Document:

STRATOS
      RENEWABLES CORPORATION

     

    UNSECURED
      CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT

     

    This
      Unsecured Convertible Note and Warrant Purchase Agreement (this “Agreement”)
      is
      made as of August 27, 2008, by and between Stratos Renewables Corporation,
      a
      Nevada corporation (the “Company”),
      and
      the investors listed on Schedule
      I
      (the
“Schedule
      of Investors”)
      attached to this Agreement (each an “Investor”
and
      together the “Investors”).

     

    RECITALS:

     

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

     

    B. Each
      Investor wishes to purchase, and the Company wishes to sell, upon the terms
      and
      conditions stated in this Agreement, (i) an unsecured convertible promissory
      note convertible into shares of the common stock, par value $0.001 per share
      (the “Common
      Stock”)
      of the
      Company, (each, a “Note,”
and
      collectively, the “Notes”
and
      as
      converted, collectively, the “Note
      Shares”),
      in
      the principal amount set forth opposite such Investor’s name in the Schedule of
      Investors and (ii) a warrant to acquire up to that number of additional shares
      of Common Stock set forth opposite such Investor’s name in the Schedule of
      Investors (the “Warrants,”
and
      the
      shares of Common Stock issuable upon exercise, collectively, the “Warrant
      Shares.”)

     

    C. The
      Notes, the Warrants, the Note Shares and the Warrant Shares collectively are
      referred to herein as the “Securities.”

     

    D. The
      Company is hereby offering to the Investors: (a) a minimum of $5,000,000 in
      aggregate principal of the Notes and related Warrants (the “Initial
      Investment”),
      and
      (b) up to a maximum aggregate principal amount of not more than $10,000,000,
      inclusive of the Initial Investment, in additional Notes and related Warrants
      (the “Maximum
      Aggregate Investment”).
      

     

    NOW,
      THEREFORE,
      the
      Company and each Investor hereby agree as follows:

     

    SECTION
      1

     

    Purchase,
      Sale and Issuance of Notes
      and Warrants

     

    1.1 Sale
      and Issuance of Notes
      and Warrants. 
      Subject to the terms and conditions of this Agreement, at the Closing (as
      defined below), each Investor agrees to purchase, severally and not jointly,
      and
      the Company agrees to sell and issue to each Investor, (a) a Note in the
      principal amount set forth opposite the Investor’s name on Schedule I hereto,
      and (b) Warrants to purchase up to that number of Warrant Shares equal to the
      quotient of (x) the principal amount of an Investor’s investment in the Notes
      divided by (y) $0.70 (the “Stated
      Conversion Price”),
      multiplied by 35% (subject
      to adjustment as set forth in the Warrant).
      The
      Warrants shall be exercisable for Common Stock at the price of $0.75 per share,
      subject to adjustment as set forth in the Warrant (the “Warrant
      Exercise Price”).
      The
      Notes and the Warrants shall be issued in substantially the same form as
      attached hereto as Exhibit
      A
      and
Exhibit B
      respectively.

     

    
      
        
        

      

      
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    1.2 Purchase
      Price.
      The
      purchase price for the Notes and related Warrants to be purchased by each
      Investor at the Closing shall be the amount set forth opposite such Investor’s
      name in the Schedule of Investors (the “Purchase
      Price”).

     

    SECTION
      2

     

    Closing
      Date and Delivery

     

    2.1 Closing.
      The
      purchase, sale and issuance of the Notes and the Warrants shall take place
      at a
      closing (the “Closing”)
      at the
      offices of Stratos Renewables Corporation, 9440
      Little Santa Monica Blvd., Suite 401,
      Beverly
      Hills, California
      90210,
      to be consummated simultaneously with the execution of this Agreement (the
      “Closing
      Date”).

     

    2.2 Delivery. 
At
      the Closing, (a) each Investor shall pay its respective amount of the Purchase
      Price to the Company for the Notes and Warrants to be issued and sold to such
      Investor at the Closing, by wire transfer of immediately available funds in
      accordance with the Company’s written wire instructions, (b) the Company will
      deliver to the Investor (i) one or more Notes such Investor is purchasing as
      is
      set forth opposite such Investor’s name in the Schedule of Investors and (ii) a
      Warrant pursuant to which such Investor shall have the right to acquire such
      number of Warrant Shares as is set forth opposite such Investor’s name in the
      Schedule of Investors (subject to adjustment as set forth in the Warrant),
      in
      all cases duly executed on behalf of the Company and registered in the name
      of
      such Investor.

     

    SECTION
      3

     

    Representations
      and Warranties of the Company

     

    The
      Company hereby represents and warrants to each Investor that, except as set
      forth on the Disclosure Schedule attached as Exhibit
      C
      to this
      Agreement, the following representations are true and complete as of the date
      hereof and as of the Closing. The Disclosure Schedule shall be delivered
      separately to the Investors and shall be arranged in sections corresponding
      to
      the numbered and lettered sections and subsections contained in this
Section
      3,
      and the
      disclosures in any section or subsection of the Disclosure Schedule shall
      qualify other sections and subsections in this Section
      3
      if and
      only to the extent that it is reasonably apparent to someone unfamiliar with
      the
      Company and its business from the face of such disclosure that such disclosure
      is applicable to such other sections and subsections.

     

    
      
        
        

      

      
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    3.1 Due
      Incorporation, Qualification, etc.
      The
      Company (a) is a corporation duly organized, validly existing and in good
      standing under the laws of its state of incorporation; (b) has the power and
      authority to own, lease and operate its properties and carry on its business
      as
      now conducted and as proposed to be conducted by the Company in the SEC
      Documents (as defined below); and (c) is duly qualified, licensed to do business
      and in good standing as a foreign corporation in each jurisdiction where it
      does
      business except where the failure to be so qualified or licensed could
      reasonably be expected to have a Material Adverse Effect. For the purposes
      of
      this Agreement, “Material
      Adverse Effect”
shall
      mean a material adverse effect on (i) the business, assets, operations,
      prospects or financial or other condition of the Company and its Subsidiaries
      (as defined below) considered together; (ii) the ability or authority of
      the Company to pay or perform its obligations under this Agreement in accordance
      with the terms of this Agreement and the other Transaction Documents (as defined
      below) and to avoid an event of default, or an event which, with the giving
      of
      notice or the passage of time or both, would constitute an event of default,
      under any Transaction Document; or (iii) the rights and remedies of the
      Investor under this Agreement, the other Transaction Documents or any related
      document, instrument or agreement.

     

    3.2 Subsidiaries.
      The
      Company has no direct or indirect Subsidiaries other than those listed in
Section
      3.2
      of the
      Disclosure Schedule.
      Except
      as disclosed in Section
      3.2
      of the
      Disclosure Schedule, the Company owns, directly or indirectly, all of the
      capital stock or comparable equity interests of each Subsidiary free and clear
      of any and all liens, charges, claims, security interests, encumbrances, rights
      of first refusal or other restrictions (collectively, “Liens”)
      and
      all the issued and outstanding shares of capital stock or comparable equity
      interest of each Subsidiary are validly issued and are fully paid,
      non-assessable and free of preemptive and similar rights.
      For the
      purposes of this Agreement, “Subsidiary”
shall
      mean, with respect to any Person, each corporation or other entity of which
      (a)
      such Person or any other Subsidiary of such Person is a general partner or
      a
      manager (b) or at least 50% of the securities or other ownership interests
      having by their terms ordinary voting power to elect at least 50% of the board
      of directors or other Persons performing similar functions is directly or
      indirectly owned or controlled by such Person, by any one or more of its
      Subsidiaries or by such Person and one or more of its Subsidiaries. For the
      purposes of this Agreement, “Person”
shall
      mean and include an individual, a partnership, a corporation (including a
      business trust), a joint stock company, a limited liability company, an
      unincorporated association, a joint venture or other entity or a governmental
      authority.

     

    3.3 Authority.
      The
      execution, delivery and performance by the Company of this Agreement, the Notes
      and the Warrants, and all such other documents required by the terms of this
      Agreement to be executed by the Company (collectively, the “Transaction
      Documents”),
      the
      consummation of the transactions contemplated hereby and thereby, the issuance
      of the Notes, and the reservation and issuance of the Note Shares and Warrant
      Shares, (a) are within the power of the Company and (b) have been duly
      authorized by all necessary actions on the part of the Company and no further
      filing, consent or authorization is required by the Company, its Board of
      Directors or its stockholders in connection with any of the
      foregoing.

     

    3.4 Enforceability.
      Each
      Transaction Document has been duly executed and delivered by the Company and
      constitutes a legal, valid and binding obligation of the Company, enforceable
      against the Company in accordance with its terms, except as limited by
      bankruptcy, insolvency or other laws of general application relating to or
      affecting the enforcement of creditors’ rights generally and general principles
      of equity.

     

    
      
        
        

      

      
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    3.5 Non-Contravention.
      The
      execution and delivery by the Company of the Transaction Documents and the
      performance and consummation of the transactions contemplated hereby and thereby
      (including, without limitation, the issuance of the Notes and the Warrants
      and
      the reservation for issuance and issuance of the Note Shares and Warrant Shares)
      do not and will not (a) violate the Company’s Articles of Incorporation or
      Bylaws, as amended, as the case may be (“Charter
      Documents”),
      or
      any material judgment, order, writ, decree, statute, rule or regulation
      applicable to the Company or any of its Subsidiaries; (b) violate any
      provision of, or result in the termination, amendment, cancellation or breach
      or
      the acceleration of, or entitle any other Person to accelerate (whether after
      the giving of notice or lapse of time or both), any material mortgage,
      indenture, agreement, instrument or contract to which the Company or any of
      its
      Subsidiaries is a party or by which it is bound; or (c) result in the
      creation or imposition of any lien upon any property, asset or revenue of the
      Company or any of its Subsidiaries or the suspension, revocation, impairment,
      forfeiture, or nonrenewal of any material permit, license, authorization or
      approval applicable to the Company or any of its Subsidiaries, their respective
      businesses or operations, or any of their respective assets or properties.
      

     

    3.6 Approvals.
      The
      Company is not required to obtain any consent, authorization or order of, or
      make any filing or registration with, any court, governmental agency or any
      regulatory or self-regulatory agency or any other Person in order for it to
      execute, deliver or perform any of its obligations under or contemplated by
      the
      Transaction Documents, in each case in accordance with the terms hereof or
      thereof other than such as have been made or obtained and except for the filing
      of Form D pursuant to Regulation D or any “blue sky” filing.

     

    3.7 Title
      to Assets.
      The
      Company and its Subsidiaries have good and marketable title to all real property
      owned by them that is material to the business of the Company and the Company
      and its Subsidiaries have good and marketable title in all personal property
      owned by them that is material to the business of the Company and the
      Subsidiaries, in each case free and clear of all Liens, except for Liens that
      do
      not, individually or in the aggregate, have or result in a Material Adverse
      Effect. To the Company’s knowledge, any real property and facilities held under
      lease by the Company and the Subsidiaries are held by them under valid and
      subsisting leases of which the Company and the Subsidiaries are in material
      compliance.

     

    3.8 No
      Violation or Default.
      Each of
      the Company and its Subsidiaries, as applicable, is not in violation of or
      in
      default with respect to (a) its Charter Documents or any material judgment,
      order, writ, decree, statute, rule or regulation applicable to it; (ii) any
      material mortgage, indenture, agreement, instrument or contract to which it
      is a
      party or by which it is bound (nor is there any waiver in effect which, if
      not
      in effect, would result in such a violation or default), (iii) any order of
      any
      court, arbitrator or governmental body or (iv) any material statute, rule or
      regulation of any governmental authority, where, in each case, such violation
      or
      default, individually, or together with all such violations or defaults, could
      reasonably be expected to have a Material Adverse Effect.

     

    3.9 Litigation.
      No
      actions (including, without limitation, derivative actions), suits, proceedings
      or investigations are pending or, to the knowledge of the Company, threatened
      against or affecting the Company or any of its Subsidiaries at law or in equity
      in any court or before any other governmental authority that if adversely
      determined (a) would (alone or in the aggregate) reasonably be expected to
      have a Material Adverse Effect or (b) seeks to enjoin, either directly or
      indirectly, the execution, delivery or performance by the Company of the
      Transaction Documents or the transactions contemplated thereby.

     

    
      
        
        

      

      
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    3.10 Taxes.
      Within
      the times and in the manner prescribed by law, the Company and each of its
      Subsidiaries (i) has filed all foreign, federal, state and local income and
      all
      other material tax returns, reports and declarations required by any
      jurisdiction to which it is subject, (ii) has paid all taxes, assessments and
      penalties due and payable that are material in amount, shown or determined
      to be
      due on such returns, reports and declarations, except those being contested
      in
      good faith and (iii) has set aside on its books provision reasonably adequate
      for the payment of all taxes for periods subsequent to the periods to which
      such
      returns, reports or declarations apply. There are no unpaid taxes in any
      material amount claimed to be due by the taxing authority of any jurisdiction,
      and, to the knowledge of the Company, there is no basis for any such
      claim.

     

    3.11 OTCBB
      Compliance.
      The
      Company is in compliance with all requirements for, and its Common Stock is
      quoted on the Electronic Over-the-Counter Bulletin Board system.

