Document:

Unassociated Document

    Exhibit
      10.1

     

    SECURITIES
      PURCHASE AGREEMENT

     

    This
      Securities Purchase Agreement (this “Agreement”)
      is
      dated as of October 9, 2008 between Enable Holdings, Inc., a Delaware
      corporation (the “Company”),
      and
      the purchaser identified on the signature pages hereto (including its successors
      and assigns, the “Purchaser”).

     

    WHEREAS,
      subject to the terms and conditions set forth in this Agreement and pursuant
      to
      Sections 4(2) and 4(6) of the Securities Act of 1933, as amended (the
“Securities
      Act”),
      and
      Rule 506 promulgated thereunder, the Company desires to issue and sell to the
      Purchaser, and the Purchaser, severally and not jointly, desires to purchase
      from the Company, securities of the Company as more fully described in this
      Agreement.

     

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

     

    ARTICLE
      I

    DEFINITIONS

     

    1.1
      Definitions. 
      In addition to the terms defined elsewhere in this Agrement: (a) capitalized
      terms that are not otherwise defined herein have the meanings given to such
      terms in the Debentures (as defined herein), and (b) the following terms have
      the meanings set forth in this Section 1.1:

     

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

     

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

     

    “Board
      of Directors”
means
      the board of directors of the Company.

     

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

     

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

     

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

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    “Commission”
means
      the Securities and Exchange Commission.

     

    “Common
      Stock”
means
      the common stock of the Company, par value $.001 per share, and any other class
      of securities into which such securities may hereafter be reclassified or
      changed into.

     

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

     

    “Company
      Counsel”
means
      Fredrikson & Byron, P.A., with offices located at 200 South Sixth Street,
      Suite 4000, Minneapolis, MN 55402.

     

    “Consent
      and Waiver”
shall
      have the meaning ascribed to such term in Section 3.1(e).

     

    “Debentures”
means
      the 18% Unsecured Debentures due, subject to the terms therein, 3 months from
      their date of issuance, issued by the Company to the Purchaser hereunder, in
      the
      form of Exhibit
      A
      attached
      hereto.

     

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

     

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

     

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

     

    “Exempt
      Issuance”
means
      the issuance of (a) shares of Common Stock or options to employees, officers
      or
      directors of the Company pursuant to any stock or option plan duly adopted
      for
      such purpose by a majority of the non-employee members of the Board of Directors
      or a majority of the members of a committee of non-employee directors
      established for such purpose, (b) securities upon the exercise, redemption
      or
      exchange of or conversion of any Securities issued hereunder and/or other
      securities exercisable or exchangeable for or convertible into shares of Common
      Stock issued and outstanding on the date of this Agreement, provided that such
      securities have not been amended since the date of this Agreement to increase
      the number of such securities or to decrease the exercise, exchange or
      conversion price of such securities, and (c) securities issued pursuant to
      acquisitions or strategic transactions approved by a majority of the
      disinterested directors of the Company, provided that any such issuance shall
      only be to a Person which is, itself or through its subsidiaries, an operating
      company in a business synergistic with the business of the Company and in which
      the Company receives benefits in addition to the investment of funds, but shall
      not include a transaction in which the Company is issuing securities primarily
      for the purpose of raising capital or to an entity whose primary business is
      investing in securities.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Exercise
      Price”
shall
      have the meaning ascribed to such term in the Warrants.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    “Maximum
      Rate”
shall
      have the meaning ascribed to such term in Section 5.17.

     

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

     

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

     

    “Purchaser
      Party”
shall
      have the meaning ascribed to such term in Section 4.10.

     

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

     

    “Required
      Minimum”
means,
      as of any date, the maximum aggregate number of shares of Common Stock then
      issued or potentially issuable in the future pursuant to the Transaction
      Documents, including any Underlying Shares issuable upon exercise in full of
      all
      Warrants, ignoring any conversion or exercise limits set forth therein, and
      assuming that the Exercise Price is at all times on and after the date of
      determination 75% of the then Exercise Price on the Trading Day immediately
      prior to the date of determination.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    “Securities”
means
      the Debentures, the Warrants, and the Underlying Shares.

     

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

     

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

     

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

     

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

     

    “Trading
      Day”
means
      a
      day on which the New York Stock Exchange is open for trading.

     

    “Trading
      Market”
means
      the following markets or exchanges on which the Common Stock is listed or quoted
      for trading on the date in question: the American Stock Exchange, the Nasdaq
      Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
      the
      New York Stock Exchange or the OTC Bulletin Board.

     

    “Transaction
      Documents”
means
      this Agreement, the Debentures, the Warrants, all exhibits and schedules thereto
      and hereto and any other documents or agreements executed in connection with
      the
      transactions contemplated hereunder.

     

    “Transfer
      Agent”
means
      American Pacific Stock Transfer Company, the current transfer agent of the
      Company with a mailing address of 500 E. Warm Springs Road, Suite 240, Las
      Vegas
      NV 89119, and a facsimile number of (702) 433-1979 and any successor transfer
      agent of the Company.

     

    “Underlying
      Shares”
means
      the shares of Common Stock issued and issuable upon exercise of the
      Warrants.

     

    “Variable
      Rate Transaction”
shall
      have the meaning ascribed to such term in Section 4.13(b).

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    “VWAP”
means,
      for any date, the price determined by the first of the following clauses that
      applies: (a) if the Common Stock is then listed or quoted on a Trading Market,
      the daily volume weighted average price of the Common Stock for such date (or
      the nearest preceding date) on the Trading Market on which the Common Stock
      is
      then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day
      from
      9:30 a.m. New York City time to 4:02 p.m. New York City time); (b)  if the
      OTC Bulletin Board is not a Trading Market, the volume weighted average price
      of
      the Common Stock for such date (or the nearest preceding date) on the OTC
      Bulletin Board; (c) if the Common Stock is not then listed or quoted on the
      OTC
      Bulletin Board and if prices for the Common Stock are then reported in the
“Pink
      Sheets” published by Pink Sheets, LLC (or a similar organization or agency
      succeeding to its functions of reporting prices), the most recent bid price
      per
      share of the Common Stock so reported; or (d) in all other cases, the fair
      market value of a share of Common Stock as determined by an independent
      appraiser selected in good faith by the Purchaser of a majority in interest
      of
      the Securities then outstanding and reasonably acceptable to the Company, the
      fees and expenses of which shall be paid by the Company.

     

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

     

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

     

    ARTICLE
      II

    PURCHASE
      AND SALE

     

    2.1
      Closing. 
      On the Closing Date, upon the terms and subject to the conditions set forth
      herein, substantially concurrent with the execution and delivery of this
      Agreement by the parties hereto, the Company agrees to sell, and the Purchaser
      agrees to purchase, $400,000 in principal amount of the Debentures.  The
      Purchaser shall deliver to the Company, via wire transfer or a certified check,
      immediately available funds equal to its Subscription Amount and the Company
      shall deliver to the Purchaser its respective Debenture and Warrants, as
      determined pursuant to Section 2.2(a), and the Company and the Purchaser shall
      deliver the other items set forth in Section 2.2 deliverable at the
      Closing.  Upon satisfaction of the conditions set forth in Sections 2.3,
      the Closing shall occur at the offices of Company Counsel or such other location
      as the parties shall mutually agree. 

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    2.2
      Deliveries.

     

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

     

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

     

    (ii) a
      Debenture with a principal amount equal to the Purchaser’s Subscription Amount,
      registered in the name of the Purchaser; and

     

    (iii) a
      Warrant
      registered in the name of the Purchaser to purchase up to a number of shares
      of
      Common Stock equal to 200% of the Purchaser’s Principal Amount divided by the
      Exercise Price, with an initial Exercise Price equal to $0.25, subject to
      adjustment therein; and

     

    (iv) an
      officer’s certificate from the Chief Executive Officer of the Company, dated as
      of the Closing Date, certifying and setting forth (i) the names, signatures
      and
      positions of the Persons authorized to execute this Agreement and any other
      Transaction Documents to which the Company is a party and (ii) a copy of the
      resolutions of the Company authorizing the execution, delivery and performance
      of this Agreement.

     

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

     

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

     

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

     

    2.3
      Closing
      Conditions.

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

    (v)
      from
      the date hereof to the Closing Date, trading in the Common Stock shall not
      have
      been suspended by the Commission  or the Company’s principal Trading Market
      (except for any suspension of trading of limited duration agreed to by the
      Company, which suspension shall be terminated prior to the Closing), and, at
      any
      time prior to the Closing Date, trading in securities generally as reported
      by
      Bloomberg L.P. shall not have been suspended or limited, or minimum prices
      shall
      not have been established on securities whose trades are reported by such
      service, or on any Trading Market, nor shall a banking moratorium have been
      declared either by the United States or New York State authorities nor shall
      there have occurred any material outbreak or escalation of hostilities or other
      national or international calamity of such magnitude in its effect on, or any
      material adverse change in, any financial market which, in each case, in the
      reasonable judgment of the Purchaser, makes it impracticable or inadvisable
      to
      purchase the Securities at the Closing.

