Document:

Exhibit 10.2

 

SEPARATION
AGREEMENT AND

GENERAL
RELEASE

 

This Separation Agreement
and General Release (“Agreement”) is entered into as of the 11th day of
November, 2010, by and between Benjamin Daitch (“Employee”)
and Cano Petroleum, Inc. (“Cano”),
hereinafter collectively referred to as the “parties” or individually as “party.”

 

RECITALS

 

WHEREAS, Employee has been
employed by Cano as Senior Vice President and Chief Financial Officer.

 

WHEREAS, Employee and Cano
executed an Employment Agreement on June 23, 2008, which covered the terms
and conditions of Employee’s employment with Cano, as amended by First
Amendment to Employment Agreement on December 31, 2008 (as amended, the “Employment
Agreement”);

 

WHEREAS, Employee and Cano
desire to terminate Employee’s employment with Cano as Senior Vice President
and Chief Financial Officer effective November 10, 2010 (the “Termination
Date”); and

 

WHEREAS, the parties desire
to settle fully and finally, in the manner set forth herein, all differences
between them which have arisen, or which may arise, prior to, or at the time of
the execution of this Agreement, including, but in no way limited to, any and
all claims and controversies arising out of the employment relationship between
Employee and Cano;

 

NOW, THEREFORE, in
consideration of the Recitals and the mutual promises, covenants and agreements
set forth herein, the parties covenant and agree as follows:

 

1.             Except as otherwise provided
herein, Employee, IRREVOCABLY AND UNCONDITIONALLY RELEASES, ACQUITS, AND
FOREVER DISCHARGES Cano, its current and former parent, subsidiaries,
affiliated, and related corporations, firms, associations, partnerships, and
entities, their successors and assigns, and the current and former owners,
shareholders, directors, officers, employees, agents, attorneys and
representatives of said corporations, firms, associations, partnerships, and
entities, and their guardians, successors, assigns, heirs, executors, and
administrators (hereinafter collectively referred to as the “Releases”) from
any and all claims, complaints, grievances, liabilities, obligations, promises,
agreements, damages, causes of action, rights, debts, demands, controversies,
costs, losses, and expenses (including attorneys’ fees and expenses)
whatsoever, other than any arising under this Agreement.

 

2.             Cano, for itself and on
behalf of its current and former parent, subsidiaries, affiliated and related
corporations, firms, associations, partnerships, and entities, their successors

 

1

 

and assigns, and the current
and former owners, shareholders, directors, officers, employees, agents,
attorneys, representatives, and insurers of said corporations, firms,
associations, partnerships, and entities, and their guardians, successors,
assigns, heirs, executors, and administrators hereby IRREVOCABLY AND
UNCONDITIONALLY RELEASES, ACQUITS, AND FOREVER DISCHARGES Employee, from any
and all claims, complaints, grievances, liabilities, obligations, promises,
agreements, damages, causes of action, rights, debts, demands, controversies,
costs, losses, and expenses (including attorneys’ fees and expenses)
whatsoever, other than any arising under this Agreement.

 

3.             Employee waives and releases
forever any right or rights he might have to employment, reemployment, or
reinstatement with Cano or any of the other Releases.

 

4.             Cano and Employee agree that
in addition to the termination of his employment as Senior Vice President and
Chief Financial Officer of Cano, Employee shall also be terminated, effective November 11,
2010 from any other positions he holds as a director or officer with any of the
Releases.  Employee agrees that the
effectiveness of this Agreement constitutes his written resignation from any
such positions.

 

5.             The parties agree as
follows:

 

(a)           Cano agrees to pay Employee
(or Employee’s estate in the event of Employee’s death) a payment of
$125,753.42 (“Severance Payment”), less taxes and deductions required by law,
in consideration for the promises, covenants, agreements, and releases set
forth herein.  The Severance Payment
described in this paragraph shall be paid to Employee by wire transfer to
Employee’s account (as used for direct deposit for payroll) in one lump sum
payment by no later than 1:00 PM Central Time, December 2, 2010.

 

(b)           Employee shall continue on
as an employee of Cano until November 30, 2010 to supervise the transition
of his job duties.

 

(c)           Cano agrees to timely make
all necessary and required regulatory filings resulting from or required as a
result of the execution of this Agreement.

 

(d)           Employee agrees to release
and relinquish any and all unvested restricted shares provided by Cano.  Cano and Employee agree that Employee shall
have no right, interest or title to any other stock option or restricted stock
grant under any plan.

 

(e)           Employee agrees to be
personally responsible for all COBRA payments for which he may elect, to
continue his family medical and/or other insurance benefits provided by Cano.

 

(f)            Unless instructed by Cano
otherwise, and specifically excluding all information or documents relating to
current or pending Cano litigation, Employee agrees to return to Cano or its
attorneys or, in the case of information, destroy, immediately upon the
Effective Date, all equipment and property, including confidential information,
written or electronic, as well as any and all documents, notes, memoranda or
other materials in his possession which relate or refer to 

 

2

 

Cano or its Affiliates and
to retain no copies or notes relating to same. However, Employee will be
allowed to retain his current laptop computer and Blackberry.

 

6.             Nothing in this Agreement is
intended to release or relinquish Employee’s right to defense or coverage under
any past, present or future of Cano’s Directors’ and Officers’ Liability
Insurance coverages or any other insurance policies (the “Policies”) regarding
claims respecting matters for which Employee is entitled to defense or coverage
under the Policies.

 

7.             Employee acknowledges that
he has had access to and has become familiar with confidential information of
Cano, its subsidiaries and affiliates, including, but not limited to,
processes, computer programs, compilations of information, records, sales
procedures, customer requirements, pricing techniques, customer lists, methods
of doing business, identities and compensation levels of employees in key
positions, and other confidential information (collectively, referred to as “Confidential
Information”) which are owned by Cano, its subsidiaries and/or affiliates and
regularly used in the operation of its business, and as to which Cano, its
subsidiaries and/or affiliates take precautions to prevent dissemination to
persons other than certain directors, officers and employees.  Employee acknowledges and agrees that the
Confidential Information (1) are secret and not known in the industry; (2) give
the Company or its subsidiaries and/or affiliates an advantage over competitors
who do not know or use the Confidential Information; (3) are of such value
and nature as to make it reasonable and necessary to protect and preserve the
confidentiality and secrecy of the Confidential Information; and (4) are
valuable and special and unique assets of Cano or its subsidiaries and/or
affiliates, the disclosure of which could cause substantial injury and loss of
profits and goodwill to Cano or its subsidiaries and/or affiliates.  Employee may not use in any way or disclose
any of the Confidential Information, directly or indirectly, at any time in the
future, except as required in connection with a judicial or administrative
proceeding, or if the information becomes public knowledge other than as a
result of an unauthorized disclosure by the Employee.  All files, records, documents, information,
data, and similar items relating to the business of Cano, whether prepared by
Employee or otherwise coming into his possession, will remain the exclusive
property of Cano, and in any event must be promptly delivered to Cano or
destroyed.  Employee agrees upon his
receipt of any subpoena, process, or other request to produce or divulge,
directly or indirectly, any Confidential Information to any entity, agency,
tribunal, or person, Employee shall timely notify and promptly deliver a copy
of the subpoena, process or other request to Cano.  Cano shall solely bear any and all cost and
expense, including attorneys’ fees and costs related to the protection of such
Confidential Information in such event. 
This paragraph shall not apply to any information which is or becomes
public knowledge or which was known by Employee prior to his employment with
Cano.

