Document:

EXHIBIT
10.57

     

      
        SECURITIES
PURCHASE AGREEMENT

      

       

      This
Securities Purchase Agreement (this “Agreement”) is dated
as of _______ ___, 2010, between Nephros, Inc., a Delaware corporation (the
“Company”), and
each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and
collectively the “Purchasers”).

       

      WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
an effective registration statement under the Securities Act of 1933, as amended
(the “Securities
Act”), the Company desires to issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, desires to purchase from the Company,
securities of the Company as more fully described in this
Agreement.

       

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

       

      ARTICLE
I.

      DEFINITIONS

       

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

       

      “Acquiring
Person” shall have the
meaning ascribed to such term in Section 4.5.

       

      “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 on which all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to (i)
the Purchasers’ obligations to pay the Subscription Amount and (ii) the
Company’s obligations to deliver the Securities, in each case, have been
satisfied or waived, but in no event later than the third Trading Day following
the date hereof.

      
        
           

        

        
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      “Commission” means the
United States Securities and Exchange Commission.

       

      “Common Stock” means
the common stock of the Company, par value $0.001 per share, and any other class
of securities into which such securities may hereafter be reclassified or
changed.

       

      “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, right, option, warrant
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 Wyrick Robbins Yates & Ponton LLP, with offices located at 4101 Lake
Boone Trail, Suite 300, Raleigh, North Carolina 27607.

       

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

       

      “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 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 price, exchange price
or conversion price of such securities (which, for purposes of clarity, shall
not include adjustments pursuant to anti-dilution provisions in securities
issued and outstanding on the date of this Agreement), 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 (or to the equityholders of a Person) which is, itself or
through its subsidiaries, an operating company or an owner of an asset in a
business synergistic with the business of the Company and shall provide to the
Company additional 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.

       

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

       

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

      
        
           

        

        
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      “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(z).

       

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

       

      “Liens” means a lien,
charge, pledge, 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).

       

      “Participation
Maximum” shall have the meaning ascribed to such term in Section
4.11(a).

       

      “Per Share Purchase
Price” equals $______, subject to adjustment for reverse and forward
stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.

       

      “Per Unit Purchase
Price” means the product of the Per Share Purchase Price multiplied by
the number of Shares in a Unit.

       

      “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.

       

      “Pharmaceutical
Product” shall have the meaning ascribed to such term in Section
3.1(gg).

       

      “Pre-Notice” shall
have the meaning ascribed to such term in Section 4.11(b).

       

      “Pro Rata Portion”
shall have the meaning ascribed to such term in Section 4.11(e).

       

      “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.

       

      “Prospectus” means the
final prospectus filed for the Registration Statement.

       

      “Prospectus
Supplement” means the supplement to the Prospectus complying with Rule
424(b) of the Securities Act that is filed with the Commission and delivered by
the Company to each Purchaser at the Closing.

       

      “Purchaser Party”
shall have the meaning ascribed to such term in Section 4.8.

      
        
           

        

        
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      “Registration
Statement” means the effective registration statement with Commission
file No. 333-167022 which registers the sale of the Shares, the Warrants and the
Warrant Shares to the Purchasers.

       

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

       

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

       

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

       

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

       

      “Securities” means the
Shares, the Warrants and the Warrant Shares.

       

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

       

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

       

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

       

      “Subsequent Financing”
shall have the meaning ascribed to such term in Section 4.11(a).

       

      “Subsequent Financing
Notice” shall have the meaning ascribed to such term in Section
4.11(b).

       

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

       

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

      
        
           

        

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

       

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

       

      “Transfer Agent” means
Continental Stock Transfer & Trust Company, the current transfer agent of
the Company, with a mailing address of 17 Battery Place, 8th Floor, New York,
New York 10004 and a facsimile number of (212) 509-5150, and any successor
transfer agent of the Company.

       

      “Unit” means a unit
comprised of _____ Shares and ____ Warrants.

       

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

       

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

       

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

       

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

       

      ARTICLE
II.

      PURCHASE
AND SALE

       

      2.1          Closing.  On the Closing Date, upon
the terms and subject to the conditions set forth herein, substantially
concurrent with the execution and delivery of this Agreement by the parties
hereto, the Company agrees to sell, and the Purchasers, severally and not
jointly,  agree to purchase, up to an aggregate of $___________ of
Units.  The Units shall not be certificated, the Units will separate
immediately and the Shares and Warrants in each Unit will be issued separately
and will trade separately.  Each Purchaser shall deliver to the
Company, via wire transfer or a certified check of immediately available funds
equal to such Purchaser’s Subscription Amount as set forth on the signature page
hereto executed by such Purchaser and the Company shall deliver to each
Purchaser its respective Shares and a Warrant as determined pursuant to Section
2.2(a), and the Company and each Purchaser shall deliver the other items set
forth in Section 2.2 deliverable at the Closing.  Upon satisfaction of
the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing
shall occur at the offices of WS or such other location as the parties shall
mutually agree.

      
        
           

        

        
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      2.2          Deliveries.

       

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

       

      (i)           this
Agreement duly executed by the Company;

       

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

       

      (iii)         a
copy of the irrevocable instructions to the Company’s transfer agent instructing
the transfer agent to deliver via The Depository Trust Company Deposit or
Withdrawal at Custodian system (“DWAC”) Shares equal
to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price,
registered in the name of such Purchaser;

       

      (iv)        a
Warrant registered in the name of such Purchaser to purchase up to a number of
shares of Common Stock equal to ___% of such Purchaser’s Shares, with an
exercise price equal to $_____, subject to adjustment therein (such Warrant
certificate may be delivered within three Trading Days of the Closing Date);
and

       

      (v)          the
Prospectus and Prospectus Supplement (which may be delivered in accordance with
Rule 172 under the Securities Act).

       

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

       

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

       

      (ii)          such
Purchaser’s Subscription Amount by wire transfer to the account 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 Purchasers contained herein (unless as of a specific date
therein in which case they shall be accurate as of such date);

       

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

       

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

      
        
           

        

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

       

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

       

      (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, 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 such 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 or the SEC Reports (as defined herein), each of which shall
be deemed a part hereof and shall qualify any representation or otherwise made
herein to the extent of the disclosure contained in the SEC Reports or the
corresponding section of the Disclosure Schedules, the Company hereby makes the
following representations and warranties to each Purchaser:

       

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

      
        
           

        

        
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      (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, 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 nor
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 this
Agreement and each of the other Transaction Documents and otherwise to carry out
its obligations hereunder and thereunder.  The execution and delivery
of this Agreement each of the other 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 herewith or therewith other than in
connection with the Required Approvals.  This Agreement and each other
Transaction Document to which it is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
(i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.

      
        
           

        

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

       

      (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) the filings required pursuant to Section 4.4 of this Agreement, (ii)
the filing with the Commission of the Prospectus Supplement, (iii)
application(s) to each applicable Trading Market for the listing of the Shares
and Warrant Shares for trading thereon in the time and manner required thereby
and (iv) such filings as are required to be made under applicable state
securities laws (collectively, the “Required
Approvals”).

       

      (f)           Issuance of the Securities;
Registration.  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.  The Warrant Shares, when issued in
accordance with the terms of the Warrants, will be validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the
Company.  The Company has reserved from its duly authorized capital
stock the maximum number of shares of Common Stock issuable pursuant to this
Agreement and the Warrants. The Company has prepared and filed the Registration
Statement in conformity with the requirements of the Securities Act, which
became effective on _____________ (the “Effective Date”),
including the Prospectus, and such amendments and supplements thereto as may
have been required to the date of this Agreement.  The Registration
Statement is effective under the Securities Act and no stop order preventing or
suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus has been issued by the Commission and no
proceedings for that purpose have been instituted or, to the knowledge of the
Company, are threatened by the Commission.  The Company, if required
by the rules and regulations of the Commission, proposes to file the Prospectus,
with the Commission pursuant to Rule 424(b).  At the time the
Registration Statement and any amendments thereto became effective, at the date
of this Agreement and at the Closing Date, the Registration Statement and any
amendments thereto conformed and will conform in all material respects to the
requirements of the Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; and
the Prospectus and any amendments or supplements thereto, at time the Prospectus
or any amendment or supplement thereto was issued and at the Closing Date,
conformed and will conform in all material respects to the requirements of the
Securities Act and did not and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

      
        
           

        

        
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      (g)          Capitalization.  The
capitalization of the Company is as set forth in the SEC Reports.  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 and/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 that has not been waived
in writing.  Except as disclosed in the SEC Reports or 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.  Except as disclosed in the SEC Reports, the issuance and
sale of the Securities will not obligate the Company to issue shares of Common
Stock or other securities to any Person (other than the Purchasers) and will not
result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under any of such securities. All of the
outstanding shares of capital stock of the Company are duly authorized, 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.  Except as disclosed in the SEC Reports, 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.

      
        
           

        

        
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      (h)          SEC Reports; Financial
Statements.  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, together with the Prospectus and the
Prospectus Supplement, 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 Company has never been an issuer subject to Rule 144(i) under
the Securities Act. 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;
Undisclosed Events, Liabilities or Developments.  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, fact, circumstance, occurrence or
development has occurred or exists or is reasonably expected to occur or exist
with respect to the Company or its Subsidiaries or their respective businesses,
prospects, properties, operations, assets or financial condition that would be
required to be disclosed by the Company under applicable securities laws at the
time this representation is made or deemed made that has not been publicly
disclosed at least 1 Trading Day prior to the date that this representation is
made.

      
        
           

        

        
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      (j)           Litigation.  There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) 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 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.  To
the knowledge of the Company, no executive officer of the Company or any
Subsidiary, 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.

       

      (l)           Compliance.  Neither
the Company nor any Subsidiary: (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any judgment, decree or
order of any court, arbitrator or other governmental authority or (iii) is or
has been in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign, federal, state
and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety and employment and labor matters, except
in each case as could not have or reasonably be expected to result in a Material
Adverse Effect.

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      (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.  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 (i) 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 (ii) Liens for the
payment of federal, state or other taxes, for which appropriate reserves have
been made therefore in accordance with GAAP and, 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)          Intellectual
Property.  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
required 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”).  None of, and neither the Company nor any Subsidiary
has received a notice (written or otherwise) that any of, the Intellectual
Property Rights has expired, terminated or been abandoned, or is expected to
expire or terminate or be abandoned, within two (2) years from the date of this
Agreement.  Neither the Company nor any Subsidiary has received, since
the date of the latest audited financial statements included within the SEC
Reports, a written notice of a claim or otherwise has any knowledge that the
Intellectual Property Rights violate or infringe upon the rights of any Person,
except as could not have or reasonably be expected to not have a Material
Adverse Effect.  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.

       

      (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 in an amount equal to at least $5,000,000.  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.

      
        
           

        

        
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      (q)          Transactions With Affiliates
and Employees.  Except as set forth in the SEC Reports, none of
the officers or directors of the Company or any Subsidiary and, to the knowledge
of the Company, none of the employees of the Company or any Subsidiary 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, providing for
the borrowing of money from or lending of money to 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, stockholder,
member or partner, in each case in excess of $120,000 other than for (i) payment
of salary or consulting fees for services rendered, (ii) reimbursement for
expenses incurred on behalf of the Company and (iii) other employee benefits,
including stock option agreements under any stock option plan of the
Company.

       

      (r)           Sarbanes-Oxley; Internal
Accounting Controls.  The Company and the Subsidiaries is in
material compliance with any and all applicable requirements of the
Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and
all applicable rules and regulations promulgated by the Commission thereunder
that are effective as of the date hereof and as of the Closing
Date.  Except as
disclosed in the SEC Reports, the Company and the Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurance that:
(i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company and the Subsidiaries have established disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
the Subsidiaries 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 disclosure controls and procedures of the Company and the
Subsidiaries as of the end of the period covered by the 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 internal control over financial reporting (as such term is
defined in the Exchange Act) of the Company and its Subsidiaries that have
materially affected, or is reasonably likely to materially affect, the internal
control over financial reporting of the Company and its
Subsidiaries.

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

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

       

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

       

      (u)          Registration
Rights.  Except as disclosed in the SEC Reports, no Person has
any right to cause the Company or any Subsidiary to effect the registration
under the Securities Act of any securities of the Company or any
Subsidiary.

       

      (v)          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, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such listing and
maintenance requirements.

       

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

      
        
           

        

        
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      (x)          Disclosure.  Except
with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms that neither it
nor any other Person acting on its behalf has provided any of the Purchasers or
their agents or counsel with any information that it believes constitutes or
might constitute material, non-public information which is not otherwise
disclosed in the Prospectus Supplement.   The Company understands
and confirms that the Purchasers will rely on the foregoing representation in
effecting transactions in securities of the Company.  All of the
disclosure furnished by or on behalf of the Company to the Purchasers regarding
the Company and its Subsidiaries, their respective businesses 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 no Purchaser
makes or has made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Section 3.2 hereof.

       

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

       

      (z)          Solvency.  Based
on the consolidated financial condition of the Company as of the Closing Date,
after giving effect to the receipt by the Company of the proceeds from the sale
of the Securities hereunder, (i) the fair saleable value of the Company’s assets
exceeds the amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature, (ii) the Company’s assets do not constitute
unreasonably small capital to carry on its business as now conducted and as
proposed to be conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the Company,
consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the
proceeds the Company would receive, were it to liquidate all of its assets,
after taking into account all anticipated uses of the cash, would be sufficient
to pay all amounts on or in respect of its liabilities when such amounts are
required to be paid.  The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its
debt).  The Company has no knowledge of any facts or circumstances
which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year
from the Closing Date.  The SEC Reports set forth as of the date
thereof all outstanding secured and unsecured Indebtedness of the Company or any
Subsidiary, or for which the Company or any Subsidiary has
commitments.  For the purposes of this Agreement, “Indebtedness” means
(x) any liabilities for borrowed money or amounts owed in excess of $50,000
(other than trade accounts payable incurred in the ordinary course of business),
(y) 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 consolidated 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 (z) the present
value of any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP.  Neither the Company nor any
Subsidiary is in default with respect to any Indebtedness.

      
        
           

        

        
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      (aa)        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 its Subsidiaries each (i) has made or filed all United
States federal, state and local income and all foreign income and franchise tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for periods subsequent
to the periods to which such returns, reports or declarations
apply.  There are no unpaid taxes in any material amount claimed to be
due by the taxing authority of any jurisdiction, and the officers of the Company
or of any Subsidiary know of no basis for any such claim.

       

      (bb)       Foreign Corrupt
Practices.  Neither the Company nor any Subsidiary, nor to the
knowledge of the Company or any Subsidiary, any agent or other person acting on
behalf of the Company or any Subsidiary, 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 any
Subsidiary (or made by any person acting on its behalf of which the Company is
aware) which is in violation of law, or (iv) violated in any material respect
any provision of the Foreign Corrupt Practices Act of 1977, as
amended.

       

      (cc)        Accountants.  The
Company’s accounting firm is set forth in the SEC Reports.  To the
knowledge and belief of the Company, such accounting firm (i) is a registered
public accounting firm as required by the Exchange Act and (ii) shall express
its opinion with respect to the financial statements to be included in the
Company’s Annual Report for the fiscal year ending December 31,
2010.

      
        
           

        

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

       

      (ee)        Acknowledgement
Regarding Purchaser’s Trading Activity.  Anything in this Agreement
or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(e)
and 4.14 hereof), it is understood and acknowledged by the Company that: (i)
none of the Purchasers has been asked by the Company to agree, nor has any
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 any 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) any Purchaser, and counter-parties in “derivative” transactions to which
any such Purchaser is a party, directly or indirectly, presently may have a
“short” position in the Common Stock, and (iv) each 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 (y) one or more Purchasers 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 Warrant Shares deliverable with respect to Securities are being determined,
and (z) 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.

       

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

      
        
           

        

        
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      (gg)       FDA.  As to
each product subject to the jurisdiction of the U.S. Food and Drug
Administration (“FDA”) under the
Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder
(“FDCA”) that
is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed
by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical
Product”), such Pharmaceutical Product is being manufactured, packaged,
labeled, tested, distributed, sold and/or marketed by the Company in compliance
with all applicable requirements under FDCA and similar laws, rules and
regulations relating to registration, investigational use, premarket clearance,
licensure, or application approval, good manufacturing practices, good
laboratory practices, good clinical practices, product listing, quotas,
labeling, advertising, record keeping and filing of reports, except where the
failure to be in compliance would not have a Material Adverse
Effect.  There is no pending, completed or, to the Company's
knowledge, threatened, action (including any lawsuit, arbitration, or legal or
administrative or regulatory proceeding, charge, complaint, or investigation)
against the Company or any of its Subsidiaries, and none of the Company or any
of its Subsidiaries has received any notice, warning letter or other
communication from the FDA or any other governmental entity, which (i) contests
the premarket clearance, licensure, registration, or approval of, the uses of,
the distribution of, the manufacturing or packaging of, the testing of, the sale
of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws
its approval of, requests the recall, suspension, or seizure of, or withdraws or
orders the withdrawal of advertising or sales promotional materials relating to,
any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical
investigation by the Company or any of its Subsidiaries, (iv) enjoins production
at any facility of the Company or any of its Subsidiaries, (v) enters or
proposes to enter into a consent decree of permanent injunction with the Company
or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws,
rules or regulations by the Company or any of its Subsidiaries, and which,
either individually or in the aggregate, would have a Material Adverse Effect;
provided, however, that the
Company makes no representations, warranties or guarantees as to the future
actions of the FDA with regard to the Company’s product candidates currently
being evaluated or regulated by the FDA.  The properties, business and
operations of the Company have been and are being conducted in all material
respects in accordance with all applicable laws, rules and regulations of the
FDA.  The Company has not been informed by the FDA that the FDA will
prohibit the marketing, sale, license or use in the United States of any product
proposed to be developed, produced or marketed by the Company nor has the FDA
expressed any concern as to approving or clearing for marketing any product
being developed or proposed to be developed by the Company.