     

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES

     

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

     

    (a)
      Subsidiaries.  All of the direct and indirect subsidiaries of the Company
      are set forth on Schedule
      3.1(a). 
      The Company owns, directly or indirectly, all of the capital stock or other
      equity interests of each Subsidiary free and clear of any Liens, and all of
      the
      issued and outstanding shares of capital stock of each Subsidiary are validly
      issued and are fully paid, non-assessable and free of preemptive and similar
      rights to subscribe for or purchase securities.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (b)
      Organization
      and Qualification. 
      The Company and each of the Subsidiaries is an entity duly incorporated or
      otherwise organized, validly existing and in good standing under the laws of
      the
      jurisdiction of its incorporation or organization (as applicable), with the
      requisite power and authority to own and use its properties and assets and
      to
      carry on its business as currently conducted.  Neither the Company nor any
      Subsidiary is in violation or default of any of the provisions of its respective
      certificate or articles of incorporation, bylaws or other organizational or
      charter documents.  Each of the Company and the Subsidiaries is duly
      qualified to conduct business and is in good standing as a foreign corporation
      or other entity in each jurisdiction in which the nature of the business
      conducted or property owned by it makes such qualification necessary, except
      where the failure to be so qualified or in good standing, as the case may be,
      could not have or reasonably be expected to result in (i) a material adverse
      effect on the legality, validity or enforceability of any Transaction Document,
      (ii) a material adverse effect on the results of operations, assets, business,
      prospects or condition (financial or otherwise) of the Company and the
      Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
      Company’s ability to perform in any material respect on a timely basis its
      obligations under any Transaction Document (any of (i), (ii) or (iii), a
“Material
      Adverse Effect”)
      and no
      Proceeding has been instituted in any such jurisdiction revoking, limiting
      or
      curtailing or seeking to revoke, limit or curtail such power and authority
      or
      qualification.

     

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

     

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

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (e)
      Filings,
      Consents and Approvals. 
      The Company is not required to obtain any consent, waiver, authorization or
      order of, give any notice to, or make any filing or registration with, any
      court
      or other federal, state, local or other governmental authority or other Person
      in connection with the execution, delivery and performance by the Company of
      the
      Transaction Documents, other than (i) filings required pursuant to Section
      4.6,
      (ii) the notice and/or application(s) to each applicable Trading Market for
      the
      issuance and sale of the Securities and the listing of the Underlying Shares
      for
      trading thereon in the time and manner required thereby and (iii) the filing
      of
      Form D with the Commission and such filings as are required to be made under
      applicable state securities laws (collectively, the “Required
      Approvals”).

     

    (f)
      Issuance
      of the Securities. 
      The Securities are duly authorized and, when issued and paid for in accordance
      with the applicable Transaction Documents, will be duly and validly issued,
      fully paid and nonassessable, free and clear of all Liens imposed by the Company
      other than restrictions on transfer provided for in the Transaction
      Documents.  The Underlying Shares, when issued in accordance with the terms
      of the Transaction Documents, will be validly issued, fully paid and
      nonassessable, free and clear of all Liens imposed by the Company other than
      restrictions on transfer provided for in the Transaction Documents. The Company
      has reserved from its duly authorized capital stock a number of shares of Common
      Stock for issuance of the Underlying Shares in an amount set forth on
Schedule
      3.1(f)
      attached
      hereto. 

     

    (g)
      Capitalization. 
      The capitalization of the Company is as set forth on Schedule
      3.1(g),
      which
Schedule
      3.1(g)
      shall
      also include the number of shares of Common Stock owned beneficially, and of
      record, by Affiliates of the Company as of the date hereof. Except as set forth
      on Schedule
      3.1(g),
      the
      Company has not issued any capital stock since its most recently filed periodic
      report under the Exchange Act, other than pursuant to the exercise of employee
      stock options under the Company’s stock option plans, the issuance of shares of
      Common Stock to employees pursuant to the Company’s employee stock purchase
      plans and pursuant to the conversion or exercise of Common Stock Equivalents
      outstanding as of the date of the most recently filed periodic report under
      the
      Exchange Act.  No Person has any right of first refusal, preemptive right,
      right of participation, or any similar right to participate in the transactions
      contemplated by the Transaction Documents.  Except as set forth on
Schedule
      3.1(g)
      and as a
      result of the purchase and sale of the Securities, there are no outstanding
      options, warrants, scrip rights to subscribe to, calls or commitments of any
      character whatsoever relating to, or securities, rights or obligations
      convertible into or exercisable or exchangeable for, or giving any Person any
      right to subscribe for or acquire, any shares of Common Stock, or contracts,
      commitments, understandings or arrangements by which the Company or any
      Subsidiary is or may become bound to issue additional shares of Common Stock
      or
      Common Stock Equivalents. 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 Purchaser) and will not result in a right of any holder
      of Company securities to adjust the exercise, conversion, exchange or reset
      price under any of such securities. All of the outstanding shares of capital
      stock of the Company are validly issued, fully paid and nonassessable, have
      been
      issued in compliance with all federal and state securities laws, and none of
      such outstanding shares was issued in violation of any preemptive rights or
      similar rights to subscribe for or purchase securities.  No further
      approval or authorization of any stockholder, the Board of Directors or others
      is required for the issuance and sale of the Securities.  There are no
      stockholders agreements, voting agreements or other similar agreements with
      respect to the Company’s capital stock to which the Company is a party or, to
      the knowledge of the Company, between or among any of the Company’s
      stockholders.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (p)
      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 in which the Company
      and
      the Subsidiaries are engaged, including, but not limited to, directors and
      officers insurance coverage at least equal to the aggregate Subscription
      Amount.  Neither the Company nor any Subsidiary has any reason to believe
      that it will not be able to renew its existing insurance coverage as and when
      such coverage expires or to obtain similar coverage from similar insurers as
      may
      be necessary to continue its business without a significant increase in
      cost.

     

    (q)
      Transactions
      with Affiliates and Employees. 
      Except as set forth in the SEC Reports, none of the officers or directors of
      the
      Company and, to the knowledge of the Company, none of the employees of the
      Company is presently a party to any transaction with the Company or any
      Subsidiary (other than for services as employees, officers and directors),
      including any contract, agreement or other arrangement providing for the
      furnishing of services to or by, providing for rental of real or personal
      property to or from, or otherwise requiring payments to or from any officer,
      director or such employee or, to the knowledge of the Company, any entity in
      which any officer, director, or any such employee has a substantial interest
      or
      is an officer, director, trustee or partner, in each case in excess of $100,000
      other than for (i) payment of salary or consulting fees for services rendered,
      (ii) reimbursement for expenses incurred on behalf of the Company and (iii)
      other employee benefits, including stock option agreements under any stock
      option plan of the Company.

     

    (r)
      Sarbanes-Oxley;
      Internal Accounting Controls. 
      The Company is in material compliance with all provisions of the Sarbanes-Oxley
      Act of 2002 which are applicable to it as of the Closing Date.  The Company
      has established disclosure controls and procedures (as defined in Exchange
      Act
      Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting
      (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f) for the Company
      and
      designed such disclosure controls and procedures to ensure that information
      required to be disclosed by the Company in the reports it files or submits
      under
      the Exchange Act is recorded, processed, summarized and reported, within the
      time periods specified in the Commission’s rules and forms.  The Company’s
      certifying officers have evaluated the effectiveness of the Company’s disclosure
      controls and procedures and internal controls over financial reporting (as
      such
      term is defined in Item 307(c) of Regulation S-K) as of the end of the period
      covered by the Company’s most recently filed periodic report under the Exchange
      Act (such date, the “Evaluation
      Date”). 
      The Company presented in its most recently filed periodic report under the
      Exchange Act the conclusions of the certifying officers about the effectiveness
      of the disclosure controls and procedures based on their evaluations as of
      the
      Evaluation Date.  Since the Evaluation Date, there have been no changes in
      the Company’s internal controls over financial reporting that has materially
      affected, or is reasonably likely to materially affect, the Company’s internal
      control over financial reporting.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

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

     

    (t)
      Private
      Placement. 
      Assuming the accuracy of the Purchaser’s representations and warranties set
      forth in Section 3.2, no registration under the Securities Act is required
      for
      the offer and sale of the Securities by the Company to the Purchaser as
      contemplated hereby. The issuance and sale of the Securities hereunder does
      not
      contravene the rules and regulations of the Trading Market.

     

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

     

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

     

    (w)
      Listing
      and Maintenance Requirements. 
      The Common Stock is registered pursuant to Section 12(b) or 12(g) of the
      Exchange Act, and the Company has taken no action designed to, or which to
      its
      knowledge is likely to have the effect of, terminating the registration of
      the
      Common Stock under the Exchange Act nor has the Company received any
      notification that the Commission is contemplating terminating such
      registration.  The Company has not, in the 12 months preceding the date
      hereof, received notice from any Trading Market on which the Common Stock is
      or
      has been listed or quoted to the effect that the Company is not in compliance
      with the listing or maintenance requirements of such Trading Market. The Company
      is in compliance with all such listing and maintenance
      requirements.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (x)
      Intentionally
      Omitted.