 

8.             Employee agrees to cooperate
with Cano, specifically including any attorney retained by Cano, in connection
with any pending or future litigation, business, or investigatory matter which
Employee is not individually named as a party thereto.  The parties acknowledge and agree that such
cooperation may include, but shall in no way be limited to, Employee’s making
himself reasonably available for interview by Cano, or any attorney retained by
Cano, and providing to Cano any documents still in his possession or under his
control relating to the litigation, business, or investigatory matter. Cano
agrees to provide Employee with reasonable notice of the need for assistance.  Cano additionally agrees to schedule such
assistance in such a 

 

3

 

manner as not to interfere
with Employee’s actual or potential employment with a third party and further
agrees to pay Employee a Reasonable Fee, plus bear any expenses of Employee
incurred in association with such assistance. For purposes of this paragraph, a
“Reasonable Fee” is an hourly rate equivalent to the average hourly rate
charged to Cano for the specific attorneys within the firm (partners and
associates) retained by Cano to handle the subject legal matter which requires
the Employee’s assistance.

 

9.             The parties acknowledge and
agree that, in the event either party to this Agreement breaches any provision
of this Agreement, the Party claiming breach will be entitled to such relief as
is available to it at law or equity.  The
prevailing party in any litigation or arbitration resulting from any such claim
shall be entitled to recover attorney’s fees and expenses of litigation or arbitration
from the losing party.

 

10.           One or more waivers of a
breach of any covenant, term, or provision of this Agreement by any party shall
not be construed as a waiver of a subsequent breach of the same covenant, term,
or provision, nor shall it be considered a waiver of any other then existing or
subsequent breach of a different covenant, term, or provision.

 

11.           If any provision or term of
this Agreement is held to be illegal, invalid, or unenforceable, such provision
or term shall be fully severable; this Agreement shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised part of this Agreement; and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by
the illegal, invalid, or unenforceable provision or by its severance from this
Agreement.  Furthermore, in lieu of each
such illegal, invalid, or unenforceable provision or term there shall be added
automatically as a part of this Agreement another provision or term as similar
to the illegal, invalid, or unenforceable provision, as may be possible and
that is legal, valid, and enforceable.

 

12.           Employee may revoke this
Agreement by notice to Cano, in writing, within seven (7) days of the date
of its execution by Employee (the “Revocation Period”).  The parties agree that this Agreement shall
not be effective in the event Employee revokes this Agreement.  Employee also acknowledges and agrees that if
Cano has not received from him written notice of his revocation of this
Agreement prior to the expiration of the Revocation Period, Employee will have
forever waived his right to revoke this Agreement and this Agreement shall
thereafter be effective, enforceable and have full force and effect.

 

13.           This Agreement constitutes
the entire Agreement of the parties, and supersedes all prior and
contemporaneous negotiations and agreements, oral or written.  All prior and contemporaneous negotiations
and agreements are deemed incorporated and merged into this Agreement and are
deemed to have been abandoned if not so incorporated.  No representations, oral or written, are
being relied upon by either party in executing this Agreement other than the
express representations of this Agreement. 
This Agreement cannot be changed or terminated without the express
written consent of the parties.

 

14.           This Agreement shall be
governed by and construed in accordance with the laws of the State of Texas,
except where preempted by federal law.

 

4

 

15.           By executing this Agreement,
Employee acknowledges that (a) this Agreement has been reviewed with him
by a representative of Cano; (b) he has had at least twenty-one (21) days
to consider the terms of this Agreement and has considered its terms for that
period of time or has knowingly and voluntarily waived his right to do so; (c) he
has been advised by Cano to consult with an attorney regarding the terms of
this Agreement; (d) he has consulted with, or has had sufficient
opportunity to consult with, an attorney of his own choosing regarding the
terms of this Agreement; (e) any and all questions regarding the terms of
this Agreement have been asked and answered to his complete satisfaction; (f) he
has read this Agreement and fully understands its terms and their import; (g) except
as provided by this Agreement, he has no contractual right or claim to the
benefits described herein; (h) the consideration provided for herein is
good and valuable; and (i) he is entering into this
Agreement voluntarily, of his own free will, and without any coercion, undue
influence, threat, or intimidation of any kind or type whatsoever.

 

	
   

  	
  CANO PETROLEUM, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey Johnson

  
	
   

  	
   

  	
  S. Jeffrey Johnson

  
	
   

  	
   

  	
  Chairman and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Benjamin Daitch

  
	
   

  	
  Benjamin Daitch

  

 

5November 17, 2010 Exhibit 10.1

                                                                          Exhibit 10.1 

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this "Agreement") is dated as of
November 9, 2010, between Zoom Technologies, Inc., a Delaware corporation (the "Company"), and each
purchaser identified on the signature pages hereto (each, including its successors and assigns, a
"Purchaser" and collectively, the "Purchasers").

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

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

ARTICLE I.

                  DEFINITIONS
 

1.1   Definitions.  The following terms have the meanings set forth in this Section 1.1:

"8-K Filing" shall mean the current report on Form 8-K filed on EDGAR with the
Commission disclosing the sale of equity securities pursuant to this Agreement and attaching as exhibits thereto all material
Transaction Documents, including, without limitation, this Agreement, the form of Series G Warrant, and the Registration
Rights Agreement.

"Acquiring Person" shall have the meaning ascribed to such term in Section
4.6.

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

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

 "Board of Directors" means the board of directors of the Company.

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

"Bylaws" shall have the meaning ascribed to it in Section 3.1(h).

"Certificate of Incorporation" shall have the meaning ascribed to it in Section
3.1(h).

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

"Closing Date" means the Trading Day on which all of the Transaction Documents
have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers'
obligations to pay the Subscription Amount and (ii) the Company's obligations to deliver the Securities, in each case, have
been satisfied or waived.

"Closing Statement" means the Closing Statement in the form on Annex
A attached hereto.

"Commission" means the United States Securities and Exchange
Commission.

"Common Stock" means the common stock of the Company, par value $0.01 per
share, and any other class of securities into which such securities may hereafter be reclassified or changed.