       

      (hh)       Office of Foreign Assets
Control.  Neither the Company or any Subsidiary nor, to the
Company's knowledge, any director, officer, agent, employee or affiliate of the
Company  or any Subsidiary is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”).

       

      (ii)          U.S. Real Property Holding
Corporation.  The Company is not and has never been a U.S. real
property holding corporation within the meaning of Section 897 of the Internal
Revenue Code of 1986, as amended, and the Company shall so certify upon
Purchaser’s request.

      
        
           

        

        
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      (jj)          Bank Holding Company
Act.  Neither the Company nor any of its Subsidiaries or
Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the
“BHCA”) and to
regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”).  Neither the Company nor any of its Subsidiaries or
Affiliates owns or controls, directly or indirectly, five percent (5%) or more
of the outstanding shares of any class of voting securities or twenty-five
percent or more of the total equity of a bank or any entity that is subject to
the BHCA and to regulation by the Federal Reserve.  Neither the
Company nor any of its Subsidiaries or Affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve.

       

      (kk)        Money
Laundering.  The operations of the Company and its Subsidiaries
are and have been conducted at all times in material compliance with applicable
financial record-keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, applicable money laundering
statutes and applicable rules and regulations thereunder (collectively, the
“Money Laundering
Laws”), and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any Subsidiary with respect to the Money Laundering Laws is pending or, to
the knowledge of the Company or any Subsidiary, threatened.

       

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

       

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

       

      (b)          Understandings
or Arrangements.  Such Purchaser is acquiring
the Securities as principal for its own account and has no direct or indirect
arrangement or understandings with any other persons to distribute or regarding
the distribution of such Securities (this representation and warranty not
limiting such Purchaser’s right to sell the Securities pursuant to the
Registration Statement or otherwise in compliance with applicable federal and
state securities laws).  Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business.

      
        
           

        

        
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      (c)          Purchaser
Status.  At the
time such Purchaser was offered the Securities, it was, and as of the date
hereof it is, and on each date on which it exercises any Warrants, it will be an
“accredited investor” as defined in Rule 501 under the Securities
Act.  Such Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.

       

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

       

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

       

      The
Company acknowledges and agrees that the representations contained in Section
3.2 shall not modify, amend or affect such Purchaser’s right to rely on the
Company’s representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction Document or
any other document or instrument executed and/or delivered in connection with
this Agreement or the consummation of the transaction contemplated
hereby.

      
        
           

        

        
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      ARTICLE
IV.

      OTHER
AGREEMENTS OF THE PARTIES

       

      4.1          Warrant
Shares.  If all
or any portion of a Warrant is exercised at a time when there is an effective
registration statement to cover the issuance or resale of the Warrant Shares or
if the Warrant is exercised via cashless exercise at a time when the conditions
for sale of the Warrant Shares pursuant to Rule 144 have been satisfied, the
Warrant Shares issued pursuant to any such exercise shall be issued free of all
legends.  If at any time following the date hereof the Registration
Statement (or any subsequent registration statement registering the sale or
resale of the Warrant Shares) is not effective or is not otherwise available for
the sale or resale of the Warrant Shares, the Company shall immediately notify
the holders of the Warrants in writing that such registration statement is not
then effective and thereafter shall promptly notify such holders when the
registration statement is effective again and available for the sale or resale
of the Warrant Shares (it being understood and agreed that the foregoing shall
not limit the ability of the Company to issue, or any Purchaser to sell, any of
the Warrant Shares in compliance with applicable federal and state securities
laws).  The Company shall use best efforts to keep a registration
statement (including the Registration Statement) registering the issuance or
resale of the Warrant Shares effective during the term of the
Warrants.

       

      4.2          Furnishing
of Information.  Until the earliest of the
time that (i) no Purchaser owns Securities or (ii) the Warrants have expired,
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.

       

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

       

      4.4          Securities
Laws Disclosure; Publicity.  The Company shall (a) by
9:00 a.m. (New York City time) on the Trading Day immediately following the date
hereof, issue a press release disclosing the material terms of the transactions
contemplated hereby, and (b) file a Current Report on Form 8-K, including the
Transaction Documents as exhibits thereto, with the Commission within the time
required by the Exchange Act.  From and after the issuance of such
press release, the Company represents to the Purchasers that it shall have
publicly disclosed all material, non-public information delivered to any of the
Purchasers by the Company or any of its Subsidiaries, or any of their respective
officers, directors, employees or agents in connection with the transactions
contemplated by the Transaction Documents.  The Company and each
Purchaser shall consult with each other in issuing any other press releases with
respect to the transactions contemplated hereby, and neither the Company nor any
Purchaser shall issue any such press release nor otherwise make any such public
statement without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of each Purchaser, with
respect to any press release of the Company, which consent shall not
unreasonably be withheld or delayed, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or
communication.  Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the Commission or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (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 Purchasers with prior
notice of such disclosure permitted under this clause
(b).

      
        
           

        

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

       

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

       

      4.7          Use of
Proceeds.  Except
as set forth on Schedule
4.7 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: (a) for the
satisfaction of any portion of the Company’s debt (other than payment of trade
payables in the ordinary course of the Company’s business and prior practices),
(b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for
the settlement of any outstanding litigation or (d) in violation of the “FCPA”
(means the Foreign Corrupt Practices Act) or OFAC
regulations.

      
        
           

        

        
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      4.8          Indemnification
of Purchasers.   Subject to the
provisions of this Section 4.8, the Company will indemnify and hold each
Purchaser and its directors, officers, shareholders, members, partners,
employees and agents (and any other Persons with a functionally equivalent role
of a Person holding such titles notwithstanding a lack of such title or any
other title), each Person who controls such Purchaser (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, shareholders, agents, members, partners or employees (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title) of such
controlling persons (each, a “Purchaser
Party”) harmless from any
and all losses, liabilities, obligations, claims, contingencies, damages, costs
and expenses, including all judgments, amounts paid in settlements, court costs
and reasonable attorneys’ fees and costs of investigation that any such
Purchaser Party may suffer or incur as a result of or relating to (a) any breach
of any of the representations, warranties, covenants or agreements made by the
Company in this Agreement or in the other Transaction Documents or (b) any
action instituted against the Purchaser Parties in any capacity, or any of them
or their respective Affiliates, by any stockholder of the Company who is not an
Affiliate of such Purchaser Party, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is based upon a
breach of such Purchaser Party’s representations, warranties or covenants under
the Transaction Documents or any agreements or understandings such Purchaser
Party may have with any such stockholder or any violations by such Purchaser
Party of state or federal securities laws or any conduct by such Purchaser Party
which constitutes fraud, gross negligence, willful misconduct or
malfeasance).  If any action shall be brought against any Purchaser
Party in respect of which indemnity may be sought pursuant to this Agreement,
such Purchaser Party shall promptly notify the Company in writing, and the
Company shall have the right to assume the defense thereof with counsel of its
own choosing reasonably acceptable to the Purchaser Party.  Any
Purchaser Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Purchaser Party except to the extent
that (i) the employment thereof has been specifically authorized by the Company
in writing, (ii) the Company has failed after a reasonable period of time to
assume such defense and to employ counsel or (iii) in such action there is, in
the reasonable opinion of counsel, a material conflict on any material issue
between the position of the Company and the position of such Purchaser Party, in
which case the Company shall be responsible for the reasonable fees and expenses
of no more than one such separate counsel.  The Company will not be
liable to any Purchaser Party under this Agreement (y) for any settlement by a
Purchaser Party effected without the Company’s prior written consent, which
shall not be unreasonably withheld or delayed; or (z) to the extent, but only to
the extent that a loss, claim, damage or liability is attributable to any
Purchaser Party’s breach of any of the representations, warranties, covenants or
agreements made by such Purchaser Party in this Agreement or in the other
Transaction Documents. The
indemnification required by this Section 4.8 shall be made by periodic payments
of the amount thereof during the course of the investigation or defense, as and
when bills are received or are incurred. The indemnity agreements contained
herein shall be in addition to any cause of action or similar right of any
Purchaser Party against the Company or others, and (y) any liabilities the
Company may be subject to pursuant to law.

       

      4.9          Reservation
of Common Stock. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep available at all
times, free of preemptive rights, a sufficient number of shares of Common Stock
for the purpose of enabling the Company to issue Shares pursuant to this
Agreement and Warrant Shares pursuant to any exercise of the
Warrants.

       

      4.10        Listing of
Common Stock. The Company hereby agrees to use best
efforts to maintain the listing or quotation of the Common Stock on the Trading
Market on which it is currently listed, and concurrently with the Closing, the
Company shall apply to list or quote all of the Shares and Warrant Shares on
such Trading Market and promptly secure the listing of all of the Shares and
Warrant Shares on such Trading Market. The Company further agrees, if the
Company applies to have the Common Stock traded on any other Trading Market, it
will then include in such application all of the Shares and Warrant Shares, and
will take such other action as is necessary to cause all of the Shares and
Warrant Shares to be listed or quoted on such other Trading Market as promptly
as possible.  The Company will then take all action reasonably
necessary to continue the listing and trading of its Common Stock on a Trading
Market and will comply in all respects with the Company’s reporting, filing and
other obligations under the bylaws or rules of the Trading
Market.

      
        
           

        

        
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      4.11        Participation
in Future Financing.

       

      (a)          From
the date hereof until the date that is the _____ month anniversary of the
Closing Date, as to any Purchaser (including Affiliates) with a Subscription
Amount of at least $100,000, upon any issuance by the Company or any of its
Subsidiaries of Common Stock or Common Stock Equivalents for cash consideration,
Indebtedness or a combination of units hereof (a “Subsequent
Financing”), each Purchaser shall have the right to participate in up to
an amount of the Subsequent Financing equal to ___% of the Subsequent Financing
(the “Participation
Maximum”) on the same terms, conditions and price provided for in the
Subsequent Financing.

       

      (b)          At
least five (5) Trading Days prior to the closing of the Subsequent Financing,
the Company shall deliver to each Purchaser a written notice of its intention to
effect a Subsequent Financing (“Pre-Notice”), which
Pre-Notice shall ask such Purchaser if it wants to review the details of such
financing (such additional notice, a “Subsequent Financing
Notice”).  Upon the request of a Purchaser, and only upon a request
by such Purchaser, for a Subsequent Financing Notice, the Company shall
promptly, but no later than one (1) Trading Day after such request, deliver a
Subsequent Financing Notice to such Purchaser.  The Subsequent Financing
Notice shall describe in reasonable detail the proposed terms of such Subsequent
Financing, the amount of proceeds intended to be raised thereunder 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.   

       

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

       

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

       

      (e)          If
by 5:30 p.m. (New York City time) on the fifth (5th)
Trading Day after all of the Purchasers have received the Pre-Notice, the
Company receives responses to a Subsequent Financing Notice from Purchasers
seeking to purchase more than the aggregate amount of the Participation Maximum,
each such Purchaser shall have the right to purchase its Pro Rata Portion (as
defined below) of the Participation Maximum.  “Pro Rata Portion”
means the ratio of (x) the Subscription Amount of Securities purchased on the
Closing Date by a Purchaser participating under this Section 4.11 and (y) the
sum of the aggregate Subscription Amounts of Securities purchased on the Closing
Date by all Purchasers participating under this Section 4.11.

      
        
           

        

        
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      (f)           The
Company must provide the Purchasers with a second Subsequent Financing Notice,
and the Purchasers will again have the right of participation set forth above in
this Section 4.11, if the Subsequent Financing subject to the initial Subsequent
Financing Notice is not consummated for any reason on the terms set forth in
such Subsequent Financing Notice within 30 Trading Days after the date of the
initial Subsequent Financing Notice.

       

      (g)          Notwithstanding
the foregoing, this Section 4.11 shall not apply in respect of (i)
an Exempt Issuance or (ii)
an underwritten public offering of Common Stock.

       

      4.12        Subsequent
Equity Sales.

       

      (a)          From
the date hereof until ___ days after the Closing Date, neither the Company nor
any Subsidiary shall issue, enter into any agreement to issue or announce the
issuance or proposed issuance of any shares of Common Stock or Common Stock
Equivalents.

       

      (b)          From
the date hereof until ______________, the Company shall be prohibited from
effecting or entering into an agreement to effect any issuance by the Company or
any of its Subsidiaries of Common Stock or Common Stock Equivalents for cash
consideration (or a combination of units hereof) involving a Variable Rate
Transaction.  “Variable Rate
Transaction” means a transaction in which the Company (i) issues or sells
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 price, exercise price 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.  Any Purchaser shall be
entitled to obtain injunctive relief against the Company to preclude any such
issuance, which remedy shall be in addition to any right to collect
damages.

       

      (c)           Notwithstanding
the foregoing, this Section 4.12 shall not apply in respect of an Exempt
Issuance, except that no Variable Rate Transaction shall be an Exempt
Issuance.

       

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

      
        
           

        

        
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      4.14        Certain
Transactions and Confidentiality. Each Purchaser, severally and not
jointly with the other Purchasers, covenants that neither it nor any Affiliate
acting on its behalf or pursuant to any understanding with it will execute any
purchases or sales, including Short Sales of any of the Company’s securities
during the period commencing with the execution of this Agreement and ending at
such time that the transactions contemplated by this Agreement are first
publicly announced pursuant to the initial press release as described in Section
4.4.  Each Purchaser,
severally and not jointly with the other Purchasers, covenants that until such
time as the transactions contemplated by this Agreement are publicly disclosed
by the Company pursuant to the initial press release as described in Section
4.4, such Purchaser will maintain the confidentiality of the existence and terms
of this transaction and the information included in the Disclosure
Schedules.  Notwithstanding the foregoing and notwithstanding
anything contained in this Agreement to the contrary, the Company expressly
acknowledges and agrees that (i) no Purchaser makes any representation, warranty
or covenant hereby that it will not engage in effecting transactions in any
securities of the Company after the time that the transactions contemplated by
this Agreement are first publicly announced pursuant to the initial press
release as described in Section 4.4, (ii) no Purchaser shall be restricted or
prohibited from effecting any transactions in any securities of the Company in
accordance with applicable securities laws from and after the time that the
transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.4 and (iii) no
Purchaser shall have any duty of confidentiality to the Company or its
Subsidiaries after the issuance of the initial press release as described in
Section 4.4.  Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment
vehicle whereby separate portfolio managers manage separate portions of such
Purchaser’s assets and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other portions of
such Purchaser’s assets, the covenant set forth above shall only apply with
respect to the portion of assets managed by the portfolio manager that made the
investment decision to purchase the Securities covered by this
Agreement.

       

      4.15        Delivery of
Warrants After Closing.  The Company shall deliver,
or cause to be delivered, the respective Warrant certificates purchased by each
Purchaser to such Purchaser within 3 Trading Days of the Closing
Date.

       

      4.16        Capital
Changes.  Until
the one year anniversary of the Closing Date, the Company shall not undertake a
reverse or forward stock split or reclassification of the Common Stock without
the prior written consent of the Purchasers holding a majority in interest of
the Shares.

       

      ARTICLE
V.

      MISCELLANEOUS

       

      5.1          Termination.  This Agreement may be terminated
by any Purchaser, as to such Purchaser’s obligations hereunder only and without
any effect whatsoever on the obligations between the Company and the other
Purchasers, by written notice to the other parties, if the Closing has not been
consummated on or before ________ ___, 2010; provided, however, that no such termination will affect
the right of any party to sue for any breach by any other party (or
parties).

      
        
           

        

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

       

      5.3          Entire
Agreement.  The
Transaction Documents, together with the exhibits and schedules thereto, the
Prospectus and the Prospectus Supplement, contain the entire understanding of
the parties with respect to the subject matter hereof and thereof 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 at or prior to 5:30 p.m. (New York City time) on a Trading Day,
(b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (c) the second
(2nd) Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service or (d)
upon actual receipt by the party to whom such notice is required to be
given.  The address for such notices and communications shall be as
set forth on the signature pages attached hereto.

       

      5.5          Amendments;
Waivers.  No
provision of this Agreement may be waived, modified, supplemented or amended
except in a written instrument signed, in the case of an amendment, by the
Company and the Purchasers holding at least 67% in interest of the Shares based
on the initial Subscription Amounts hereunder or, in the case of a waiver, by
the party against whom enforcement of any such waived provision is
sought.  No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right.