     

    (y)
      Disclosure. 
      Except with respect to the material terms and conditions of the transactions
      contemplated by the Transaction Documents, the Company confirms that neither
      it
      nor any other Person acting on its behalf has provided any of the Purchaser
      or
      their agents or counsel with any information that it believes constitutes or
      might constitute material, nonpublic information.  The Company understands
      and confirms that the Purchaser will rely on the foregoing representation in
      effecting transactions in securities of the Company.  All disclosure
      furnished by or on behalf of the Company to the Purchaser regarding the Company,
      its business and the transactions contemplated hereby, including the Disclosure
      Schedules to this Agreement, is true and correct and does not contain any untrue
      statement of a material fact or omit to state any material fact necessary in
      order to make the statements made therein, in light of the circumstances under
      which they were made, not misleading.   The press releases
      disseminated by the Company during the twelve months preceding the date of
      this
      Agreement taken as a whole do not contain any untrue statement of a material
      fact or omit to state a material fact required to be stated therein or necessary
      in order to make the statements therein, in light of the circumstances under
      which they were made and when made, not misleading.  The Company
      acknowledges and agrees that the Purchaser makes or has made any representations
      or warranties with respect to the transactions contemplated hereby other than
      those specifically set forth in Section 3.2 hereof.

     

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

     

    (aa)
      Indebtedness. 
      The Company does not intend to incur debts beyond its ability to pay such debts
      as they mature (taking into account the timing and amounts of cash to be payable
      on or in respect of its debt).   Schedule
      3.1(aa)
      sets
      forth as of the date hereof all outstanding secured and unsecured Indebtedness
      of the Company or any Subsidiary, or for which the Company or any Subsidiary
      has
      commitments.  For the purposes of this Agreement, “Indebtedness”
means
      (a) any liabilities for borrowed money or amounts owed in excess of $150,000
      (other than trade accounts payable incurred in the ordinary course of business),
      (b) all guaranties, endorsements and other contingent obligations in respect
      of
      indebtedness of others, whether or not the same are or should be reflected
      in
      the Company’s balance sheet (or the notes thereto), except guaranties by
      endorsement of negotiable instruments for deposit or collection or similar
      transactions in the ordinary course of business; and (c) the present value
      of
      any lease payments in excess of $150,000 due under leases required to be
      capitalized in accordance with GAAP.  Neither the Company nor any
      Subsidiary is in default with respect to any Indebtedness.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    (ee)
      Accountants. 
      The Company’s accounting firm is set forth on Schedule
      3.1(ee)
      of the
      Disclosure Schedule.  To the knowledge and belief of the Company, such
      accounting firm (i) is a registered public accounting firm as required by the
      Exchange Act and (ii) shall express its opinion with respect to the financial
      statements to be included in the Company’s Annual Report on Form 10-K for the
      year ending December 31, 2008.

     

    (ff)
      Seniority. 
      As of the Closing Date, except as set forth on Schedule
      3.1(ff),
      no
      Indebtedness or other claim against the Company is senior to the Debentures
      in
      right of payment, whether with respect to interest or upon liquidation or
      dissolution, or otherwise, other than indebtedness secured by purchase money
      security interests (which is senior only as to underlying assets covered
      thereby) and capital lease obligations (which is senior only as to the property
      covered thereby).

     

    (gg)
      No
      Disagreements with Accountants and Lawyers. 
      There are no disagreements of any kind presently existing, or reasonably
      anticipated by the Company to arise, between the Company and the accountants
      and
      lawyers formerly or presently employed by the Company and the Company is current
      with respect to any fees owed to its accountants and lawyers which could affect
      the Company’s ability to perform any of its obligations under any of the
      Transaction Documents.

     

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

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (ii)
      Acknowledgment
      Regarding Purchaser’s Trading Activity. 
      Notwithstanding anything in this Agreement or elsewhere herein to the contrary
      (except for Sections 3.2(f) and 4.15 hereof), it is understood and acknowledged
      by the Company that (i) none of the Purchaser has been asked to agree by the
      Company, nor has the Purchaser agreed, to desist from purchasing or selling,
      long and/or short, securities of the Company, or “derivative” securities based
      on securities issued by the Company or to hold the Securities for any specified
      term, (ii) past or future open market or other transactions by the Purchaser,
      specifically including, without limitation, Short Sales or “derivative”
transactions, before or after the closing of this or future private placement
      transactions, may negatively impact the market price of the Company’s
      publicly-traded securities, (iii) the Purchaser, and counter-parties in
“derivative” transactions to which any the Purchaser is a party, directly or
      indirectly, may presently have a “short” position in the Common Stock, and (iv)
      the Purchaser shall not be deemed to have any affiliation with or control over
      any arm’s length counter-party in any “derivative” transaction.  The
      Company further understands and acknowledges that (a) one or more Purchaser
      may
      engage in hedging activities at various times during the period that the
      Securities are outstanding, including, without limitation, during the periods
      that the value of the Underlying Shares deliverable with respect to Securities
      are being determined and (b) such hedging activities (if any) could reduce
      the
      value of the existing stockholders’ equity interests in the Company at and after
      the time that the hedging activities are being conducted.  The Company
      acknowledges that such aforementioned hedging activities do not constitute
      a
      breach of any of the Transaction Documents.

     

    (jj)
      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 of the Company or (iii) paid or agreed to pay to any Person any
      compensation for soliciting another to purchase any other securities of the
      Company, other than, in the case of clauses (ii) and (iii), compensation paid
      to
      the Company’s placement agent in connection with the placement of the
      Securities.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    3.2
      Representations
      and Warranties of the Purchaser.   
      The Purchaser hereby represents and warrants as of the date hereof and as of
      the
      Closing Date to the Company as follows:

     

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

     

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

     

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

     

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

     

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

     

    (f)
      Short
      Sales and Confidentiality Prior To The Date Hereof. 
      Other than consummating the transactions contemplated hereunder, the Purchaser
      has not directly or indirectly, nor has any Person acting on behalf of or
      pursuant to any understanding with the Purchaser, executed any purchases or
      sales, including Short Sales, of the securities of the Company during the
      period commencing from the time that the Purchaser first received a term sheet
      (written or oral) from the Company or any other Person representing the Company
      setting forth the material terms of the transactions contemplated hereunder
      until the date hereof (“Discussion
      Time”). 
      Other than to other Persons party to this Agreement, the Purchaser has
      maintained the confidentiality of all disclosures made to it in connection
      with
      this transaction (including the existence and terms of this
      transaction).

    
      
        
        

      

      
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    ARTICLE
      IV

    OTHER
      AGREEMENTS OF THE PARTIES

     

    4.1
      Transfer
      Restrictions.

     

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

     

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

     

    [NEITHER]
      THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE]]
      HAS
      [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
      SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
      TO
      SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
      COMPANY.  THIS SECURITY [AND THE SECURITIES ISSUABLE UPON [EXERCISE] OF
      THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
      OR
      OTHER LOAN SECURED BY SUCH SECURITIES.

    
      
        
        

      

      
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    The
      Company acknowledges and agrees that the Purchaser may from time to time pledge
      pursuant to a bona fide margin agreement with a registered broker-dealer or
      grant a security interest in some or all of the Securities to a financial
      institution that is an “accredited investor” as defined in Rule 501(a) under the
      Securities Act and who agrees to be bound by the provisions of this Agreement
      and, if required under the terms of such arrangement, the Purchaser may transfer
      pledged or secured Securities to the pledgees or secured parties. Such a pledge
      or transfer would not be subject to approval of the Company and no legal opinion
      of legal counsel of the pledgee, secured party or pledgor shall be required
      in
      connection therewith. Further, no notice shall be required of such pledge.
      At
      the Purchaser’s expense, the Company will execute and deliver such reasonable
      documentation as a pledgee or secured party of Securities may reasonably request
      in connection with a pledge or transfer of the Securities.

