appropriate stop orders
to enforce the provisions of this paragraph. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6 <U>No Piggyback on
Registrations</U>. Neither the Company nor any of its security holders (other than the
Purchasers in such capacity pursuant hereto) may include securities of the Company in the
Registration Statement other than the Registrable Securities, and the Company shall not
after the date hereof enter into any agreement providing any such right to any of its
security holders. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7 <U>Piggy-Back Registrations</U>.
If at any time during the Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities and the Company shall determine to
prepare and file with the Commission a Registration Statement relating to an offering for
its own account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, then the Company shall send
to each Purchaser written notice of such determination and if, within fifteen days after
receipt of such notice, any such Purchaser shall so request in writing, the Company shall
include in such Registration Statement all or any part of such Registrable Securities such
Purchaser requests to be registered. </FONT></P>

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<A NAME=A022><font size="2"></font></A>
<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE VII
<br>
MISCELLANEOUS </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <U>Termination</U>. This
Agreement may be terminated by the Company or any Purchaser, by written notice to the
other parties, if the Closing has not been consummated by the third Business Day following
the date of this Agreement; provided that no such termination will affect the right of any
party to sue for any breach by the other party (or parties). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <U>Fees and Expenses</U>. At the
Closing, the Company shall pay to LMS up to an aggregate of $30,000 for their legal fees
and expenses incurred in connection with its due diligence and the preparation and
negotiation of the Transaction Documents. 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 issuance of the Securities. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <U>Entire Agreement</U>. 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. At or after the Closing, and without further consideration, the Company will
execute and deliver to the Purchasers such further documents as may be reasonably
requested in order to give practical effect to the intention of the parties under the
Transaction Documents. Notwithstanding anything to the contrary herein, Securities may be
assigned to any Person in connection with a bona fide margin account or other loan or
financing arrangement secured by such Securities. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <U>Notices</U>. 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
prior to 5:00 p.m. on a Business Day, (b) the next Business Day after the date of
transmission, if such notice or communication is delivered via facsimile on a day that is
not a Business Day or later than 5:00 p.m. on any Business Day, (c) the Business Day
following the date of deposit with a nationally recognized overnight courier service, or
(d) upon actual receipt by the party to whom such notice is required to be given. The
addresses and facsimile numbers for such notices and communications are those set forth on
the signature pages hereof, or such other address or facsimile number as may be designated
in writing hereafter, in the same manner, by any such Person. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <U>Amendments; Waivers</U>. No
provision of this Agreement may be waived or amended except in a written instrument signed
by the Company and the holders of a majority of the Shares. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise of any such
right. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 <U>Construction</U>. The headings
herein are for convenience only, do not constitute a part of this Agreement and shall not
be deemed to limit or affect any of the provisions hereof. The language used in this
Agreement will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 <U>Successors and Assigns</U>.
This Agreement shall be binding upon and inure to the benefit of the parties and their
successors and permitted assigns. The Company may not assign this Agreement or any rights
or obligations hereunder without the prior written consent of the Purchasers. Any
Purchaser may assign 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 hereof that apply to
the &#147;Purchasers.&#148; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8 <U>No Third-Party
Beneficiaries</U>. 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 that each Related Person is
an intended third party beneficiary of <U>Section 4.8</U> and each Indemnified Party is an
intended third party beneficiary of <U>Section 6.4</U> and (in each case) may enforce the
provisions of such Sections directly against the parties with obligations thereunder. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9 <U>Governing Law; Venue; Waiver