       

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

       

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

      
        
           

        

        
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      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
4.8.

       

      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, partners, members, 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, suit or proceeding to enforce any
provisions of the Transaction Documents, then, in addition to the obligations of
the Company under Section 4.8, the prevailing party in such action, suit or
proceeding shall be reimbursed by the other party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.

       

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

       

      5.11        Execution.  This Agreement may be
executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to each other party,
it being understood that the 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.

      
        
           

        

        
          29

          
            

          

        

        
           

        

      

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

       

      5.13        [RESERVED]

       

      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 Purchasers and the Company will be entitled to
specific performance under the Transaction Documents.  The parties
agree that monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations contained in the Transaction
Documents and hereby agree to waive and not to assert in any action for specific
performance of any such obligation the defense that a remedy at law would be
adequate.

       

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

      
        
           

        

        
          30

          
            

          

        

        
           

        

      

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

       

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

       

      5.19        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.

       

      5.20        Construction. The parties agree that each of them
and/or their respective counsel have 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 thereto. In addition, each and every reference to share prices and
shares of Common Stock in any Transaction Document shall be subject to
adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.

       

      5.21        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)

      
        
           

        

        
          31

          
            

          

        

        
           

        

      

      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.

      

      
        
          
            
              	
                      NEPHROS,
      INC.

                    	 	
                      Address for Notice:

                    
	 
      	 	 
      
	
                      By: 

                    	
                        

                    	 	
                      Fax:
      (201) 343-5207

                    
	 
      	
                      Name:

                      Title:

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

                    	 	 
      

            

          

        

      

      

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

      SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

      
        
           

        

        
          32

          
            

          

        

        
           

        

      

      [PURCHASER
SIGNATURE PAGES TO NEPH SECURITIES PURCHASE AGREEMENT]

      

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

       

      Name of
Purchaser: ________________________________________________________

       

      Signature of Authorized Signatory of
Purchaser: _________________________________

       

      Name of
Authorized Signatory:
_______________________________________________

       

      Title of
Authorized Signatory:
________________________________________________

       

      Email
Address of Authorized
Signatory:_________________________________________

       

      Facsimile
Number of Authorized Signatory:
__________________________________________

       

      Address
for Notice to Purchaser:

      

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

      

      Subscription
Amount: $_________________

      

      Units:
___________________

      

      Shares:
_________________

      

      Warrant
Shares: __________________

      

      EIN
Number:  [PROVIDE
THIS UNDER SEPARATE COVER]

      

      o  Notwithstanding
anything contained in this Agreement to the contrary, by checking this box (i)
the obligations of the above-signed to purchase the securities set forth in this
Agreement to be purchased from the Company by the above-signed, and the
obligations of the Company to sell such securities to the above-signed, shall be
unconditional and all conditions to Closing shall be disregarded, (ii) the
Closing shall occur on the third (3rd)
Trading Day following the date of this Agreement and (iii) any condition to
Closing contemplated by this Agreement (but prior to being disregarded by clause
(i) above) that required delivery by the Company or the above-signed of any
agreement, instrument, certificate or the like or purchase price (as applicable)
shall no longer be a condition and shall instead be an unconditional obligation
of the Company or the above-signed (as applicable) to deliver such agreement,
instrument, certificate or the like or purchase price (as applicable) to such
other party on the Closing Date.

      

      [SIGNATURE
PAGES CONTINUE]

      
        
           

        

        
          33Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

    REDACTED
VERSION

     

    CONFIDENTIAL

     

    SERVICES
AGREEMENT

     

    BETWEEN

     

    LAW
OFFICES OF DAVID J. STERN, P.A.

     

    AND

     

    DJS
PROCESSING, LLC

     

    DATED
JANUARY 15, 2010

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

    TABLE
OF CONTENTS

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                          

                                    	 
      	
                                          

                                    	 
      	
                                      Page

                                    
	 
      	 
      	 
      	 
      	 
      
	
                                      RECITALS

                                    	 
      	
                                      1

                                    
	 
      	 
      	 
      	 
      
	
                                      ARTICLE
      I.

                                    	
                                      DEFINITIONS

                                    	
                                      1

                                    
	 
      	 
      	 
      	 
      
	
                                      ARTICLE
      II.

                                    	
                                      SERVICES

                                    	
                                      1

                                    
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                      2.1

                                    	
                                      Engagement

                                    	
                                      1

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      2.2

                                    	
                                      Use
      of Provider

                                    	
                                      1

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      2.3

                                    	
                                      Non-Exclusive
      Provision of Services

                                    	
                                      1

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      2.4

                                    	
                                      Description
      of Services

                                    	
                                      2

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      2.5

                                    	
                                      Independence
      of the Law Firm

                                    	
                                      2

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      2.6

                                    	
                                      Standard
      Operating Procedures

                                    	
                                      2

                                    
	 
      	 
      	 
      	 
      	 
      
	
                                      ARTICLE
      III.

                                    	
                                      CHANGES
      TO SERVICES; CHANGE IN CIRCUMSTANCES

                                    	
                                      2

                                    
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                      3.1

                                    	
                                      Changes
      to Services

                                    	
                                      2

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      3.2

                                    	
                                      Service
      Fees for Changed Services

                                    	
                                      2

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      3.3

                                    	
                                      Provision
      of Changed Services

                                    	
                                      2

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      3.4

                                    	
                                      Change
      in Circumstances

                                    	
                                      3

                                    
	 
      	 
      	 
      	 
      
	
                                      ARTICLE
      IV.

                                    	
                                      RIGHT
      OF FIRST REFUSAL

                                    	
                                      3

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      4.1

                                    	
                                      Additional
      Law Firm Services

                                    	
                                      3

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      4.2

                                    	
                                      Additional
      Provider Services

                                    	
                                      4

                                    
	 
      	 
      	 
      	 
      	 
      
	
                                      ARTICLE
      V.

                                    	
                                      TERM
      AND TERMINATION

                                    	
                                      5

                                    
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                      5.1

                                    	
                                      Commencement

                                    	
                                      5

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      5.2

                                    	
                                      Initial
      Term

                                    	
                                      5

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      5.3

                                    	
                                      Renewal
      Periods

                                    	
                                      5

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      5.4

                                    	
                                      Termination

                                    	
                                      5

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      5.5

                                    	
                                      Effects
      of Termination

                                    	
                                      6

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      5.6

                                    	
                                      Performance
      Metrics Termination

                                    	
                                      6

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      5.7

                                    	
                                      Survival
      Following Termination

                                    	
                                      6

                                    
	 
      	 
      	 
      	 
      	 
      
	
                                      ARTICLE
      VI.

                                    	
                                      FACILITIES
      AGREEMENT

                                    	
                                      7

                                    
	 
      	 
      	 
      	 
      
	
                                      ARTICLE
      VII.

                                    	
                                      SERVICE
      FEES

                                    	
                                      7

                                    
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                      7.1

                                    	
                                      Services

                                    	
                                      7

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      7.2

                                    	
                                      Reimbursed
      Expenses

                                    	
                                      7

                                    
	 
      	 
      	 
      	 
      
	 
      	
                                      7.3

                                    	
                                      Changes
      to Fee Schedule.

                                    	
                                      7

                                    

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

    

    
      
        
          
            
              
                
                  
                    	 
      	
                            7.4

                          	
                            Billing
      Process

                          	
                            8

                          
	 
      	 
      	 
      	 
      
	 
      	
                            7.5

                          	
                            Payment

                          	
                            9

                          
	 
      	 
      	 
      	 
      
	 
      	
                            7.6

                          	
                            Temporary
      Service Fees

                          	
                            10

                          
	 
      	 
      	 
      	 
      
	 
      	
                            7.7

                          	
                            Taxes.

                          	
                            10

                          
	 
      	 
      	 
      	 
      
	 
      	
                            7.8

                          	
                            Ongoing
      Services at Effective Date.

                          	
                            11

                          
	 
      	 
      	 
      	 
      	 
      
	
                            ARTICLE
      VIII.

                          	
                            PROVIDER
      OBLIGATIONS

                          	
                            11

                          
	 
      	 
      	 
      	 
      	 
      
	 
      	
                            8.1

                          	
                            Reliance

                          	
                            11

                          
	 
      	 
      	 
      	 
      
	 
      	
                            8.2

                          	
                            Notice
      of Adverse Circumstances

                          	
                            11

                          
	 
      	 
      	 
      	 
      
	 
      	
                            8.3

                          	
                            Compliance
      with Applicable Law

                          	
                            11

                          
	 
      	 
      	 
      	 
      
	 
      	
                            8.4

                          	
                            Separation
      of Services

                          	
                            12

                          
	 
      	 
      	 
      	 
      
	 
      	
                            8.5

                          	
                            Conflict
      Check; Waiver

                          	
                            12

                          
	 
      	 
      	 
      	 
      
	 
      	
                            8.6

                          	
                            Review
      of Procedures; Quality Control

                          	
                            12

                          
	 
      	 
      	 
      	 
      
	 
      	
                            8.7

                          	
                            Standard
      of Care

                          	
                            12

                          
	 
      	 
      	 
      	 
      
	 
      	
                            8.8

                          	
                            Performance
      Metrics

                          	
                            13

                          
	 
      	 
      	 
      	 
      
	 
      	
                            8.9

                          	
                            Marketing
      Materials

                          	
                            13

                          
	 
      	 
      	 
      	 
      
	 
      	
                            8.10

                          	
                            Guaranteed
      Payments

                          	
                            13

                          
	 
      	 
      	 
      	 
      	 
      
	
                            ARTICLE
      IX.

                          	
                            PRACTICE
      OF LAW

                          	
                            14

                          
	 
      	 
      	 
      	 
      
	
                            ARTICLE
      X.

                          	
                            SCHEDULED
      ASSESSMENTS

                          	
                            14

                          
	 
      	 
      	 
      	 
      
	
                            ARTICLE
      XI.

                          	
                            EXPENSES

                          	
                            15

                          
	 
      	 
      	 
      	 
      
	
                            ARTICLE
      XII.

                          	
                            INDEPENDENT
      CONTRACTOR; USE OF SUBCONTRACTORS

                          	
                            15

                          
	 
      	 
      	 
      	 
      	 
      
	 
      	
                            12.1

                          	
                            Independent
      Contractor

                          	
                            15

                          
	 
      	 
      	 
      	 
      
	 
      	
                            12.2

                          	
                            Subcontractors

                          	
                            15

                          
	 
      	 
      	 
      	 
      	 
      
	
                            ARTICLE
      XIII.

                          	
                            FIRM
      OBLIGATIONS

                          	
                            15

                          
	 
      	 
      	 
      	 
      	 
      
	 
      	
                            13.1

                          	
                            Notice
      of Excluded File

                          	
                            15

                          
	 
      	 
      	 
      	 
      
	 
      	
                            13.2

                          	
                            Client
      Notification and Consent

                          	
                            16

                          
	 
      	 
      	 
      	 
      
	 
      	
                            13.3

                          	
                            Firm
      Personnel

                          	
                            16

                          
	 
      	 
      	 
      	 
      
	 
      	
                            13.4

                          	
                            Firm
      Information

                          	
                            16

                          
	 
      	 
      	 
      	 
      
	 
      	
                            13.5

                          	
                            License
      to Practice Law

                          	
                            16

                          
	 
      	 
      	 
      	 
      
	 
      	
                            13.6

                          	
                            Compliance
      with Applicable Law

                          	
                            16

                          
	 
      	 
      	 
      	 
      
	 
      	
                            13.7

                          	
                            Professional
      Ethical Requirements

                          	
                            16

                          
	 
      	 
      	 
      	 
      
	 
      	
                            13.8

                          	
                            Review
      of Procedures

                          	
                            16

                          
	 
      	 
      	 
      	 
      
	 
      	
                            13.9

                          	
                            Notice
      of Adverse Circumstances

                          	
                            17

                          

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

    

    
      
        
          
            
              
                
                  
                    	 
      	
                            13.10

                          	
                            Marketing
      Materials

                          	
                            17

                          
	 
      	 
      	 
      	 
      
	 
      	
                            13.11

                          	
                            Continuation
      of Business

                          	
                            17

                          
	 
      	 
      	 
      	 
      	 
      
	
                            ARTICLE
      XIV.

                          	
                            ASSET
      OWNERSHIP

                          	
                            17

                          
	 
      	 
      	 
      	 
      	 
      
	 
      	
                            14.1

                          	
                            Intellectual
      Property; Equipment.

                          	
                            17

                          
	 
      	 
      	 
      	 
      
	 
      	
                            14.2

                          	
                            Reservation
      of Rights/No Contest.

                          	
                            17

                          
	 
      	 
      	 
      	 
      
	 
      	
                            14.3

                          	
                            Licenses.

                          	
                            18

                          
	 
      	 
      	 
      	 
      	 
      
	
                            ARTICLE
      XV.

                          	
                            RESTRICTIVE
      COVENANTS

                          	
                            19

                          
	 
      	 
      	 
      	 
      	 
      
	 
      	
                            15.1

                          	
                            Confidentiality

                          	
                            19

                          
	 
      	 
      	 
      	 
      
	 
      	
                            15.2

                          	
                            Privileged
      Information.

                          	
                            20

                          
	 
      	 
      	 
      	 
      
	 
      	
                            15.3

                          	
                            Competition

                          	
                            20

                          
	 
      	 
      	 
      	 
      
	 
      	
                            15.4

                          	
                            Recruitment
      of Employees

                          	
                            21

                          
	 
      	 
      	 
      	 
      
	 
      	
                            15.5

                          	
                            Limits
      on Activities

                          	
                            21

                          
	 
      	 
      	 
      	 
      
	 
      	
                            15.6

                          	
                            Equitable
      Remedies

                          	
                            21

                          
	 
      	 
      	 
      	 
      
	 
      	
                            15.7

                          	
                            Blue-Pencil

                          	
                            21

                          
	 
      	 
      	 
      	 
      	 
      
	
                            ARTICLE
      XVI.

                          	
                            INSURANCE

                          	
                            21

                          
	 
      	 
      	 
      	 
      	 
      
	 
      	
                            16.1

                          	
                            Provider’s
      Insurance

                          	
                            21

                          
	 
      	 
      	 
      	 
      
	 
      	
                            16.2

                          	
                            Malpractice
      Insurance

                          	
                            22

                          
	 
      	 
      	 
      	 
      	 
      
	
                            ARTICLE
      XVII.

                          	
                            INDEMNIFICATION

                          	
                            22

                          
	 
      	 
      	 
      	 
      	 
      
	 
      	
                            17.1

                          	
                            Firm’s
      Indemnity

                          	
                            22

                          
	 
      	 
      	 
      	 
      
	 
      	
                            17.2

                          	
                            Provider’s
      Indemnity

                          	
                            23

                          
	 
      	 
      	 
      	 
      
	 
      	
                            17.3

                          	
                            Limitation
      of Liability

                          	
                            23

                          
	 
      	 
      	 
      	 
      
	 
      	
                            17.4

                          	
                            Indemnification
      Procedures.

                          	
                            23

                          
	 
      	 
      	 
      	 
      
	 
      	
                            17.5

                          	
                            Sole
      and Exclusive Remedy

                          	
                            25

                          
	 
      	 
      	 
      	 
      	 
      
	
                            ARTICLE
      XVIII.

                          	
                            RECORDS;
      AUDIT RIGHTS

                          	
                            25

                          
	 
      	 
      	 
      	 
      	 
      
	 
      	
                            18.1

                          	
                            Maintenance
      of Records

                          	
                            25

                          
	 
      	 
      	 
      	 
      
	 
      	
                            18.2

                          	
                            Access
      to Records

                          	
                            25

                          
	 
      	 
      	 
      	 
      
	 
      	
                            18.3

                          	
                            Audit
      Rights

                          	
                            26

                          
	 
      	 
      	 
      	 
      	 
      
	
                            ARTICLE
      XIX.

                          	
                            DISPUTE
      RESOLUTION

                          	
                            26

                          
	 
      	 
      	 
      	 
      	 
      
	 
      	
                            19.1

                          	
                            Exclusive
      Procedures

                          	
                            26

                          
	 
      	 
      	 
      	 
      
	 
      	
                            19.2

                          	
                            Negotiation

                          	
                            26

                          
	 
      	 
      	 
      	 
      
	 
      	
                            19.3

                          	
                            Mediation

                          	
                            26

                          
	 
      	 
      	 
      	 
      
	 
      	
                            19.4

                          	
                            Judicial
      Enforcement

                          	
                            27

                          

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

    

    
      
        
          
            
              
                
                  	
                          ARTICLE
      XX.