     

    (c)
      Certificates evidencing the Underlying Shares shall not contain any legend
      (including the legend set forth in Section 4.1(b) hereof): (i) while a
      registration statement covering the resale of such security is effective under
      the Securities Act, (ii) following any sale of such Underlying Shares pursuant
      to Rule 144, (iii) if such Underlying Shares are eligible for sale under Rule
      144, without the requirement for the Company to be in compliance with the
      current public information required under Rule 144 as to such Underlying Shares
      and without volume or manner-of-sale restrictions or (iv) if such legend is
      not
      required under applicable requirements of the Securities Act (including judicial
      interpretations and pronouncements issued by the staff of the Commission).
      Upon
      the receipt of the documentation customary in connection with requests to remove
      legends, except as expressly provided in this Section 4.1, the Company shall
      cause its counsel to issue a legal opinion to the Transfer Agent promptly but
      in
      any event within three (3) Trading Days if required by the Transfer Agent to
      effect the removal of the legend hereunder. If all or any portion of a the
      Underlying Shares are converted by an effective registration statement to cover
      the resale of the Underlying Shares, or if such Underlying Shares may be sold
      under Rule 144, without the requirement for the Company to be in compliance
      with
      the current public information required under Rule 144 as to such Underlying
      Shares and without volume or manner-of-sale restrictions or if such legend
      is
      not otherwise required under applicable requirements of the Securities Act
      (including judicial interpretations and pronouncements issued by the staff
      of
      the Commission) then such Underlying Shares shall be issued free of all legends.
      The Company agrees that at such time as such legend is no longer required under
      this Section 4.1(c), it will, no later than three Trading Days following the
      delivery by the Purchaser to the Company or the Transfer Agent of a certificate
      representing Underlying Shares, as applicable, issued with a restrictive legend
      (such third Trading Day, the “Legend Removal Date”), deliver or cause to be
      delivered to the Purchaser a certificate representing such shares that is free
      from all restrictive and other legends. The Company may not make any notation
      on
      its records or give instructions to the Transfer Agent that enlarge the
      restrictions on transfer set forth in this Section 4. Certificates for
      Underlying Shares subject to legend removal hereunder shall be transmitted
      by
      the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s
      prime broker with the Depository Trust Company System as directed by the
      Purchaser.

    
      
        
        

      

      
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    (d)
      The
      Purchaser agrees that it will sell any Securities pursuant to either the
      registration requirements of the Securities Act, including any applicable
      prospectus delivery requirements, or an exemption therefrom, and that if
      Securities are sold pursuant to a registration statement, they will be sold
      in
      compliance with the plan of distribution set forth therein, and acknowledges
      that the removal of the restrictive legend from certificates representing
      Securities as set forth in this Section 4.1 is predicated upon the Company’s
      reliance upon this understanding.

     

    4.2
      Acknowledgment
      of Dilution. 
      The Company acknowledges that the issuance of the Securities may result in
      dilution of the outstanding shares of Common Stock, which dilution may be
      substantial under certain market conditions.  The Company further
      acknowledges that its obligations under the Transaction Documents, including
      without limitation its obligation to issue the Underlying Shares pursuant to
      the
      Transaction Documents, are unconditional and absolute and not subject to any
      right of set off, counterclaim, delay or reduction, regardless of the effect
      of
      any such dilution or any claim the Company may have against the Purchaser and
      regardless of the dilutive effect that such issuance may have on the ownership
      of the other stockholders of the Company.

     

    4.3
      Furnishing
      of Information. 
      Until the earliest of the time that the Purchaser owns Securities, the Company
      covenants to timely file (or obtain extensions in respect thereof and file
      within the applicable grace period) all reports required to be filed by the
      Company after the date hereof pursuant to the Exchange Act even if the Company
      is not then subject to the reporting requirements of the Exchange
      Act.    As long as the Purchaser owns Securities, if the Company
      is not required to file reports pursuant to the Exchange Act, it will prepare
      and furnish to the Purchaser and make publicly available in accordance with
      Rule
      144(c) such information as is required for the Purchaser to sell the Securities
      under Rule 144.  The Company further covenants that it will take such
      further action as any holder of Securities may reasonably request, to the extent
      required from time to time to enable such Person to sell such Securities without
      registration under the Securities Act within the requirements of the exemption
      provided by Rule 144.

     

    4.4
      Integration. 
      The Company shall not sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the Securities
      Act) that would be integrated with the offer or sale of the Securities to the
      Purchaser in a manner that would require the registration under the Securities
      Act of the sale of the Securities to the Purchaser or that would be integrated
      with the offer or sale of the Securities for purposes of the rules and
      regulations of any Trading Market.

     

    4.5
      Exercise
      Procedures. 
      The form of Notice of Exercise included in the Warrants set forth the totality
      of the procedures required of the Purchaser in order to exercise the Warrants
      and no additional legal opinion or other information or instructions shall
      be required of the Purchaser to exercise their Warrants.  The Company shall
      honor exercises of the Warrants and shall deliver Underlying Shares in
      accordance with the terms, conditions and time periods set forth in the
      Transaction Documents.

     

    
      
        
        

      

      
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    4.6
      Securities
      Laws Disclosure; Publicity. 
      The Company shall, by 8:30 a.m. (New York City time) on the fourth
      (4th)
      Trading
      Day following the date hereof, issue a Current Report on Form 8-K disclosing
      the
      material terms of the transactions contemplated hereby and attaching the
      Transaction Documents as exhibits thereto.  Notwithstanding the foregoing,
      the Company shall not publicly disclose the name of the Purchaser, or include
      the name of the Purchaser in any filing with the Commission or any regulatory
      agency or Trading Market, without the prior written consent of the Purchaser,
      except: (a) as required by federal securities law in connection with the filing
      of final Transaction Documents (including signature pages thereto) with the
      Commission and (b) to the extent such disclosure is required by law or Trading
      Market regulations, in which case the Company shall provide the Purchaser with
      prior notice of such disclosure permitted under this clause (b).

     

    4.7
      Shareholder
      Rights Plan. 
      No claim will be made or enforced by the Company or, with the consent of the
      Company, any other Person, that the Purchaser is an “Acquiring Person” under any
      control share acquisition, business combination, poison pill (including any
      distribution under a rights agreement) or similar anti-takeover plan or
      arrangement in effect or hereafter adopted by the Company, or that the Purchaser
      could be deemed to trigger the provisions of any such plan or arrangement,
      by
      virtue of receiving Securities under the Transaction Documents or under any
      other agreement between the Company and the Purchaser.

     

    4.8
      Non-Public
      Information. 
      Except with respect to the material terms and conditions of the transactions
      contemplated by the Transaction Documents, and the Transaction Documents which
      will be attached as exhibits to the Form 8-K, the Company covenants and agrees
      that neither it nor any other Person acting on its behalf will provide the
      Purchaser or its agents or counsel with any information that the Company
      believes constitutes material non-public information, unless prior thereto
      the
      Purchaser shall have executed a written agreement regarding the confidentiality
      and use of such information.  The Company understands and confirms that the
      Purchaser shall be relying on the foregoing covenant in effecting transactions
      in securities of the Company.

     

    4.9
      Use
      of
      Proceeds. 
      Except as set forth on Schedule
      4.9
      attached
      hereto, the Company shall use the net proceeds from the sale of the Securities
      hereunder for working capital purposes and shall not use such proceeds for
      (a)
      the satisfaction of any portion of the Company’s debt (other than payment of
      trade payables in the ordinary course of the Company’s business and prior
      practices), (b) the redemption of any Common Stock or Common Stock Equivalents
      or (c) the settlement of any outstanding litigation.

     

    4.10
      Indemnification
      of Purchaser.  
      Subject to the provisions of this Section 4.10, the Company will indemnify
      and
      hold the Purchaser and its directors, officers, shareholders, members, partners,
      employees and agents (and any other Persons with a functionally equivalent
      role
      of a Person holding such titles notwithstanding a lack of such title or any
      other title), each Person who controls the Purchaser (within the meaning of
      Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
      directors, officers, shareholders, agents, members, partners or employees (and
      any other Persons with a functionally equivalent role of a Person holding such
      titles notwithstanding a lack of such title or any other title) of such
      controlling person (each, a “Purchaser
      Party”)
      harmless from any and all:

    
      
        
        

      

      
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    (i) losses,
      liabilities, obligations, claims, contingencies, damages, costs and expenses,
      including all judgments, amounts paid in settlements, court costs and reasonable
      attorneys’ fees and costs of investigation that any the Purchaser Party may
      suffer or incur as a result of or relating to (a) any breach of any of the
      representations, warranties, covenants or agreements made by the Company in
      this
      Agreement or in the other Transaction Documents or (b) any action instituted
      against the Purchaser in any capacity, or any of them or their respective
      Affiliates, by any stockholder of the Company who is not an Affiliate of the
      Purchaser, with respect to any of the transactions contemplated by the
      Transaction Documents (unless such action is based upon a breach of the
      Purchaser’s representations, warranties or covenants under the Transaction
      Documents or any agreements or understandings the Purchaser may have with any
      such stockholder or any violations by the Purchaser of state or federal
      securities laws or any conduct by the Purchaser which constitutes fraud, gross
      negligence, willful misconduct or malfeasance).

     

    (ii) losses,
      liabilities, obligations, claims, contingencies, damages, costs and expenses,
      including all judgments, amounts paid in settlements, court costs and reasonable
      attorneys’ fees and costs of investigation that any the Purchaser may suffer or
      incur as a result of or relating to, or arising out of or based upon the failure
      of the Company to register shares other than those held by Purchaser or
      otherwise obtain the registration of any holder disclosed in Schedule 3.1(v)
      other than Purchaser whose consent is required to effectuate the Purchaser’s
      right hereunder to be registered prior to and to the exclusion of such holder(s)
      under any registration rights or other similar agreement existing prior to
      this
      Agreement.

     

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

     

    
      
        
        

      

      
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    4.11
      Reservation
      and Listing of Securities.