     

    3.12 SEC
      Documents.
      The
      Company has filed all reports, schedules, forms, statements and other documents
      required to be filed by it with the SEC pursuant to the reporting requirements
      of the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”).
      Such
      reports, schedules, forms, statements and other documents together with any
      materials filed or furnished by the Company under the Exchange Act, whether
      or
      not any such reports were required, are collectively referred to herein as
      the
“SEC Documents.” As of their respective dates, the SEC Reports filed by the
      Company complied in all material respects with the requirements of the
      Securities Act and the Exchange Act and the rules and regulations of the SEC
      promulgated thereunder, and none of the SEC Reports, when filed by the Company,
      contained any untrue statement of a material fact or omitted to state a material
      fact required to be stated therein or necessary in order to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading. As of their respective dates, the financial statements of the
      Company included in the SEC Documents complied in all material respects with
      applicable accounting requirements and the published rules and regulations
      of
      the SEC 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, consistently applied, during the periods involved (except (a) as
      may
      be otherwise indicated in such financial statements or the notes thereto, or
      (b)
      in the case of unaudited interim statements, to the extent they may exclude
      footnotes or may be condensed or summary statements) and fairly present in
      all
      material respects the consolidated financial position of the Company and its
      consolidated Subsidiaries as of 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 year-end audit adjustments). All material agreements
      to
      which the Company or any Subsidiary is a party or to which the property or
      assets of the Company or any Subsidiary are subject are included as part of
      or
      identified in the SEC Documents, to the extent such agreements are required
      to
      be included or identified pursuant to the rules and regulations of the
      SEC.

     

    3.13 Absence
      of Certain Changes.
      Since
      June 30, 2008, there has been no material adverse change and no material adverse
      development in the business, properties, operations, condition (financial or
      otherwise), or results of operations or prospects of the Company and its
      Subsidiaries, considered together. Since June 30, 2008, the Company has not
      declared or paid any dividends. Neither the Company nor any of its Subsidiaries
      have taken any steps to seek protection pursuant to any bankruptcy law nor
      does
      the Company or any of its Subsidiaries have any knowledge or reason to believe
      that its creditors intend to initiate involuntary bankruptcy proceedings or
      any
      actual knowledge of any fact that would reasonably lead a creditor to do so.
      The
      Company is not as of the date hereof, and after giving effect to the
      transactions contemplated hereby to occur at the Closing, will not be Insolvent
      (as defined below). For purposes of this Section 3.13,
      “Insolvent”
means,
      with respect to any Person, (i) the present fair saleable value of such Person’s
      assets is less than the amount required to pay such Person’s total indebtedness,
      (ii) such Person is unable to pay its debts and liabilities, subordinated,
      contingent or otherwise, as such debts and liabilities become absolute and
      matured, (iii) such Person intends to incur or believes that it will incur
      debts
      that would be beyond its ability to pay as such debts mature or (iv) such Person
      has unreasonably small capital with which to conduct the business in which
      it is
      engaged as such business is now conducted and is currently proposed to be
      conducted.

     

    
      
        
        

      

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

     

    3.15 Sarbanes-Oxley
      Act.
      The
      Company is in compliance in all material respects with applicable requirements
      of the Sarbanes-Oxley Act of 2002 and applicable rules and regulations
      promulgated by the SEC thereunder, except where such noncompliance would not
      have, individually or in the aggregate, a Material Adverse Effect.

     

    3.16 Disclosure
      Controls and Procedures.
      The
      Company maintains disclosure controls and procedures (as such term is defined
      in
      Rule 13a-15 of the General Rules and Regulations under the Exchange Act) that
      comply with the requirements of the Exchange Act; such disclosure controls
      and
      procedures have been designed to provide reasonable assurance that information
      required to be disclosed by the Company and its Subsidiaries is accumulated
      and
      communicated to the Company’s management, including the Company’s principal
      executive officer and principal financial officer by others within those
      entities, and such disclosure controls and procedures are
      effective.

     

    3.17 Capitalization.
      The
      authorized capital stock of the Company currently consists of 250,000,000 shares
      of Common Stock and 50,000,000 shares of Preferred Stock, $.001 par value (the
      “Preferred
      Stock”).
      All
      outstanding shares of capital stock of the Company have been duly authorized,
      validly issued, and are fully paid and nonassessable.

     

    (a) Except
      as
      set forth in Section
      3.17(a)
      of the
      Disclosure Schedule, there are no outstanding shares of Common Stock, Preferred
      Stock, options, rights, warrants, debentures, instruments, convertible
      securities or other agreements or commitments obligating the Company to issue
      any additional shares of its capital stock of any class. 

     

    
      
        
        

      

      
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    (b) Except
      as
      set forth in Section
      3.17(b)
      of the
      Disclosure Schedule, there are no (i) outstanding debt securities, notes, credit
      agreements, credit facilities or other agreements, documents or instruments
      evidencing indebtedness of the Company or by which the Company is or may become
      bound; (ii) financing statements securing obligations in any material amounts,
      either singly or in the aggregate, filed in connection with the Company; (iii)
      agreements or arrangements under which the Company is obligated to register
      the
      sale of any of its securities under the Securities Act; (iv) there are no
      outstanding securities or instruments of the Company which contain any
      redemption or similar provisions, and there are no contracts, commitments,
      understandings or arrangements by which the Company is or may become bound
      to
      redeem a security of the Company

     

    (c) Except
      as
      set forth on Section
      3.17(c)
      of the
      Disclosure Schedule, and except for customary adjustments as a result of stock
      dividends, stock splits, combinations of shares, reorganizations,
      recapitalizations, reclassifications or other similar events, there are no
      anti-dilution or price adjustment provisions contained in any security issued
      by
      the Company (or in any agreement providing rights to security holders) and
      the
      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
      Investors) and will not result in a right of any holder of securities to adjust
      the exercise, conversion, exchange or reset price under such securities. To
      the
      knowledge of the Company, except as disclosed in the SEC Documents and any
      Schedules filed with the SEC pursuant to Rule 13d-1 of the Exchange Act by
      reporting persons or in Section
      3.13
      of the
      Disclosure Schedule, no Person or group of related Persons beneficially owns
      (as
      determined pursuant to Rule 13d-3 under the Exchange Act), or has the right
      to
      acquire, by agreement with or by obligation binding upon the Company, beneficial
      ownership of in excess of 5% of the outstanding Common Stock.

     

    3.18 Issuance
      of Notes.
      The
      Notes and the Warrants are duly authorized and, upon issuance in accordance
      with
      the terms hereof, shall be validly issued and free from all preemptive or
      similar rights, taxes, liens and charges with respect to the issue thereof.
      As
      of the Closing, the Company shall have duly authorized and reserved for issuance
      a number of shares of Common Stock which equals the number of Note Shares and
      Warrant Shares. The Company shall, so long as any of the Notes and Warrants
      are
      outstanding, take all action necessary to reserve and keep available out of
      its
      authorized and unissued capital stock, solely for the purpose of effecting
      the
      conversion of the Notes and the exercise of the Warrants, 100% of the number
      of
      shares of Common Stock issuable upon the conversion of the Notes and the
      exercise of the Warrants. When issued upon conversion of the Notes and/or
      exercise of the Warrants, the Note Shares and the Warrant Shares, as applicable,
      will be validly issued, fully paid and nonassessable and free from all
      preemptive or similar rights, taxes, liens and charges with respect to the
      issue
      thereof, with the holders being entitled to all rights accorded to a holder
      of
      Common Stock. The issuance by the Company of the Securities is exempt from
      registration under the Securities Act.

     

    3.19 Related
      Party Transactions.
      No
      affiliate, officer, director, or any Related Party is a party to any agreement
      with the Company. No employee of the Company or any Related Party is indebted
      in
      any amount to the Company and, except for accrued payroll obligations, the
      Company is not indebted to any of its employees or any Related Party. For
      purposes of this Agreement, “Related
      Party”
shall
      mean with respect to any specified Person (i) each Person who, together with
      its
      affiliates, owns of record or beneficially at least five percent (5%) of the
      outstanding capital stock of the specified Person as of the date of this
      Agreement; (ii) each individual who is, or who has at any time been, an officer
      or director of the specified Person; (iii) each affiliate of the Persons
      referred to in clauses (i) and (ii) above; (iv) any trust or other entity (other
      than the specified Person) in which any one of the Persons referred to in
      clauses (i), (ii) and (iii) above holds (or in which more than one of such
      Persons collectively hold), beneficially or otherwise, a voting, proprietary
      or
      equity interest; and (v) any trust or other entity (other than the specified
      Person) with which any of such Persons is affiliated.

     

    
      
        
        

      

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

     

    3.21 Patents
      and Trademarks.
      To the
      Company’s knowledge, the Company and its Subsidiaries own, or possess adequate
      rights or licenses to use, all trademarks, trade names, service marks, service
      mark registrations, service names, patents, patent applications, patent rights,
      copyrights, inventions, licenses, approvals, governmental authorizations, trade
      secrets and other intellectual property rights (“Intellectual
      Property Rights”)
      necessary to conduct their respective businesses
      as now
      conducted. Except as disclosed in the SEC Documents, there is no claim, action
      or proceeding being made or brought, or to the knowledge of the Company, being
      threatened, against the Company or its Subsidiaries regarding its Intellectual
      Property Rights.

     

    3.22 Insurance.
      The
      Company and the Subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are prudent
      and customary in the businesses and location in which the Company and the
      Subsidiaries are engaged.
      Neither
      the Company nor any of its subsidiaries has sustained since the date of the
      latest unaudited financial statements included in the SEC Documents any loss
      or
      interference with its business from fire, explosion, flood or other calamity,
      whether or not covered by insurance, or from any labor dispute or court or
      governmental action, order or decree, otherwise than as set forth or
      contemplated in the SEC Documents Prospectus that would individually or in
      the
      aggregate result in a Material Adverse Effect.

     

    3.23 Regulatory
      Permits.
      To the
      Company’s knowledge, the Company and the Subsidiaries possess all certificates,
      authorizations and permits issued by the appropriate federal, state, local
      or
      foreign regulatory authorities necessary to conduct their respective businesses
      as described in the SEC Documents (“Material
      Permits”),
      except
      where the failure to possess such permits does not, individually or in the
      aggregate, have or reasonably be expected to result in a Material Adverse
      Effect, and neither the Company nor any Subsidiary has received any written
      notice of proceedings relating to the revocation or modification of any Material
      Permit.

     

    3.24 Employee
      Relations.
      Neither
      the Company nor any of its Subsidiaries is a party to any collective bargaining
      agreement or, to the Company’s knowledge, employs any member of a union. No
      current executive officer of the Company or any of its Subsidiaries has notified
      in writing the Company or any such Subsidiary that such officer intends to
      leave
      the Company or any such Subsidiary or otherwise terminate such officer's
      employment with the Company or any such Subsidiary. To the knowledge of the
      Company or any such Subsidiary, no executive officer of the Company or any
      of
      its Subsidiaries is in violation of any material term of any employment
      contract, confidentiality, disclosure or proprietary information agreement,
      non-competition agreement, or any other contract or agreement or any restrictive
      covenant, and the continued employment of each such executive officer does
      not
      subject the Company or any such Subsidiary to any liability with respect to
      any
      of the foregoing matters.

     

    
      
        
        

      

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

     

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

     

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

     

    3.28 Application
      of Takeover Protections.
      Except
      as described in Section 3.28
      of the
      Disclosure Schedule, there is no control share acquisition, business
      combination, poison pill (including any distribution under a rights agreement)
      or other similar anti-takeover provision under the Company’s Charter Documents
      or the laws of its state of incorporation that is or could become applicable
      to
      any of the Investors as a result of the Investors 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 Investors’ ownership of the Securities.

     

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

     

    
      
        
        

      

      
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    3.30 General
      Solicitation.
      Neither
      the Company, nor any of its affiliates, nor any Person acting on its or their
      behalf, has engaged in any form of general solicitation or general advertising
      (within the meaning of Regulation D promulgated under the Securities Act) in
      connection with the offer or sale of the Notes or Warrants. As provided in
      Section 8.2
      hereof,
      the Company shall be responsible for the payment of any placement agent’s fees,
      financial advisory fees, or brokers’ commission (other than for persons engaged
      by any Investor or its investment advisor) relating to or arising out of the
      issuance of the Securities pursuant to this Agreement.

     

    3.31 No
      Integration.
      Neither
      the Company nor any of its affiliates nor, any Person acting on the Company’s
      behalf has, directly or indirectly, at any time within the past six months,
      made
      any offer or sale of any security or solicitation of any offer to buy any
      security under circumstances that would (i) eliminate the availability of
      the exemption from registration under Regulation D under the Securities Act
      in connection with the offer and sale by the Company of the Securities as
      contemplated hereby or (ii) cause the offering of the Securities pursuant
      to the Transaction Documents to be integrated with prior offerings by the
      Company for purposes of any applicable stockholder approval provisions. The
      Company is not required to be registered as, and is not an affiliate of, an
      “investment company” within the meaning of the Investment Company Act of 1940,
      as amended. The Company is not required to be registered as a United States
      real
      property holding corporation within the meaning of the Foreign Investment in
      Real Property Tax Act of 1980.

     

    3.32 Private
      Placement.
      Assuming the accuracy of the representations and warranties of the Investors
      contained in Section SECTION
      4
      of this
      Agreement and the compliance by the Investors with the provisions set forth
      herein, it is not necessary, in connection with the issuance and sale of any
      Securities, in the manner contemplated by the Transaction Documents, to register
      any Securities under the Securities Act.