                        	
                          GENERAL

                        	
                          27

                        
	 
      	 
      	 
      	 
      	 
      
	 
      	
                          20.1

                        	
                          Notices

                        	
                          27

                        
	 
      	 
      	 
      	 
      
	 
      	
                          20.2

                        	
                          Assignment

                        	
                          28

                        
	 
      	 
      	 
      	 
      
	 
      	
                          20.3

                        	
                          Enforcement

                        	
                          28

                        
	 
      	 
      	 
      	 
      
	 
      	
                          20.4

                        	
                          Governing
      Law; Venue; Jurisdiction

                        	
                          28

                        
	 
      	 
      	 
      	 
      
	 
      	
                          20.5

                        	
                          Change
      in Applicable Law

                        	
                          28

                        
	 
      	 
      	 
      	 
      
	 
      	
                          20.6

                        	
                          No
      Third Party Beneficiaries

                        	
                          28

                        
	 
      	 
      	 
      	 
      
	 
      	
                          20.7

                        	
                          Severability

                        	
                          28

                        
	 
      	 
      	 
      	 
      
	 
      	
                          20.8

                        	
                          Construction.

                        	
                          29

                        
	 
      	 
      	 
      	 
      
	 
      	
                          20.9

                        	
                          Force
      Majeure

                        	
                          29

                        
	 
      	 
      	 
      	 
      
	 
      	
                          20.10

                        	
                          Entire
      Agreement; Amendment

                        	
                          30

                        
	 
      	 
      	 
      	 
      
	 
      	
                          20.11

                        	
                          Counterparts;
      Effectiveness

                        	
                          30

                        
	 
      	 
      	 
      	 
      
	 
      	
                          20.12

                        	
                          Waiver
      of Jury Trial

                        	
                          30

                        
	 
      	 
      	 
      	 
      	 
      
	
                          EXHIBIT
      A

                        	  	
                          DEFINITIONS

                        	
                          A-1

                        
	 
      	 
      	 
      	 
      
	
                          EXHIBIT
      B

                        	 	
                          Description
      of Services

                        	
                          B-1

                        
	 
      	 
      	 
      
	
                          EXHIBIT
      C

                        	 	
                          Fee
      Schedule

                        	
                          C-1

                        
	 
      	 
      	 
      
	
                          EXHIBIT
      D

                        	 	
                          Expenses

                        	
                          D-1

                        
	 
      	 
      	 
      
	
                          EXHIBIT
      E

                        	 	
                          Performance
      Metrics

                        	
                          E-1

                        

                

              

            

          

        

      

    

     

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

    SERVICES
AGREEMENT

     

    This
Services Agreement (the “Agreement”)
is made as of the 15th of
January, 2010 (the “Effective
Date”), between the LAW
OFFICES OF DAVID J. STERN, P.A., a Florida professional association, with
a place of business at 900 S. Pine Island Road, Suite 400, Plantation, Florida
33324 (“Firm”)
and DJS PROCESSING, LLC,
a Delaware limited liability company with a place of business at 900 S. Pine
Island Road, Suite 400, Plantation, Florida 33324 (“Provider”)
(each of Firm and Provider, a “Party”;
together, the “Parties”).

     

    RECITALS

     

    A.           Firm
is engaged in the practice of law with its principal office in
Florida.

     

    B.           Firm
now desires to engage Provider as an independent contractor to provide Services
to Firm, upon the terms and conditions set forth in this Agreement.

     

    AGREEMENT

     

    ARTICLE
I.

    DEFINITIONS

     

    The
capitalized terms used in this Agreement (including the Exhibits) shall have the
meanings set forth in Exhibit
A attached hereto.

     

    ARTICLE
II.

    SERVICES

     

    2.1     Engagement.  Provider
agrees to provide to Firm, and Firm agrees to purchase from Provider, all
Services used in the conduct of Firm’s business.

     

    2.2         Use of
Provider.  Firm shall use Provider to provide any and all
Services used by Firm from time to time during the Term and shall not retain,
hire, employ, use or engage any employee or Person other than Provider to
provide Services, whether directly or indirectly, except (i) to the extent that
Provider is prohibited by Applicable Law from performing any such Service, (ii)
Services to be performed for any Excluded File, (iii) Services arising out of
Additional Law Firm Services for which Provider has declined to accept the
applicable offer in accordance with Section
4.1, and (iv) Services arising out of Additional Provider Services for
which Firm has declined to accept the applicable offer in accordance with Section
4.2.

     

    2.3        
Non-Exclusive Provision
of Services.  Firm acknowledges and agrees that Provider is
providing Services to Firm under this Agreement on a non-exclusive basis and
that Provider may provide any services, including services that are the same or
substantially similar to the Services, to other Persons, including to law firms
other than Firm (the “Other
Firms”), in any jurisdiction.  Notwithstanding the foregoing,
in no event shall Firm be required to direct and supervise the provision of
Services by Provider to third parties (whether or not such supervision is
required by Applicable Law).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

    

    2.4        
Description of
Services.  The Services to be provided by Provider under this
Agreement shall initially be those set forth in Exhibit
B attached
hereto, and shall also include Changed Services and additional Services pursuant
to Article
IV hereof, to be performed by Provider to the extent required, and as
contemplated by, the terms and conditions of this Agreement.  Without
limiting the foregoing, the employees of Firm shall not provide Services for any
Included Files to any Client without the prior written consent of
Provider.

     

    2.5        
Independence of the Law
Firm.  The Parties hereto acknowledge that Provider will not
provide Legal Services with respect to any Files, and Firm shall have complete
and absolute control over the methods by which the practice of law is conducted
by Firm.  All matters involving the internal management, control, or
finances of Firm shall remain the sole responsibility of Firm and its
shareholders, and Provider shall have no authority whatsoever over Firm as it
relates to its practice of law.  If the Service(s) to be provided
require the direction and supervision of an attorney employed or contracted by
Firm, then (i) Firm’s attorney(s) shall so direct and supervise the Service(s)
and the personnel providing those Service(s) on behalf of Provider and (ii) the
Firm, in its sole and absolute discretion, has the right to exclude any employee
or Subcontractor of Provider from being involved in the provision of such
Service(s) for the Firm if the Firm deems such action is necessary for Firm to
fulfill its obligations under Applicable Law.  The Parties acknowledge
that Provider shall have no authority whatsoever to enter into, amend,
terminate, extend or renew any agreement or arrangement on behalf of Firm or any
employee or associate of Firm, or to bind Firm, in any way, without Firm’s prior
written consent.

     

    2.6       
Standard Operating
Procedures.  Provider shall provide the
Services in accordance with standard operating procedures (“SOPs”)
formulated in compliance with Applicable Law.  Until the Parties agree
otherwise, the SOPs shall be (i) those utilized by Firm in providing services to
the Clients prior to the Effective Date; (ii) communicated by Firm to Provider
and documented prior to the Effective Date; and (iii) amended from time to time
by the Parties in accordance with Article
III.

     

    ARTICLE
III.

    CHANGES TO SERVICES; CHANGE
IN CIRCUMSTANCES

     

    3.1        
Changes to
Services.  If, at any time during the Term, Applicable Law,
Client demands, or best practices require any change in the scope or nature of
Services, or in the method, manner or means by which Services are performed,
excluding any Additional Law Firm Services as described in Section
4.1 or any
Additional Provider Services as described in Section
4.2, Provider at that time agrees to perform such changed, different
and/or additional Services (collectively, the “Changed
Services”), subject to the provisions of Section
3.2.  Each Party shall provide notice to the other as soon as
commercially reasonable of the need for Changed Services and, subject to Section
2.2, Firm agrees to engage Provider for such Changed
Services.

     

    3.2        
Service Fees for Changed
Services.  Any modification to the Services may result in an
adjustment to the Services Fees payable for such Services, as provided in Article
VII.

     

    3.3        
Provision of Changed
Services.  If required by Applicable Law, the Client or the
Firm, Provider shall commence performing Changed Services prior to the time when
the Parties shall have reached agreement on any adjustment to the Service Fees,
if any, for such Changed Services.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

    

    3.4        
Change in
Circumstances.  The Parties acknowledge that, from time to
time, after the Effective Date, it may be necessary or desirable for either
Party to change or adjust the nature and/or structure of its
business.  Accordingly, notwithstanding anything to the contrary
contained in this Agreement, each Party agrees to negotiate with the other in
good faith, at the request from time to time of the other Party, to adjust or
amend the terms and provisions of this Agreement to reflect such changes in the
nature and/or structure of the requesting Party’s business and to give effect to
the general financial intent of the Parties.

     

    ARTICLE
IV.

    RIGHT OF FIRST
REFUSAL

     

    4.1        
Additional Law Firm
Services.  Provider shall have a right of first refusal to
provide any additional Services required by Firm in connection with Firm’s
provision of any Legal Services that are not of the nature or type conducted by
Firm as of the Effective Date (“Additional
Law Firm Services”) in accordance with this Section
4.1; provided that Provider demonstrates to Firm’s reasonable
satisfaction that it is able to provide the Additional Law Firm Services in
accordance with the standard of care set forth in Section
8.7 and subject to Section
15.5.

     

    4.1.1          Notice.  Firm will
give Provider written notice (a “Notice”)
of its intention to conduct the Additional Law Firm Services at least thirty
(30) days prior to its initiation of the Additional Law Firm
Services.  The Notice shall offer Provider the right to perform all
Services necessary or incidental for Firm to conduct such Additional Law Firm
Services and set forth the proposed Service Fees and scope of Services required
with respect to the Additional Law Firm Services.  Firm shall
determine such proposed Service Fees in good faith and at a reasonable level
based upon then current rates charged by other similar companies for such
services.  If required by Applicable Law, a client of Firm or Firm,
Provider shall commence performing the Additional Law Firm Services prior to the
time when the Parties shall have reached agreement on any adjustment to the
Service Fees, if any, for such Additional Law Firm Services.

     

    4.1.2          Offer and
Acceptance.  Provider shall have 45 days after receipt of the
Notice (the “Offer
Period”) to accept such offer by giving Firm a written notice of
acceptance.  During the Offer Period, both Parties will use
commercially reasonable efforts to reach a mutually satisfactory agreement
relating to terms and conditions for the provision of such Services, including
Service Fees relating thereto.  The Parties will amend this Agreement
to include the agreed terms and conditions relating to such
Services.  If Provider does not accept the offer in its entirety
during the Offer Period, Firm will have the right within 90 days after
expiration of the Offer Period, to retain a third party, which is not an
Affiliate of Firm, to provide such Services (other than those that Firm and
Provider have agreed will be provided by Provider) on terms and conditions that
are less favorable to the third party than the terms and conditions offered to
Provider in the Notice.  If Firm does not consummate an agreement with
a third party within that 90-day period in accordance with the foregoing
limitations, the right of Firm to retain a third party to provide such Services
will terminate and Firm must again comply with the procedures set forth in this
Section
4.1.2 with respect to the provision of such Services.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

    

    4.1.3          Prohibition by Applicable
Law.  This Section
4.1.3 will not apply to the extent Provider is prohibited by Applicable
Law from performing Additional Law Firm Services.  In such case, Firm
must notify Provider of the requirement that a law firm provide such
Services.  If requested in writing by Provider, Firm will use
commercially reasonable efforts to revise the proposal so as to permit Provider
to perform such Additional Law Firm Services in accordance with Section
4.1 and Applicable Law.

     

    4.2        
Additional Provider
Services.  In the event that Provider offers new or additional
services required by Firm to conduct its business, Provider shall have a right
of first refusal to provide such new or additional services to Firm (“Additional
Provider Services”) in accordance with this Section
4.2; provided that Provider demonstrates to Firm’s reasonable
satisfaction that it is able to provide the Additional Provider Services in
accordance with the standard of care set forth in Section
8.7.

     

    4.2.1          Notice.  Provider
shall provide Firm with written notice of offering to provide the Additional
Provider Services the proposed Service Fees and scope of services required with
respect to the Additional Provider Services (the “Additional
Provider Services Notice”).  Provider shall determine such
proposed Service Fees in good faith and at a reasonable level based upon then
current rates charged by other similar companies for such services.

     

    4.2.2          Offer and
Acceptance.  To the extent that Firm requires such Additional
Provider Services to conduct its business, Firm shall have 45 days after receipt
of the Additional Provider Services Notice (the “Additional
Provider Services Offer Period”) to accept such offer by giving Provider
a written notice of acceptance.  During the Additional Provider
Services Offer Period, both Parties will use commercially reasonable efforts to
reach a mutually satisfactory agreement relating to terms and conditions for the
provision of such Additional Provider Services, including Service Fees relating
thereto.  The Parties will amend this Agreement to include the agreed
terms and conditions relating to such Additional Provider
Services.  If Firm does not accept the offer in its entirety during
the Additional Provider Services Offer Period, Firm will have the right to
continue to (i) use any third party previously used by Firm to provide such
Additional Provider Services (other than those services that Firm and Provider
have agreed will be provided by Provider) on terms and conditions that are less
favorable to the third party than the terms and conditions offered to Firm in
the Additional Provider Services Notice or (ii) provide such Additional Provider
Services itself.  In the event that Firm (i) does not require the
Additional Provider Services at the time of receipt of the Additional Provider
Services Notice, but thereafter requires such services, (ii) engages a third
party to provide such services or (iii) changes the third party providing such
services or the terms upon which it engages a third party to provide such
services, then such services shall constitute Additional Law Firm Services
covered by Section
4.1.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

    

    4.2.3          Prohibition by Applicable Law or
Existing Agreement.  This Section
4.2 will not apply to the extent Firm is prohibited by Applicable Law
from retaining Provider to provide the applicable Additional Provider Services
or the retention of Provider to provide the applicable Additional Provider
Services would be a breach of any existing agreement to which Firm is a
party.  In such case, Firm must notify Provider of such prohibition
and, if requested in writing by Provider, use commercially reasonable efforts to
revise the proposal so as to permit Provider to perform such Additional Provider
Services in accordance with this Section
4.2, Applicable Law and existing agreements.

     

    ARTICLE
V.

    TERM AND
TERMINATION

     

    5.1       
Commencement.  This
Agreement shall commence on the Effective Date.

     

    5.2       
Initial
Term.  Unless terminated earlier in accordance with this Article
V, this Agreement will continue in full force and effect for an initial
term of twenty-five (25) years (the “Initial
Term”), subject to Section
5.3.

     

    5.3       
Renewal
Periods.  Unless terminated earlier in accordance with this
Article
V, this Agreement shall automatically renew for successive additional
five (5) year periods after the Initial Term (each a “Renewal
Period”), unless either Party delivers to the other a written notice of
its intention not to renew this Agreement at least twelve (12) months prior to
the expiration of the Initial Term or any Renewal Period, in which case this
Agreement shall terminate at the expiration of that Initial Term or Renewal
Period, as the case may be.  The Initial Term and any subsequent
Renewal Period shall hereinafter collectively be referred to as the “Term.”

     

    5.4       
Termination.  This
Agreement may be terminated for any of the following reasons: (i) upon the
expiration of this Agreement in accordance with Sections
5.2 or 5.3; (ii) by written agreement of both Parties; (iii) by any Party
upon written notice to the other Party in the event that any governmental,
regulatory or judicial entity of competent jurisdiction shall have issued a
permanent injunction or other final order of decree which is not subject to
appeal or in respect of which all time periods for appeal have expired enjoining
or otherwise preventing any Party from performing, in any  material
respect, this Agreement or any Service; (iv) upon written notice by one Party of
material breach of this Agreement or the Facilities Agreement by the other
Party, including, but not limited to, Section
8.7, and, if capable of cure, such breach remains uncured for a period of
one hundred twenty (120) days after such written notice of the material breach;
provided that, if Provider is terminating for a non-monetary breach by Firm or
due to an inability to increase the Service Fee pursuant to Article
VII, upon request of Firm, Provider must continue to provide the Services
to Firm for the period requested by Firm, up to six (6) months, on the
terms and conditions set forth in this Agreement; or (v) as provided in Section
5.6 below.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

    

    5.5        
Effects of Termination.
  Upon such termination of this Agreement, (i) Provider shall
continue to collect and receive from Firm all reimbursements and payments due to
Provider prior to the date of termination of this Agreement and for Services
required to be rendered by Provider following the termination of this Agreement;
(ii) in addition to Subsection (i), if requested by Firm, Provider will continue
providing Services for any Included File in progress at the time of termination
until such Included File is (a) closed, (b) becomes an Excluded File or (c)
until Firm is no longer handling such File; and Firm will continue to be
obligated to pay the Service Fees and all other amounts payable to Provider for
all such Included Files in existence at the date of termination for as long as
it continues to provide Services for such Included File and the Access Fee for
Excluded Files to the extent Firm uses Provider Intellectual Property Rights in
connection with such Excluded File; (iii) Firm will return to Provider and cease
to use all Confidential Information of Provider, all Provider Intellectual
Property Rights, and any third party information, except as required to conclude
work on Included Files in accordance with this Section
5.5 and Excluded Files for which an Access Fee is paid; (iv) Provider
will return to Firm and cease to use all Confidential Information of Firm and
all Intellectual Property Rights owned by Firm (which does not include any
Provider Intellectual Property Rights), except as required to conclude work on
Included Files in accordance with this Section 5.5
and on Excluded Files for which Firm has paid an Access Fee; and (v) Provider
will, for a period of seven (7) years after the Termination Date, maintain and
grant Firm access, at Firm’s cost, to the work performed on the Included Files
pursuant to this Agreement in accordance with Article
XVIII.