     

    (a)
      The
      Company shall maintain a reserve from its duly authorized shares of Common
      Stock
      for issuance pursuant to the Transaction Documents in such amount as may then
      be
      required to fulfill its obligations in full under the Transaction
      Documents.

     

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

     

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

     

    4.12
      Intentionally
      Omitted.

     

    4.13
      Subsequent
      Equity Sales. 

     

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

     

    (c)
      Notwithstanding the foregoing, this Section 4.13 shall not apply (i) in respect
      of an Exempt Issuance, except that no Variable Rate Transaction shall be an
      Exempt Issuance.

     

    
      
        
        

      

      
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    4.14
      Equal
      Treatment of Purchaser. 
      No consideration (including any modification of any Transaction Document) shall
      be offered or paid to any Person to amend or consent to a waiver or modification
      of any provision of any of the Transaction Documents unless the same
      consideration is also offered to all of the parties to the Transaction
      Documents. Further, the Company shall not make any payment of principal or
      interest on the Debentures in amounts which are disproportionate to the
      respective principal amounts outstanding on the Debentures at any applicable
      time.  For clarification purposes, this provision constitutes a separate
      right granted to the Purchaser by the Company and negotiated separately by
      the
      Purchaser, and is intended for the Company to treat the Purchaser as a class
      and
      shall not in any way be construed as the Purchaser acting in concert or as
      a
      group with respect to the purchase, disposition or voting of Securities or
      otherwise.

     

    4.15
      Short
      Sales and Confidentiality After The Date Hereof.
      The
      Purchaser covenants that neither it nor any Affiliate acting on its behalf
      or
      pursuant to any understanding with it will execute any Short Sales during the
      period commencing at the Discussion Time and ending at the time that the
      transactions contemplated by this Agreement are first publicly announced as
      described in Section 4.6.  The Purchaser covenants that until such time as
      the transactions contemplated by this Agreement are publicly disclosed by the
      Company as described in Section 4.6, the Purchaser will maintain the
      confidentiality of the existence and terms of this transaction and the
      information included in the Disclosure Schedules. Notwithstanding the foregoing,
      the Purchaser makes any representation, warranty or covenant hereby that it
      will
      not engage in Short Sales in the securities of the Company after the time that
      the transactions contemplated by this Agreement are first publicly announced
      as
      described in Section 4.6; provided, however, the Purchaser agrees that it will
      not enter into any Net Short Sales (as hereinafter defined) from the period
      commencing on the Closing Date and ending on the date that is the earlier of
      (x)
      the 6 month anniversary of the Closing Date or (y) the date that the Purchaser
      no longer holds any Debentures.  For purposes of this Section 4.15, a
“Net
      Short Sale”
by
      the
      Purchaser shall mean a sale of Common Stock by the Purchaser that is marked
      as a
      short sale and that is made at a time when there is no equivalent offsetting
      long position in Common Stock held by the Purchaser.  For purposes of
      determining whether there is an equivalent offsetting long position in Common
      Stock held by the Purchaser, Underlying Shares that have not yet been converted
      pursuant to the Debentures and Warrant Shares that have not yet been exercised
      pursuant to the Warrants shall be deemed to be held long by the Purchaser,
      and
      the amount of shares of Common Stock held in a long position shall be all
      unconverted Underlying Shares and unexercised Warrant Shares (ignoring any
      exercise limitations included therein) issuable to the Purchaser on such date,
      plus any shares of Common Stock or Common Stock Equivalents otherwise then
      held
      by the Purchaser.  Notwithstanding the foregoing, in the case of the
      Purchaser that is a multi-managed investment vehicle whereby separate portfolio
      managers manage separate portions of the Purchaser’s assets and the portfolio
      managers have no direct knowledge of the investment decisions made by the
      portfolio managers managing other portions of the Purchaser’s assets, the
      covenant set forth above shall only apply with respect to the portion of assets
      managed by the portfolio manager that made the investment decision to purchase
      the Securities covered by this Agreement.

     

    
      
        
        

      

      
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    4.16
      Form
      D; Blue Sky Filings. 
      The Company agrees to timely file a Form D with respect to the Securities as
      required under Regulation D and to provide a copy thereof, promptly upon request
      of the Purchaser. The Company shall take such action as the Company shall
      reasonably determine is necessary in order to obtain an exemption for, or to
      qualify the Securities for, sale to the Purchaser at the Closing under
      applicable securities or “Blue Sky” laws of the states of the United States, and
      shall provide evidence of such actions promptly upon request of the
      Purchaser.

     

    4.17
      Capital
      Changes. 
      Until such time that the Debentures are no longer outstanding, the Company
      shall not undertake a reverse stock split of the Common Stock without the prior
      written consent of the Purchaser holding 75% of the principal amount outstanding
      of the Debentures.

     

    4.18
      Most
      Favored Nation Provision. 
      From the date hereof until such time that the Debentures are no longer
      outstanding, if the Company or any Subsidiary proposes to issue any Common
      Stock
      or Common Stock Equivalents (such an issuance, a “Subsequent
      Financing”),
      the
      Purchaser may elect, in its sole discretion, to exchange all or some of the
      Debentures then held by the Purchaser for any securities issued in a Subsequent
      Financing on a $1.00 for $1.00 basis based on the outstanding principal amount
      of such Debentures, along with any liquidated damages and other amounts owing
      thereon, and the effective price at which such securities are to be sold in
      such
      Subsequent Financing; provided,
      however,
      that
      this Section 4.18 shall not apply with respect to (i) an Exempt Issuance or
      (ii)
      an underwritten public offering of Common Stock. At least 10 Trading Days prior
      to the closing of any Subsequent Financing, the Company shall deliver to the
      Purchaser a written notice of its intention to effect a Subsequent Financing
      (“Pre-Notice”),
      which
      Pre-Notice shall ask the Purchaser if it wants to review the details of such
      financing (such additional notice, a “Subsequent
      Financing Notice”). 
      Upon the request of the Purchaser, and only upon a request by the Purchaser,
      for
      a Subsequent Financing Notice, the Company shall promptly, but no later than
      1
      Trading Day after such request, deliver a Subsequent Financing Notice to the
      Purchaser.  The Subsequent Financing Notice shall describe in reasonable
      detail the proposed terms of such Subsequent Financing, the amount of proceeds
      intended to be raised thereunder and the Person or Persons through or with
      whom
      such Subsequent Financing is proposed to be effected and shall include a term
      sheet or similar document relating thereto as an
      attachment.   Any Purchaser desiring to exercise its rights
      pursuant to this Section in respect of  such Subsequent Financing must
      provide written notice to the Company by not later than 5:30 p.m. (New York
      City
      time) on the 10th
      Trading
      Day after all of the Purchaser have received the Pre-Notice that the Purchaser
      desires to exercise its rights pursuant to this Section and the amount of
      Debentures as to which it desires to exercise such rights. Notwithstanding
      the
      procedural requirements set forth in this Section 4.18, the Purchaser may elect,
      in its sole discretion, to exchange all or some of the Debentures then held
      by
      the Purchaser for the Company’s 18% Senior Secured Debentures (the “Secured
      Debentures”) on a $1.00 for $1.00 basis based on the outstanding principal
      amount of such Debentures, along with any liquidated damages and other amounts
      owing thereon, upon the Initial Closing of the offering (as defined in that
      certain Securities Purchase Agreement (the “Senior Secured SPA” attached hereto
      as Exhibit
      C).

     

    
      
        
        

      

      
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    4.19
      Public
      Information. 
      At any time during the period commencing from the six (6) month anniversary
      of
      the Closing Date and ending at such time that all of the Securities, may be
      sold
      without the requirement for the Company to be in compliance with Rule 144(c)(1)
      and otherwise without restriction or limitation pursuant to Rule 144, if the
      Company shall fail for any reason to satisfy the current public information
      requirement under Rule 144(c) (a “Public
      Information Failure”)
      then,
      in addition to the Purchaser’s other available remedies, the Company shall pay
      to the Purchaser, in cash, as partial liquidated damages and not as a penalty,
      by reason of any such delay in or reduction of its ability to sell the
      Securities, an amount in cash equal to two percent (2.0%) of the aggregate
      Subscription Amount of the Purchaser’s Securities on the day of a Public
      Information Failure and on every thirtieth (30th)
      day
      (pro rated for periods totaling less than thirty days) thereafter until the
      earlier of (a) the date such Public Information Failure is cured and (b) such
      time that such public information is no longer required  for the Purchaser
      to transfer the Underlying Shares pursuant to Rule 144.  The payments to
      which the Purchaser shall be entitled pursuant to this Section 4.19 are referred
      to herein as “Public
      Information Failure Payments.” 
      Public Information Failure Payments shall be paid on the earlier of (i) the
      last
      day of the calendar month during which such Public Information Failure Payments
      are incurred and (ii) the third (3rd)
      Business Day after the event or failure giving rise to the Public Information
      Failure Payments is cured. In the event the Company fails to make Public
      Information Failure Payments in a timely manner, such Public Information Failure
      Payments shall bear interest at the rate of 1.5% per month (prorated for partial
      months) until paid in full. Nothing herein shall limit the Purchaser’s right to
      pursue actual damages for the Public Information Failure, and the Purchaser
      shall have the right to pursue all remedies available to it at law or in equity
      including, without limitation, a decree of specific performance and/or
      injunctive relief.