     

    3.33 Registration
      Rights.
      Except
      as described in Section 3.33
      of the
      Disclosure Schedule, the Company has not granted or agreed to grant to any
      Person any rights (including “piggy-back” registration rights) to have any
      securities of the Company registered with the SEC or any other governmental
      authority that have not been satisfied or waived.

     

    3.34 Disclosure;
      Accuracy of Information Furnished.
      The
      Company confirms that neither it nor any officers, directors or affiliates,
      has
      provided any of the Investors or their agents or counsel with any information
      that constitutes or might constitute material, nonpublic information (other
      than
      the existence and terms of the issuance of Securities, as contemplated by this
      Agreement). The Company understands and confirms that each of the Investors
      may
      rely on the foregoing representations in effecting transactions in securities
      of
      the Company. None of the Transaction Documents and none of the other
      certificates, statements or information furnished to the Investor by or on
      behalf of the Company in connection with the Transaction Documents or the
      transactions contemplated thereby contains or will contain any untrue statement
      of a material fact or omits or will omit to state a material fact necessary
      to
      make the statements therein, in light of the circumstances under which they
      were
      made, not misleading. The Company acknowledges and agrees that no Investor
      makes
      or has made any representations or warranties with respect to the transactions
      contemplated hereby other than those set forth in the Transaction Documents.
      

     

    
      
        
        

      

      
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    3.35 Undisclosed
      Liabilities.
      The
      Company has not undertaken or incurred any liability or obligation, direct
      or
      contingent, except for liabilities or obligations disclosed in the SEC
      Documents.

     

    SECTION
      4

     

    Representations
      and Warranties of the Investor

     

    Each
      Investor represents and warrants with respect to only itself
      that:

     

    4.1 Authority
      and Binding Obligation.
      The
      execution, delivery and performance by the Investor of the Transaction Documents
      and the consummation of the transactions contemplated thereby (a) are
      within the power of the Investor and (b) have been duly authorized by all
      necessary actions on the part of the Investor. Each Transaction Document has
      been, or will be, duly executed and delivered by the Investor and constitutes,
      or will constitute, a legal, valid and binding obligation of the Investor,
      enforceable against the Investor in accordance with its terms, except as limited
      by bankruptcy, insolvency or other laws of general application relating to
      or
      affecting the enforcement of creditors’ rights generally and general principles
      of equity.

     

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

     

    4.3 Securities
      Law Compliance.
      Such
      Investor understands that the Securities are being offered and sold to it in
      reliance on specific exemptions from the registration requirements of United
      States federal and state securities laws and that the Company is relying in
      part
      upon the truth and accuracy of, and such Investor’s compliance with, the
      representations, warranties, agreements, acknowledgments and understandings
      of
      such Investor set forth herein in order to determine the availability of such
      exemptions and the eligibility of such Investor to acquire the Securities.
      The
      Investor has not been formed solely for the purpose of making this investment
      and is purchasing the Securities for its own account for investment, not as
      a
      nominee or agent, and not with a view to, or for resale in connection with,
      the
      distribution thereof. The Investor has such knowledge and experience in
      financial and business matters that the Investor is capable of evaluating the
      merits and risks of such investment, is able to incur a complete loss of such
      investment and is able to bear the economic risk of such investment for an
      indefinite period of time. The Investor is an accredited investor as such term
      is defined in Rule 501 of Regulation D under the Securities
      Act.

     

    
      
        
        

      

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

     

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

     

    4.6 Transfer
      or Resale.
      Such
      Investor understands that except as provided in Section 5.1 (Registration
      Rights) hereof: (i) the Securities have not been and are not being registered
      under the Securities Act or any state securities laws, and may not be offered
      for sale, sold, assigned or transferred unless (A) subsequently registered
      thereunder, (B) such Investor shall have delivered to the Company an opinion
      of
      counsel, in a form reasonably acceptable to the Company, to the effect that
      such
      Securities to be sold, assigned or transferred may be sold, assigned or
      transferred pursuant to an exemption from such registration, or (C) such
      Investor provides the Company with reasonable assurance that such Securities
      can
      be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated
      under the Securities Act (collectively, “Rule
      144”);
      (ii)
      any sale of the Securities made in reliance on Rule 144 may be made only in
      accordance with the terms of Rule 144 and further, if Rule 144 is not
      applicable, any resale of the Securities under circumstances in which the seller
      (or the Person through whom the sale is made) may be deemed to be an underwriter
      (as that term is defined in the Securities Act) may require compliance with
      some
      other exemption under the Securities Act or the rules and regulations of the
      SEC
      thereunder; and (iii) neither the Company nor any other Person is under any
      obligation to register the Securities under the Securities Act or any state
      securities laws or to comply with the terms and conditions of any exemption
      thereunder. Notwithstanding the foregoing, the Securities may be pledged in
      connection with a bona fide margin account or other loan secured by the
      Securities and such pledge of Securities shall not be deemed to be a transfer,
      sale or assignment of the Securities hereunder, and no Investor effecting a
      pledge of Securities shall be required to provide the Company with any notice
      thereof or otherwise make any delivery to the Company pursuant to this Agreement
      or any other Transaction Document, including, without limitation, this Section
      4.6;
      provided,
      that in
      order to make any sale, transfer or assignment of Securities, such Investor
      and
      its pledgee makes such disposition in accordance with or pursuant to a
      registration statement or an exemption under the Securities Act.

     

    
      
        
        

      

      
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    4.7 Legends.
      Such
      Investor understands that the certificates or other instruments representing
      the
      Notes and the Warrants and the stock certificates representing the Note Shares
      and the Warrant Shares, except as set forth below, shall bear any legend as
      required by the “blue sky” laws of any state and a restrictive legend in
      substantially the following form (and a stop-transfer order may be placed
      against transfer of such stock certificates):

     

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

     

    4.8 Residency.
      Such
      Investor is a resident of that jurisdiction specified below its address on
      the
      Schedule of Investors.

     

    4.9 Broker-Dealer
      Status.
      Such
      Investor is a not a registered broker-dealer or, if such Investor is an
      affiliate of a broker-dealer, such Investor is acquiring the Securities
      hereunder in the ordinary course of its business and such Investor does not
      presently have any agreement or understanding, directly or indirectly, with
      any
      Person to distribute any of the Securities.

     

    4.10 Foreign
      Investors.
      If the
      Investor is not a United States person (as defined by Section 7701(a)(30)
      of the Internal Revenue Code of 1986, as amended (the “Code”)),
      the
      Investor hereby represents that it has satisfied itself as to the full
      observance of the laws of its jurisdiction in connection with any invitation
      to
      subscribe for the Securities or any use of this Agreement, including
      (a) the legal requirements within its jurisdiction for the purchase of the
      Securities, (b) any foreign exchange restrictions applicable to such
      purchase, (c) any governmental or other consents that may need to be
      obtained, and (d) the income tax and other tax consequences, if any, that
      may be relevant to the purchase, holding, redemption, sale, or transfer of
      the
      Securities. The Investor’s subscription and payment for and continued beneficial
      ownership of the Securities will not violate any applicable securities or other
      laws of the Investor’s jurisdiction.

     

    
      
        
        

      

      
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    SECTION
      5

     

    Certain
      Agreements

     

    5.1 Piggyback
      Registration Rights.

     

    (a) Registration
      Requirements.
      If, at
      any time, the Company files a registration statement after the execution of
      this
      Agreement if, the Company proposes to register any of its securities under
      the
      Securities Act (other than pursuant to Form S-4, Form S-8 or any successor
      form
      of limited purpose), the Company will give notice at least 20 days prior to
      the
      filing of each such registration statement to the Investor or the holder of
      the
      Note Shares or Warrant Shares as applicable (collectively the “Conversion
      Shares”)
      of its
      intention to effect such a registration and will include in such registration
      all Conversion Shares with respect to which the Company has received requests
      for inclusion therein within 10 days after receipt of the Company's notice.
      In
      connection with any offering involving an underwriting of shares of the
      Company’s capital stock, the Company shall not be required to include any of the
Investor’s
      securities in such underwriting unless they accept the terms of the underwriting
      as agreed upon between the Company and its underwriters, and then only in such
      quantity as the underwriters determine in their sole discretion will not
      jeopardize the success of the offering by the Company. If the total number
      of
      securities, including the Conversion Shares, requested by stockholders to be
      included in such offering exceeds the amount of securities to be sold other
      than
      by the Company that the underwriters determine in their reasonable discretion
      is
      compatible with the success of the offering, then the Company shall be required
      to include in the offering only that number of such securities, including the
      Conversion Shares, which the underwriters and the Company determine in their
      sole discretion will not jeopardize the success of the offering. 

     

    (b) The
      Company shall use its best efforts to:

     

    (i) furnish
      to the Investor with respect to the Conversion Shares registered under the
      registration statement such number of copies of the registration statement
      and
      the prospectus (including supplemental prospectuses) filed with the SEC in
      conformance with the requirements of the Securities Act and other such documents
      as the Investor may reasonably request, in order to facilitate the public sale
      or other disposition of all or any of the Conversion Shares by the Investor;
      

     

    (ii) make
      any
      necessary blue sky filings to permit the Conversion Shares to be sold in any
      state requested by the Investor;

     

    (iii) pay
      the
      expenses incurred by the Company and the Investor in complying with this Section
      5.1, including, all registration and filing fees, FINRA fees, exchange listing
      fees, printing expenses, fees and disbursements of counsel for the Company,
      blue
      sky fees and expenses and the expense of any special audits incident to or
      required by any such registration (and including attorneys’ fees of one counsel
      to the Investor, but excluding any and all underwriting discounts and selling
      commissions applicable to the sale of Conversion Shares by the
      Investor);

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (iv) advise
      the Investor, promptly after it shall receive notice or obtain knowledge of
      the
      issuance of any stop order by the SEC delaying or suspending the effectiveness
      of the registration statement or of the initiation of any proceeding for that
      purpose; and it will promptly use its commercially reasonable best efforts
      to
      prevent the issuance of any stop order or to obtain its withdrawal at the
      earliest possible moment if such stop order should be issued; and

     

    (v) with
      a
      view to making available to the Investor the benefits of Rule 144 and any other
      rule or regulation of the SEC that may at any time permit the Investor to sell
      Conversion Shares to the public without registration, the Company covenants
      and
      agrees to use its commercially reasonable best efforts to: (i) make and keep
      public information available, as those terms are understood and defined in
      Rule
      144, until the earlier of (A) such date as all of the Conversion Shares qualify
      to be resold pursuant to Rule 144 within any 90 day period without restriction
      or any other rule of similar effect or (B) such date as all of the Conversion
      Shares shall have been resold; (ii) file with the SEC in a timely manner all
      reports and other documents required of the Company under the Securities Act
      and
      under the Exchange Act; and (iii) furnish to the Investor upon request, as
      long
      as the Investor owns any Conversion Shares, (A) a written statement by the
      Company as to whether it has complied with the reporting requirements of the
      Securities Act and the Exchange Act, (B) a copy of the Company’s most recent
      Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other
      information as may be reasonably requested in order to avail the Investor of
      any
      rule or regulation of the SEC that permits the selling of any such Conversion
      Shares without registration.

     

    The
      Company understands that the Investor disclaims being an underwriter, but
      acknowledges that a determination by the SEC that the Investor is deemed an
      underwriter shall not relieve the Company of any obligations it has
      hereunder.

     

    (c) For
      the
      purpose of this Section 5.1:

     

    (i) the
      term
“Selling
      Shareholder”
shall
      mean the Investor, its executive officers and directors and each person, if
      any,
      who controls the Investor within the meaning of Section 15 of the Securities
      Act
      or Section 20 of the Exchange Act; 

     

    (ii) the
      term
“Registration
      Statement”
shall
      include any final prospectus, exhibit, supplement or amendment included in
      or
      relating to, and any document incorporated by reference in, the Registration
      Statement (or deemed to be a part thereof) referred to in this section; and
      

     

    (iii) the
      term
“untrue
      statement”
shall
      mean any untrue statement or alleged untrue statement of a material fact, or
      any
      omission or alleged omission to state in the Registration Statement a material
      fact required to be stated therein or necessary to make the statements therein,
      in the light of the circumstances under which they were made, not
      misleading.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (d) The
      Company agrees to indemnify and hold harmless each Selling Shareholder from
      and
      against any losses, claims, damages or liabilities to which such Selling
      Shareholder may become subject (under the Securities Act or otherwise) insofar
      as such losses, claims, damages or liabilities (or actions or proceedings in
      respect thereof) arise out of, or are based upon (i) any untrue statement of
      a
      material fact contained in the Registration Statement, (ii) any inaccuracy
      in
      the representations and warranties of the Company contained in this Agreement
      or
      the failure of the Company to perform its obligations hereunder or (iii) any
      failure by the Company to fulfill any undertaking included in the Registration
      Statement, and the Company will reimburse such Selling Shareholder for any
      reasonable legal expense or other actual accountable out-of-pocket expenses
      reasonably incurred in investigating, defending or preparing to defend any
      such
      action, proceeding or claim; provided, however, that the Company shall not
      be
      liable in any such case to the extent that such loss, claim, damage or liability
      arises out of, or is based upon, an untrue statement made in such Registration
      Statement in reliance upon and in conformity with written information furnished
      to the Company by or on behalf of such Selling Shareholder specifically for
      use
      in preparation of the Registration Statement or the failure of such Selling
      Shareholder to comply with its covenants and agreements contained herein or
      any
      statement or omission in any prospectus that is corrected in any subsequent
      prospectus that was delivered to the Selling Shareholder prior to the pertinent
      sale or sales by the Selling Shareholder.