     

    5.6       
Performance Metrics
Termination.   In the event that Provider consistently fails to
achieve the Performance Metrics, due to its own action or omission and not those
of any third party, with respect to Included Files of a Client, Firm shall
notify Provider of such failure to perform (the “Performance
Notice”), which Performance Notice shall contain (i) the detail of the
nature of such failure(s) to perform, and (ii) suggested steps to cure such
failure.  Upon receipt by Provider of the Performance Notice, Provider
shall have one hundred twenty (120) days to work in good faith to resolve such
failures.  If Provider is unable reasonably to resolve such failures,
Firm shall have the right to designate all Included Files of that Client as
Excluded Files.  If requested by Firm, Provider will complete any and
all work in progress on any such File for such Client, and Firm shall pay
Provider the Service Fee for any such Files for which it completes the required
Services in accordance with the terms of this Agreement.  Firm shall
be required to pay a percentage of the Access Fee for these Excluded Files based
upon the percentage of Services required to be rendered with respect to such
Excluded File following the date the File is designated as an Excluded File and
Firm shall have the right to the use of Provider Intellectual Property as
provided in Section
7.3.4 to provide Services to those Files.

     

    5.7        
Survival Following
Termination.  Notwithstanding expiration or termination of this
Agreement (whether in whole or in part), (i) nothing in this Article
V shall in any way operate to impair or destroy any of the rights or
remedies of either Party of its obligations to comply with the provisions of
this Agreement which have accrued prior to the Termination Date, (ii) Firm will
remain liable to Provider for all Service Fees, and other amounts payable to
Provider under this Agreement and (iii) the provisions of Sections
2.5, 2.6, 8.1, 8.4, 8.5, 8.6, 8.8, 8.10, 13.3, 13.4 , 13.5, 13.6 and 13.10 and
Articles V, VII, IX, XI, XII, XIV, XV, XVI, XVII, XVIII and XX shall
survive termination of this Agreement indefinitely.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

    

    ARTICLE
VI.

    FACILITIES
AGREEMENT

     

    The
Parties acknowledge that, on the Effective Date, Provider and Firm have entered
into a Facilities Sharing Agreement for the sublease of a portion of the
premises to be occupied by Firm after the Effective Date (the “Facilities
Agreement”).  The Parties acknowledge that either Party may
immediately terminate the Facilities Agreement upon termination or expiration of
this Agreement, in accordance with the terms and conditions of the Facilities
Agreement.

     

    ARTICLE
VII.

    SERVICE
FEES

     

    7.1       
Services.  In consideration
for the performance of Services relative to each Included File, Firm shall pay
Provider the applicable fee as set forth on the Fee
Schedule, attached hereto as Exhibit
C (the “Service
Fees”).  If at any time prior to the conclusion of a File, such
File is converted from one file type to another (e.g., from a foreclosure File
to a bankruptcy File), then a new File will be deemed to have been created on
the date of such conversion and to have been referred by Firm to Provider for
processing and Provider will be entitled to a new Service Fee in accordance with
the Fee Schedule for that File.  In no case shall the payment of
Service Fees by Firm to Provider be interpreted or implied as permitting
Provider to share in Firm’s fees for Legal Services.  Rather, the
payment of Service Fees by Firm to Provider is acknowledged as the Parties’
negotiated agreement establishing the reasonable value of the
Services.

     

    7.2       
Reimbursed
Expenses.  Firm shall
reimburse Provider for all Client Reimbursements advanced by Provider in
connection with the performance of Services hereunder as provided in Sections
7.4 and 7.5. In the event that Firm is unable to secure reimbursement
from any Client for such amount due to Provider’s failure to submit timely such
costs to Firm, Firm shall not be obligated to make such reimbursement to
Provider.

     

    7.3       
Changes to Fee Schedule.

     

    7.3.1          Either
Party may propose a Fee Schedule change if (i) changes in Applicable Law, Client
demands, Performance Metrics, or best practices, as determined by Firm or
Provider, materially changes Services required so as to increase or decrease
materially the cost of providing the Services; or (ii) the cost to provide the
Services increases or decreases materially, whether as a result of increases or
decreases in fees charged by third Parties or as a result of an increase or
decrease in the volume of Services provided, whether affecting Provider, the
industry in which Provider participates or the national, regional or global
economy generally.  In determining whether there should be a change to
the Fee Schedule, all changes in Services or the cost to provide Services shall
be considered cumulatively until there is a change to the Fee Schedule
reflecting such change.

     

    7.3.2          The
Party proposing an adjustment to the Fee Schedule must provide the other Party
written notice setting forth the proposed adjustment and the facts or
circumstances together with reasonable supporting information to support the
proposed adjustment.  Such notice may be provided by (i) David J.
Stern or a person designated by Mr. Stern on behalf of the Firm and (ii) a
person designated by majority vote of the members of the Board of Managers of
the Provider (who are not an owner, officer, employee or agent of the Firm)
shall be authorized to negotiate on behalf of Provider.  The Fee
Schedule may not be adjusted more than twice each calendar year.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

    

    7.3.3         In
the event that Firm and Provider wish to amend the Fee Schedule, the Parties
agree to act in good faith and to use commercially reasonable efforts to seek to
reach an agreement mutually satisfactory to the Parties in connection with any
proposed amendment to the Fee Schedule that is permitted by this Article
VII.  In the event that David J. Stern is the Chief Executive
Officer of the Provider, a person designated by majority vote of the members of
the Board of Managers of the Provider (other than David J. Stern or any other
owner, officer or employee or agent of the Firm) shall be authorized to
negotiate on behalf of Provider.  If the Parties are unable to reach
agreement on any such proposed adjustment within sixty (60) days after notice of
such proposed adjustment, the Parties will cause promptly thereafter a
nationally recognized independent firm of public accountants (the “Arbitrator”)
reasonably satisfactory to both Parties to make a determination in writing,
within thirty (30) days, of the appropriate amendment to the Fee Schedule, which
determination shall be binding on the Parties.  The Arbitrator’s
determination shall be made based upon the amount it reasonably determines is
required to fairly compensate Provider for the Services to be provided, taking
into consideration the relevant reasonable economic expectations of each of the
Parties when they entered into this Agreement and the economic needs of the Firm
in order for it to provide Legal Services to its Clients in accordance with
Applicable Law.  The fees and expenses of the Arbitrator shall be
allocated equally between Provider and Firm.  Each Party agrees that
it will, and each agrees to cause the Arbitrator to, cooperate in the
determination of any such adjustment to the Fee Schedule, including making
available to the other party and to the Arbitrator, to the extent necessary, any
books, personnel , records and work papers.

     

    7.3.4         Access Fee.  In the
event that any File is or becomes an Excluded File, Firm shall pay to Provider a
fee for the Firm’s use of Provider Intellectual Property in conjunction with the
handling and processing of said File(s) (the “Access
Fee”), consistent with the terms of this Article
VII and as set forth in the Fee Schedule attached hereto as Exhibit
C. With respect
to Files that become Excluded Files after work has been started on the Files,
the Access Fee shall be based upon the percentage of Services required to be
rendered with respect to such Excluded File following the date the File is
designated as an Excluded File.  Following the termination of this
Agreement, Firm shall pay the Provider the Access Fee or the applicable
percentage thereof pursuant to this Section
7.3.4 of this Agreement, for any File of Firm with respect to which Firm
uses Provider Intellectual Property pursuant to the license set forth in Section
14.3 to the extent Firm has not or will not pay a full Service Fee for
such File or has not paid a full Access Fee for such File.  The Access
Fee was mutually established by the Parties and represents a reasonable market
rate for the benefits provided.

     

    7.4        
Billing
Process.  Provider will
submit invoices to Firm for all Service Fees (other than amounts payable under
Section
7.7) and Client Reimbursements (the “Invoice”)
on the following schedule:

     

    
      	
               
      

            	
              (i)

            	
              Provider
      may invoice the Firm for Client Reimbursements incurred by Provider at any
      time after such Client Reimbursements are
  incurred.

            

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

    

    
      	
               
      

            	
              (ii)

            	
              Provider
      may issue the first fee invoice (“First Invoice”) with respect to
      foreclosure services rendered on a File once the Firm is permitted to
      invoice its Clients, or, if earlier, sixty (60) days after the File is
      referred to Provider.  The First Invoice shall be for 75% of the
      Service Fees payable with respect to foreclosure services rendered on a
      File and shall reference any Client Reimbursements previously invoices but
      not yet paid to Provider by the
Firm.

            

    

     

    
      	
               
      

            	
              (iii)

            	
              Provider
      may issue the second fee invoice (“Second Invoice”) with respect to
      foreclosure services rendered on a File once the Firm is permitted to
      invoice its Clients or, if earlier, three hundred thirty (330) days after
      the File is referred to Provider.  The Second Invoice shall be
      for 25% of the Service Fees payable with respect to foreclosure services
      rendered on the File and shall reference any Client Reimbursements
      previously invoiced but not yet paid to Provider by the
    Firm.

            

    

     

    
      	
               
      

            	
              (iv)

            	
              In
      all other cases, the Provider may invoice the Firm for services rendered
      on a File (the “Non-Foreclosure Invoice”) once the Firm is permitted to
      invoice its clients for these services or, if earlier, ninety (90) days
      after the File is referred to Provider or as otherwise agreed by the
      Provider and the Firm.

            

    

     

    Provider
will, with each Invoice, provide to Firm such information as may be reasonably
requested by Firm to support the calculation of such Service
Fees.  When invoicing its Clients, Firm will include in such invoices
all Client Reimbursements previously invoiced by Provider to Firm unless Firm
has already invoiced Client for such Client Reimbursements.

     

    7.5        
Payment.  Firm agrees to
pay each invoice promptly, without notice, demand and without any set-off and,
in any event, no later than five (5) Business Days after Firm receives payment
of the invoice issued by Firm to its Client for (i) the Client Reimbursements
covered by Provider’s invoice, in the case of Client Reimbursements, and (ii)
legal services for which the Services covered by Provider’s invoice were
provided, in the case of Services, provided, however, that in no event shall
Firm’s payment of Service Fees occur more than ninety (90) days after the date
of Provider’s invoice to Firm for such Service Fees.  If Firm defaults
on any amount payable to Provider pursuant to this Agreement for more than 30
days after its payment date as set forth in this Agreement, Firm will be
obligated to pay interest on such overdue amount from the date due, until paid,
at the prime rate as published in The Wall Street Journal, Eastern
Edition in effect at the time of such payment plus 2% per annum (the
“Default
Rate”).  Interest payable under this Section
7.5 shall be calculated daily on the basis of a year of 365 days and the
actual number of days elapsed and compounded monthly, from the relevant date
when payment was due through the date of payment; provided that such interest
rate will not exceed the maximum rate permitted by Applicable
Law.  All payments made by Firm hereunder will be applied first to
accrued but unpaid interest and then to amounts otherwise due under this
Agreement but unpaid.  If Firm fails to pay the full amount due within
90 days of the date payment was due, such failure will be considered a material
breach of this Agreement (except to the extent of any invoiced amounts
reasonably disputed by Firm in good faith).  In the event that Firm
has received payment from its Client on an Included File and has failed to pay
Provider for the Services rendered on such File as required by this Agreement,
then the Default Rate shall be increased by 5% per annum with respect to the
amount payable to Provider for Services for that File, and Provider shall be
permitted to offset the amount due to Provider for Services for that File
against amounts due by Provider to Firm under Section
8.10.  Firm will maintain in force and effect its billing and
collection practices generally as they existed prior to the Effective Date, with
only such changes as are required from time to time by its Clients.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

    

    7.6       
Temporary Service
Fees.  If Provider provides any Services hereunder (including
Changed Services) during any period after an adjustment to the Fee Schedule has
been proposed but prior to the time when any resulting adjustment to the Fee
Schedule shall have been agreed by the Parties or determined by the Arbitrator,
the Service Fees payable for such Services until the time of such agreement or
determination (the “Temporary
Service Fees”) shall be equal to the Service Fees existing prior to such
proposal.  At such time when the resulting Service Fees for such
Services are agreed or so determined by the Arbitrator, (i) the applicable
adjustment to the Fee Schedule for such Services will be effective as of the
date when the adjustment was first proposed, notwithstanding the fact that the
amount of such adjustment may not have been agreed by the Parties or so
determined by the Arbitrator until a later date, (ii) the Firm shall be required
to pay to Provider any amount by which the aggregate Service Fees payable for
such Services (based upon the Service Fees as ultimately agreed by the Parties
or so determined by the Arbitrator) exceeds the aggregate Temporary Service Fees
actually paid for such Services and (iii) Provider shall be required to pay to
the Firm any amount by which the aggregate Temporary Service Fees actually paid
for such Services exceeds the aggregate Services Fees payable for such Services
(based upon the Service Fees as ultimately agreed by the Parties or so
determined by the Arbitrator).  Firm or Provider, as the case may be,
shall submit invoices for all amounts payable by the other party promptly after
the applicable adjustment to the Fee Schedule has been agreed by the Parties or
determined by the Arbitrator in accordance with this Section
7.6.  Any amount payable by Firm or Provider pursuant to this
Section
7.6 shall be payable as provided in Section
7.5.

     

    7.7      
  Taxes.

     

    7.7.1         Amounts
payable by either of Firm or Provider hereunder are exclusive of any applicable
withholding, sales, use, excise, services or similar tax (any such tax, a “Sales
Tax”), which may be assessed on the provision of Services
hereunder.  If any Sales Tax is assessed on the provision of any
Services under this Agreement, Firm shall either (i) pay directly or reimburse
or indemnify Provider for such Sales Tax, or (ii) provide Provider with a
certificate or other proof, reasonably acceptable to Provider, evidencing an
exemption from liability for such Sales Tax.  All amounts under this
Agreement and in any Fee Schedule are expressed exclusive of Sales
Taxes.

     

    7.7.2         The
Parties agree to cooperate with each other in determining the extent to which
any Sales Tax is due and owing under the circumstances, and will provide and
make available to each other any resale certificate, information regarding out
of state use of materials, services or sale, and other exemption certificates or
information reasonably requested by either party.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

    

    7.8        
Ongoing
Services at Effective Date.

     

    7.8.1         Provider
shall provide foreclosure Services on all of Firm’s open Files at the Effective
Date, except as otherwise provided in Section
2.2, on the following basis:  (a) with respect to Files that
have been open less than two hundred forty (240) days, if there have been no
billings by Firm to its Client on the File, then Provider may bill Firm for one
hundred (100%) percent of the foreclosure Service Fees on such File in
accordance with Section
7.4, (b) with respect to Files that have been open less than two hundred
forty (240) days, if there has been one billing by Firm to its Client on the
File, then Provider may bill Firm for twenty-five (25%) percent of the
foreclosure Service Fees on such File and (c), with respect to Files that have
been open more than two hundred forty (240) days, if Firm bills its Client with
respect to such file after the Effective Date, then Provider may bill Firm for
twenty-five (25%) percent of the foreclosure Service Fees on such
File.  In all other cases, Provider may not bill Firm for any
foreclosure Service Fees on such File.

     

    7.8.2         Provider
shall provide all other Services on all of Firm’s open Files at the Effective
Date, except as otherwise provided in Section
2.2, on the following basis: if the Firm bills its client for any service
after the Effective Date, then Provider shall be permitted to bill Firm for any
Services provided by Provider relating thereto at one hundred (100%) percent of
its Service Fee.

     

    7.8.3         All
billing and payments on Services covered by this Section
7.8 shall be in accordance with Sections
7.4 and 7.5, except for Files covered by Section
7.8.1(c)(i), which shall be billed at the time Firm bills its Client on
such File.

     

    ARTICLE
VIII.

    PROVIDER
OBLIGATIONS

     

    8.1       
Reliance.  Provider
shall be entitled to rely upon the genuineness, validity and truthfulness of any
instruction, notice, document, instrument, certificate or other writing provided
to it by Firm in connection with the performance of Services hereunder unless
such instruction, notice, document, instrument, certificate or other writing
appears on its face to be fraudulent, false or forged.

     

    8.2        
Notice of Adverse
Circumstances.  Provider agrees to notify Firm promptly of the
occurrence of any event that would, or would reasonably be expected, to result
in a material adverse effect upon the business, operations, assets or financial
condition of Provider or Firm, including: (a)  commencement of
litigation, investigation or other proceeding to which Provider is a party
before any Governmental Body; (b) any claim that Provider’s activities do not
comply with Applicable Law; or (c) any complaint from a Client.  Such
notice shall provide sufficient details and information to enable Firm to
appreciate the substance of the matter giving rise to the notice, and Provider
shall promptly provide such additional information regarding the matter
addressed by the notice as Firm may reasonably request.

     

    8.3        
Compliance with
Applicable Law.  Provider agrees to perform Services hereunder
in compliance with all Applicable Law.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

    8.4           Separation
of Services.  Provider agrees to use commercially reasonable
efforts to separate any services that it may, from time to time, perform for its
clients who are not Clients of Firm (the “Non-Firm
Clients”) from services it performs for Clients of
Firm.