"Company Counsel" means Ellenoff Grossman & Schole LLP, with offices
located at 150 East 42nd Street, New York, New York 10017, or any successor counsel of the Company.

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

"Disclosure Schedules" shall have the meaning ascribed to such term in Section
3.1.

"Effective Date" shall have the meaning ascribed to such term in the Registration
Rights Agreement.

"Escrow Agent" means Computershare Trust Company, N.A. with offices located
at 350 Indiana St., Suite 750, Golden, CO 80401.

"Escrow Agreement" means the escrow agreement entered into prior to the date
hereof, by and among the Company and the Escrow Agent in substantially the form of Exhibit D attached hereto
pursuant to which the Purchasers, shall deposit Subscription Amounts with the Escrow Agent to be applied to the transactions
contemplated hereunder.

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

                              2

"GAAP" shall have the meaning ascribed to such term in Section 3.1(i).

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

"Intellectual Property Rights" shall have the meaning ascribed to such term in
Section 3.1(w).

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

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

"Material Adverse Effect" shall mean (i) a material adverse effect on the legality,
validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets,
business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a
material adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under any
Transaction Document.

"Material Permits" shall have the meaning ascribed to such term in Section
3.1(k).

                              3

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

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

"Public Information Failure" shall have the meaning ascribed to it in Section
4.2(b).

"Public Information Failure Payments" shall have the meaning ascribed to it in
Section 4.2(b).

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

"Registration Statement" means a registration statement meeting the requirements
set forth in the Registration Rights Agreement and covering the resale of the Warrant Shares by each Purchaser as provided
for in the Registration Rights Agreement.

"Required Approvals" shall have the meaning ascribed to such term in Section
3.1(f).

"Required Minimum" means, as of any date, the maximum aggregate number of
Shares then issued or potentially issuable in the future pursuant to the Transaction Documents, including, without limitation,
100% of the shares of Common Stock underlying the Series G Warrants, ignoring any conversion or exercise limits set forth
therein.

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

"Rule 424" means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same purpose and effect as such Rule.

"SEC Reports" shall have the meaning ascribed to such term in Section
3.1(i).

"Securities" means the Shares, the Warrants, and the Warrant Shares.

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

                              4

"Series G Warrants" means the Series G Common Stock purchase warrants
delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, which warrants shall be exercisable as set
forth in the (as defined therein), subject to the Exchange Cap (as defined therein) limitation.  The Series G Warrants shall have
an exercise price of $4.71 and a term of exercise equal to 5 years from the Issue Date, in the form of
Exhibit  B attached hereto.

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

"Shareholder Approval" means such approval as may be required by the
applicable rules and regulations of the Nasdaq Capital Market (or any successor entity) from the shareholders of the Company
with respect to the transactions contemplated by the Transaction Documents, including the issuance of any Shares in excess
of 19.9% of the issued and outstanding Common Stock on the Closing Date.

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

"Stockholder Approval" shall have the meaning ascribed to it in Section
3.1(a).

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

 "Subsidiary" means any subsidiary of the Company as set forth on Schedule
3.1(b) and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after
the date hereof.

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

"Trading Market" means any of the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the NYSE AMEX, the Nasdaq Capital Market, the
Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (or any successors to any of the
foregoing).

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

"Transfer Agent" means Computershare Stock Transfer, the current transfer agent
of the Company, with a mailing address of 330 N. Brand Blvd., Suite 701Glendale, CA 91203-2149, and any successor
transfer agent of the Company.

                              5

"Trigger Date" shall have the meaning ascribed to it in Section 4.1(b).

 "Warrants" means, the Series G Warrants.

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

ARTICLE II.

                  PURCHASE AND SALE

2.1   Closing.  On the Closing Date, upon the terms and subject to the conditions set forth
herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees
to sell, and the Purchasers, severally and not jointly, agree to purchase, up to an aggregate of 2,113,664 Shares at a per share
purchase price equal to $3.75 per share.  For every Share subscribed by each applicable Purchaser, the Company shall issue
such number of Series G Warrants as set forth in Section 2.2(a) below. Each Purchaser shall deliver to the Escrow Agent via
wire transfer or a certified check of immediately available funds equal to such Purchaser's Subscription Amount as set forth on
the signature page hereto executed by such Purchaser and the Company shall deliver to each Purchaser its respective
Common Stock and Warrants as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver
the other items set forth in Section 2.2 deliverable at the Closing. In lieu of delivering such funds to the Escrow Agent,
Purchaser may deliver such funds at the Closing to the Company via wire transfer or a certified check of immediate available
funds.  Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the
offices of Ellenoff Grossman & Schole LLP at 150 East 42nd Street, New York, NY 10017 or such other
location as the parties shall mutually agree and the Subscription Amount shall be released from Escrow to the account of the
Company in accordance with the terms of the Escrow Agreement.

2.2   Deliveries.

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

	this Agreement duly executed by the Company;

	legal opinion of U.S Counsel, as well as the Good Standing Certificate of the Company,
substantially in the forms of, substantially in the forms of Exhibit C, attached hereto; 

	a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to
deliver, on an expedited basis, a certificate evidencing a number of Shares equal to such Purchaser's Subscription Amount
divided by the per share purchase price of $3.75 per share, registered in the name of such Purchaser;

                              6

	a number of Series G Warrants to the applicable Purchaser equal to seventy-five percent (75%) of
the shares of Common Stock subscribed by such Purchaser;

	the Registration Rights Agreement duly executed by the Company; 

	the Escrow Agreement, duly executed by the Company; 

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

	this Agreement duly executed by such Purchaser;

	such Purchaser's Subscription Amount by wire transfer to the account as specified in writing by the
Company;

	the Registration Rights Agreement, duly executed by such Purchaser;

	the Escrow Agreement, duly executed by such Purchaser; and

	the Purchaser Questionnaire in the form on Annex B attached hereto.

2.3   Closing Conditions. 

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

	the accuracy in all material respects on the Closing Date of the representations and warranties of
the Purchasers contained herein (unless as of a specific date therein);

	all obligations, covenants and agreements of each Purchaser required to be performed at or prior
to the Closing Date shall have been performed; and

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

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

	the accuracy in all material respects (except that any representation and warranty that is qualified
as to "materiality" or "Material Adverse Effect" shall be true and correct in all respects) when made and on the Closing
Date of the representations and warranties of the Company contained herein (except for those

                              7

which by their terms specifically
refer to an earlier date, in which case such representations and warranties shall have been true and correct in all material
respects (except that any representation and warranty that is qualified as to "materiality" or "Material Adverse Effect"
shall be true and correct in all respects) as of such earlier date);

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

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

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

	as of the Closing Date, the NASDAQ Capital Market shall have approved the additional listing with
respect to the Shares and, the additional listing application with respect to the Warrant Shares subject to shareholder approval;
and

	from the date hereof to the Closing Date, trading in the Common Stock shall not have been
suspended by the Commission or the Company's principal Trading Market (except for any suspension of trading of limited
duration agreed to by the Company, which suspension shall be terminated prior to the Closing).