     

    ARTICLE
      V

    MISCELLANEOUS

     

    5.1
      Termination. 
      This Agreement may be terminated by the Purchaser, as to the Purchaser’s
      obligations hereunder only and without any effect whatsoever on the obligations
      between the Company and the other Purchaser, by written notice to the other
      parties, if the Closing has not been consummated on or before October 15, 2008;
      provided,
      however,
      that
      such termination will not affect the right of any party to sue for any breach
      by
      the other party (or parties).

     

    5.2
      Fees
      and Expenses.  The
      Company shall deliver to the Purchaser, prior to the Closing, a completed and
      executed copy of the Closing Statement attached hereto as Annex
      A. 
      Except as expressly set forth in the Transaction Documents to the contrary,
      each
      party shall pay the fees and expenses of its advisers, counsel, accountants
      and
      other experts, if any, and all other expenses incurred by such party incident
      to
      the negotiation, preparation, execution, delivery and performance of this
      Agreement.  The Company shall pay all transfer agent fees, stamp taxes and
      other taxes and duties levied in connection with the delivery of any Securities
      to the Purchaser.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    5.5
      Amendments;
      Waivers. 
      No provision of this Agreement may be waived, modified, supplemented or amended
      except in a written instrument signed, in the case of an amendment, by the
      Company and the Purchaser of at least 75% in interest of the Securities still
      held by Purchaser or, in the case of a waiver, by the party against whom
      enforcement of any such waived provision is sought.  No waiver of any
      default with respect to any provision, condition or requirement of this
      Agreement shall be deemed to be a continuing waiver in the future or a waiver
      of
      any subsequent default or a waiver of any other provision, condition or
      requirement hereof, nor shall any delay or omission of any party to exercise
      any
      right hereunder in any manner impair the exercise of any such
      right.

     

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

     

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

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    5.10
      Survival. 
      The representations and warranties shall survive the Closing and the delivery
      of
      the Securities for the applicable statute of limitations.

     

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

     

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

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    5.13
      Rescission
      and Withdrawal Right. 
      Notwithstanding anything to the contrary contained in (and without limiting
      any
      similar provisions of) any of the other Transaction Documents, whenever the
      Purchaser exercises a right, election, demand or option under a Transaction
      Document and the Company does not timely perform its related obligations within
      the periods therein provided, then the Purchaser may rescind or withdraw, in
      its
      sole discretion from time to time upon written notice to the Company, any
      relevant notice, demand or election in whole or in part without prejudice to
      its
      future actions and rights; provided,
      however,
      in the
      case of a rescission of an exercise of a Warrant, the Purchaser shall be
      required to return any shares of Common Stock delivered in connection with
      any
      such rescinded exercise notice.

     

    5.14
      Replacement
      of Securities. 
      If any certificate or instrument evidencing any Securities is mutilated, lost,
      stolen or destroyed, the Company shall issue or cause to be issued in exchange
      and substitution for and upon cancellation thereof (in the case of mutilation),
      or in lieu of and substitution therefor, a new certificate or instrument, but
      only upon receipt of evidence reasonably satisfactory to the Company of such
      loss, theft or destruction.  The applicant for a new certificate or
      instrument under such circumstances shall also pay any reasonable third-party
      costs (including customary indemnity) associated with the issuance of such
      replacement Securities.

     

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

     

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

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    5.17
      Usury. 
      To the extent it may lawfully do so, the Company hereby agrees not to insist
      upon or plead or in any manner whatsoever claim, and will resist any and all
      efforts to be compelled to take the benefit or advantage of, usury laws wherever
      enacted, now or at any time hereafter in force, in connection with any claim,
      action or proceeding that may be brought by the Purchaser in order to enforce
      any right or remedy under any Transaction Document.  Notwithstanding any
      provision to the contrary contained in any Transaction Document, it is expressly
      agreed and provided that the total liability of the Company under the
      Transaction Documents for payments in the nature of interest shall not exceed
      the maximum lawful rate authorized under applicable law (the “Maximum
      Rate”),
      and,
      without limiting the foregoing, in no event shall any rate of interest or
      default interest, or both of them, when aggregated with any other sums in the
      nature of interest that the Company may be obligated to pay under the
      Transaction Documents exceed such Maximum Rate.  It is agreed that if the
      maximum contract rate of interest allowed by law and applicable to the
      Transaction Documents is increased or decreased by statute or any official
      governmental action subsequent to the date hereof, the new maximum contract
      rate
      of interest allowed by law will be the Maximum Rate applicable to the
      Transaction Documents from the effective date forward, unless such application
      is precluded by applicable law.  If under any circumstances whatsoever,
      interest in excess of the Maximum Rate is paid by the Company to the Purchaser
      with respect to indebtedness evidenced by the Transaction Documents, such excess
      shall be applied by the Purchaser to the unpaid principal balance of any such
      indebtedness or be refunded to the Company, the manner of handling such excess
      to be at the Purchaser’s election.

     

    5.18
      Independent
      Nature of Purchaser’s Obligations and Rights. 
      The obligations of the Purchaser under any Transaction Document are several
      and
      not joint with the obligations of any other Purchaser, and the Purchaser shall
      be responsible in any way for the performance or non-performance of the
      obligations of any other Purchaser under any Transaction Document.  Nothing
      contained herein or in any other Transaction Document, and no action taken
      by
      the Purchaser pursuant thereto, shall be deemed to constitute the Purchaser
      as a
      partnership, an association, a joint venture or any other kind of entity, or
      create a presumption that the Purchaser are in any way acting in concert or
      as a
      group with respect to such obligations or the transactions contemplated by
      the
      Transaction Documents.  The Purchaser shall be entitled to independently
      protect and enforce its rights, including without limitation the rights arising
      out of this Agreement or out of the other Transaction Documents, and it shall
      not be necessary for any other Purchaser to be joined as an additional party
      in
      any proceeding for such purpose.  The Purchaser has been represented by its
      own separate legal counsel in their review and negotiation of the Transaction
      Documents.  

     

    5.19
      Liquidated
      Damages. 
      The Company’s obligations to pay any partial liquidated damages or other amounts
      owing under the Transaction Documents is a continuing obligation of the Company
      and shall not terminate until all unpaid partial liquidated damages and other
      amounts have been paid notwithstanding the fact that the instrument or security
      pursuant to which such partial liquidated damages or other amounts are due
      and
      payable shall have been canceled.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    5.20
      Saturdays,
      Sundays, Holidays, etc.  If
      the last or appointed day for the taking of any action or the expiration of
      any
      right required or granted herein shall not be a Business Day, then such action
      may be taken or such right may be exercised on the next succeeding Business
      Day.

     

    5.21
      Construction.
      The
      parties agree that each of them and/or their respective counsel has reviewed
      and
      had an opportunity to revise the Transaction Documents and, therefore, the
      normal rule of construction to the effect that any ambiguities are to be
      resolved against the drafting party shall not be employed in the interpretation
      of the Transaction Documents or any amendments hereto.

     

    5.22
      Waiver
      of Jury Trial. 
      In any action, suit or proceeding in any jurisdiction brought by any party
      against any other party, the parties each knowingly and intentionally, to the
      greatest extent permitted by applicable law, hereby absolutely, unconditionally,
      irrevocably and expressly waives forever trial by jury.

     

    (Signature
      Pages Follow)

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

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

     

    
      	
              ENABLE
                HOLDINGS, INC.

            
	 
	
              By:/s/
                Jeffrey D. Hoffman            

                   Name:
                Jeffrey D. Hoffman

                  
                Title: CEO

            
	 
	
              Address
                for Notice:

               

              ENABLE
                HOLDINGS, INC.

              8725
                W. Higgins Road, Suite 900

              Chicago,
                Illinois 60631

              Attn:
                Jeffrey D. Hoffman, CEO

               

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

               

              Fredrikson
                & Byron, P.A.

              200
                South Sixth Street, Suite 4000

              Minneapolis,
                MN 55402

              Attn:
                Thomas F. Steichen, Esq.