     

    8.5           Conflict
Check; Waiver.  Whenever Provider proposes to provide any
services to a party, other than a Client of Firm, Provider shall cooperate with
Firm to comply with any professional or ethical requirements to which Firm is
subject in using a provider of Services with a multiple customer
base.  Examples of such requirements may include, but are not limited
to, requirements related to confidentiality and avoiding conflicts of
interests.  Provider agrees to perform a conflicts check in accordance
with the procedures established from time to time by Firm (as notified to
Provider) to determine whether a potential conflict of interest exists relating
to the provision of services to a Non-Firm Client and the provision of Services
under this Agreement to Clients.  Subject to any confidentiality
obligations under the terms of any written agreement with a third party or under
Applicable Law, if the results of such conflicts check reveal a potential
conflict of interest, Provider agrees immediately to notify Firm of such
potential conflict.  If waivers of the conflict cannot be obtained,
then Provider shall not provide services to the Non-Firm Client except for
services of the type provided prior to the date when the conflict
arose.  If the provision by Provider of any Services for a Client of
Firm would constitute a conflict of interest under Applicable Law as a result of
services being rendered for a pre-existing Non-Firm Client, (i) Provider will
not, without obtaining the prior written consent of Firm, perform such Services
and (ii) the File for such Client will become an Excluded File and Firm shall be
obligated to pay the applicable Access Fee for such File in accordance with
Article
VII.

     

    8.6           Review
of Procedures; Quality Control.  On a regular basis throughout
the Term, Provider shall review its internal policies, procedures, training
programs, forms and other relevant materials to ensure that the provision of
Services hereunder is at all times in accordance with Applicable
Law.  Provider shall carry out a written program to monitor the
quality of the Services provided by Provider, which program shall be subject to
review and approval by Firm, which approval shall not be unreasonably withheld,
delayed or conditioned.  If any dispute shall arise between Firm and
Provider regarding the quality of Services supervised by the Firm pursuant to
Section
2.5 and required changes in SOPs to improve the quality of such Services,
that cannot be resolved as provided in Sections
19.2 and 19.3, then Provider shall implement any such changes in SOPs
required by the Firm.

     

    8.7           Standard
of Care.  Provider hereby warrants that it at all times shall
perform the Services with the same degree of care, skill and diligence with
which Firm historically has performed such services for the benefit of itself
and its subsidiaries, if any, prior to the date of this Agreement, and in any
event with at least the degree of care, skill and diligence that is customary in
the industry and in accordance with any performance metrics specified by Firm’s
Clients.  Provider also warrants that the Services shall be performed
in a good, professional, and workmanlike manner by qualified
personnel.  Without limiting Firm’s rights under Section
5.4, in the event of a breach of any of the foregoing warranties, or any
other defective or non-confirming Services, Provider shall promptly re-perform
such Services at no additional charge to Firm and, if a recurring deficiency,
undertake appropriate corrective actions to prevent future
occurrences.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

    8.8           Performance
Metrics.  Provider shall not consistently fail to meet the
Performance Metrics due to its own action or omission and not those of any third
party.  Provider shall provide monthly reporting regarding failures by
Provider to meet the Performance Metrics, as set forth in Exhibit
E.  The Parties agree to review annually the Performance
Metrics and determine whether adjustments are required for changes in
circumstances, including technological advances, changes in methods, or changes
to Services reasonably requested by Firm.  If Provider consistently
fails to meet the Performance Metrics, Provider shall (i) promptly investigate
and perform an analysis to identify the cause of the failure; (ii) provide to
Firm a report on the causes of the problem; (iii) correct the problem, at the
sole cost and expense of Provider, to the extent such problem is within
Provider’s control; (iv) take appropriate preventive measures to reduce the
probability of recurrence, if the problem is within Provider’s control; (v) take
appropriate actions to mitigate the adverse effects of the problem prior to its
correction; and (vi) periodically advise Firm of the status of remedial efforts
being undertaken with respect to such problems.

     

    8.9           Marketing
Materials.  Provider may not use the name of Firm in any
marketing materials without the prior written consent of
Firm.  Provider may not use the name of any Client of Firm in any
marketing materials without the prior written consent of the
Client.  Provider may seek the consent of Client only as authorized by
Firm.  All marketing materials used or distributed by Provider must be
in accordance with Applicable Law.

     

    8.10         Guaranteed
Payments. Subject to Section
7.5,
Provider shall make payments to Firm as provided in this Section
8.10 in the event that Firm does not generate at least Two Million and
00/100 Dollars ($2,000,000.00) annually in Adjusted EBITDA for the first four
(4) years following the Effective Date (the “Measurement
Period”).  Adjusted EBITDA will be calculated for each calendar
month during the Measurement Period, the calendar years ended December 31, 2010,
2011 and 2012 and 2013; provided that the calculation for the calendar year
periods shall be based upon Firm’s audited financial statements for such years,
prepared in accordance with GAAP, and audited by an independent certified public
accounting firm selected by the Firm and approved by Provider, which approval
will not be unreasonably withheld.  “Adjusted
EBITDA” shall equal Firm’s EBITDA, (a) less, to the extent not included
in EBITDA for the applicable period, reserves for uncollectible accounts
receivable, (b) plus, to the extent included in EBITDA for the applicable
period, any net loss arising from the sale, other disposition, write-down or
abandonment of capital assets, (c) plus, to the extent included in EBITDA for
the applicable period, any net loss arising from or represented by items that
would in accordance with GAAP require separate treatment or classification in
the preparation of Firm’s financial statements as extraordinary items, (d) plus,
to the extent included in EBITDA for the applicable period, (i) any expenses in
excess of $2,000,000 related to (A) David J. Stern’s travel and Firm’s promotion
costs, (B) David J. Stern’s salary, bonus and benefits at Firm in excess of Four
Hundred One Thousand Two Hundred Eighteen and 00/100 Dollars ($401,218.00),
(C) other compensation or payments to David J. Stern or his affiliates, (D) for
periods beginning after December 31, 2009, Excess Attorney Cost, or (E) real
estate rental and/or lease expenses in excess of those provided in the
Facilities Agreement; (e) less, to the extent included in EBITDA for the
applicable period, any net gain arising from the sale or other disposition of
capital assets and (f) less, to the extent included in EBITDA for the applicable
period, any net gain arising from or represented by items that would in
accordance with GAAP require separate treatment or classification in the
preparation of Firm’s financial statements as extraordinary items.  An
estimated reimbursement payment of One Hundred Sixty Six Thousand Six Hundred
Sixty Seven and 00/100 Dollars ($166,667.00) per month will be made by Provider
to Firm within fifteen (15) days following each month end for each month during
the Measurement Period.  After delivery to Provider of monthly
financial statements of Firm (with a calculation of such month’s Adjusted
EBITDA), Provider and Firm will mutually agree on any “true-up” payments due to
or from Firm or Provider (as the case may be) in order for Firm to achieve
$166,667 of Adjusted EBITDA for the previous month so that Provider only pays
Firm the amount, if any, required for the Adjusted EBITDA to at least equal
$166,667 for that month.  In addition, within thirty (30) days
following delivery of the final audited financial statements of Firm (with a
calculation of such year’s Adjusted EBITDA) for each year through December 31,
2013, but in no case later than April 30 of the following  year,
Provider and Firm will mutually agree on any “true-up” payments due to or from
Firm or Provider (as the case may be) so that Provider only pays Firm the
amount, if any, required for the Adjusted EBITDA to at least equal the targeted
$2,000,000 of Adjusted EBITDA for the calendar year covered by those financial
statements.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

    ARTICLE
IX.

    PRACTICE
OF LAW

     

    The
Parties acknowledge that Provider does not intend, and is not authorized or
qualified, to engage in any activity that constitutes the practice of
law.  To the extent any act or service required to be performed by
Provider pursuant to this Agreement is construed to constitute the practice of
law by a court of competent jurisdiction or by any Governmental Body charged by
law with regulating the practice of law, the requirement to perform that act or
service shall be deemed waived and unenforceable.  To the extent
required by Applicable Law, all employees of Provider and any Subcontractors
performing Services for any Included Files will do so under the supervision of
an attorney employed by Firm.  Provider and Firm each agrees to ensure
that its respective signs, forms, letterhead, advertising and other materials
contain no information that is inconsistent with the fact that Provider provides
Services only and not Legal Services, that Firm provides Legal Services, that
they are separate businesses and that neither performs the work or services of
the other (except as otherwise provided under this Agreement).  The
Parties each acknowledge and agree that no benefit to Provider under this
Agreement requires or is in any way contingent upon the recommendation, referral
or any other arrangement by Provider for the provision of any Legal Services or
other service offered by Firm.

     

    ARTICLE
X.

    SCHEDULED
ASSESSMENTS

     

    The
Parties shall hold assessment meetings (the “Assessments”)
once each calendar quarter on a date mutually agreed upon by the Parties, and at
such times between such quarterly meetings as the Firm may reasonably require,
to discuss matters relating to this Agreement, including to assess any proposed
changes to the Service Fees, SOPs, Performance Metrics or any  amounts
payable hereunder as contemplated hereby, any anticipated needs or proposals for
Changed Services, any proposed changes to the monitoring or supervision of
Services or monitoring of Legal Services, any complaint to or other grievance
filed by a Client against Firm that relates to or involves Provider or the
relationship between Provider and Firm, the Services or this Agreement, and any
other operational, strategic, or other issues or matters arising in connection
with this Agreement.  The Parties intend that information exchanged at
such Assessments will be in addition to ongoing communication throughout the
Term between representatives of Provider and Firm with respect to this
Agreement.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

    ARTICLE
XI.

    EXPENSES

     

    During
the Term of this Agreement, the Parties agree that each party shall be
responsible for the performance of certain activities and the payment of certain
expenses as set forth in Exhibit
D, “Expenses”, attached hereto and incorporated herein by
reference.

     

    ARTICLE
XII.

    INDEPENDENT
CONTRACTOR; USE OF SUBCONTRACTORS

     

    12.1         Independent
Contractor.  Provider is an independent contractor and nothing
in this Agreement, or related to Provider’s performance under this Agreement,
shall be construed to create an employee relationship between Firm and Provider
or any Provider consultant or subcontractor (each a “Subcontractor”). Provider
will be responsible for (i) selecting, hiring, training and supervising (except
for the supervision and monitoring required by Applicable Law to be provided by
Firm) all employees and other staff of Provider who provide Services for
Included Files.  Provider shall timely pay all benefits and
compensation of such employees and other personnel and all other employees and
other personnel of Provider, consistent with the Allocation of Expenses in Exhibit
D.

     

    12.2         Subcontractors.  Provider
shall generally perform the Services required to be supervised by an attorney
authorized to practice law in Florida (which are to be supervised by the Firm)
(the “Supervised
Services”) through its own staff or the staff of its
Affiliates.  When Provider is not able to provide the Supervised
Services itself or through its Affiliates, and in providing Services other than
the Supervised Services, Provider may, in its discretion, utilize Subcontractors
to provide the Services hereunder other than (i) any Subcontractor that the
applicable Client prohibits Firm or Provider from using, or requires Firm or
Provider to cease using, and (ii) any Subcontractor that Applicable Law
prohibits Firm or Provider from using; provided that Provider will remain
ultimately responsible for ensuring that the Services are provided to Firm in
accordance with the terms and conditions of this Agreement, and that each
Subcontractor shall agree to be bound by the provisions of Article
XV regarding Confidential Information.  Firm may require
Provider to use any Subcontractor specified by Firm if (i) the applicable Client
requires Firm or Provider to use such Subcontractor (without Firm or any of its
Affiliates having caused the Client to, or otherwise having suggested, that the
Client impose such requirement) or (ii) Firm reasonably believes that the use of
such Subcontractor is necessary for Firm or Provider to fulfill its obligations
under Applicable Law.

     

    ARTICLE
XIII.

    FIRM
OBLIGATIONS

     

    13.1         Notice
of Excluded File.  Firm shall not provide (or engage any other
Person to provide) any Services or any further Services for an Excluded File
until it has notified Provider in writing that such File is or has become an
Excluded File.  Firm may make arrangements with another Person to
provide all or part of any Services for any Excluded File or may provide the
Services itself.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

    13.2         Client
Notification and Consent.  Firm will (i) prior to the Effective
Date, notify its Clients of the arrangements described in this Agreement and the
formation and ownership of Provider and (ii) use commercially reasonable
efforts to obtain the consent of its Clients thereto, to the extent required by
Applicable Law or by the terms of any agreement between Firm and any Client and,
if such consent is not obtained, Files from such Client will be Excluded
Files.  Firm will provide a copy of, and Provider shall have the right
to review and comment on, any such notification prior to delivery to any
Clients.  Copies of any such consents obtained from Clients shall be
provided to Provider.

     

    13.3         Firm
Personnel.  Firm will be responsible for selecting, hiring,
training and supervising all employees and other personnel of Firm who provide
Legal Services.  Firm shall timely pay all benefits and compensation
of such employees and personnel and all other employees and other personnel of
Firm.

     

    13.4         Firm
Information.  Firm shall make available on a timely basis to
Provider all information requested by Provider and that is reasonably necessary
to enable Provider to provide the Services; provided
that, Provider shall not be responsible for any failure to perform
Services to the extent caused by the insufficiency or inaccuracy of information
so requested or provided.  Subject to the obligations of the Parties
to protect the confidential information of Clients of Firm, Firm shall give
Provider reasonable access, during normal business hours and at such other times
as are reasonably required, to Firm’s premises to the extent reasonably
necessary to enable Provider to perform the Services.  Provider shall
use its reasonable efforts to provide Services in a manner that does not disrupt
Firm’s normal business activities.

     

    13.5         License
to Practice Law.  Firm will comply with Rule 4-8.6, Authorized
Business Entities, of the Rules Regulating the Florida Bar, including that Firm
will engage in the practice of law in the State of Florida only through
officers, directors, agents and employees who are qualified to practice law in
the State of Florida, and
will provide to its Clients the services of attorneys authorized to practice law
in said jurisdiction that are sufficient
to provide the Legal Services required on the Included Files and will supervise
Services through persons with sufficient competency and experience in the
applicable area of law.

     

    13.6         Compliance
with Applicable Law.  Firm agrees to provide Legal Services to
Clients with respect to Included Files, in compliance with all Applicable
Law.

     

    13.7         Professional
Ethical Requirements.  From and after the Effective Date, Firm
agrees to inform Provider of all professional ethical responsibilities with
respect to Provider’s performance of Services, and shall cooperate with Provider
to ensure that all Client Confidences and Secrets will be protected and
maintained to the fullest extent required by any professional ethics rules
applicable to Firm’s practice of law.

     

    13.8         Review
of Procedures.  On a regular basis throughout the Term, Firm
shall review its internal policies, procedures, training programs, forms and
other relevant materials to ensure that the provision of Services hereunder is
at all times in accordance with Applicable Law.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

    13.9         Notice
of Adverse Circumstances.  Firm agrees to notify Provider
promptly of the occurrence of any of the following events that would, or would
reasonably be expected to result in a material adverse effect upon the business,
operations, assets or financial condition of Firm, (and to provide such details
and information as reasonably requested by Provider relating thereto) including:
(a) the commencement of any litigation, investigation or other proceeding to
which Firm, or any attorney employed by Firm relating to his employment by Firm
or his practice of law, is a party before any Governmental Body; (b) the
termination by any Client of its engagement of Firm (or any Client ceasing to
use Firm); (c) Firm’s acceptance of any new Excluded File; (d) any managing
member of Firm who is an attorney ceasing to be employed by Firm for any reason
whatsoever; (e) any change in disbursements payable by Client to Firm; or (f)
any claim (whether actual or, to its knowledge, threatened) that the performance
of any services by Firm or Provider is not in compliance with Applicable
Law.  Firm agrees to notify Provider immediately of any disciplinary
actions or malpractice actions initiated against any attorney of Firm, including
in the notice a statement of the underlying facts and circumstances alleged in
the action.

     

    13.10       Marketing
Materials.  Firm may not use the name of Provider in any
marketing materials without the prior written consent of
Provider.

     

    13.11      Continuation
of Business.  Firm agrees to use commercially reasonable
efforts to continue to conduct its business in the ordinary course consistent
with past practice for a period of at least five (5) years from the Effective
Date.

     

    ARTICLE
XIV.

    ASSET
OWNERSHIP

     

    14.1         Intellectual
Property; Equipment.

     

     14.1.1         It
is hereby acknowledged and agreed that Provider shall retain all right, title
and interest in and to any and all inventions, technological developments,
intellectual property and proprietary rights, whether or not patentable or
registrable under copyright or similar laws, made or received or reduced to
practice by Provider, either alone or jointly with Firm, during the Term of this
Agreement.

     

     14.1.2         All
procedures, methods, systems, strategies, Firm’s intellectual property rights,
tools, equipment, facilities and other resources owned by Firm are expressly
retained by Firm and will remain the exclusive property of Firm.