     

    (e) The
      Investor severally (as to itself), and not jointly, agrees to indemnify and
      hold
      harmless the Company (and each person, if any, who controls the Company within
      the meaning of Section 15 of the Securities Act, each officer of the Company
      who
      signs the Registration Statement and each director of the Company) from and
      against any losses, claims, damages or liabilities to which the Company (or
      any
      such officer, director or controlling person) may become subject (under the
      Securities Act or otherwise), insofar as such losses, claims, damages or
      liabilities (or actions or proceedings in respect thereof) arise out of, or
      are
      based upon, (i) any failure by that Investor to comply with the covenants and
      agreements contained herein or (ii) any untrue statement of a material fact
      contained in the Registration Statement if, and only if, such untrue statement
      was made in reliance upon and in conformity with written information furnished
      by or on behalf of the Investor specifically for use (and identified as such)
      in
      preparation of the Registration Statement, and the Investor will reimburse
      the
      Company (or such officer, director or controlling person, as the case may be),
      for any reasonable legal expense or other reasonable actual accountable
      out-of-pocket expenses reasonably incurred in investigating, defending or
      preparing to defend any such action, proceeding or claim. The obligation to
      indemnify shall be limited to the net amount of the proceeds received by the
      Investor from the sale of the Common Shares pursuant to the Registration
      Statement.

     

    (f) Promptly
      after receipt by any indemnified person of a notice of a claim or the beginning
      of any action in respect of which indemnity is to be sought against an
      indemnifying person pursuant to this Section 5.1, such indemnified person shall
      notify the indemnifying person in writing of such claim or of the commencement
      of such action, but the omission to so notify the indemnifying party will not
      relieve it from any liability which it may have to any indemnified party under
      this Section 5.1 (except to the extent that such omission materially and
      adversely affects the indemnifying party’s ability to defend such action) or
      from any liability otherwise than under this Section 5.1(c). Subject to the
      provisions hereinafter stated, in case any such action shall be brought against
      an indemnified person, the indemnifying person shall be entitled to participate
      therein, and, to the extent that it shall elect by written notice delivered
      to
      the indemnified party promptly after receiving the aforesaid notice from such
      indemnified party, shall be entitled to assume the defense thereof, with counsel
      reasonably satisfactory to such indemnified person. After notice from the
      indemnifying person to such indemnified person of its election to assume the
      defense thereof (unless it has failed to assume the defense thereof and appoint
      counsel reasonably satisfactory to the indemnified party), such indemnifying
      person shall not be liable to such indemnified person for any legal expenses
      subsequently incurred by such indemnified person in connection with the defense
      thereof; provided, however, that if there exists or shall exist a conflict
      of
      interest that would make it inappropriate, in the reasonable opinion of counsel
      to the indemnified person, for the same counsel to represent both the
      indemnified person and such indemnifying person or any affiliate or associate
      thereof, the indemnified person shall be entitled to retain its own counsel
      (who
      shall not be the same as the opining counsel) at the expense of such
      indemnifying person; provided, however, that no indemnifying person shall be
      responsible for the fees and expenses of more than one separate counsel
      (together with appropriate local counsel) for all indemnified parties. In no
      event shall any indemnifying person be liable in respect of any amounts paid
      in
      settlement of any action unless the indemnifying person shall have approved
      the
      terms of such settlement; provided that such consent shall not be unreasonably
      withheld. No indemnifying person shall, without the prior written consent of
      the
      indemnified person, effect any settlement of any pending or threatened
      proceeding in respect of which any indemnified person is or could reasonably
      have been a party and indemnification could have been sought hereunder by such
      indemnified person, unless such settlement includes an unconditional release
      of
      such indemnified person from all liability on claims that are the subject matter
      of such proceeding.

     

    
      
        
        

      

      
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    (g) If
      the
      indemnification provided for in this Section 5.1 is unavailable to or
      insufficient to hold harmless an indemnified party under subsection (d) or
      (e)
      above in respect of any losses, claims, damages or liabilities (or actions
      or
      proceedings in respect thereof) referred to therein, then each indemnifying
      party shall contribute to the amount paid or payable by such indemnified party
      as a result of such losses, claims, damages or liabilities (or actions in
      respect thereof) in such proportion as is appropriate to reflect the relative
      fault of the Company on the one hand and the Investor on the other in connection
      with the statements or omissions or other matters which resulted in such losses,
      claims, damages or liabilities (or actions in respect thereof), as well as
      any
      other relevant equitable considerations. The relative fault shall be determined
      by reference to, among other things, in the case of an untrue statement, whether
      the untrue statement relates to information supplied by the Company on the
      one
      hand or the Investor on the other and the parties’ relative intent, knowledge,
      access to information and opportunity to correct or prevent such untrue
      statement. The Company and the Investor agrees that it would not be just and
      equitable if contribution pursuant to this subsection (g) were determined by
      pro
      rata allocation or by any other method of allocation which does not take into
      account the equitable considerations referred to above in this subsection (g).
      The amount paid or payable by an indemnified party as a result of the losses,
      claims, damages or liabilities (or actions in respect thereof) referred to
      above
      in this subsection (g) shall be deemed to include any legal or other expenses
      reasonably incurred by such indemnified party in connection with investigating
      or defending any such action or claim. Notwithstanding the provisions of this
      subsection (g), Investor shall not be required to contribute any amount in
      excess of the amount by which the net amount received by the Investor from
      the
      sale of the Conversion Shares to which such loss relates exceeds the amount
      of
      any damages which the Investor has otherwise been required to pay to the Company
      by reason of such untrue statement. No person guilty of fraudulent
      misrepresentation (within the meaning of Section 11(f) of the Securities Act)
      shall be entitled to contribution from any person who was not guilty of such
      fraudulent misrepresentation. 

     

    
      
        
        

      

      
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    (h) The
      Company, and the Investor by its acceptance of this Agreement, hereby
      acknowledge that they are sophisticated business persons who were represented
      by
      counsel during the negotiations regarding the provisions hereof including,
      without limitation, the provisions of this Section 5.1, and are fully informed
      regarding said provisions. They further acknowledge that the provisions of
      this
      Section 5.1 fairly allocate the risks in light of the ability of the parties
      to
      investigate the Company and its business in order to assure that adequate
      disclosure is made in the Registration Statement as required by the Securities
      Act and the Exchange Act.

     

    (i) The
      Company may request the Investor to furnish the Company with such information
      with respect to the Investor and the Investor’s proposed distribution of
      securities being purchased hereunder pursuant to the Company Registration
      Statement, as applicable, as the Company may from time to time reasonably
      request in writing or as shall be required by law or by the SEC in connection
      therewith, and the Investor agrees to furnish the Company with such information
      as a condition to the inclusion of any of the Investor’s Securities in such
      Company Registration Statement.

     

    (j) The
      obligations of the Company and of the Investor under this Section 5.1 shall
      survive completion of any offering of Conversion Shares in such Registration
      Statement for a period of two years from the effective date of the Registration
      Statement. No indemnifying party, in the defense of any such claim or
      litigation, shall, except with the consent of each indemnified party, consent
      to
      entry of any judgment or enter into any settlement which does not include as
      an
      unconditional term thereof the giving by the claimant or plaintiff to such
      indemnified party of a release from all liability in respect to such claim
      or
      litigation.

     

    5.2 Special
      Right of Participation in Future Securities Offerings by I2BF Venture
      Capital.

     

    (a) Defined
      Terms.
      When
      used herein, the following terms shall have the respective meanings
      indicated:

     

    (i) “Excluded
      Security”
means
      (i) securities purchased under this Agreement; (ii) securities issued upon
      exercise of the Warrants; (iii) securities issued upon the conversion of the
      Notes, (iv) shares of Common Stock issuable or issued to (x) employees,
      consultants or directors from time to time either directly or upon the exercise
      of options, in such case granted or to be granted by the Company’s Board of
      Directors, pursuant to one or more stock option plans or restricted stock plans
      or stock purchase plans in effect as of the Closing or subsequently approved
      by
      the Board of Directors, (y) vendors pursuant to warrants to purchase Common
      Stock that are outstanding on the date hereof or issued hereafter, provided
      such
      issuances are approved by the Board of Directors, or (z) banks,
      equipment lessors or other financial institutions, or to real property lessors,
      pursuant to a bona fide debt financing, project financing, equipment leasing
      or
      real property leasing transaction approved by the Board of Directors of the
      Company;
      (v)
      shares of Common Stock issued in connection with any stock split, stock dividend
      or recapitalization of the Company; (vi) shares of Common Stock issued in
      connection with the acquisition by the Company of any corporation or other
      entity or substantially all of the assets of any corporation or other entity
      or
      division thereof occurring after the Closing Date; (vii) shares of Common Stock
      issued upon the exercise or conversion of any securities of the Company
      outstanding on the Closing Date; (viii) shares of Common Stock issued in
      connection with a joint venture, strategic alliance or other commercial
      relationship relating to the operation of the Company’s business the primary
      purpose of which is not to raise equity capital; and (ix) securities issued
      pursuant to a bona fide firm commitment underwritten public
      offering.

     

    
      
        
        

      

      
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    (ii) “Pro
      Rata Share”
means,
      with respect to affiliates of I2BF Venture Capital (collectively “I2BF”)
      at any
      time, the percentage determined by dividing the aggregate number of I2BF’s Note
      Shares and Warrant Shares issuable under the Notes and Warrants at such time,
      determined on a fully diluted basis after giving effect to the exercise in
      full
      of such Warrants (without regard to any restrictions on such exercise that
      may
      be set forth in the Warrants) and the conversion in full of the Notes (without
      regard to any restrictions on such conversion that may be set forth in the
      Notes), by the number of shares of Company Common Stock outstanding plus the
      number of Note Shares and Warrant Shares issuable under the Notes and Warrants
      at such time.

     

    (iii) “Subsequent
      Placement”
means
      the issuance, sale, exchange, or agreement or obligation to issue, sell or
      exchange or reserve, or agreement to or set aside for issuance, sale or exchange
      any shares of Common Stock (or securities or rights convertible, exercisable
      or
      exchangeable, directly or indirectly, for Common Stock) that are offered or
      sold
      by the Company for a per share price that is less than the Stated Conversion
      Price (proportionately adjusted for stock splits, stock dividends and similar
      event); provided,
      however,
      that
      the issuance or sale, or agreement to issue or sell, an Excluded Security shall
      not constitute a Subsequent Placement.

     

    (b) Offered
      Securities.
      From
      the Closing Date through the earlier to occur of: (i) when I2BF’s Warrants are
      no longer outstanding and have either been exercised or have expired, or (ii)
      the third anniversary of the date of this Agreement, the Company will not,
      directly or indirectly, effect a Subsequent Placement, unless in each such
      case
      the Company shall have first offered to sell to I2BF its Pro Rata Share of
      the
      securities being offered in such Subsequent Placement (the securities being
      offered to I2BF being referred to herein as the “Offered
      Securities”).
      The
      Company shall offer to sell to I2BF its Pro Rata Share of the Offered
      Securities, at a price and on such other terms as in the Subsequent Placement
      generally and as shall have been specified by the Company in writing delivered
      to I2BF (the “Offer”),
      which
      Offer by its terms shall remain open and irrevocable for a period of not less
      than fifteen (15) Days from I2BF’s receipt of the terms of the Offer in writing
      (the “Offer
      Period”).
      I2BF
      agrees that it will keep the terms of any such Subsequent Placement confidential
      until such information is publicly available. Additionally, I2BF agrees that
      it
      will not purchase or sell any of the Company’s securities while in possession of
      information regarding any Subsequent Placement until such information is
      publicly available. 

     

    (c)  Notice
      of Acceptance.
      If I2BF
      wishes to accept the Offer, I2BF shall deliver written notice thereof (a
“Notice
      of Acceptance”)
      to the
      Company prior to the expiration of the Offer Period, specifying the amount
      of
      the Offered Securities that it elects to purchase.

     

    (d)   Permitted
      Sales of Refused Securities.
      In the
      event that a Notice of Acceptance is not timely delivered by I2BF in respect
      of
      all the Offered Securities, the Company shall have forty-five (45) days from
      the
      expiration of the Offer Period to close the sale of all or any part of such
      Offered Securities as to which a Notice of Acceptance has not been given by
      I2BF
      (the “Refused
      Securities”)
      to the
      person or persons specified in the Offer, but only upon terms and conditions,
      including, without limitation, unit price and interest rates (if applicable),
      which are, in the aggregate, no more favorable to such other person or persons
      or less favorable to the Company than those set forth in the Offer.