            

    

    

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGE FOR PURCHASER
      FOLLOWS]

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    [PURCHASER
      SIGNATURE PAGES TO ENABLE SECURITIES PURCHASE AGREEMENT]

     

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

    

      
        	
                Name
                  of Purchaser: Dawn Geras

              
	 
	
                Signature
                  of Authorized Signatory of Purchaser:
                  

              
	 
	 
	
                /s/
                  Dawn Geras                                        

              
	 
	
                Name
                  of Authorized Signatory: 

              
	                                             
                
	 
	
                Title
                  of Authorized Signatory: 

              
	                                            
	 
	
                Email
                  Address of Purchaser: 

              
	                                            
	 
	
                Facsimile
                  Number of Purchaser: 

              
	                                            
	 
	
                Address
                  for Notice of Purchaser:

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

              
	 
	
                Subscription
                  Amount:     $400,000   

              
	 
	
                Warrant
                  Shares:     3,200,000       

              

      

    

     

    EIN
      Number:  [PROVIDE
      THIS UNDER SEPARATE COVER]

     

    [SIGNATURE
      PAGES CONTINUE]

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    Annex
      A

     

    CLOSING
      STATEMENT

     

    Pursuant
      to the attached Securities Purchase Agreement, dated as of the date hereto,
      the
      purchaser shall purchase $400,000 of Debentures and Warrants from Enable
      Holdings, Inc. (the “Company”). 
      All funds will be wired into an account maintained by the Company.  All
      funds will be disbursed in accordance with this Closing
      Statement. 

     

    Disbursement
      Date: 
      October 9, 2008

     

    
      	
              I.  
                PURCHASE
                PRICE

            	
               

            
	
               

            	
              Gross
                Proceeds to be Received

            	
              $400,000

            
	
               

            	
               

            
	
              II. DISBURSEMENTS

            	
               

            
	
               

            	
               

            	
               

            
	
               

            	
              Enable:

            	
              $400,000

            
	
               

            	
               

            
	
              Total
                Amount Disbursed:

            	
              $400,000

            
	
               

            	
               

            
	
               

            	
               

            
	
               

            	
               

            
	
              WIRE
                INSTRUCTIONS:

              For
                Enable:

            	
               

            

    

     

    
      
        
        

      

      
        35Exhibit
      10.27

    

    

    

    August
      14, 2008.

    

    William
      D. Kirkland

    President
      & CEO

    Collexis
      Holdings, Inc.

    1201
      Main
      Street

    Suite
      980

    Columbia,
      SC 29201

     

    Dear
      Bill,

    

    Thank
      you
      for reaching out to us - we are very excited by the prospect of helping Collexis
      to develop a roadmap for the next phase of its commercialization. 

    

    OUR
      UNDERSTANDING

    

    Collexis.
      Collexis
      Holdings, Inc. (OTC: CLXS), headquartered in Columbia, South Carolina, has
      a
      mission to provide software that supports knowledge extraction and discovery
      across multiple industries. It develops software that supports the
      market-building tools to search and mine sets of information. In addition to
      the
      standard data and information retrieval capabilities, the Company's technology
      is able to discover relationships between elements of different information
      items, via clustering and/or aggregation, and thus uncover important implicit
      knowledge. Collexis Engine 6.0 software enables discovery through
      identification, ordering, and aggregation of ideas and concepts. It can create
      ‘fingerprints’ of texts, such as articles, Web pages, books, and internal and
      external databases, which can be used in turn to find the relevant information
      for a researcher or business professional.

     

    Collexis
      has completed several initiatives over the past year, including the acquisition
      of Lawriter (500,000 members), the launch of a medical social network (30,000
      registered users), the launch of new marketing partnerships (Thomson Web of
      Science), and the acquisition and reorganization of internal software and
      technology development capabilities. 

     

    
      	 	
              Booz
                & Company (N.A.) Inc.

              101
                Park Avenue

              New
                York, NY 10178

              Tel    
                1 212 551 6309

              Fax   
                1 212 551 6732

              www.booz.com

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    August
      14, 2008.

    Page
      2

    

    So,
      you
      are looking for a consultant with both relevant industry expertise and deep
      functional expertise to help Collexis develop an optimal near- to mid-term
      roadmap for value-maximizing commercialization. Specifically, you would like
      to
      address the following questions:

    

    
      	 	
              ·

            	
              What
                applications should Collexis develop next, and for which markets
                first?

            

    

    
      	 	
              ·

            	
              Which
                geographic markets should be
                prioritized?

            

    

    
      	 	
              ·

            	
              What
                verticals should Collexis target?

            

    

    
      	 	
              ·

            	
              What
                revenue models should be employed, for which markets, and for which
                applications?

            

    

    
      	 	
              ·

            	
              What
                is the best channel(s) to market for Collexis? Should it build its
                own
                salesforce, or partner with another?
                Whom?

            

    

    

    Booz
      & Company is uniquely qualified to support Collexis in this effort. We bring
      experience in similar engagements, as well as significant industry
      expertise.

     

    We
      estimate 6 weeks to complete this assignment and anticipate working closely
      with
      the Collexis senior team to maintain direction and perspective throughout the
      project. Therefore, the availability of key stakeholders to participate in
      this
      effort will be important.

    

    The
      time
      frame also relies on participation and insights from industry professionals.
      We
      will leverage these interviews with key opinion leaders to obtain their views
      on
      likely future demand for Collexis’ and other related products. 

     

    We
      will
      perform a detailed review of Collexis’ product portfolio, including assessing
      factors including, but not limited to:

    

    
      	 	
              ·

            	
              User
                experience compared to alternative sources and
                tools

            

    

    
      	 	
              ·

            	
              High-level
                understanding of how Collexis and competitive and complementary products
                fit into the workflow to meet end-user needs within specific
                verticals

            

    

    
      	 	
              ·

            	
              Key
                advantages of current and planned
                development

            

    

    
      	 	
              ·

            	
              Development
                and marketing plans and schedule

            

    

     

    We
      will
      develop the optimal roadmap for the next phase of your commercialization
      efforts. The selection process will involve the prioritization of opportunities
      based on their intrinsic value, risk profile and other attributes, such as
      the
      preferences and utility curve of your key stakeholders. .

     

    We
      will
      staff this assignment with resources that draw on the full range of capabilities
      of Booz & Company. We have assembled an experienced team of professionals to
      support Collexis in this effort. We propose a senior team with the experience
      and insight into strategic issues that Collexis faces. Our senior time
      commitment is a reflection
      of how we view the importance and complexity of this effort. We will be
      supported in the background by our core team of consultants to fully leverage
      our impact.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    August
      14, 2008.

    Page
      3

    

    Based
      on
      the discussions we have had and the outlined in this document, we believe this
      assignment will take 6 weeks to complete. Booz & Company’s charge for
      professional consulting fees for the activities and size of team outlined would
      result in overall professional fees of $354,000, plus expenses as incurred.
      All
      engagement related expenses for travel, research, report production and the
      like
      will be charged in addition to the professional fees.

     

    Booz
      & Company will devote its best professional efforts to this assignment. All
      findings, conclusions, and recommendations will represent our best judgment
      based on the information available. A copy of our terms and conditions are
      attached as Appendix I. To authorize us to begin work and acknowledge your
      agreement to this proposal, including the terms and conditions, please sign
      this
      proposal and return to us.

    

    * * * * * * * * * * *

    

    Bill,
      we
      look forward to getting started and working with you on this most important
      strategic initiative.

     

    
      	
              By:
                

            	
              /s/Justin
                Pettit

            
	
              BOOZ
                & COMPANY INC.

            
	
              Vice
                President

            

    

     

    Accepted
      and Agreed to:

    

    
      	
              By:

            	
              /s/William
                D. Kirkland

            
	 	
              President
                and CEO

            
	 	
              Collexis
                Holdings, Inc.

            

    

     

    Date:_August
      14, 2008

     

    cc:
      M.
      Egol

    C.
      Vollmer

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
APPENDIX
      I

     

    
      	1.	
              Scope
                Of Work: Booz
                & Company Inc. (“Booz & Company”) hereby agrees to perform the
                work described in the attached proposal to Client (the
                “Proposal”).

            

    

     

    
      	2.	
              Compensation:
                Client
                agrees to pay Booz & Company for the services rendered to the Client
                pursuant to this Agreement and to reimburse Booz & Company for
                expenses incurred in connection with providing such services in accordance
                with the attached Proposal. 

            

    

     

    
      	3.	
              Confidentiality:
                Each
                party shall keep confidential and shall not use (except in connection
                with
                this Agreement) any confidential information disclosed to it by the
                other
                party. The parties agree that the following shall not constitute
                “confidential information”:

            

    

     

    (i) information
      that was in the public domain or in the possession of the receiving party at
      the
      time of disclosure to that party by the other party,

     

    (ii)
       information
      independently developed by a party,

     

    (iii)
       information
      that subsequently comes into the public domain through no fault of the receiving
      party, and

     

    (iv)
       information
      that is also disclosed to the receiving party by a third party who is under
      no
      obligation to the disclosing party to keep that information
      confidential.

     

    The
      foregoing notwithstanding, Booz & Company may serve other clients in the
      same industry as long as it does so without compromising its responsibility
      to
      maintain the confidentiality of Client’s confidential information including
      parties with whom you compete or have a commercial relationship.