     

    14.2         Reservation
of Rights/No Contest.

     

     14.2.1        All
rights in Provider Intellectual Property Rights (as defined below) not expressly
granted to Firm herein are expressly reserved to Provider.  Firm
agrees not to (and will ensure that its Affiliates do not) directly or
indirectly question, attack, contest or in any other manner impugn the value,
validity or enforceability of any Provider Intellectual Property Rights,
including in any action in which enforcement of a provision of this Agreement is
sought.  Firm will not voluntarily become a party adverse to Provider
in any claim, action, suit, arbitration, litigation or other proceeding anywhere
in the world in which a third party contests the validity of any Provider
Intellectual Property Rights.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

     

     14.2.2         All
rights in Firm’s intellectual property rights not expressly granted to Provider
herein are expressly reserved to Firm.  Provider agrees not to (and
will ensure that its Affiliates do not) directly or indirectly question, attack,
contest or in any other manner impugn the value, validity or enforceability of
any Firm intellectual property rights, including in any action in which
enforcement of a provision of this Agreement is sought.  Provider will
not voluntarily become a party adverse to Firm in any claim, action, suit,
arbitration, litigation or other proceeding anywhere in the world in which a
third party contests the validity of any Firm intellectual property
rights.

     

    14.3         Licenses.

     

     14.3.1         Provider
hereby grants to Firm a royalty-free, non-transferable, non-exclusive,
non-sublicensable, limited license to use all intellectual property rights of
Provider (other than any trademarks, service marks, trade dress, logos, domain
names, rights of publicity, trade names, corporate names, business and marketing
plans, customer and supplier lists and, whether or not confidential, business
information relating to any customer of Provider, other than Firm, (including
pricing and cost information)) (the “Provider
Intellectual Property Rights”) during and six (6) months after the Term
solely for the purpose of conducting, and solely to the extent necessary to
conduct, its business in respect of Included Files and Excluded Files for which
an Access Fee is paid in accordance with the terms and conditions of this
Agreement.  For avoidance of doubt, nothing in this Agreement shall
grant or be construed to grant Firm any right to sublicense or permit any third
party to use Provider Intellectual Property Rights, including any third party
providing services to Firm with respect to any Excluded Files.  If
Firm makes or develops any improvements, derivative works, modifications or
other enhancements or works based in any way on Provider Intellectual Property
Rights (collectively, “Improvements”),
Firm hereby assigns and conveys and agrees to assign and convey all of its
right, title and interest in and to such Improvements to Provider.

     

     14.3.2         Upon
the expiration of the foregoing license, Firm shall promptly return to Provider
any Provider Intellectual Property Rights in the possession of Firm, together
with all tangible embodiments thereof, and shall have no further right or
license to use such Provider Intellectual Property Rights

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

    ARTICLE
XV.

    RESTRICTIVE
COVENANTS

     

    15.1         Confidentiality.  Provider
and Firm each acknowledges that it may receive Confidential Information from the
other in connection with the performance of their respective obligations under
this Agreement.  Neither Provider nor Firm will disclose or use any
Confidential Information of the other Party without the prior written consent of
such other party, except as required for the performance by Provider of Services
hereunder or the performance by Firm of Legal Services to Clients with respect
to Included Files, as the case may be, or as otherwise contemplated by this
Agreement, including servicing of Excluded Files as permitted by this Agreement,
except that the Confidential Information or portions thereof may be disclosed
within the internal organization of the party receiving such Confidential
Information (the “Receiving
Party”) and to its subsidiaries, affiliates, consultants, contractors or
other third parties serving as its legal, accounting, financial, investment or
other advisors who need to know such information for the purpose of assisting
the Receiving Party in the conduct of its business; provided that (i) the
Receiving Party shall inform each such party and its personnel of the
confidentiality of the information being provided and of the provisions of this
Agreement; (ii) they shall agree to abide by and be bound by the provisions of
this Agreement; and (iii) the Receiving Party hereby agrees to be responsible
for any breach of this Agreement by any such person; provided, however,
Privileged Information may only be disclosed by Provider as provided in Section
15.2.  Each party will keep such Confidential Information
confidential and will use commercially reasonable efforts to ensure that its
Affiliates and officers, directors, employees, personnel, agents and
representatives (the “Representatives”)
who have access to such Confidential Information comply with such non-disclosure
and non-use obligations.

     

     15.1.1         Nothing
in this Agreement shall permit the disclosure of any Confidential Information
that constitutes a trade secret under Applicable Law at any time.

     

     15.1.2         Neither
Party shall be under any obligation with respect to any Confidential Information
if it is or becomes part of the public domain other than by breach of this
Agreement by either Party.

     

     15.1.3         Notwithstanding
the foregoing, a Receiving Party and its Representatives may disclose
Confidential Information as and to the extent required by Applicable Law (as
applicable, the “Disclosing
Party”), provided that the Disclosing Party provides notice to the
non-disclosing party of the anticipated disclosure a reasonable time prior to
such disclosure.  In the event that the Receiving Party or any of its
Representatives receives a request under Applicable Law to disclose all or any
part of the information contained in the Confidential Information, the Receiving
Party agrees to (i) immediately notify the Disclosing Party of the existence,
terms and circumstances surrounding such a request; (ii) consult with the
Disclosing Party on the advisability of taking legally available steps to resist
or narrow such request, and (iii) if disclosure of such information is required,
upon request by the Disclosing Party, cooperate with the Disclosing Party at the
Disclosing Party’s expense in obtaining an order or other reliable assurance
that confidential treatment will be accorded to such portion of the information
which the Disclosing Party so designates.  Nothing contained herein
will require either Provider or Firm or any other Persons mentioned above to
fail to honor a subpoena, court or administrative order or a requirement of
Applicable Law on a timely basis.

     

     15.1.4         The
Parties recognize that there is a risk that electronic confidential
communications between Firm and Provider may be intercepted by third parties not
associated with the Parties, and the Parties hereby agree to accept that risk,
and neither will hold the other Party liable for any such loss of
confidentiality or losses flowing therefrom, provided that the Parties
transmitting electronic information have adopted and at all relevant times were
using industry-standard network security technology

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

     15.1.5         Provider
and Firm will each use commercially reasonable efforts to safeguard all
Confidential Information of the other Party against improper disclosure or
use.  Provider shall cause each of its employees that provide Services
to Firm to sign an agreement whereby such employee shall agree to keep
confidential Firm’s Confidential Information and Client Confidences and
Secrets.  Upon request, Provider shall provide a copy of such
agreement to Firm.

     

    15.2         Privileged
Information.

     

     15.2.1         Provider
shall report directly to Firm with respect to Included Files.  Any and
all communications between Provider and Firm or any of its Clients, as well as
communications between Provider and Firm or any attorney, agent, employee or
personnel acting on the Firm’s or any of its Client’s behalf, will be
confidential and made solely for the purpose of assisting Firm in its
representation of its Clients.  Provider will not disclose to any
Person, without Firm and Client’s written permission, the nature or content of
any such oral or written communications, information regarding any Client gained
from the inspection of any record or document submitted by Firm to Provider
relating to any File or any other Confidential Information relating to Clients
that has come into the possession of Provider during the performance of Services
under this Agreement or otherwise, including Client Confidences and Secrets
(“Privileged
Information”).  Provider will not permit any Person (other than
Provider’s employees and other personnel) to inspect any Privileged Information
without Firm’s permission in advance, except as required by Applicable Law;
provided that,
in that event, Provider will comply with the requirements of Section
15.1.3 above with respect to the Privileged Information.  All
Privileged Information, regardless of the nature and the source from which it
emanates, will be held by Provider solely for Firm’s convenience and subject to
Firm’s unqualified right to instruct Provider with respect to possession and
control.

     

     15.2.2         Provider
will immediately return all Privileged Information to Firm upon
request.

     

    15.3         Competition.  In
consideration for the benefits Firm will receive in connection with this
Agreement and as an inducement to Provider to enter into this Agreement, at all
times during the Term and for a period of two (2) years after the Term, Firm
will not, and Firm will ensure that its Affiliates will not, directly or
indirectly, without the prior written consent of Provider, provide any Services
or any services substantially similar to the Services, purchase, join, control,
invest in, organize, start or form any business, individual, partnership, firm,
corporation or other entity that provides any Services or any services
substantially similar to the Services, or otherwise compete with the business of
Provider as conducted during the Term in any state in the United States where
Provider conducted business at the date of termination of this Agreement, except
to provide Services to Firm’s Clients on Excluded Files as permitted by the
terms of this Agreement and to continue to provide title insurance as a title
insurance agent in accordance with its current business activities in this area
(but not title searches) to Firm’s Clients, unless and until Provider or one of
its Affiliates is able to provide such title insurance through the Fund (“Permitted
Title Insurance Activities”).  Notwithstanding the foregoing,
if this Agreement is terminated for any reason arising out of Provider’s uncured
material breach of the Agreement, the terms of this non-compete provision shall
not apply to Firm.  Except as specified in Section
15.5, nothing contained in this Section
15.3 shall in any way restrict Firm’s ability to provide or perform Legal
Services (without Services) to Clients.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

    15.4         Recruitment
of Employees.  At all times during the Term and for a period of
two (2) years after the Term, neither Firm nor Provider will, and each of them
will ensure that its Affiliates will not, directly or indirectly, employ,
solicit, induce, recruit, encourage or otherwise interfere with the employment
relationship of any person who is employed by the other Party at such time or
who was employed by the other Party within the previous twelve (12) month period
(or attempt to do any of the foregoing).  Notwithstanding the
foregoing, if this Agreement is terminated for any reason arising out of either
Party’s uncured material breach of the Agreement, the terms of this recruitment
provision shall not apply to the non-breaching Party.

     

    15.5         Limits
on Activities.  Notwithstanding anything else herein to the
contrary, Firm shall undertake no other business activities other than legal
activities that support, require or relate to the Services of Provider; provided
that, up to five percent (5%) of Firm’s annual billings for services may
consist of business activities that do not support, require or relate to the
Services of Provider and Firm may continue to conduct the Permitted Title
Insurance Activities, except that it shall not do so to the extent that Company
becomes authorized to do so.

     

    15.6         Equitable
Remedies.  Each Party agrees that a failure to comply with any
provision of this Article
XV will cause the other Party irreparable harm and that such other Party
will be entitled to equitable relief including specific performance, an
injunction, a restraining order and/or other equitable relief in order to
enforce the provisions of this Article
XV, which right is in addition to, and not in lieu of, any other remedy
to which such Party is entitled under Applicable Law (including monetary
damages).

     

    15.7         Blue-Pencil.  If
any court of competent jurisdiction shall at any time deem the term of any
particular restrictive covenant contained in this Article
XV too lengthy or the scope too extensive, the other provisions of this
Article
XV shall nevertheless stand, and the restricted period and/or the scope
shall be reduced to such duration or size as such court shall determine to be
permissible.

     

    ARTICLE
XVI.

    INSURANCE

     

    16.1         Provider’s
Insurance.  Provider covenants that during the Term it will
maintain the insurance coverage listed below (“Insurance
Policies”) with, to the extent available, insurance carriers rated no
less than “A” by A.M. Best.  Provider will name Firm as an additional
insured under the Insurance Policies described below and, at the request of Firm
from time to time, Provider shall furnish to Firm a copy of the certificates of
insurance evidencing the coverage under Provider’s Insurance
Policies.  The certificate(s) will indicate that the policy will not
change or terminate without at least thirty (30) days prior written notice to
Firm.  Provider further agrees that no such Insurance Policies may be
cancelled or the amount of coverage under the Insurance Policies reduced without
thirty (30) days prior written notice to Firm.  The Insurance Policies
shall be deemed primary without right of contribution from Firm or Firm’s
insurers, and the insurance carriers under those Insurance Policies will waive
their subrogation rights against Firm.  Provider shall obtain the
following insurance coverage:

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

     16.1.1         Automobile
Liability.  Hired/non-owned automobile liability insurance in a
coverage amount of $1 Million combined single limit;

     

     16.1.2         General
Liability.  General liability insurance in a coverage amount of $1
Million per occurrence and $2 Million in the aggregate;

     

     16.1.3         Errors
and Omissions Liability.  Errors and omissions liability insurance in
a coverage amount of $1 Million per occurrence and $3 Million in the aggregate;
and

     

     16.1.4         Workers’
Compensation.  Workers’ compensation insurance covering United States
employees: (i) Part A—Statutory Benefits, and (ii) Part B—Employer’s Liability
Coverage, in a coverage amount of $1 Million per occurrence;

     

     16.1.5         General
Umbrella.  General Umbrella coverage in the amount of $5 Million
in the aggregate for the policy coverages described in Sections
16.1.2, 16.1.3, and 16.1.5 hereof.

     

    16.2         Malpractice
Insurance.  During the Term of this Agreement and any
extensions or renewals thereof, and except as otherwise provided herein, Firm
shall use commercially reasonable efforts to maintain legal malpractice
insurance policies (the “Malpractice
Insurance Policies”) in at least the same amount as provided for by
Firm’s current Malpractice Insurance Policies issued by an insurance carrier
with an A.M. Best rating of “A” or better (subject to appropriate increase for
any growth in Firm’s business or revenues).  Firm represents and
warrants that the Malpractice Insurance Policies are in full force and effect
and that they are not in default under any of them and no material claim for
coverage thereunder has been denied under any such current Malpractice Insurance
Policies with respect to any matter.

     

    ARTICLE
XVII.

    INDEMNIFICATION

     

    17.1         Firm’s
Indemnity.  Firm shall be responsible for, and shall indemnify,
defend and hold harmless Provider (and its Affiliates, directors, officers,
members, employees, personnel or agents) from and against, any and all Losses
(including deductible amounts under any insurance policies) arising out of,
based upon or resulting from any gross negligence, willful misconduct,
malpractice, error or omission (“Covered
Action”) (or claimed Covered Action) by Firm or any of its Affiliates,
directors, officers, members, employees, personnel or agents (other than
Provider or any of its Affiliates, directors, officers, members, employees,
personnel or agents acting on behalf of Provider) or breach of this Agreement,
whether such Covered Action  occurred prior to, on or after the
Effective Date; provided, however, that Firm will not be liable for
indemnification hereunder to the extent that the claim, damage, loss, liability
or expense results from the willful misconduct or gross negligence of Provider
or breach of this Agreement by Provider.  Notwithstanding anything to
contrary herein, with respect to indemnification for actions or omissions of
Firm existing as of the date hereof for which indemnification is available to
Provider under the Contribution Agreement, Provider shall only be entitled to
obtain indemnification for such actions or omissions pursuant to the
Contribution Agreement and not hereunder.

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

    17.2         Provider’s
Indemnity.  Provider shall be responsible for, and shall
indemnify, defend and hold harmless Firm (and its Affiliates, directors,
officers, members, employees, personnel or agents) from and against, any and all
Losses (including deductible amounts under any insurance policies) arising out
of, based upon or resulting from any Covered Action (or claimed Covered Action)
by Provider or any of its Affiliates, directors, officers, members, employees,
personnel or agents (other than Firm or any of its Affiliates, directors,
officers, members, employees, personnel or agents acting on behalf of Firm) or
breach of this Agreement from and after the Effective Date; provided, however,
that Provider will not be liable for indemnification hereunder to the extent
that the claim, damage, loss, liability, or expense results from the willful
misconduct or gross negligence of Firm or breach of this Agreement by
Firm.

     

    17.3         Limitation
of Liability.  Neither Party nor any of their respective
Affiliates will be liable to the other Party or any third party for any special,
punitive, consequential, incidental or exemplary damages (including lost or
anticipated revenues or profits relating to the same and attorneys’ fees)
arising from any claim relating to this Agreement or any of the Services to be
provided hereunder or the performance of or failure to perform such Party’s
obligations under this Agreement, whether such claim is based on warranty,
contract, tort (including negligence or strict liability) or otherwise, and
regardless of whether such damages are foreseeable or an authorized
representative of such Party is advised of the possibility or likelihood of such
damages.  Each Party disclaims all warranties, express or implied,
other than the express warranties set forth in this Agreement, including,
without limitation, the implied warranties of merchantability and fitness for a
particular purpose.

     

    17.4         Indemnification
Procedures.

     

     17.4.1         Third
Party Claims.

     

    
      	
               
      

            	
              (i)

            	
              Within
      ten (10) days after receipt by the Indemnified Party of notice of the
      commencement of any action by a third party in respect of which, if
      successful, the Indemnified Party would be entitled to indemnification
      hereunder (a “Third
      Party Claim”), the Indemnified Party shall notify each Indemnifying
      Party thereof in writing (stating the nature, basis and amount of the
      claim in reasonable detail), but any failure to so notify the Indemnifying
      Party shall not relieve the Indemnifying Party from any liability that it
      may have to the Indemnified Party other than to the extent the
      Indemnifying Party is actually prejudiced thereby.  Thereafter,
      the Indemnified Party shall deliver to the Indemnifying Party within ten
      (10) days after the Indemnified Party’s receipt thereof, copies of all
      notice and documents (including court papers) received by the Indemnified
      Party relating to the Third Party
Claim.