ARTICLE III.

                  REPRESENTATIONS, WARRANTIES AND COVENANTS

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

	Approval of Issuance of Securities.  The Company covenants to (i) hold a special meeting
of shareholders to approve at the earliest practical date following the date hereof to approve the issuance and/or potential
issuance of common stock equal to 19.99 percent or more of the Company's issued and outstanding common stock pursuant
to NASDAQ rules and regulations (the "Stockholder Approval"); (ii) file the required notification with NASDAQ
regarding the issuance and/or potential issuance of common stock equal to 19.99 percent or more of the Company's issued
and outstanding common stock pursuant to NASDAQ rules and regulations and (iii) file any required proxy statement on
Schedule 14A soliciting the vote from the Company's shareholders or information Statement on Schedule 14C, as applicable,
to approve the issuance of the Warrant  Shares and to remove any restrictions on exercise of the Warrants with respect to the
Exchange Cap (as defined therein), within 60 days of the date hereof.  The

                              8

Company covenants to use its best efforts to obtain
SEC clearance on the proxy statement on Schedule 14A or information statement on Schedule 14C as soon as
practicable.

	Subsidiaries.  All of the direct and indirect subsidiaries of the Company are set forth on
Schedule 3.1(b).  The Company owns, directly or indirectly, such percentage of the Subsidiary as set forth in
Schedule 3.1(b) and such ownership interest is free and clear of any Liens, and all of the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and
similar rights to subscribe for or purchase securities.  If the Company has no subsidiaries, all other references to the
Subsidiaries or any of them in the Transaction Documents shall be disregarded. Other than as
contemplated by the Transaction Documents, there are no outstanding preemptive, conversion or other rights, options,
warrants or agreements granted or issued by or binding upon any subsidiary for the purchase or acquisition of any shares of
capital stock of any subsidiary or any other securities convertible into, exchangeable for or evidencing the rights to subscribe
for any shares of such capital stock that would have a dilutive effect on the Company's ownership of its subsidiaries. Other
than as contemplated by the Transaction Documents, neither the Company nor any subsidiary is subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any shares of the capital stock of any subsidiary or any
convertible securities, rights, warrants or options of the type described in the preceding sentence. Neither the Company nor
any subsidiary is party to, nor has any knowledge of, any agreement restricting the voting or transfer of any shares of the
capital stock of any subsidiary.

	Organization and Qualification.  The Company and each of the Subsidiaries is an entity
duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on
its business as currently conducted.  Each of the Company and the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the
case may be, could not have or reasonably be expected to result in a Material Adverse Effect and no Proceeding has been
initiated in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or
qualification.

	Authorization; Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder.  The execution and delivery of each of the Transaction Documents by
the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by
all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or
the Company's stockholders in connection therewith other than in connection with the

                              9

Required Approvals.  Each Transaction
Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered
in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors'
rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.  

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

	Filings, Consents and Approvals.  The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state,
local or other governmental authority or other Person in connection with the execution, delivery and performance by the
Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.5 of this Agreement, (ii) the
filing with the Commission pursuant to the Registration Rights Agreement, (iii) the notice and/or application(s) to each
applicable Trading Market for the issuance and sale of the Shares, Warrants and Warrant Shares and the listing of the Shares
and Warrant Shares for trading thereon in the time and manner required thereby, (iv) the filing of Form D with the Commission
and such filings as are required to be made under applicable state securities laws and (v) any Shareholder Approval, if
required, (collectively, the "Required Approvals").

	Issuance of the Securities.  The Shares and Warrants are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens

                              10

other than restrictions on transfer provided for in the Transaction Documents.  The
Warrant Shares, when duly issued and when issuance of such is authorized by the stockholders of the Company, will be duly
authorized and, when issued and paid for in
accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and
clear of all Liens other than restrictions on transfer provided for in the Transaction Documents.  The Company has reserved
from its duly authorized capital stock a number of shares of Common Stock for issuance of the Warrant Shares at least equal
to the Required Minimum on the date hereof.  

	Capitalization.  The capitalization of the Company is as set forth on Schedule
3.1(h), which Schedule 3.1(h) shall also include the number of shares of Common Stock owned beneficially, and
of record, by Affiliates of the Company as of the date hereof. All of such outstanding shares have been, or upon issuance will
be, validly issued and are fully paid and nonassessable.   Except as disclosed in Schedule 3(h):
(i)  none of the Company's capital stock is subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company; (ii)  there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or
exercisable or exchangeable for, any shares of capital stock of the Company or any of its Subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to
issue additional shares of capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any shares of capital stock of the Company or any of its Subsidiaries; (iii)  there are no outstanding
debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing
Indebtedness of the Company or any of its Subsidiaries which are convertible into or exchangeable for any shares of capital
stock of the Company; (iv)  there are no outstanding securities or instruments of the Company or any of its
Subsidiaries which contain any redemption or similar provisions and other agreements consistent with past practices), and
there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or
may become bound to redeem a security of the Company or any of its Subsidiaries; (v)  there are no securities or
instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities; (vi)  the
Company does not have any stock appreciation rights or "phantom stock" plans or agreements or any similar plan
or agreement; and (vii) there are no financing statements securing obligations in any material amounts, either singly or in the
aggregate, filed in connection with the Company or any of its Subsidiaries; (viii) there are no agreements or arrangements
under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the
Securities Act (except pursuant to the Registration Rights Agreement); and (ix) the Company and its Subsidiaries have no
liabilities or obligations required to be disclosed in the SEC Reports but not so disclosed in the SEC Reports, other than those
incurred in the ordinary course of the Company's or its Subsidiaries' respective businesses and which, individually or in the
aggregate, do not or would not have a Material Adverse Effect.   The Company has made available to the Purchasers true,

                              11

correct and complete copies of the Company's Certificate of Incorporation, as amended and as in effect on the date
hereof (the "Certificate of Incorporation"), and the Company's Bylaws, as amended and as in effect on the
date hereof (the "Bylaws"), and the terms of all securities convertible into, or exercisable or exchangeable
for, shares of Common Stock and the material rights of the holders thereof in respect thereto.  No Person has any right of first
refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the
Transaction Documents.  The issuance and sale of the Securities will not obligate the Company to issue shares of Common
Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company
securities to adjust the exercise, conversion, exchange or reset price under any of such securities. No further approval or
authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities.