     

    
      
        
        

      

      
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    (e)  Reduction
      in Amount of Offered Securities.
      In the
      event that the Company proposes to sell less than all the Refused Securities
      (any such sale to be in the manner and on the terms specified in Section
      5.2(d) above),
      then I2BF may, at its option and in its sole and absolute discretion, reduce
      the
      number or other units of the Offered Securities specified in its Notice of
      Acceptance to an amount which shall be not less than the amount of the Offered
      Securities which I2BF elected to purchase pursuant to Section
      5.2(c)
      above
      multiplied by a fraction, (A) the numerator of which shall be the amount of
      Offered Securities which the Company actually proposes to sell, and (B) the
      denominator of which shall be the amount of all Offered Securities. In the
      event
      that I2BF so elects to reduce the number or amount of Offered Securities
      specified in its Notice of Acceptance, the Company may not sell or otherwise
      dispose of more than the reduced amount of the Offered Securities until such
      securities have been reoffered to I2BF in accordance herewith.

     

    (f)  Closing.
      Upon
      each closing of the purchase and sale of Offered Securities, I2BF shall purchase
      from the Company, and the Company shall sell to I2BF the number of Offered
      Securities specified in its Notice of Acceptance, as reduced pursuant to
Section
      5.2(e)
      above if
      I2BF has so elected, upon the terms and conditions specified in the Offer.
      The
      purchase by I2BF of any Offered Securities is subject in all cases to the
      preparation, execution and delivery by the Company and I2BF of a purchase
      agreement relating to such Offered Securities on the same terms and conditions
      applicable to other persons purchasing the Offered Securities.

     

    (g)  Further
      Sale.
      In each
      case, any Offered Securities not purchased by I2BF or other person or persons
      in
      accordance herewith may not be sold or otherwise disposed of by the Company
      until they are again offered to I2BF under the procedures specified
      herein.

     

    5.3 Certain
      Covenants.
      

     

    (a) Defined
      Terms.
      When
      used herein, the following terms shall have the respective meanings
      indicated:

     

    (i) “Debt”
means,
      as to a particular Person at the specified time of determination, the sum of
      the
      following, but without duplication, in accordance with GAAP:

     

    (1) all
      obligations of such Person for borrowed money, including obligations evidenced
      by bonds, debentures, notes or other similar instruments
      and
      accruals for interest not yet earned, but excluding any and all indebtedness
      incurred in the ordinary course of business owed to or for, trade creditors,
      financial institutions, vendors, employees, consultants, professionals, taxes,
      supplies, raw material
      and for
      other similar purposes;

     

    (2) every
      reimbursement obligation of such Person with respect to letters of credit,
      bankers’ acceptances or similar facilities that is issued to support an
      obligation for borrowed money or that creates an obligation under a
      credit facility pursuant to which obligations for borrowed money are
      created;

     

    (3) every
      obligation of such Person as a guarantor with respect to the items referenced
      in
      (1)-(2); and

     

    
      
        
        

      

      
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    (4) all
      monetary obligations under any leasing or similar arrangement which, in
      connection with GAAP, is classified as a capital lease (provided that, for
      purposes of clarification, the term “Debt” shall not include any bona fide lease
      or the use or occupation of real property, not classified as a capital lease
      in
      connection with GAAP).

     

    (ii) “GAAP”
means
      generally accepted accounting principles as in effect from time to time in
      the
      United States of America, applied on a consistent basis.

     

    (iii) “Issuer
      Party”
means
      the Company or any Subsidiary of the Company and “Issuer
      Parties”
means
      all of them. 

     

    (b) The
      Company may sell additional unsecured convertible promissory notes (the
“Other
      Notes”)
      and
      common stock purchase warrants (the “Other
      Warrants”)
      to
      investors on terms not less favorable to the Company than the Notes and Warrants
      until the Company has raised the Maximum Aggregate Investment, inclusive of
      the
      Initial Investment.

     

    (c) So
      long
      as the Notes are outstanding, no Issuer Party may, without the prior written
      consent of the holders of a majority of the then outstanding aggregate unpaid
      principal amount of the Notes and Other Notes, incur Debt other
      than:
      (i)
the
      Notes
      and the Other Notes; (ii) Debt in existence or committed on the date hereof;
      and;
      (iii) Debt of any Issuer Party to any other Issuer Party; (iv) obligations
      less
      than an aggregate of $10,000,000 that are treated as capitalized lease
      obligations in accordance with GAAP; and (v) borrowings, the proceeds of which
      shall be used to repay the Notes and Other Notes.

     

    SECTION
      6

     

    Conditions
      to the Investor’s Obligation to Close

     

    Each
      Investor’s obligations at the Closing are subject to the fulfillment, on or
      prior to the Closing Date, of all of the following conditions, any of which
      may
      be waived in whole or in part by the Investor: 

     

    6.1 Representations
      and Warranties.
      The
      representations and warranties made by the Company in Section 3 hereof
      shall have been true and correct when made, and shall be true and correct on
      the
      Closing Date. 

     

    6.2 Performance.
      The
      Company shall have performed and complied with all covenants, agreements,
      obligations and conditions contained in this Agreement that are required to
      be
      performed or complied with by the Company on or before such
      Closing.

     

    6.3 Governmental
      Approvals and Filings.
      The
      Company shall have obtained all governmental approvals required in connection
      with the lawful sale and issuance of the Notes and the Warrants.

     

    6.4 Legal
      Requirements.
      At the
      Closing, the sale and issuance by the Company, and the purchase by the Investor,
      of the Notes and the Warrants shall be legally permitted by all laws and
      regulations to which the Investor or the Company are subject.

     

    
      
        
        

      

      
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    6.5 Proceedings
      and Documents.
      All
      corporate and other proceedings in connection with the transactions contemplated
      at the Closing and all documents and instruments incident to such transactions
      shall be reasonably satisfactory in substance and form to the
      Investor.

     

    6.6 Transaction
      Documents.
      The
      Company shall have duly executed and delivered to the Investor each of the
      Transaction Documents.

     

    6.7 Compliance
      Certificate.
      The
      President of the Company shall deliver to the Investors at Closing a certificate
      certifying that the conditions specified in Sections
      6.1
      and
6.2
      have
      been fulfilled.

     

    6.8 Secretary’s
      Certificate.
      The
      Secretary of the Company shall deliver to the Investors at Closing a certificate
      attaching and certifying to the truth and correctness of the resolutions of
      the
      Company’s Board of Directors adopted in connection with the transactions
      contemplated by this Agreement.

     

    6.9 Good
      Standing Certificates.
      The
      Company shall have delivered to Investors (i) a certificate of the Secretary
      of
      State of the State of Nevada, with respect to the good standing of the Company,
      (ii) a certificate of good standing from the applicable governmental entity
      in
      each jurisdiction where the Company is required to be qualified to do business,
      and (iii) with respect to each of the Company’s Subsidiaries, (X) a certificate
      of good standing (or equivalent document) from the Secretary of State (or
      equivalent governmental entity) of the jurisdiction of incorporation or
      organization of such Subsidiary, and (Y) a certificate of good standing from
      the
      applicable governmental entity in each jurisdiction where it is required to
      be
      qualified to do business, all of which are dated within five (5) Business Days
      prior to the Closing.

     

    6.10 Opinion.
      The
      Investor shall have received from Baker & Hostetler LLP, counsel for the
      Company, an opinion, dated as of the Closing Date, in form and substance
      reasonably satisfactory to the Investor.

     

    SECTION
      7

     

    Conditions
      to Company’s Obligation to Close

     

    The
      Company’s obligation to issue and sell the Notes and the Warrant at the Closing
      is subject to the fulfillment, on or prior to the Closing Date, of the following
      conditions, any of which may be waived in whole or in part by the
      Company:

     

    7.1 Representations
      and Warranties.
      The
      representations and warranties made by the Investor in Section 4 shall be true
      and correct when made, and shall be true and correct on the Closing
      Date.

     

    7.2 Performance.
      The
      Investors shall have performed and complied with all covenants, agreements,
      obligations and conditions contained in this Agreement that are required to
      be
      performed or complied with by them on or before such Closing.

     

    7.3 Governmental
      Approvals and Filings.
      The
      Company shall have obtained all governmental approvals required in connection
      with the lawful sale and issuance of the Notes and the Warrant.

     

    
      
        
        

      

      
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    7.4 Legal
      Requirements.
      At the
      Closing, the sale and issuance by the Company, and the purchase by the
      Investors, of the Notes and the Warrant shall be legally permitted by all laws
      and regulations to which the Investor or the Company are subject.

     

    7.5 Purchase
      Price.
      The
      Investors shall have delivered to the Company the Purchase Price.

     

    7.6 Timing
      of Closing.
      The
      Closing shall have occurred not later than August 27, 2008 and shall have
      resulted in gross proceeds to the Company of not less than
      $5,000,000.

     

    SECTION
      8

     

    Miscellaneous

     

    8.1 Fees
      and Expenses.
      Upon
      the Closing, the Company shall pay the reasonable fees and expenses of Wilson
      Sonsini Goodrich & Rosati, P.C., the counsel for I2BF, in an amount not to
      exceed, in the aggregate, $50,000, which fees and expenses shall be documented
      by I2BF prior to payment of such fees and expenses. At the Closing, the Company
      will remit such amount by wire transfer directly to Wilson Sonsini Goodrich
      & Rosati, P.C. on behalf of the Company. Except for the amount payable to
      such firm, the Company shall not be liable for and shall have no obligation
      to
      pay the fees and expenses of counsel to any other Investor.

     

    8.2 Finder’s
      Fees and Commissions.
      Except
      for the placement agent commission payable by the Company to Citation Capital
      Management Limited, an investment advisory company authorized and regulated
      by
      the Financial Services Authority of the United Kingdom,
      as
      set
      forth in Schedule
      8.2,
      each
      party represents that it neither is nor will be obligated for any finder’s fee
      or commission in connection with this transaction. Each Investor agrees to
      indemnify and to hold harmless the Company from any liability for any commission
      or compensation in the nature of a finder’s or broker’s fee arising out of this
      transaction (and the costs and expenses of defending against such liability
      or asserted liability) for which each or any Investor of its officers,
      employees, or representatives is responsible. The Company agrees to indemnify
      and hold harmless each Investor from any liability for any commission or
      compensation in the nature of a finder’s or broker’s fee arising out of
      this transaction (and the costs and expenses of defending against such liability
      or asserted liability) for which the Company or any of its officers, employees
      or representatives is responsible.

     

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

     

    
      
        
        

      

      
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    8.4 Public
      Announcements.
      Except
      as otherwise required by applicable laws, rules or regulations, neither the
      Company, nor the Investor shall make any public announcement with respect to
      this Agreement or the transactions contemplated hereby, without the written
      consent of the Company and I2BF (on behalf of the Investors); provided,
      however,
      that
      the Company shall not be required to obtain such consent if a governmental
      entity specifically requests disclosure.

     

    8.5 Waivers
      and Amendments.
      Any
      provision of this Agreement may be amended, waived or modified only upon the
      written consent of the Company and the Investor.

     

    8.6 Delays
      or Omissions. 
      Except as expressly provided herein, no delay or omission to exercise any right,
      power or remedy accruing to either party to this Agreement upon any breach
      or
      default of the other party under this Agreement shall impair any such right,
      power or remedy of such non-defaulting party, nor shall it be construed to
      be a
      waiver of any such breach or default, or an acquiescence therein, or of or
      in
      any similar breach or default thereafter occurring, nor shall any waiver of
      any
      single breach or default be deemed a waiver of any other breach or default
      theretofore or thereafter occurring. Any waiver, permit, consent or approval
      of
      any kind or character on the part of any party of any breach or default under
      this Agreement, or any waiver on the part of any party of any provisions or
      conditions of this Agreement, must be in writing and shall be effective only
      to
      the extent specifically set forth in such writing. All remedies, either under
      this Agreement or by law or otherwise afforded to any party to this Agreement,
      shall be cumulative and not alternative.

     

    8.7 Attorney’s
      Fees.
      In the
      event that any suit or action is instituted to enforce any provisions in this
      Agreement, the prevailing party in such dispute shall be entitled to recover
      from the losing party all fees, costs and expenses of enforcing any right of
      such prevailing party under or with respect to this Agreement, including without
      limitation, such reasonable fees and expenses of attorneys and accountants,
      which shall include, without limitation, all fees, costs and expenses of
      appeals.

     

    8.8 Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by and construed and enforced in accordance
      with the internal laws of the State of California, 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 (whether brought against a party
      hereto or its respective affiliates, directors, officers, shareholders,
      employees or agents) shall be commenced in the state and federal courts sitting
      in the City of Los Angeles. Each party hereto hereby irrevocably submits to
      the
      exclusive jurisdiction of the state and federal courts sitting in the City
      of
      Los Angeles 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 this Agreement), 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. Each party hereto
      (including its affiliates, agents, officers, directors and employees) hereby
      irrevocably waives, to the fullest extent permitted by applicable law, any
      and
      all right to trial by jury in any legal proceeding arising out of or relating
      to
      this Agreement or the transactions contemplated hereby. If either party shall
      commence an action or proceeding to enforce any provisions of this Agreement,
      then the prevailing party in such action or proceeding shall be reimbursed
      by
      the other party for its attorneys fees and other costs and expenses incurred
      with the investigation, preparation and prosecution of such action or
      proceeding.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    8.9 Survival.
      The
      representations, warranties, covenants and agreements made herein shall survive
      the execution and delivery of this Agreement.