     

    
      	4.	
              Cooperation:
                Both
                Booz & Company and Client acknowledge and agree that successful
                completion of this assignment will require their full and mutual
                good
                faith cooperation. The development tasks to be performed by Client
                personnel, including staffing requirements, and the obligations of
                Client
                regarding such personnel, are as set forth in the Proposal. In addition
                to
                performing those tasks identified in the Proposal, Client agrees
                to
                provide such services, equipment, software and support as are stated
                to be
                Client's responsibility in the Proposal. Client further agrees that
                information provided to Booz & Company shall be complete, accurate and
                prompt, that its reviews of Booz & Company work shall be timely and
                shall be performed by personnel fully familiar with Client’s business and
                requirements.

            

    

     

    
      	5.	
              Use
                of Information:
                Client understands and agrees that in performing this assignment
                Booz
                & Company will be using publicly available information and information
                in reports and other material provided by others, including, without
                limitation, information provided by Client, and that Booz & Company
                does not assume responsibility for and may rely, without independent
                verification, on the accuracy and completeness of any such information.
                All estimates and projections contained in our work product will
                be based
                on data and information obtained from the sources cited and contain
                significant elements of subjective judgment and analysis, which may
                or may
                not be correct.

            

    

     

    
      	6.	
              Use
                of Work Product:
                Client understands and agrees that all reports, analyses or other
                material
                provided by Booz & Company are solely for client’s information and use
                in connection with the assignment and that no third party may rely
                on our
                work product. Booz & Company shall retain all rights to concepts,
                approaches, methodologies, models, tools, generic industry information,
                knowledge and experience possessed by Booz & Company prior to, or
                acquired by it during, the performance of the assignment.
                

            

    

     

    
      	7.	
              Limitation
                of Liability: Booz
                & Company shall have no liability with respect to its obligations
                under this Agreement or otherwise for consequential, incidental or
                punitive damages even if it has been advised of the possibility of
                such
                damages. In any event, the liability of Booz & Company to Client for
                any reason and upon any cause of action shall be limited to the amount
                paid to Booz & Company by Client hereunder. This limitation applies to
                all causes of action in the aggregate, including without limitation
                to
                breach of contract, breach of warranty, negligence, strict liability,
                misrepresentations, and other torts. Both parties understand and
                agree
                that the remedies and limitations herein allocate the risks of product
                and
                service nonconformity between the parties as authorized by applicable
                laws. The fees proposed herein reflect this allocation of risk and
                the
                exclusion and limitation of damages in the Proposal and this
                Agreement.

            

    

     

    
      	8.	
              Indemnification:
                Client hereby agrees to indemnify and hold Booz & Company harmless
                from and against all claims, liability, losses, damages and expenses
                as
                they are incurred, including legal fees and disbursements and the
                cost of
                Booz & Company personnel time at normal professional rates relating to
                or arising out of any transaction or matter which is related to the
                subject matter of the assignment. Client shall not, however, be liable
                under this indemnity to the extent that any such claims, liability,
                losses, damages and expenses result from the gross negligence or
                willful
                default of Booz & Company.

            

    

     

    
      	9.	
              Dispute
                Resolution:
                Any dispute whatsoever between the parties arising out of or relating
                to
                the assignment shall be settled by arbitration in New York, New York
                under
                the Rules of Arbitration of the American Arbitration Association
                (“AAA”),
                and judgment upon the award rendered by the Arbitrator(s) may be
                entered
                in any Court having jurisdiction thereof. The arbitration shall be
                conducted in English by three Arbitrators. The party initiating
                arbitration shall appoint an Arbitrator in its arbitration notice
                to the
                other party who shall appoint the second Arbitrator within 30 days
                of
                receipt of the notice. If the second party shall fail to appoint
                an
                Arbitrator within that period then the second Arbitrator shall be
                appointed by the AAA. The first two Arbitrators shall appoint a third
                Arbitrator within 30 days of the appointment of the second Arbitrator.
                If
                the first two Arbitrators fail to appoint a third Arbitrator within
                that
                period, the third Arbitrator shall be appointed by the AAA. Judgment
                upon
                the award rendered by the AAA may be entered in any Court having
                jurisdiction thereof.

            

    

     

    
      	10.	
              Termination:
                In
                the event that either party hereto becomes or is declared insolvent
                or
                bankrupt, is the subject of any proceedings relating to its liquidation,
                insolvency or for the appointment of a receiver or similar officer
                for it,
                makes an assignment for the benefit of all or substantially all of
                its
                creditors, or enters into an agreement for the composition, extension,
                or
                readjustment of all or substantially all of its obligations, then
                the
                other party hereto may, by giving written notice thereof to such
                party,
                terminate this Agreement as of a date specified in such notice of
                termination. The Client may also terminate this Agreement at any
                time by
                giving Booz & Company thirty days’ written notice to that effect; in
                such event, Booz & Company shall be entitled to payment for services
                rendered and for expenses and obligations incurred in connection
                with this
                Agreement prior to the effective date of termination.
                

            

    

     

    
      	11.	
              Independent
                Contractor: Booz
                & Company is an independent contractor and not an agent or
                representative of Client. No employee of Booz & Company shall be
                deemed an employee of Client. Except as otherwise expressly agreed,
                Client
                will not have control over Booz & Company or its employees. Booz &
                Company agrees that it shall be Booz & Company's responsibility to
                withhold all federal, state or local income taxes, social security
                taxes,
                unemployment and other payroll taxes required by law to be withheld
                from
                the compensation of the employees performing services
                hereunder.

            

    

     

    
      	12.	
              Equal
                Opportunity: Booz
                & Company agrees that it will not discriminate against any employee
                or
                applicant for employment on account of race, color, religion, sex,
                sexual
                preference, handicap or national origin. Booz & Company certifies that
                it has developed and presently has in full force and effect a written
                affirmative action compliance program in accordance with the requirements
                set forth in 41 C.F.R.

            

    

     

    
      	13.	
              Laws
                And Regulations: Booz
                & Company agrees, in connection with the performance of services
                hereunder, to comply with all applicable federal, state or local
                laws and
                regulations.

            

    

     

    
      	14.	
              Third-Party
                Hardware and Software:
                The parties understand that any work product delivered under this
                Agreement may include certain third-party hardware and/or software
                products. It is acknowledged by Client that Client shall be solely
                responsible for obtaining licenses to such third-party software,
                if such
                software is not already in Client’s possession, including the right to
                incorporate such software into its systems. Booz & Company makes no
                warranties or representations hereunder, express or implied, as to
                the
                quality, capabilities, operations, performance or suitability of
                any
                third-party hardware or software including the ability to integrate
                with
                any software developed for Client, and the quality, capabilities,
                operations, performance and suitability of such third-party hardware
                or
                software lies solely with Client and the vendor or supplier of that
                hardware or software.

            

    

     

    
      	15.	
              No
                Third-Party Beneficiaries: Booz
                & Company and the Client mutually agree that this Agreement is
                intended by them to be solely for the benefit of the parties hereto
                and
                that no third parties may rely on any reports,
                analyses or other material provided
                by Booz & Company or shall obtain any direct or indirect benefits from
                the Agreement, have any claim or be entitled to any remedy under
                this
                Agreement or otherwise in any way be regarded as third-party beneficiaries
                under this Agreement.

            

    

     

    
      	16.	
              Securities:
                No
                reference may be made to Booz & Company in any prospectus, proxy
                statement, offering memorandum, or similar document without Booz
&
                Company’s prior written consent, which Booz & Company may, in its
                discretion, withhold.

            

    

     

    
      	17.	
              Best
                Efforts: Booz
                & Company agrees to undertake this assignment on a best efforts basis
                and that its findings and recommendations will reflect its best judgment
                based on the information available to
                it.

            

    

     

    
      	18.	
              Assignment:
                The
                Client and Booz & Company agree that neither party may assign its
                rights under this Agreement without the prior written consent of
                the other
                party.

            

    

     

    
      	19.	
              Force
                Majeure: Neither
                party shall be liable to the other for any delay or failure to perform
                any
                of the services or obligations set forth in this Agreement due to
                a cause
                beyond its reasonable control. Performance times shall be considered
                extended for the period required to make up the work lost because
                of such
                cause.

            

    

     

    
      	20.	
              Miscellaneous:
                The
                attached Proposal and these terms and conditions constitute the entire
                agreement and understanding between the parties with respect to the
                subject hereof and merges and supersedes all prior discussions and
                writings with respect hereto. This Agreement shall be governed by,
                and
                construed in accordance with, the laws of the State of New York,
                as if it
                were executed and were to be performed entirely within the State
                of New
                York. No modification, alteration or amendment of this Agreement
                shall be
                effective unless contained in a writing that is signed by both parties
                and
                that specifically refers to this Agreement. In the event that any
                term or
                provision of this Agreement shall, for any reason, be held to be
                illegal,
                invalid or unenforceable under the laws, regulations or ordinances
                of any
                federal, state or local government authority to which this Agreement
                is
                subject, such term or provision shall be deemed severed from this
                Agreement, and the remaining terms and provisions will be unaffected
                thereby.

            

    

     

    
      	21.	
              Headings:
                The
                headings in these Terms and Conditions are inserted for convenience
                only
                and shall not constitute a part hereof or affect in any way the meaning
                or
                interpretation of this Agreement.

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