	SEC Reports; Financial Statements.  Except as set forth on Schedule 3.1 (i), the
Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under
the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding
the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing
materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein
as the "SEC Reports") 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.  Except as set forth on Schedule 3.1(i), as of their respective
filing dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.  Except as set forth on Schedule 3.1(i), 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 ("GAAP"), except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required
by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as
of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments 

	Litigation.  There is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the Company before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an
"Action") which (i) adversely affects or challenges the legality, validity or enforceability

                              12

of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to
result in a Material Adverse Effect.  Neither the Company nor any director or officer thereof, is or has been the subject of any
Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.
There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former director or officer of the Company.  The Commission has not
issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the
Exchange Act or the Securities Act.  

	Regulatory Permits.  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 currently conducted, except where the failure to possess such permits could not reasonably be
expected to result in a Material Adverse Effect ("Material Permits"), and neither the Company nor any
Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

	Private Placement.  Assuming the accuracy of the Purchasers' representations and
warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by
the Company to the Purchasers as contemplated hereby. Upon approval of the Company's stockholder, the issuance and sale
of the Securities hereunder does not contravene the rules and regulations of the Trading Market.

	Listing and Maintenance
Requirements.  The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is
contemplating terminating such registration.  The Company has not, from September 10, 2009, the date of the Trading
Market's letter approving the Company's continued listing on such Trading Market, and until the date hereof, received notice
from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such Trading Market. The Company is unaware of any facts or
circumstances that could reasonably be expected to cause failure to maintain the continued listing of the Common Stock on
the Trading Market.  

	Disclosure.  Except with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf
has provided any of the Purchasers or their agents or counsel with any information that it believes constitutes or might
constitute material, non-public information.  The Company understands and confirms that the Purchasers will rely on the
foregoing representation in effecting transactions in securities of the Company.  All of the disclosure furnished by or on behalf of the

                              13

Company to the Purchasers regarding the Company, its business and the transactions contemplated hereby, including
the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.   

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

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

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

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

                              14

	Material Changes; Undisclosed Events, Liabilities or Developments.  Since the date of
the latest audited financial statements included within the SEC Reports, except as set forth on Schedule 3.1(s) or as
specifically disclosed in a subsequent SEC Report filed prior to the date hereof: (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not required to be reflected in the Company's financial
statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of
accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its
stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v)
the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company
stock option plans.  The Company does not have pending before the Commission any request for confidential treatment of
information.  Except for the issuance of the Securities contemplated by this Agreement (i), no event, liability or
development has occurred or exists with respect to the Company or its Subsidiaries or their respective business, properties,
operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws at
the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the
date that this representation is made.

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

	Compliance.  Neither the Company nor any Subsidiary: (i) is in default under or in
violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that

                              15

it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii)
is in violation of any order of any court, arbitrator or governmental body or (iii) is or has been in violation of any statute, rule or
regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its
business and all such laws that affect the environment, except in each case as could not have or reasonably be expected to
result in a Material Adverse Effect.

	Title to Assets.  The Company and the Subsidiaries have valid land-use rights to all real
property granted to them by the PRC government 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 and Liens for the payment of federal, state or other taxes, the payment of
which is neither delinquent nor subject to penalties.  Any real property and facilities held under lease by the Company and the
Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are
in compliance.

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

	Transactions With Affiliates and Employees.  Except as set forth in the SEC Reports,
none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the
Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or
such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or

                              16

partner, in each case in excess of $120,000 other than for: (i) payment of
salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii)
other employee benefits, including stock option agreements under any stock option plan of the Company.

	Sarbanes-Oxley; Internal Accounting Controls.  Except as disclosed in the SEC Reports,
the Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as
of the date hereof, and any and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of
the date hereof.  

	Certain Fees.  Except as set forth in Schedule 3.1(z), no brokerage or finder's
fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.
The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other
Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by
the Transaction Documents.

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

	Shell Company Status. The Company is not, and has never been, an issuer identified in
Rule  144(i)(1).

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

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

	Solvency.  Based on the consolidated financial condition of the Company as of the
Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder: (i) the
fair saleable value of the Company's assets exceeds the amount that will be required to be paid on or in respect of the
Company's existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company's assets
do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted
including its capital needs taking into account the particular capital requirements of the business conducted by the Company,
and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with
the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid.
The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing
and amounts of cash to be payable on or in respect of its debt).  The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization
laws of any jurisdiction within one year from the Closing Date.  Schedule 3.1(ee) sets forth as of the date hereof all
outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any
Subsidiary has commitments.

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

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

	Accountants.  The Company's accounting firm is set forth on Schedule 3.1(hh)
of the Disclosure Schedules.  To the knowledge and belief of the Company, such accounting firm: (i) is a registered public
accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be
included in the Company's Annual Report for the year ending December 31, 2009. 

	No Disagreements with Accountants and Lawyers.Except as set forth on
Schedule 3.1(ii), there are no disagreements of any kind presently existing, or reasonably anticipated by the
Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company
which could affect the Company's ability to perform any of its obligations under any of the Transaction

                              18

Documents, the Company is current with respect to any fees owed to its accountants and lawyers.  

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

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

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

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

                              19

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

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

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

ARTICLE IV.

                  OTHER AGREEMENTS OF THE PARTIES

4.1   Transfer Restrictions.

	The Securities may only be disposed of in compliance with state and federal securities laws.  In
connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, the Company
may require the transferor thereof to provide to the Company an opinion of counsel selected by the Company, to the effect that
such transfer does not require registration of such transferred Securities under the Securities Act.  As a condition of transfer, any such transferee shall

                               20

agree in writing to be bound by the terms of this Agreement and the Registration Rights Agreement
and shall have the rights and obligations of a Purchaser under this Agreement and the Registration Rights Agreement.

	The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on
any Shares, Warrants and Warrant Shares in substantially the following form:
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS
EXERCISABLE, IF APPLICABLE, HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT,
THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY UNLESS SOLD OR
TRANSFERRED TO A "QUALIFIED INSTITUTIONAL BUYER" WITHIN THE MEANING OF RULE 144A UNDER
THE 1933 ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  THIS SECURITY AND
THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

	Certificates evidencing the Shares and the Warrant Shares shall not contain any legend (including
the legend set forth in Section 4.1(b) hereof): (i) while a registration statement (including the Registration Statement) covering
the resale of such security is effective under the Securities Act, (ii) following any sale of such Shares or Warrant Shares
pursuant to Rule 144, (iii) if such Shares or Warrant Shares, as the case may be, are eligible for sale under Rule 144, without
the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such
Shares or Warrant Shares, as the case may be, and without volume or manner-of-sale restrictions or (iv) 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). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after
the Effective Date if required by the Transfer Agent to effect the removal of the legend hereunder.  If any Warrant is exercised
or any Shares are sold at a time when there is an effective registration statement to cover the resale of the Warrant Shares or
the Shares, as the case may be, or if such Warrant Shares or Shares may be