     

    8.10 Successors
      and Assigns.
      This
      Agreement, and any and all rights, duties and obligations hereunder, shall
      not
      be assigned, transferred, delegated or sublicensed by either party without
      the
      prior written consent of the non-assigning party; provided, that the Investor
      may assign its rights hereunder (including the rights in Section SECTION
      5)
      to any
      of its affiliates without the Company’s prior consent. Except as set forth in
      the previous sentence, any attempt by the Investor without such permission
      to
      assign, transfer, delegate or sublicense any rights, duties or obligations
      that
      arise under this Agreement shall be void. Subject to the foregoing and except
      as
      otherwise provided herein, the provisions of this Agreement shall inure to
      the
      benefit of, and be binding upon, the successors, assigns, heirs, executors
      and
      administrators of the parties hereto.

     

    8.11 Registration,
      Transfer and Replacement of the Note.
      The
      Notes shall be registered notes. The Company will keep, at its principal
      executive office, books for the registration and registration of transfer of
      the
      Notes. Prior to presentation of any Note for registration of transfer, the
      Company shall treat the Person in whose name such Note is registered as the
      owner and holder of such Note for all purposes whatsoever, whether or not such
      Note shall be overdue, and the Company shall not be affected by notice to the
      contrary. Subject to any restrictions on or conditions to transfer set forth
      in
      any Note, the holder of any Note, at its option, may in person or by duly
      authorized attorney surrender the same for exchange at the Company’s chief
      executive office, and promptly thereafter and at the Company’s expense, except
      as provided below, receive in exchange therefor one or more new Note(s), each
      in
      the principal amount requested by such holder, dated the date to which interest
      shall have been paid on the Note so surrendered or, if no interest shall have
      yet been so paid, dated the date of the Note so surrendered and registered
      in
      the name of such Person or Persons as shall have been designated in writing
      by
      such holder or its attorney for the same principal amount as the then unpaid
      principal amount of the Note so surrendered. Upon receipt by the Company of
      evidence reasonably satisfactory to it of the ownership of and the loss, theft,
      destruction or mutilation of any Note and (i) in
      the case of loss, theft or destruction, of indemnity reasonably satisfactory
      to
      it; or (ii) in
      the case of mutilation, upon surrender thereof, the Company, at its expense,
      will execute and deliver in lieu thereof a new Note executed in the same manner
      as the Note being replaced, in the same principal amount as the unpaid principal
      amount of such Note and dated the date to which interest shall have been paid
      on
      such Note or, if no interest shall have yet been so paid, dated the date of
      such
      Note.

     

    8.12 Entire
      Agreement.
      This
      Agreement together with the other Transaction Documents constitute and contain
      the entire agreement between the Company and the Investor and supersede any
      and
      all prior agreements, negotiations, correspondence, understandings and
      communications among the parties, whether written or oral, respecting the
      subject matter hereof.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    8.13 Notices.
      All
      notices, requests, demands, consents, instructions or other communications
      required or permitted hereunder shall in writing and faxed, mailed or delivered
      to each party as follows: (a) if to the Investor, at the Investor’s address
      or facsimile number set forth on the signature page hereto, or at such other
      address as the Investor shall have furnished the Company in writing, or
      (b) if to the Company, at 9440 Little Santa Monica Blvd., Suite 401,
      Beverly Hills, California 90210, Attn: Valerie Broadbent, facsimile: (310)
      919-3044, or at such other address or facsimile number as the Company shall
      have
      furnished to the Investor in writing. All such notices and communications will
      be deemed effectively given the earlier of (i) when received,
      (ii) when delivered personally, (iii) one business day after being
      delivered by facsimile (with receipt of appropriate confirmation), (iv) one
      business day after being deposited inside the United States with an overnight
      courier service of recognized standing for delivery within the United States,
      (v) three business day after being deposited within the United States with
      an overnight courier service of recognized standing for delivery outside of
      the
      United States or vice versa or (v) four days after being deposited in the
      U.S. mail, first class with postage prepaid, provided that first class mail
      shall not be used for the delivery of notice outside of the United
      States.

     

    8.14 Severability. 
      If any provision of this Agreement becomes or is declared by a court of
      competent jurisdiction to be illegal, unenforceable or void, portions of such
      provision, or such provision in its entirety, to the extent necessary, shall
      be
      severed from this Agreement, and such court will replace such illegal, void
      or
      unenforceable provision of this Agreement with a valid and enforceable provision
      that will achieve, to the extent possible, the same economic, business and
      other
      purposes of the illegal, void or unenforceable provision. The balance of this
      Agreement shall be enforceable in accordance with its terms. 

     

    8.15 Further
      Assurances. 
      Each party hereto agrees to execute and deliver, by the proper exercise of
      its
      corporate, limited liability company, partnership or other powers, all such
      other and additional instruments and documents and do all such other acts and
      things as may be reasonably necessary to more fully effectuate this
      Agreement.

     

    8.16 Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which will be
      deemed an original, but all of which together will constitute one and the same
      agreement. Facsimile copies of signed signature pages will be deemed binding
      originals.

     

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

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      each
      Investor and the Company have caused its respective signature page to this
      Unsecured Convertible Note and Warrant Purchase Agreement to be duly executed
      as
      of the date first written above.

    

    
      	
              COMPANY:

            
	 
	
              STRATOS
                RENEWABLES

            
	
              CORPORATION

            
	 
	
              By:

            	
              /s/
                Carlos Antonio Salas

            
	 	
              Carlos
                Antonio Salas

            
	 	
              Chief
                Executive Officer

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      each
      Investor and the Company have caused its respective signature page to this
      Unsecured Convertible Note and Warrant Purchase Agreement to be duly executed
      as
      of the date first written above.

    

    
      	
              INVESTORS:

            
	 
	
              I2BF
                BIODIESEL LIMITED

            
	 
	
              /s/
                Ilya A. Golubovich

            
	
              Ilya
                A. Golubovich 

              DirectorUnassociated Document

    AMENDED
      AND RESTATED

    SUBSCRIPTION
      ESCROW AGREEMENT

     

    This
      AMENDED AND RESTATED SUBSCRIPTION ESCROW AGREEMENT, dated as of July 15, 2008
      (the “Agreement”), is made by and among American Realty Capital Trust, Inc., a
      Maryland corporation (the “Company”), Realty Capital Securities, LLC, a Delaware
      limited liability company (“the Dealer Manager”), and Boston Private Bank &
Trust Company, a Massachusetts trust company (the “Escrow Agent”), and hereby
      amends and restates in its entirety that certain SUBSCRIPTION ESCROW AGREEMENT
      entered by and among
      the
      Company, the Dealer Manager, and the Escrow Agent as of December 11,
      2007.

     

    Whereas,
      the Company will issue in a public offering (the “Offering”) its common
stock
      (the “Shares”) to investors (the “Investors”) pursuant to a Registration
      Statement on Form S-11 (the “Registration Statement”) filed by the Company with
      the Securities and Exchange Commission (the “SEC”);

     

    Whereas,
      the
      Dealer Manager will act as dealer manager for the Offering;

     

    Whereas,
      until such time as subscriptions of the Company have been received for Stock,
      resulting in total minimum capital raised of $7,500,000 (the “Minimum Amount”)
      and, thereafter, in a total minimum capital raised of $45,000,000 (the “PA &
MA Minimum Amount”)
      and thereafter, the Company desires to deposit funds contributed by the
      Investors with the Escrow Agent, to be held for the benefit of the Investors
      and
      the Company in accordance with the
      terms
      set forth herein; and

     

    Whereas,
      the Escrow Agent represents and warrants that it is and at all times during
      the
      term of this agreement will be, deemed a “bank” as that term is defined in
      Section 3(a)(6) of the Securities Exchange Act of 1934, as amended;

     

    NOW,
      THEREFORE, for good and valuable consideration, the receipt and adequacy of
      which are hereby acknowledged by each of the parties hereto, the parties hereto,
      intending to be legally bound, do hereby agree as follows:

     

    Section
      1. Appointment
      of Escrow Agent.
      The
      Company hereby appoints Boston Private Bank & Trust Company as escrow agent
      in accordance with the terms and conditions set forth herein, and the Escrow
      Agent hereby accepts such appointment.

     

    Section
      2. Proceeds
      to be Escrowed.
      Persons
      subscribing to purchase the Stock will be instructed by the Dealer Manager
      or
      any soliciting dealers to remit the purchase price in the form of checks, drafts
      or wires (hereinafter called “instruments of payment”) payable to the order of,
      or funds wired in favor of, Boston Private Bank & Trust Company, Escrow
      Agent for American Realty Capital Trust, Inc. Any checks received made payable
      to a party other than the Escrow Agent shall be returned to the soliciting
      dealer or investor who submitted the check. By 12:00 p.m. (noon) the next
      business day after receipt of instruments of payment from the Offering, the
      Dealer Manager or its Transfer Agent will send to the Escrow Agent the
      instruments of payment from such subscribers, for deposit by the Escrow Agent
      into an interest-bearing
      deposit account entitled “American Realty Capital Trust, Inc., by Boston Private
      Bank & Trust Company as Escrow Agent” (the “Escrow Account”), which deposit
      shall occur within one (1)
      business day after you receive such materials.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    In
      the
      event that any checks deposited in the Escrow Account prove uncollectible
after
      the
      funds represented thereby have been released by the Escrow Agent, then the
      Company shall promptly reimburse the Escrow Agent for any and all costs incurred
      for such upon request, and the Escrow Agent shall deliver the returned checks
      to
      the Company.

     

    All
      funds
      in the Escrow Account (hereinafter, the “Escrow Property”), until disbursed to
      the Company in accordance with Section 4 hereof, are to be held for the benefit
      of the shareholders of the Company and are not to (i) be commingled with the
      monies or become an asset of the Company, or (ii) be subject to attachment,
      levy
      or other encumbrance in any action by a third party against the
      Company.

     

    Section
      3. Identity
      of Subscribers.
      The
      Company or its Transfer Agent or the Dealer Manager shall furnish to the Escrow
      Agent with each delivery of funds, as provided in Section 2 hereof, a list
      of
      the persons who have paid money for the purchase of Stock showing the name,
      address, tax identification number, number of shares purchased, and the amount
      of money paid. The information comprising the identity of investors shall be
      provided to the Escrow Agent in the format set forth in the List
      of Investors
      attached
      as Exhibit A. All proceeds so deposited shall remain the property of the
      subscriber and shall not be subject to any liens or charges by the Company,
      or
      the Escrow Agent, until released to the Company as hereinafter
      provided.

     

    The
      Company and the Dealer Manager hereby acknowledges the Escrow Agent’s sole right
      to reject any subscriber based on the results of the Escrow Agent’s internal due
      diligence policies and procedures, including, but not limited to, its “Know Your
      Customer” and anti-money laundering policies. The Escrow Agent may, in its sole
      discretion, reject any subscriber by giving written notice to the Company and
      the Dealer Manager.

     

    Section
      4. Disbursement
      of Funds.
      On a
      weekly basis (and more frequently if requested
      by the Company),
      the
      Escrow Agent shall notify the Company and the Dealer Manager of
      the
      amount of the funds received hereunder.

     

    (a)  If,
      payments of the Minimum Amount or more for Shares are obtained at any time
      prior
      to the Termination Date (as defined in Section 6), the Escrow Agent shall
      promptly notify the Company and the Dealer Manager, and upon the Company’s and
      Dealer Manager’s delivering a joint written notice (the “Disbursement Notice”)
      attached as Exhibit B signed jointly by two Authorized Persons (as defined
      in
      Section 12(q)) of the Company, stating that it has received and accepted
      subscription agreements for the Minimum Amount of Shares then the Escrow Agent
      shall (i) disburse to the Company, by check or wire transfer, the funds in
      the
      Escrow Account representing the gross purchase price for the Stock less the
      funds in the Escrow Account representing proceeds from subscriptions of
      Investors who are Pennsylvania or Massachusetts residents, and (ii) disburse
      to
      the subscribers any interest thereon calculated pursuant to the provisions
      of
      Section 5. Proceeds from Pennsylvania and Massachusetts residents
      will count towards
      meeting
      the Minimum Amount, but, pursuant to Section 4(b) below, such
      proceeds from Pennsylvania and Massachusetts residents will not be released
      from
      escrow until the PA & MA Minimum Amount is reached.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (b)  Following
      such disbursements in Section 4(a) above, the Escrow Agent shall thereafter
      deposit into the Escrow Account funds contributed from subscriptions of
      Investors who are Pennsylvania or Massachusetts residents and with respect
      to
      subscribers that are not Pennsylvania or Massachusetts residents, (i) will
      forward directly to American Realty Capital Trust, Inc, Account @ Wachovia
      National Bank upon receipt by Escrow Agent of any subscription
      documents received by Escrow Agent f and (ii) disburse to American Realty
      Capital Trust,
      Inc, Account @ Wachovia National Bank, by check or wire transfer, the funds
      in
      the Escrow Account representing the gross purchase price for the Stock by
      Investors who are not Pennsylvania or Massachusetts residents. If, payments
      of
      the PA & MA Minimum Amount or more for Shares are obtained at any time prior
      to the Termination Date (as defined in Section 6), the Escrow Agent shall
      promptly notify the Company and the Dealer Manager, and upon the Company’s and
      Dealer Manager’s delivering a joint written notice (the “Disbursement Notice”)
      attached as Exhibit C signed jointly by two Authorized Persons (as defined
      in
      Section 12(q)) of the
      Company, stating that is has received and accepted subscription agreements
      for
      the PA & MA Minimum Amount of Shares, then the Escrow Agent shall (x)
      disburse to the Company, by check or
      wire
      transfer, the funds in the Escrow Account representing the gross purchase price
      for the Stock, and (y) disburse to the subscribers any interest thereon
      calculated pursuant to the provisions of Section 5.