Of Jury Trial</U>. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND
INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. THE COMPANY AND PURCHASERS HEREBY
IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING
IN THE CITY AND COUNTY OF SAN FRANCISCO FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT BY THE
COMPANY OR ANY PURCHASER HEREUNDER, 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 WAIVE, AND AGREE NOT TO ASSERT IN
ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY OR ANY PURCHASER, ANY CLAIM THAT IT
IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, OR THAT SUCH SUIT, ACTION
OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF
PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH
EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS
AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF
PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY
ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY AND PURCHASERS
HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10 <U>Execution</U>. This Agreement
may be executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when counterparts have
been signed by each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is delivered
by facsimile transmission, such signature shall create a valid and binding obligation of
the party executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile signature page were an original thereof. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.11 <U>Severability</U>. If any
provision of this Agreement is held to be invalid or unenforceable in any respect, the
validity and enforceability of the remaining terms and provisions of this Agreement shall
not in any way be affected or impaired thereby and the parties will attempt to agree upon
a valid and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.12 <U>Replacement of
Securities</U>. If any certificate or instrument evidencing any Securities is mutilated,
lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction and customary and reasonable indemnity,
if requested. The applicants for a new certificate or instrument under such circumstances
shall also pay any reasonable third-party costs associated with the issuance of such
replacement Securities. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.13 <U>Remedies</U>. 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
described in the foregoing sentence and hereby agrees to waive in any action for specific
performance of any such obligation the defense that a remedy at law would be adequate. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.14 <U>Payment Set Aside</U>. To the
extent that the Company makes a payment or payments to any Purchaser hereunder or pursuant
to the Warrants, or any Purchaser enforces or exercises its rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or exercise
or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are required to be refunded,
repaid or otherwise restored to the Company by 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. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.15 <U>Adjustments in Share Numbers
and Prices</U>. In the event of any stock split, subdivision, dividend or distribution
payable in shares of Common Stock (or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly shares of Common Stock),
combination or other similar recapitalization or event occurring after the date hereof,
each reference in any Transaction Document to a number of shares or a price per share
shall be amended to appropriately account for such event. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.16 <U>Independent Nature of
Purchasers&#146; Obligations and Rights</U>. 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 of the
obligations of any other Purchaser under any Transaction Document. The decision of each
Purchaser to purchase Shares pursuant to this Agreement has been made by such Purchaser
independently of any other Purchaser and independently of any information, materials,
statements or opinions as to the business, affairs, operations, assets, properties,
liabilities, results of operations, condition (financial or otherwise) or prospects of the
Company or of the Subsidiary which may have been made or given by any other Purchaser or
by any agent or employee of any other Purchaser, and no Purchaser or any of its agents or
employees shall have any liability to any other Purchaser (or any other Person) relating
to or arising from any such information, materials, statements or opinions. Nothing
contained herein or in any 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 Document. Each Purchaser acknowledges
that no other Purchaser has acted as agent for such Purchaser in connection with making
its investment hereunder and that no other Purchaser will be acting as agent of such
Purchaser in connection with monitoring its investment hereunder. 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 represents that it has been represented by its
own separate legal counsel in its review and negotiations of this Agreement and the
Transaction Documents. </FONT></P>