                               21

sold under Rule 144 and the Company is then in
compliance with the current public information required under Rule 144, or if such Warrant Shares or Shares may be sold
under Rule 144 without the requirement for the Company to be in compliance with the current public information required under
Rule 144 as to such Warrant Shares or Shares and without volume or manner-of-sale restrictions or if such legend is not
otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements
issued by the staff of the Commission) then such Warrant Shares or Shares, as the case may be, shall be issued free of all
legends.  The Company agrees that following (i) the Effective Date, (ii) if such Warrant Shares or Shares may be sold under
Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule
144 as to such Warrant Shares or Shares and without volume or manner-of-sale restrictions or (iii) at such time as such legend
is no longer required under this Section 4.1(c), it will, no later than three Trading Days following the delivery by a Purchaser to
the Company or the Transfer Agent of a certificate representing Warrant Shares or the Shares, as applicable, issued with a
restrictive legend (such third Trading Day, the "Legend Removal Date"), deliver or cause to be delivered to
such Purchaser a certificate representing such shares that is free from all restrictive and other legends.  The Company may not
make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in
this Section 4.  Certificates for Warrant Shares and Shares subject to legend removal hereunder shall be transmitted by the
Transfer Agent to the Purchaser by crediting the account of the Purchaser's broker with the Depository Trust Company System
as directed by such Purchaser.

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

4.2   Furnishing of Information; Public Information, Failure of Registration.  

	If the Common Stock is not registered under Section 12(b) or 12(g) of the Exchange Act on the
date hereof, the Company agrees to cause the Common Stock to be registered under Section 12(g) of the Exchange Act on or
before the Closing Date. Until the time that no Purchaser owns any Securities, the Company covenants to maintain the
registration of the Common Stock under Sections 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in
respect hereof and file within the applicable grace periods) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange
Act.

	At any time during the period commencing from the six (6) month anniversary of the Closing Date
and ending at such time that all of the Securities, if a registration statement is not available for the resale of all of the Securities, may be sold

                               22

without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance
with Rule 144(c)(1), if the Company shall fail for any reason to satisfy the current public information requirement under Rule
144(c) (a "Public Information Failure") then, as partial relief for the damages to any holder of Securities by reason of
any such delay in or reduction of its ability to sell the Securities (which remedy shall not be exclusive of any other remedies
available at law or in equity), the Company shall pay to each such holder an amount in cash equal to two percent (2.0%) of the
aggregate Purchase Price of such holder's Securities that cannot be sold resulting directly from such Public Information Failure
on the day of a Public Information Failure and on every thirtieth day (pro rated for periods totaling less than thirty days)
thereafter until the earlier of (i) the date such Public Information Failure is cured and (ii) such time that such public information
is no longer required pursuant to Rule 144.   The payments to which a holder shall be entitled pursuant to this Section
4(n) are referred to herein as "Public Information Failure Payments."   Public Information Failure Payments
shall be paid on the earlier of (I) the last day of the calendar month during which such Public Information Failure Payments are
incurred and (II) the third Business Day after the event or failure giving rise to the Public Information Failure Payments is
cured.   In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public
Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in
full.

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

4.4   Exercise Procedures.  The form of Notice of Exercise included in the Warrants
set forth the totality of the procedures required of the Purchasers in order to exercise the Warrants.  No additional legal
opinion, other information or instructions shall be required of the Purchasers to exercise their Warrants.  The Company shall
honor exercises of the Warrants and shall deliver Warrant Shares in accordance with the terms, conditions and time periods
set forth in the Transaction Documents.

4.5   Securities Laws Disclosure; Publicity.  The Company shall within four Business Days
immediately following the date hereof, issue a Current Report on Form 8-K and press release disclosing the material terms of
the transactions contemplated hereby, and including the Transaction Documents as exhibits thereto.  Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any
filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser,
except: (a) as required by federal securities law in connection with (i) any registration statement contemplated by the
Registration Rights Agreement and (ii) the filing of final Transaction Documents (including signature pages thereto) with the
Commission and (b) to the extent such disclosure is required by law or Trading Market

                               23

regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b

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

4.7   Non-Public Information.  From and after the filing of the 8-K Filing with the SEC, no
Purchaser shall be in possession of any material, nonpublic information received from the Company, any of its Subsidiaries or
any of their respective officers, directors, employees or agents, that is not disclosed in the 8-K Filing.   The Company
shall not, and shall cause each of its Subsidiaries and its and each of their respective officers, directors, employees and
agents, not to, provide any Purchaser with any material, nonpublic information regarding the Company or any of its
Subsidiaries from and after the filing of the 8-K Filing with the SEC without the prior express written consent of such
Purchaser.   If a Purchaser has, or believes it has, received any such material, nonpublic information regarding the
Company or any of its Subsidiaries from the Company, any of its Subsidiaries or any of their respective officers, directors,
affiliates or agents, it may provide the Company with written notice thereof.   In the event of the disclosure of any
material nonpublic information, the Company shall comply with its obligations under Regulation FD promulgated under the
Securities Act and the Exchange Act by filing a press release and current report on Form 8-K disclosing the material non-public
information within five days of its disclosure to any Purchaser.   Subject to the foregoing, neither the Company, its
Subsidiaries nor any Purchaser shall issue any press releases or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of any Purchaser, to
make any press release or other public disclosure with respect to such transactions (i)  in substantial conformity with
the 8-K Filing and contemporaneously therewith and (ii)  as is required by applicable law and regulations (provided
that in the case of clause (i)  each Purchaser shall be consulted by the Company in connection with any such press
release or other public disclosure prior to its release).   Without the prior written consent of any applicable Purchaser,
neither the Company nor any of its Subsidiaries or affiliates shall disclose the name of such Purchaser in any filing,
announcement, release or otherwise.

4.8   Use of Proceeds.  The Company shall use the net proceeds from the sale of the
Securities hereunder for working capital.

4.9   Reservation and Listing of Securities.

	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 then be required to fulfill its obligations in full under
the Transaction Documents.

                               24

	If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of
Common Stock is less than the Required Minimum on such date, then the Board of Directors shall use commercially
reasonable efforts to amend the Company's certificate or articles of incorporation to increase the number of authorized but
unissued shares of Common Stock to at least the Required Minimum at such time, as soon as possible and in any event not
later than the 75th day after such date.

	The Company shall, if applicable: (i) by the Closing Date, prepare and file with such Trading
Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required
Minimum on the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved
for listing or quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such
listing or quotation and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required
Minimum on such date on such Trading Market or another Trading Market. 