     

    (c)  Following
      such disbursements in Sections 4(a) and (b) above, the Escrow Account shall
      close and thereafter Escrow Agent shall forward directly to the Company upon
      receipt
      by Escrow Agent of any subscription documents and instruments of payment
      received by Escrow
      Agent from subscribers.

     

    (d)  If
      the
      Minimum Amount and PA & MA Minimum Amount of proceeds has not been obtained
      and delivered prior to the Termination Date, the Escrow Agent shall, within
      a
      reasonable time following the Termination Date, but in no event more than thirty
      (30) days after the
      Termination Date, refund to each investor at the address appearing on the List
      of Investors, or at
      such
      other address as shall be furnished to the Escrow Agent by the investor in
      writing, all sums paid by the investor pursuant to his subscription agreement
      for Shares, together with the interest accrued on such funds in the Escrow
      Account, and shall then notify the Company in writing
      of such refunds. If the Company rejects any subscription for which the Escrow
      Agent has already
      collected funds, the Escrow Agent shall, upon the written request of the
      Company, promptly
      issue a refund check to the rejected subscriber. If the Company rejects any
      subscription for
      which
      the Escrow Agent has not yet collected funds but has submitted the subscriber’s
      check for collection, the Escrow Agent shall promptly issue a check in the
      amount of the subscriber’s check to the rejected subscriber after the Escrow
      Agent has cleared such funds. If the Escrow Agent has not yet submitted a
      rejected subscriber’s check for collection, the Escrow Agent shall promptly
      remit the subscriber’s check directly to the subscriber.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      5. Investment
      of the Escrow Property.
      Prior
      to the disbursement of funds deposited in the Escrow Account in accordance
      with
      the provisions of Section 2 & 3 hereof, the Escrow Agent shall invest all of
      the funds deposited in the Escrow Account in “Short-Term Investments” (as
      defined below) in compliance with SEC Rule 15c2-4 and the Escrow Agent is
      further authorized and agrees to reinvest all earnings and interest derived
      there from in Short-Term Investments specified below. In the event that
      instruments of payment are returned to the Escrow Agent for nonpayment, the
      Escrow Agent is authorized to debit the Escrow Account in accordance with
      Section 2 hereof.

     

    “Short-Term
      Investments” include obligations of, or obligations guaranteed by, the United
      States government or bank money-market accounts or certificates of deposit
      of
      national or state banks that have deposits insured by the Federal Deposit
      Insurance Corporation (including certificates of deposit of any bank acting
      as a
      depository or custodian for any such funds) which mature on or before the
      termination of the Offering, unless such instrument cannot be readily sold
      or
      otherwise disposed of for cash by the termination of the Offering without any
      dissipation of the offering proceeds invested.

     

    The
      following securities are not permissible investments:

     

    
      	
            	(a)	
              money
                market mutual funds;

            

    

     

    
      	
            	(b)	
              corporate
                equity or debt securities;

            

    

     

    
      	
            	(c)	
              repurchase
                agreements;

            

    

     

    
      	
            	(d)	
              bankers’
                acceptances;

            

    

     

    
      	
            	(e)	
              commercial
                paper; and

            

    

     

    
      	
            	(f)	
              municipal
                securities.

            

    

     

    The
      Escrow Agent shall have no obligation to invest or reinvest the Escrow Property
      if deposited with the Escrow Agent after noon (E.S.T.) on such day of deposit.
      Instructions received after noon (E.S.T.) will be treated as if received on
      the
      following business day. The Escrow Agent shall have no liability whatsoever
      to
      any party or other person or entity for any investment losses resulting from
      the
      investment, reinvestment or liquidation of the Escrow Property. Any interest
      or
      other income received on such investment and reinvestment of the Escrow Property
      shall become
      part of the Escrow Property and any losses incurred on such investment and
      reinvestment of
      the
      Escrow Property shall be debited against the Escrow Property. If a written
      direction is not given to the Escrow Agent, the Escrow Property shall remain
      uninvested with no liability for interest therein. It is agreed and understood
      that the Escrow Agent may earn fees associated with the investments outlined
      above in accordance with the terms of such investments. Notwithstanding the
      foregoing, the Escrow Agent shall have the power to sell or liquidate the
      foregoing investments whenever the Escrow Agent shall be required to release
      all
      or any portion of the Escrow Property pursuant to Section 4 hereof. In no event
      shall the Escrow Agent be deemed an investment manager or adviser in respect
      of
      any selection of investments hereunder. It is understood and agreed that the
      Escrow Agent or its affiliates are permitted to receive additional compensation
      that could be deemed to be in the Escrow Agent’s economic self-interest for (1)
      serving as administrator, shareholder servicing agent, custodian or
      sub-custodian with respect to certain of the investments, (2) using affiliates
      to effect transactions in certain investments and (3) effecting transactions
      in
      investments.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      6. Term
      of Escrow.
      The
“Termination Date” shall be (i) January 25, 2009 or (ii) the date the Escrow
      Agent receives written notice from the Company that it is abandoning the sale
      of
      the Shares. The Company may extend the termination date for up to one year
      upon
      written notice to the Escrow Agent. Upon the termination of the Agreement any
      remaining Escrow Property shall be forwarded to the Company in accordance with
      the Company’s written directions.

     

    The
      provisions of Sections 8, 10 and 11 shall survive the termination of this
      Agreement and the earlier resignation or removal of the Escrow
      Agent.

     

    Section
      7. Intentionally
      Omitted.

     

    Section
      8. Compensation
      of Escrow Agent.
      The
      Escrow Agent shall be entitled to payment from the Company for customary fees
      and expenses for all services rendered as described in Schedule II (as such
      fees
      may be adjusted from time to time). Annual fees are due annually in advance
      for
      each year or any part thereof. The Company shall reimburse the Escrow Agent
      on
      demand for all loss, liability, damage, disbursements, advances or expenses
      paid
      or incurred by it in the administration of its duties hereunder, including,
      but
      not limited to, all counsel, advisors’ and agents’ fees and disbursements and
      all taxes or other governmental charges. The obligations contained in this
      Section 8 shall survive the termination of this Agreement and the resignation
      or
      removal of the Escrow Agent.

     

    Section
      9. Resignation
      of Escrow Agent.
      The
      Escrow Agent may, in its sole discretion, resign and be discharged from its
      duties hereunder at any time by giving thirty (30) calendar days’ prior written
      notice of such resignation to the Company and the Dealer Manager. The Company
      and the Dealer Manager may remove the Escrow Agent at any time by giving thirty
      (30) calendar days’ prior written notice to the Escrow Agent. Upon such notice,
      a successor escrow agent shall be appointed by the Company and the Dealer
      Manager who shall provide written notice of such to the resigning Escrow Agent.
      Such successor escrow agent shall become the escrow agent hereunder upon the
      resignation or removal date specified in such notice. If the Company and the
      Dealer Manager are unable to agree upon a successor escrow agent within thirty
      (30) days after such notice, the Escrow Agent may, in its sole discretion,
      deliver the Escrow Property to the Company at the address provided herein or
      may
      apply to a court of competent jurisdiction for the appointment of a successor
      escrow agent or for other appropriate relief. The costs and expenses (including
      its attorneys’ fees and expenses) incurred by the Escrow Agent in connection
      with such proceeding shall be paid by the Company. Upon receipt of the identity
      of the successor escrow agent, the Escrow Agent shall either deliver the Escrow
      Property then held hereunder to the successor Escrow Agent, less the Escrow
      Agent’s fees, costs and expenses or other obligations owed to the Escrow Agent
      to be paid from any interest earned in respect of the Escrow Property, or hold
      any interest earned in respect of the Escrow Property (or any portion thereof),
      pending distribution, until all such fees, costs and expenses or other
      obligations are paid. Upon its resignation and delivery of the Escrow Property
      as set forth in this Section 9, the Escrow Agent shall be discharged of and
      from
      any and all further obligations arising in connection with the Escrow Property
      or this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      10. Indemnification
      of Escrow Agent.
      The
      Company and the Dealer Manager shall jointly and severally indemnify, defend
      and
      hold harmless the Escrow Agent and its officers, directors, employees,
      representatives and agents, from and against and reimburse the Escrow Agent
      for
      any and all claims, expenses, obligations, liabilities, losses, damages,
      injuries (to person, property, or natural resources), penalties, stamp or other
      similar taxes, actions, suits, judgments, reasonable costs and expenses
      (including reasonable attorney’s fees and expenses) of whatever kind or nature
      regardless of their merit, demanded, asserted or claimed against the Escrow
      Agent directly or indirectly relating to, or arising from, claims against the
      Escrow Agent by reason of its participation in the transactions contemplated
      hereby, including without limitation all costs required to be associated with
      claims for damages to persons or property, and all attorneys’ and consultants’
fees and expenses and court costs. Except to the extent caused by the Escrow
      Agent’s gross negligence or willful misconduct. The provisions of this Section
      10 shall survive the termination of this Agreement or the earlier resignation
      or
      removal of the Escrow Agent.

     

    Section
      11.
The
      Escrow Agent.

     

    (a)  The
      duties, responsibilities and obligations of Escrow Agent shall be limited to
      those expressly set forth herein and no duties, responsibilities or obligations
      shall be inferred or implied against the Escrow Agent. The Escrow Agent shall
      not be subject to, nor required to comply with, any other agreement to which
      the
      Company or the Dealer Manager is a party, even though reference thereto may
      be
      made herein, or to comply with any direction or instruction (other than those
      contained herein or delivered in accordance with this Agreement) from the
      Company, the Dealer Manager or an entity acting on its behalf. The Escrow Agent
      shall not be required to expend or risk any of its own funds or otherwise incur
      any liability, financial or otherwise, in the performance of any of its duties
      hereunder.

     

    (b)  If
      at any
      time the Escrow Agent is served with any judicial or administrative order,
      judgment, decree, writ or other form of judicial or administrative process
      which
      in any way affects the Escrow Property (including but not limited to orders
      of
      attachment or garnishment or other forms of levies or injunctions or stays
      relating to the transfer of the Escrow Property), the Escrow Agent is authorized
      to comply therewith in any manner it or legal counsel
      of its own choosing deems appropriate; and if the Escrow Agent complies with
      any
      such judicial
      or administrative order, judgment, decree, writ or other form of judicial or
      administrative process, Escrow Agent shall not be liable to any of the parties
      hereto or to any other person or entity even though such order, judgment,
      decree, writ or process may be subsequently modified or vacated or otherwise
      determined to have been without legal force or effect.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)  The
      Escrow Agent shall not be liable for any action taken or omitted or for
any
      loss
      or injury resulting from its actions or its performance or lack of performance
      of its duties
      hereunder in the absence of gross negligence or willful misconduct on its part.
      In no event shall
      the
      Escrow Agent be liable (i) for acting in accordance with or conclusively relying
      upon any instruction, notice, demand, certificate or document from the Company,
      the Dealer Manager, or any entity acting on behalf of the Company, (ii) for
      any
      indirect, consequential, punitive or special damages, multiple damages under
      M.G.L. c. 93A or any other authority, damages for lost profits, damages for
      emotional distress, or attorney’s fees and costs, all regardless of the form of
      action and whether or not any such damages were foreseeable or contemplated,
      (iii) for the acts or omissions of its nominees, correspondents, designees,
      agents, subagents or subcustodians, (iv) for the investment or reinvestment
      of
      any cash held by it hereunder
      in accordance with the terms hereof, including without limitation any liability
      for any delays
      (not resulting from its gross negligence or willful misconduct) in the
      investment or reinvestment of the Escrow Property, or any loss of interest
      or
      income incident to any such delays, or (v) for an amount in excess of the value
      of the Escrow Property, valued as of the date of deposit, but only to the extent
      of direct money damages. The provisions of this subsection shall survive the
      termination of this Agreement or the earlier resignation or removal of the
      Escrow Agent.

     

    (d)  If
      any
      fees, expenses or costs incurred by, or any obligations owed to, the Escrow
      Agent or its counsel hereunder are not paid within fifteen (15) calendar days
      of
      when they
      are
      due, the Escrow Agent may reimburse itself therefor from the Escrow Property
      and
      may sell,
      liquidate, convey or otherwise dispose of any investment in respect of the
      Escrow Property for such purpose. The
      Escrow
      Agent may in its sole discretion withhold from any distribution of any interest
      earned in respect of the Escrow Property an amount it believes would, upon
      sale
      or liquidation,
      produce proceeds equal to any unpaid amounts to which the Escrow Agent is
      entitled to
      hereunder.

     

    (e)  The
      Escrow Agent may consult with legal counsel of its own choosing, at the expense
      of the Company as to any matter relating to this Agreement, and the Escrow
      Agent
      shall not incur any liability in acting in good faith in accordance with any
      advice from such counsel. Reliance on such advice
      of
      counsel shall not effect or be deemed to be a waiver of the Escrow Agent’s
      attorney-client privilege or any other applicable privilege or
      protection.