<P>&nbsp;</P>

<P>&nbsp;</P>

<P>&nbsp;</P>

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<A NAME=A024><font size="2"></font></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[SIGNATURE PAGES TO
FOLLOW] </FONT></P>

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<p><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></p>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">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.</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;MCF
  CORPORATION</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 144pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;By:</font><font id="TAB1" style="LETTER-SPACING: 9pt">&nbsp;</font><font face="serif" size="2">__________________________</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;Name:</font><font id="TAB1" style="LETTER-SPACING: 9pt">&nbsp;</font><font face="serif" size="2">D.
  Jonathan Merriman</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;Title:</font><font id="TAB1" style="LETTER-SPACING: 9pt">&nbsp;</font><font face="serif" size="2">Chief
  Executive Officer</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;Address
  for Notice:</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;601
  Montgomery Street, 18th Floor</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;San
  Francisco, CA 94111</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;Phone&nbsp;-
  </font><font face="Times Roman" size="2">(415) 248-5634</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;Fax
  - </font><font face="Times Roman" size="2">(415) 723-7165</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;Attn:
  Christopher L. Aguilar</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;With
  a copy to:</font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;Cooley
  Godward LLP</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;Facsimile
  No.: (415) 951-3699</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;Telephone
  No.: (415) 693-2172</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;Attn:
  Peter H. Werner</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
  &nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="center">
  <font face="serif" size="2">[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
  SIGNATURE PAGES FOR PURCHASERS FOLLOW]</font></div>
  <font size="1"><hr style="PAGE-BREAK-AFTER: always" noShade SIZE="1"></font>
<p>&nbsp;</p>
<p style="MARGIN-LEFT: 135pt"><font face="serif" size="2">LMS CAPITAL (BERMUDA)
LIMITED</font></p>
<p style="MARGIN-LEFT: 135pt"><font face="serif" size="2">By:</font><font id="TAB1" style="LETTER-SPACING: 9pt">&nbsp;</font><font face="serif" size="2">__________________________<br>
Name:</font><font id="TAB1" style="LETTER-SPACING: 9pt">&nbsp;</font><font face="serif" size="2">Daniel
Bordage<br>
Title: Authorized Signatory</font></p>
<p style="MARGIN-LEFT: 135pt"><font face="serif" size="2">Purchase Price:</font><font id="TAB1" style="LETTER-SPACING: 9pt">&nbsp;</font><font face="serif" size="2">$6,000,000.50</font></p>
<p style="MARGIN-LEFT: 135pt"><font face="serif" size="2">Number of Shares to be
acquired: 4,615,385</font><font id="TAB1" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font></p>
<p style="MARGIN-LEFT: 135pt"><font face="serif" size="2">Underlying Shares
subject to Warrants: 1,384,616</font></p>
<p style="MARGIN-LEFT: 135pt">&nbsp;</p>
<p style="MARGIN-LEFT: 135pt"><font face="serif" size="2">LMS Capital (Bermuda)
Limited<br>
Clarendon House<br>
2 Church Street<br>
Hamilton HM 08<br>
Bermuda<br>
Facsimile No.: (441) 292-0865<br>
Telephone No.: (441) 299-4939<br>
Attn: Daniel Bordage</font><br>
&nbsp;</p>
<div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">With a copy to:</font><font id="TAB1" style="LETTER-SPACING: 9pt">&nbsp;
  &nbsp;</font><font face="serif" size="2">Gunderson Dettmer Stough Villeneuve
  Franklin &amp; Hachigian&nbsp;LLP<br>
  <font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;&nbsp;&nbsp;&nbsp;
  220 West 42</font><font face="serif" size="-1"><sup>nd</sup></font><font face="serif" size="2">
  Street, 20</font><font face="serif" size="-1"><sup>th</sup></font><font face="serif" size="2">
  Floor<br>
  <font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;&nbsp;&nbsp;&nbsp;
  New York, NY 10036</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;&nbsp;&nbsp;&nbsp;
  Facsimile No.: (877) 881-3007</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;&nbsp;&nbsp;&nbsp;
  Telephone No.: (212) 730-8133<br>
  <font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;<font id="TAB2" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</font>&nbsp;&nbsp;&nbsp;&nbsp;
  Attn: Ward Breeze</font></div>
  <font size="1"><hr style="PAGE-BREAK-AFTER: always" noShade SIZE="1">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2"><u>Exhibits</u>:</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">A</font><font id="TAB1" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;</font><font face="serif" size="2">Form
  of Warrant</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">B</font><font id="TAB1" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;</font><font face="serif" size="2">Form
  of Legal Opinion</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">C</font><font id="TAB1" style="LETTER-SPACING: 9pt">&nbsp;&nbsp;</font><font face="serif" size="2">Purchaser
  Questionnaire</font></div>
</font>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
  <font size="1"><hr style="PAGE-BREAK-AFTER: always" noShade SIZE="1">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="center">
  <font face="serif" size="2"><b>SCHEDULES</b></font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="center">
  <br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
  <font face="serif" size="2">References to schedule numbers below refer to the
  corresponding section numbers in the attached Securities Purchase Agreement.</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
  <br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
  <font face="serif" size="2"><b>Schedule 3.1(f)</b></font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
  <br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
  <font face="serif" size="2">[Cap table to be inserted]</font></div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
  &nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <font face="serif" size="2">*</font><font id="TAB1" style="LETTER-SPACING: 9pt">&nbsp;</font><font face="serif" size="2">This
  table does not include up to an additional 328,029 shares of Common Stock to
  which certain current and former holders of the Company's Series A Preferred
  Stock are entitled as a result of an error in calculating the number of shares
  of Common Stock issuable to such holders upon conversion of their shares of
  the Company's Series A Preferred Stock into Common Stock. </font>
</div>
<div style="MARGIN-LEFT: 18pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="justify">
  <br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
  <br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
  &nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
  <br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
  <font face="serif" size="2"><b>Schedule 4.7</b></font><br>
&nbsp;</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
  <font face="serif" size="2">Scott Potter</font></div>
</font>

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