4.10   Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with
the other Purchasers, covenants that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will
execute any purchases or sales, including Short Sales, of any of the Company's securities during the period commencing with
the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly
announced pursuant to the initial press release as described in Section 4.5.   Each Purchaser, severally and not jointly
with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company pursuant to the initial press release as described in Section 4.5, such Purchaser will maintain the
confidentiality of the existence and terms of this transaction and the information included in the Transaction Documents and
the Disclosure Schedules.  Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the
contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or
covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in
Section 4.5, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company
in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as described in Section 4.5 and (iii) no Purchaser shall have any
duty of confidentiality to the Company or its Subsidiaries after the issuance of the initial press release as described in Section
4.5.   Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of such Purchaser's assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser's assets,
the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made
the investment decision to purchase the Securities covered by this Agreement. 

ARTICLE V.

                  MISCELLANEOUS

                              25

5.1   Termination.   This Agreement may be terminated by any Purchaser, as to
such Purchaser's obligations hereunder only and without any effect whatsoever on the obligations between the Company and
the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before November
19, 2010.

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

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

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

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

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

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

                               26

Purchaser (other than by merger).  Any Purchaser may assign
any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities,
provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the
Transaction Documents that apply to the "Purchasers."

5.8   No Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties
hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person, except as otherwise set forth in Section 4.10.

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

5.10   Survival.  The representations and warranties contained herein shall survive the Closing
and the delivery of the Securities.

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

                               27

behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page were an original
thereof.

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

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

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

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

5.16   Independent Nature of Purchasers' Obligations and Rights.  The obligations of each
Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser
under any Transaction Document.  Nothing contained herein or in any other Transaction Document, and no action taken by any

                               28

Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction Documents.  Each Purchaser shall be entitled
to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the
other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.  Each Purchaser has been represented by its own separate legal counsel in their review and
negotiation of the Transaction Documents.  For reasons of administrative convenience only, each Purchaser and its respective
counsel have chosen to communicate with the Company through Proskauer Rose LLP.  Proskauer Rose LLP does not
represent any of the Purchasers and only represents Global Hunters Securities LLC.  The Company has elected to provide all
Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was
required or requested to do so by any of the Purchasers.

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

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

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

(Signature Pages Follow)

                              29

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.

	
ZOOM TECHNOLOGIES, INC.

  
	
Address for Notice:

	
By:__________________________________________

        Name: Lei Gu

        Title:  Chief Executive Officer

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

	

  
	  

  

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

                  SIGNATURE PAGE FOR PURCHASER FOLLOWS]

  

  

  

  

                              30

PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

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

Name of Purchaser: ________________________________________________________

Signature of Authorized Signatory of Purchaser: __________________________________

Name of Authorized Signatory: ____________________________________________________

Title of Authorized Signatory: _____________________________________________________

Email Address of Authorized Signatory: _____________________________________________

Facsimile Number of Authorized Signatory: __________________________________________

Address for Notice of Purchaser:

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

Subscription Amount: _____________

Warrant Shares: _________________

EIN Number:  

[SIGNATURE PAGES CONTINUE]

  

  

                              31

Annex A 

CLOSING STATEMENT

Pursuant to the attached Securities Purchase Agreement, dated as of the date hereto, the purchasers
shall purchase up to [-------] of Common Stock and Warrants from Zoom Technologies, Inc. a Delaware corporation (the
"Company").  All funds will be wired into an account maintained by the Escrow Agent.  All funds will be
disbursed in accordance with this Closing Statement.  

Disbursement Date:[________ ___, 2010

	
I.   PURCHASE PRICE

	  
	
Gross Proceeds to be Received 
	
$[------------]

	  	  
	
II.DISBURSEMENTS

	  
	
 
	
$

	
 
	
$

	  	
$

	  	
$

	  	
$

	  	  
	
Total Amount Disbursed:
	
$

	  	  
	  	  
	  	  
	
WIRE INSTRUCTIONS:

Bank of America

100 West 33rd St.

New York, NY

ABA #:   026 009 593 

Swift Code:  BOFAUS3N

For further credit to account number:4426874722

Name on Account:Computershare Trust Company, NA, As Escrow Agent for Clients

Ref:  Zoom Technologies Escrow

  

  

  

                              32

ANNEX B

CONFIDENTIAL PURCHASER QUESTIONNAIRE

ZOOM TECHNOLOGIES, INC. 

THIS QUESTIONNAIRE MUST BE ANSWERED FULLY AND RETURNED ALONG WITH YOUR COMPLETED
SUBSCRIPTION AGREEMENT IN CONNECTION WITH YOUR PROSPECTIVE PURCHASE OF SECURITIES FROM ZOOM
TECHNOLOGIES, INC.  (THE "COMPANY").

THE INFORMATION SUPPLIED IN THIS QUESTIONNAIRE WILL BE HELD IN STRICT CONFIDENCE.  NO
INFORMATION WILL BE DISCLOSED EXCEPT TO THE EXTENT THAT SUCH DISCLOSURE IS REQUIRED BY LAW OR
REGULATION, OTHERWISE DEMANDED BY PROPER LEGAL PROCESS OR IN LITIGATION INVOLVING THE COMPANY
AND ITS CONTROLLING PERSONS.

Capitalized terms used herein without definition shall have the respective meanings given such terms as set forth in the
Securities Purchase Agreement between the Company and the Purchaser signatory thereto (the "Purchaser
Agreement") dated as of November __, 2010.

(1)The undersigned represents and warrants that he, she or it comes within at least one category marked below,
and that for any category marked, he, she or it has truthfully set forth, where applicable, the factual basis or reason the
undersigned comes within that category.  The undersigned agrees to furnish any additional information which the Company
deems necessary in order to verify the answers set forth below.

	

Category A _____

	

The undersigned is a natural person
(not a partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently  is
$1,000,000 or more, excluding the value of a primary residence.   

Explanation.   In calculating net worth, you include all of your assets (other than your primary residence) whether
liquid or illiquid, such as cash, stock, securities, personal property and real estate based on the fair market value of such
property MINUS all debts and liabilities (other than a mortgage or other debt secured by your primary residence). 

In the event that the amount of any mortgage or other indebtedness secured by your primary residence exceeds the fair
market value of the residence and the mortgagee or other lender has recourse to you personally for any deficiency, that excess
liability should also be deducted from your net worth.   

	

Category B _____

	

The undersigned is an individual (not a partnership, corporation, etc.) who had an income in
excess of $200,000 in each of the two most recent years, or joint income with his or her spouse in excess of $300,000 in each
of those years (in each case including foreign income, tax exempt income and full amount of capital gains and losses but
excluding any income of other family members and any unrealized capital appreciation) and has a reasonable expectation of
reaching the same income level in the current year.

	

Category C _____

	

The undersigned is a director or executive officer of the Company which is issuing and
selling the Securities.