     

    (f)  The
      Escrow Agent shall not incur any liability for not performing any act
or
      fulfilling any duty, obligation or responsibility hereunder by reason of any
      occurrence beyond the
      control of the Escrow Agent (including but not limited to any act or provision
      of any present or future law or regulation or governmental authority, any act
      of
      God or war, civil unrest, local or national disturbance or disaster, any act
      of
      terrorism, the unavailability of the Federal Reserve Bank wire or facsimile
      or
      other wire or communication facility, or any computer or other technological
      malfunction).

     

    (g)  The
      Escrow Agent shall be entitled to conclusively rely upon any order, judgment,
      certification, demand, notice, instrument or other writing delivered to it
      hereunder without being required to determine the authenticity or the
      correctness of any fact stated therein or the propriety or validity or the
      service thereof. The Escrow Agent may act in conclusive reliance upon any
instrument
      or
      signature believed by it to be genuine and may assume that any person purporting
      to give receipt or advice to make any statement or execute any document in
      connection with the provisions hereof has been duly authorized to do
      so.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (h)  The
      Escrow Agent shall not be responsible in any respect for the form, execution,
      validity, value or genuineness of documents or securities deposited hereunder,
      or for any description therein, or for the identity, authority or rights of
      persons executing or delivering or purporting to execute or deliver any such
      document, security or endorsement. The Escrow Agent shall not be called upon
      to
      advise any party as to the wisdom in selling or retaining or taking or
      refraining from any action with respect to any securities or other property
      deposited hereunder.

     

    (i)  The
      Escrow Agent shall not be under any duty to give the Escrow Property held by
      it
      hereunder any
      greater
      degree of care than it gives its own similar property and shall not be required
      to invest any funds held hereunder except as directed in this
      Agreement.

     

    (j)  When
      the Escrow Agent acts on any information, instructions, communications,
      (including, but not limited to, communications with respect to the delivery
      of
securities
      or the wire transfer of funds) sent by telex, facsimile, email or other form
      of
      electronic or
      data
      transmission, the Escrow Agent, absent its own gross negligence, shall not
      be
      responsible or liable in the event such
      communication is not an authorized or authentic communication
      of the Company or the Dealer Manager or is not in the form the Company or the
      Dealer
      Manager sent or intended to send (whether due to fraud, distortion or
      otherwise). The Company shall indemnify the Escrow Agent against any loss,
      liability, claim or expense (including legal fees and expenses) it may incur
      with its acting in accordance with any such communication.

     

    (k)  In
      the event of any ambiguity or uncertainty hereunder or in any notice,
instruction
      or other communication received by the Escrow Agent hereunder, the Escrow Agent
      may,
      in
      its sole discretion,
      refrain
      from taking any action other than to retain possession of the Escrow
      Property, unless the Escrow Agent receives written instructions, signed by
      the
      Company which
      eliminates such ambiguity or uncertainty.

     

    (l)  In
      the event of any dispute between or conflicting claims among the Company
      and any other person or entity with respect to any Escrow Property, the Escrow
      Agent shall
      be
      entitled, in its sole discretion, to refuse to comply with any and all claims,
      demands or instructions with respect to such Escrow Property for so long as
      such
      dispute or conflict shall continue, and the Escrow Agent shall not be or become
      liable in any way to the Company or any other person for failure or refusal
      to
      comply with such conflicting claims, demands or instructions. The Escrow
      Agent
      shall be entitled to refuse to act until, to its sole satisfaction, either
      (i)
      such conflicting or adverse claims or demands shall have been determined by
      a
      final order, judgment or decree of a court of competent jurisdiction, which
      order, judgment or decree is
      not
      subject to appeal, or settled by agreement between the conflicting parties
      as
      evidenced in a writing
      satisfactory to the Escrow Agent or (ii) the Escrow Agent shall have received
      security or an indemnity satisfactory to it sufficient to hold it harmless
      from
      and against any and all losses which it may incur by reason of so acting. Any
      court order, judgment or decree shall be accompanied by a legal opinion by
      counsel for the presenting party, satisfactory to the Escrow Agent in its sole
      discretion, to the effect that said order, judgment or decree represents a
      final
      adjudication of the rights of the parties by a court of competent jurisdiction,
      and that the time for appeal from such order, judgment or decree has expired
      without an appeal having been filed with such court. The Escrow Agent may act
      on
      such court order and legal opinions without further question. The Escrow Agent
      may, in addition, elect, in its sole discretion, to commence an
      interpleader action or seek other judicial relief or orders as it may deem,
      in
      its sole discretion, necessary.
      The costs and expenses (including reasonable attorneys’ fees and expenses)
      incurred in connection with such proceeding shall be paid by, and shall be
      deemed an obligation of, the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (m)  The
      Escrow Agent shall have no responsibility for the contents of any writing of
      the
      arbitrators or any
      third
      party contemplated herein as a means to resolve disputes and
      may
      conclusively rely without any liability upon the contents thereof.

     

    (n)  The
      Escrow Agent does not have any interest in the Escrow Property deposited
      hereunder but is serving as escrow holder only and having only possession
      thereof. The Company shall pay or reimburse the Escrow Agent upon request for
      any transfer taxes or other
      taxes relating to the Escrow Property incurred in connection herewith and shall
      indemnify and
      hold
      harmless the Escrow Agent from any amounts that it is obligated to pay in the
      way of such taxes. Any payments of income from this Escrow Account shall be
      subject to withholding regulations then in force with respect to United States
      taxes. The Company or the Dealer Manager will provide the Escrow Agent with
      appropriate W-9 forms for tax identification number certifications, or W-8
      forms
      for non-resident alien certifications. This paragraph shall survive
      notwithstanding any termination of this Agreement or the resignation or removal
      of the Escrow Agent.

     

    (o)  The
      Escrow Agent shall provide to the Company and the Dealer Manager monthly
      statements identifying transactions, transfers or holdings of Escrow Property
      and each such
      statement shall be deemed to
      be
      correct and final upon receipt thereof by the Company and the
      Dealer Manager unless the Escrow Agent is notified in writing, by the Company
      or
      the Dealer Manager, to the contrary within thirty (30) business days of the
      date
      of such statement.

     

    Section
      12.
Miscellaneous.

     

    (a)  This
      Agreement embodies the entire agreement and understanding among the parties
      relating to the subject matter hereof.

     

    (b)  This
      Agreement shall be governed by and construed in accordance with the laws of
      the
Commonwealth
      of
      Massachusetts without reference to its principles of conflict of
      laws.

     

    (c)  Each
      of
      the parties hereto hereby irrevocably consents to the jurisdiction of
the
      courts of the Commonwealth of Massachusetts and of any Federal Court located
      in
      such Commonwealth in connection with any action, suit or other proceeding
      arising out of or relating to this Agreement or any action
      taken or
      omitted hereunder, and waives any claim of forum non conveniens and any
      objections as to laying of venue. Each party further waives personal service
      of
      any summons, complaint or other process and agrees that service thereof may
      be
      made by certified or registered mail directed to such person at such person’s
      address for purposes of notices hereunder. Each party further waives any claim
      to trial by jury.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d)  All
      notices and other communications under this Agreement shall be in writing in
      English and shall be deemed given when delivered personally, on the next
      Business Day after delivery to a recognized overnight courier
      or
      mailed first class (postage prepaid) or when sent by facsimile to the parties
      (which facsimile copy shall be followed, in the case of notices or other
      communications sent to the Escrow Agent, by delivery of the original) at the
      following addresses (or to such other address as a party may have specified
      by
      notice given to the other parties pursuant to this provision):

     

    If
      to
      the
      Company, to:

     

    American
      Realty Capital Trust, Inc.

     

    c/o
      American Realty Capital

     

    1725
      The
      Fairway

     

    Jenkintown,
      PA 19046

     

    

     

    If
      to the
      Dealer Manager, to: 

     

    Realty
      Capital Securities 

     

    Three
      Copley Place, Suite 3300 

     

    Boston,
      MA 02116

     

    

     

    If
      to
the
      Escrow Agent, to:

     

    Boston
      Private Bank & Trust Company

     

    Ten
      Post
      Office Square

     

    Boston,
      MA 02109

     

    (e)  The
      headings of the Sections of this Agreement have been inserted for convenience
      and shall not modify, define, limit or expand the express provisions of this
      Agreement.

     

    (f)  This
      Agreement and the rights and obligations hereunder of parties hereto may not
      be
      assigned except with the prior written consent of the other parties hereto.
      This
      Agreement shall be binding upon and inure to the benefit of each party’s
      respective successors and permitted assigns. Except as expressly provided
      herein, no other person shall acquire or have any rights under or by virtue
      of
      this Agreement. This Agreement is intended to be for the sole benefit of the
      parties hereto, and (subject to the provisions of this Section 10(f))
      their

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    respective
      successors and assigns, and none of the provisions of this Agreement are
      intended to be, nor shall they be construed to be, for the benefit of any third
      person.

     

    (g)  This
      Agreement may not be amended, supplemented or otherwise modified without the
      prior written consent
      of the
      parties hereto.

     

    (h)  The
      Escrow
      Agent
      makes no representation as to the validity, value, genuineness or the
      collectability of any security or other document or instrument held by or
      delivered to it.

     

    (i)  Any
      payments of income from the Escrow Property shall be subject to withholding
      regulations then in force with respect to United States taxes. The Company
      will
provide
      the Escrow Agent with its Employer Identification Number for use by the Escrow
      Agent if
      necessary. It is understood that the Escrow Agent shall be responsible for
      income reporting only with respect to income earned on the Escrow Property
      and
      will not be responsible for any other reporting.

     

    (j)  This
      Agreement
      may be
      executed in two or more counterparts, each of which shall be an original, but
      all of which together shall constitute one and the same instrument.

     

    (k)  The
      rights and remedies conferred upon the parties hereto shall be cumulative,
      and
      the exercise or waiver of any such right or remedy shall not preclude or inhibit
      the exercise of any additional rights or remedies. The waiver of any right
      or
      remedy hereunder shall not preclude the subsequent exercise of such right or
      remedy.

     

    (l)  The
      Company and the Dealer Manager hereby acknowledge that, in accordance with
      Section 326 of the USA Patriot Act, the Escrow Agent, like all financial
      institutions and in order to help fight the funding of terrorism and money
      laundering, are required to obtain, verify, and record information that
      identifies each person or legal entity that establishes
      a relationship or opens an account with Boston Private Bank & Trust Company.
      The Company
      and the Dealer Manager hereby agree that each will provide the Escrow Agent
      with
      such information as it may request in order for the Escrow Agent to satisfy
      the
      requirements of the USA Patriot Act.

     

    (m)  The
      Company and the Dealer Manager hereby represent and warrant (i) that this
      Agreement has been duly authorized, executed and delivered on its behalf and
      constitutes its legal, valid and binding obligation and (ii) that the execution,
      delivery and performance of this Agreement by the Company and the Dealer Manager
      does not and will not violate any applicable law or regulation.

     

    (n)  The
      invalidity, illegality or unenforceability of any provision of this Agreement
      shall in no way affect the validity, legality or enforceability of any other
      provision; and if any provision is held to be unenforceable as a matter of
      law,
      the other provisions shall not be affected thereby and shall remain in full
      force and effect.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (o)  No
      printed or other material in any language, including prospectuses, notices,
      reports, and promotional material which mentions Boston Private Bank & Trust
      Company or any of their respective affiliates
      by name
      or the rights, powers, or duties of the Escrow Agent under this Agreement shall
      be issued by any other parties hereto, or on such party’s behalf, without the
      prior written consent of the Escrow Agent.

     

    (p)  For
      purposes of this Agreement, “Business Day” shall mean any day that is
not
      a
      Saturday or Sunday or a day on which banks are required or permitted by law
      or
      executive order
      to
      be closed in the City of Boston, Massachusetts.

     

    (q)  For
      purposes of sending and receiving instructions or directions hereunder, all
      such
      instructions or directions shall be, and the Escrow Agent may conclusively
      rely
      upon such instructions or directions, delivered, and executed by representatives
      of the Company and the Dealer Manager designated on Schedule
      I
      attached hereto and made a part hereof (each such representative, an “Authorized
      Person”) which such designation shall include specimen signatures of such
      representatives, as such Schedule I may be updated from time to
      time.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

     

    
      	 	 	 
	 	AMERICAN
              REALTY
              CAPITAL TRUST, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Brian
              S.
              Block
	 	
              
Name:
              Brian S. Block
	 	Title:  
              Chief Financial Officer

    

     

    
       

       

      
        	 	 	 
	 	REALTY
                CAPITAL
                SECURITIES, LLC
	 
 	 
 	 
 
	 	By:  	/s/ Louisa
                Quarto
	 	
                
Name:
                Louisa Quarto
	 	Title:  
                Senior Vice President

       

      
        
          	 	 	 
	 	
                  BOSTON
                    PRIVATE
                    BANK & TRUST COMPANY, 
as
                    Escrow Agent

                
	 
 	 
 	 
 
	 	By:  	/s/ Kathleen
                  M. McQuillan
	 	
                  
Name:
                  Kathleen M. McQuillan
	 	Title:  
                  Senior Vice President

        

      

    

    
      
        	 	 	 
	 	 
	 	 	 
	 	By:  	/s/ Torrance
                Childs
	 	
                
Name:
                Torrance Childs
	 	Title:  
                Senior Vice President and Director of
                Sales

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Schedule
      II

     

     

    $3,000.00
      Initial Administrative Fee 

     

    $1,500.00
      Annual Fee 

     

    TBD
      -
      Legal Fees

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