	

Category D _____

	

The undersigned is a bank, as defined in Section  3(a)(2) of the Securities Act of
1933, as amended (the "Act"); a savings and loan association or other institution as defined in
Section  3(a)(5)(A) of the Act, whether acting in its individual or fiduciary capacity; any insurance company as defined
in Section  2(13) of the Act; any investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section  2(a)(48) of that Act; any Small Business Investment Company
licensed by the U.S. Small Business Administration under Section  301(c) or (d)

                              33

	

 

	

of the Small Business Investment Act
of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or
its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee
benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by
a plan fiduciary, as defined in Section  3(21) of such act, which is either a bank, savings and loan association,
insurance company, or registered investment advisor, or if the employee benefit plan has total assets in excess of $5,000,000
or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors (describe entity).

_________________________________________________________________

   _________________________________________________________________

	

Category E _____

	

The undersigned is a private business development company as defined in section 202(a)
(22) of the Investment Advisors Act of 1940 (describe entity)  

_________________________________________________________________

   _________________________________________________________________

	

Category F _____

	

The undersigned is either a corporation, partnership, Massachusetts business trust, or non-
profit organization within the meaning of Section  501(c)(3) of the Internal Revenue Code, in each case not formed for
the specific purpose of acquiring the Securities and with total assets in excess of $5,000,000. (describe entity)

_________________________________________________________________

   _________________________________________________________________

	

Category G _____

	

The undersigned is a trust with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Securities, where the purchase is directed by a "sophisticated investor" as defined
in Regulation  506(b)(2)(ii)  under the Act.

	

Category H _____

	

The undersigned is an entity (other than a trust) in which all of the equity owners are
"accredited investors" within one or more of the above categories.  If relying upon this Category alone, each equity
owner must complete a separate copy of this Purchaser Questionnaire.  (describe entity)

_________________________________________________________________

   _________________________________________________________________

The undersigned agrees that the undersigned will notify the Company at any time on or prior to the applicable Closing (as
defined in the Memorandum) in the event that the representations and warranties in this Purchaser Questionnaire shall cease
to be true, accurate and complete.

(2)Suitability (please answer each question)

(a)For an individual, please describe your current employment, including the company by which you are employed
and its principal business:

_________________________________________________________________

   _________________________________________________________________

   _________________________________________________________________

(b)For individuals, do you expect your current level of income to significantly decrease in

                              34

the foreseeable future?

YES      __________              NO     __________

(c)For trust, corporate, partnership and other institutional subscribers, do you expect your total assets to significantly
decrease in the foreseeable future?

YES      __________              NO     __________

(d)For all subscribers, are you familiar with the risk aspects and the non-liquidity of investments such as the Securities
for which you seek to purchase?

YES      __________              NO     __________

(e)For all subscribers, do you understand that there is no guarantee of financial return on this investment and that you
run the risk of losing your entire investment?

YES      __________              NO     __________

(3)Manner in which title is to be held: (circle one)

(a)Individual Ownership

   (b)Community Property

   (c)Joint Tenant with Right of Survivorship (both parties must sign)

   (d)Partnership

   (e)Tenants in Common

   (f)Company

   (g)Trust

   (h)Other

(4)FINRA Affiliation.

Are you affiliated or associated with an FINRA member firm (please check one):

YES      __________              NO     __________

If Yes, please describe how you are affiliated/associated:

_________________________________________________________

   _________________________________________________________

   _________________________________________________________

*If subscriber is a Registered Representative with an FINRA member firm, have the following acknowledgment signed by
the appropriate party:

The undersigned FINRA member firm acknowledges receipt of the notice required by the FINRA Conduct Rules.

                              35

_________________________________

   Name of FINRA Member Firm

By: ______________________________

           Authorized Officer

Date: ____________________________

(5) For Trust Subscribers

A. Certain trusts generally may not qualify as accredited investors except under special circumstances.  Therefore, if
you intend to purchase the shares of the Company's stock in whole or in part through a trust, please answer each of the
following questions.

Is the trustee of the trust a national or state bank that is acting in its fiduciary capacity in making the investment on
behalf of the trust?

Yes o
                           No o

Does this investment in the Company exceed 10% of the trust assets?

Yes o
                           No o

B. If the trust is a revocable trust, please complete Question 1 below.  If the trust is an irrevocable trust,
please complete Question 2 below.

1.     REVOCABLE TRUSTS

Can the trust be amended or revoked at any time by its grantors:

Yes o
                           No o

If yes, please answer the following questions relating to each grantor (please add sheets if
necessary):

Grantor Name: _________________________

Net worth of grantor (including spouse, if applicable), including home, home furnishings and automobiles exceeds
$1,000,000?

Yes o
                           No o

Income (exclusive of any income attributable to spouse) was in excess of $200,000 for 2006 and 2007 and is reasonably
expected to be in excess of $200,000 for 2008?

Yes o
                           No o

                              36

                     OR

Income (including income attributable to spouse) was in excess of $300,000 for 2006 and 2007 and is reasonably
expected to be in excess of $300,000 for 2008?

Yes o
                           No o

2.     IRREVOCABLE TRUSTS

If the trust is an irrevocable trust, please answer the following questions:

Please provide the name of each trustee:

Trustee Name: ________________________________________

Trustee Name: ________________________________________

Does the trust have assets greater than $5 million?

Yes o
                           No o

Do you have such knowledge and experience in financial and business matters as to be capable of evaluating the merits
and risks of an investment in the Company?

Yes o
                           No o

Indicate how often you invest in:

Marketable Securities

Often o
Occasionally o
Seldom o
Never o

Restricted Securities

Often o
Occasionally o
Seldom o
Never o

Venture Capital Companies

Often o
Occasionally o
Seldom o
Never o

[Remainder of page intentionally left blank]

                              37

The undersigned has been informed of the significance to the Company of the foregoing representations and answers
contained in this Confidential Purchaser Questionnaire and such representations and answers have been provided with the
understanding that the Company and the Selling Agent will rely on them.  

	
  
	
Individual

	
Date:________________________
	
    _______________________________         

                                            Name of Individual

	

	
(Please type or print)

	

	

    _______________________________         

                                            Signature of Individual

	 	

	

	
    _______________________________         

                                            Name of Joint Owner 

	

	
(Please type or print)

	 	
_______________________________

	

	
Signature (Joint Owner)

	

	
Partnership, Corporation or Other Entity

	 	 
	
Date:_______________________________
	
    _______________________________         

                                            Print or Type Entity Name

	 	
      By: Name:_______________________

	
      
	
Print or Type Name

	

	
Title: _____________________________________

	

	
    _______________________________         

                                              Signature

	 	
       Title: ____________________________

	

	
       _________________________________

	
       
	
Signature (other authorized signatory)

                              38

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}]]