            

    

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

    
      	
               
      

            	
              (ii)

            	
              The
      Indemnifying Party shall have the right to assume control of the defense
      of the Indemnified Party against the Third Party Claim, or if the
      Indemnifying Party does not assume such defense, to participate in the
      defense of such Third Party Claim at its own expense.  The
      Indemnified Party shall have the right to participate in such action or
      proceeding and to retain its own counsel but the Indemnifying Party shall
      not be liable for any legal expenses of other counsel subsequently
      incurred by such Indemnified Party in connection with the defense thereof
      unless (i) the Indemnifying Party has agreed in writing to pay such fees
      and expenses, (ii) the Indemnifying Party shall have failed to employ
      counsel in a timely manner, or (iii) the Indemnified Party shall have been
      advised by legal counsel that having common counsel would present such
      counsel with a conflict of interest or the defendants in or targets of any
      such action or proceeding include both an Indemnified Party and an
      Indemnifying Party and such Indemnified Party reasonably concludes that
      there may be legal defenses available to it or other Indemnified Parties
      that are in conflict with, or could reasonably be expected to conflict
      with, those available to the Indemnifying Party; provided,
      however, that the Indemnifying Party shall not, in connection with
      any one such action or proceeding or separate but substantially similar
      actions or proceedings in the same jurisdiction arising out of the same
      general allegations, be liable for the fees and expenses of more than one
      separate firm of attorneys at any time for all Indemnified Parties, except
      to the extent that local counsel, in addition to its regular counsel, is
      required in order to effectively defend against such action or
      proceeding.

            

    

     

    
      	
               
      

            	
              (iii)

            	
              So
      long as the Indemnifying Party is conducting the defense of the Third
      Party Claim:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Indemnified Party shall be entitled to participate in the defense of such
      claim and to employ counsel at its own expense to assist in the handling
      of such claim;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              no
      Indemnifying Party shall consent to the entry of any judgment or enter
      into any settlement that does not include as an unconditional term thereof
      the giving by each claimant or plaintiff to each Indemnified Party of a
      release from all liability in respect of such claim without the applicable
      Indemnified Party’s consent; and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      Indemnifying Party shall not be liable to such Indemnified Party hereunder
      for any legal expenses subsequently incurred by such Indemnified Party in
      connection with the defense
thereof.

            

    

     

    
      	
               
      

            	
              (iv)

            	
              The
      Indemnified Parties from whom the defense was assumed shall reimburse the
      Indemnifying Party assuming the defense for all legal fees and expenses
      reasonably incurred in defending against such claim if it is subsequently
      determined that the Third Party Claim is a claim for which indemnification
      is not required under this Article
      XVII.  The Indemnified Party shall obtain the prior
      written approval of the Indemnifying Party before paying, discharging, or
      admitting liability or entering into any settlement of a claim or ceasing
      to defend against such claim (with such approval not to be unreasonably
      withheld or delayed).  All of the applicable Indemnified and
      Indemnifying Parties shall cooperate with the Party assuming the defense
      in the defense thereof.  Such cooperation shall include the
      retention and the provision, to the Party assuming the defense, of records
      and information, which are reasonably relevant to such Third Party Claim,
      and making employees available on a mutually convenient basis to provide
      additional information and explanation of any material provided
      hereunder.  The Party assuming the defense shall keep the
      applicable Indemnified and Indemnifying Parties fully informed regarding
      the progress and status
thereof.

            

    

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

     17.4.2         Other
Claims.  In the event any Indemnified Party has a claim under
Sections
17.1 or 17.2 that does not involve a Third Party Claim being asserted
against or sought to be collected from such Indemnified Party, the Indemnified
Party shall deliver written notice of such claim with reasonable promptness (and
stating the nature, basis and amount of the claim in reasonable detail) to the
Indemnifying Party; but any failure to so notify the Indemnifying Party shall
not relieve the Indemnifying Party from any liability that it may have to the
Indemnified Party other than to the extent the Indemnifying Party is actually
prejudiced thereby.  If the Indemnifying Party disputes the liability
with respect to such claim, the Indemnifying Party and the Indemnified Party
shall proceed in good faith under the dispute resolution procedure set forth in
Article
XIX of this Agreement.

     

    17.5         Sole
and Exclusive Remedy.  Notwithstanding
anything to the contrary in this Agreement, absent fraud, the Parties agree that
the indemnification set forth in this Article
XVII shall be the sole and exclusive remedy for the matters described
herein.

     

    ARTICLE
XVIII.

    RECORDS;
AUDIT RIGHTS

     

    18.1         Maintenance
of Records.  Provider and Firm each agrees to keep and maintain
complete and accurate books and records.  Such books and records must
be kept by each such Party for at least seven (7) years after the date such book
or record was created or made, unless the other Party gives such Party written
consent authorizing destruction of such book or
record.

     

    18.2         Access
to Records.  Provider and Firm each agree to provide to the
other Party and its employees and other personnel, auditors, advisers and other
authorized representatives reasonable access, at reasonable times and upon
reasonable request, to its accounting records, financial statements and
information, files, books, records, contracts and other information and
materials reasonably relating to this Agreement, other than any Client
Confidences and Secrets.  Any such access shall not interfere
unreasonably with the conduct of the business, or disrupt the personnel or
operations of either Party, require any Party to provide the other Party with
access to or copies of any information that must be maintained as confidential
in accordance with the terms of a written agreement with a third party
(including any Client) or under Applicable Law.  Any files, books,
records, contracts, information and other materials provided by one Party to the
other pursuant to this Agreement shall remain the property of the providing
Party, subject to the rights of the receiving Party to use such materials solely
in the performance by Provider of Services hereunder or the performance by Firm
of Legal Services to Clients with respect to Included Files, as the case may be,
or as otherwise contemplated hereby.

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

    18.3         Audit
Rights.  Throughout the Term and for two (2) years thereafter,
Provider and Firm will each have the right, exercisable no more than once during
each calendar year, at its own expense and on thirty (30) days prior written
notice to the other Party, to have its auditors or other representatives audit
the books and records of the other Party for the sole purpose of certifying the
accuracy of the Service Fees and any other matters relating to this
Agreement.

     

    ARTICLE
XIX.

    DISPUTE
RESOLUTION

     

    19.1         Exclusive
Procedures.  Any dispute arising out of or relating to this
Agreement shall be resolved in accordance with the procedures specified in this
Article
XIX, which shall be the sole and exclusive procedures for the resolution
of any such disputes.

     

    19.2      
 Negotiation.  The
Parties shall attempt to resolve any dispute arising out of or relating to this
Agreement promptly by negotiation between executives who have authority to
settle the controversy.  Either Party may give the other written
notice of any dispute not resolved in the normal course of business. Within
fifteen (15) days after delivery of the notice, the receiving Party shall submit
to the other a written response.  The notice and response shall
include (i) a statement of that Party’s position and a summary of arguments
supporting that position, and (ii) the name and title of the Person who will
represent that Party and of any other person who will accompany the
representative.  Within thirty (30) days after delivery of the initial
notice, the representatives of both Parties shall meet at a mutually acceptable
time and place or by telephone, and thereafter as often as they reasonably deem
necessary, to attempt to resolve the dispute.  All reasonable requests
for information made by one Party to the other will be honored.  All
negotiations pursuant to this clause are confidential and shall be treated as
compromise and settlement negotiations for purposes of applicable rules of
evidence and any additional confidentiality protections provided by
law.

     

    19.3      
 Mediation.  If
the dispute has not been resolved by negotiation as provided above within sixty
(60) days after delivery of the initial notice of negotiation, or if the Parties
failed to meet within thirty (30) days after delivery of said notice, either
Party may give the other Party written notice of the initiation of
mediation.  Thereafter, the Parties shall endeavor to settle the
dispute by non-binding mediation, provided, however, that if one Party fails to
participate in the negotiation as described above, the other Party can initiate
mediation prior to the expiration of the foregoing periods.  The
Parties will jointly select a mediator, and will share equally all costs of the
mediation.  If the Parties cannot agree upon a mediator, a mediator
will be selected from the CPR Panels of Distinguished Neutrals, in accordance
with the CPR Mediation procedure.  All mediation proceedings are
confidential and shall be treated as compromise and settlement negotiations for
purposes of applicable rules of evidence and any additional confidentiality
protections provided by law.

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.

     

    19.4           Judicial
Enforcement.  If at any point either Party determines in good
faith that mediation will not succeed, then it shall notify the other Party of
that determination.  Thereafter, the Parties may resort to any remedy
available by law.  Notwithstanding the provisions of this Article
XIX, the Parties acknowledge that monetary damages alone will be
inadequate to remedy any violation or threatened violation of this
Agreement.  Accordingly, nothing in this Agreement, including the
requirements to submit disputes to the dispute resolution mechanisms set forth
in this Agreement, will prevent a Party from seeking equitable relief in the
form of an injunction from any court of competent jurisdiction to prevent the
other Party’s continued violation or threatened violation of this
Agreement.  A Party seeking such an injunction will not be required to
post any bond with the court.  Such right to seek an injunction will
be in addition to any potential damage award that such Party may be granted in
any proceedings with respect to such violation or threatened
violation.

     

    ARTICLE
XX.

    GENERAL

     

    20.1        Notices.  Any
notice, demand, approval, consent or communication required, permitted, or
desired to be given hereunder, will be in writing and will be served on the
Parties at the following respective addresses:

     

    
      	
              If
      to Firm:

            	
              Law
      Offices of David J. Stern, P.A.

              900
      S. Pine Island Road

              Suite
      400

              Plantation,
      Florida  33324

              ATTN:  David
      J. Stern

              Facsimile:  (954)
      233-8444

            
	 
      	 
      
	
              If
      to Provider:

            	
              DJS
      Processing, LLC

              900
      S. Pine Island Road

              Suite
      400

              Plantation,
      Florida  33324

              ATTN:  David
      J. Stern

              Facsimile:  (954)
      233-8444

            
	 
      	 
      

    

    or such
other address, or the attention of such other person or officer, as any Party
may by written notice designate.  Any notice, demand, or communication
required, permitted, or desired to be given hereunder will be sent either by
hand delivery, by prepaid certified or registered mail, return receipt
requested, postage prepaid in the United States Mail, by a nationally recognized
overnight courier, or via facsimile or other electronic transmission (including
transmission in portable document format by electronic mail).  If any
notice, demand or communication is sent by facsimile or electronic mail
transmission, an original  must be simultaneously sent by one of the
foregoing mail or courier methods.  All such notices, demands or
communications shall be deemed to have been received (i) if by personal
delivery, facsimile machine or other electronic transmission (including
transmission in portable document format by electronic mail), on the date after
such delivery, (ii) if by certified or registered mail, on the third business
day after the mailing thereof or (iii) if by next-day or overnight courier or
delivery, on the date of such delivery.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.

     

    20.2           Assignment.  This
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of each of the Parties hereto and their respective successors and
permitted assigns.  Neither this Agreement nor any rights, benefits or
obligations set forth herein may be assigned by any of the parties, except that
(a) Provider or Firm may assign this Agreement and any of the provisions hereof
without the written consent of the other to (i) a successor by way of merger,
consolidation, reorganization, stock sale, or by way of a sale of all or
substantially all of its assets where the transferee, assignee or successor in
such asset sale agrees in writing to be fully bound by all of the provisions of
this Agreement or (ii) to any lender as a collateral assignment for security
purposes.  Any purported assignment in violation of this Section
20.2 will be void.

     

    20.3     Enforcement.  In the event either Party resorts to
legal action to enforce or interpret any provision of this Agreement, the
prevailing Party will be entitled to recover the costs and expenses of such
action so incurred, including reasonable attorney’s fees.

     

    20.4        Governing Law; Venue;
Jurisdiction.  This Agreement, and all matters arising under or
related hereto, shall be governed according to the laws of the State of Florida,
without respect to its conflict of law principles.  Each Party hereby
consents to the exclusive jurisdiction of the courts of the State of Florida and
of the United States of America in the County of Broward for any actions, suits
or proceedings arising out of or relating to this Agreement and the transactions
contemplated hereby (and each Party agrees not to commence any action, suits or
proceeding relating thereto except in such courts).

     

    20.5        Change in Applicable
Law.  If any change in Applicable Law occurs that would require
(i) any change to any notice previously provided to a Client or any additional
notice to be provided to a Client relating to this Agreement, (ii) any change to
the Services provided under this Agreement, (iii) any change to the monitoring
of Services or Legal Services or (iv) any other change to this Agreement, the
Parties agree to act in good faith and use commercially reasonable efforts to
seek to resolve such matter in a manner that is mutually satisfactory to both
Parties.

     

    20.6       
No
Third Party Beneficiaries.  This
Agreement does not create, and will not be construed as creating, any rights
enforceable by any person not a Party to this
Agreement.

     

    20.7        Severability.  The Parties hereto
have negotiated and prepared the terms of this Agreement in good faith with the
intent that each and every one of the terms, covenants and conditions herein be
binding upon and inure to the benefit of the respective
Parties.  Accordingly, if any one or more of the terms, provisions,
promises, covenants or conditions of this Agreement or the application thereof
to any person or circumstance will be adjudged to any extent invalid,
unenforceable, void or voidable for any reason whatsoever by a court of
competent jurisdiction or an arbitration tribunal, such provision will be as
narrowly construed as possible, and each and all of the remaining terms,
provisions, promises, covenants and conditions of this Agreement or their
application to other persons or circumstances will not be affected thereby and
will be valid and enforcement to the fullest extent permitted by
law.  To the extent this Agreement is in violation of Applicable Law,
the Parties shall negotiate in good faith to amend this Agreement, to the extent
possible consistent with its purposes, to conform to Applicable
Law.  Neither Party shall claim or assert illegality as a defense to
the enforcement of this Agreement or any provision hereof; instead, any such
purported illegality shall be resolved pursuant to this Section
20.7.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.

     

    20.8        Construction.

     

    20.8.1        All
references in this Agreement to “Articles,” “Sections” and “Exhibits” refer to
the articles, sections and exhibits of this Agreement. The article and section
headings and titles appearing in this Agreement are inserted only as a matter of
convenience and in no way define, limit, construe, or describe the scope or
extent of such section or in any way affect this Agreement or the interpretation
hereof.

     

    20.8.2        All
references to “$” or “dollars” will be to United States dollars and all
references to “days” will be to calendar days unless otherwise
specified.

     

    20.8.3        As
used in this Agreement, neutral pronouns and any variations thereof shall be
deemed to include the feminine and masculine and all terms used in the singular
shall be deemed to include the plural, and vice versa, as the context may
require.

     

    20.8.4        The
words “hereof”, “herein” and “hereunder” and other words of similar import refer
to this Agreement as a whole, as the same may from time to time be amended or
supplemented, and not to any subdivision contained in this
Agreement.

     

    20.8.5        The
word “including” when used herein is not intended to be exclusive and means
“including, but not limited to.”  The word “or” when used herein is
not intended to be exclusive unless the context clearly requires
otherwise.

     

    20.8.6        The
Schedules hereto will be deemed to be incorporated in and an integral part of
this Agreement.

     

    20.8.7        All
provisions of this Agreement have been mutually negotiated and
drafted.  The provisions of this Agreement will be interpreted and
construed in accordance with their fair meanings, and not strictly for or
against either Party, regardless of which Party may have drafted this Agreement
or any specific provision.

     

    20.9       Force
Majeure.  Neither
Party will be deemed to have breached this Agreement and neither will be liable
or otherwise responsible for any interruption, delay or failure to perform any
obligation under this Agreement, when such interruption, delay or failure arises
from causes beyond its reasonable control, including any outbreak or material
escalation of hostilities or other armed conflict or declaration by the United
States of a national emergency or war, acts of public enemy, acts of terrorism,
embargo, any fire, explosion, earthquake, flood, hurricane, tornado, drought or
bad weather or other natural disaster, any other acts of God or acts of city,
state, local or federal governments, regulatory bodies, including the Florida
Bar or the bar of any jurisdiction in which Firm provides Legal Services, in
their sovereign, regulatory or contractual capacity.  If, however,
Provider cannot perform such delayed Services for a period of five (5) days due
to such cause, then Firm may suspend this Agreement solely with respect to such
delayed Service upon written notice to Provider.  In the event
Provider is excused from supplying any Service in accordance with the terms of
this paragraph (including during the five (5) day notice period referenced in
the prior sentence), Firm shall be free to (i) provide such services itself, or
(ii) acquire such services from any substitute source, at Firm’s expense and
without further liability to Provider, for the period of such disruption, delay
or nonperformance (and a period thereafter necessary to honor reasonable
commitments beyond the expiration of any disruption or delay), and solely to the
extent reasonably necessitated by, such nonperformance.  If, after the
period of disability, Provider is once again able to perform the Services in
accordance with the terms of this Agreement, Firm shall reinstate this Agreement
with respect to Provider’s performance of such Services upon written notice to
Provider.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.

     

    20.10  
  Entire
Agreement; Amendment.  With
respect to the subject matter of this Agreement, this Agreement supersedes all
previous contracts and constitutes the entire agreement between the
Parties.  Neither Party will be entitled to benefits other than those
specified herein.  No prior oral statements or contemporaneous
negotiations or understandings or prior written material not specifically
incorporated herein will be of any force and effect, and no changes in or
additions to this Agreement will be recognized unless incorporated herein by
amendment as provided herein, such amendment(s) to become effective on the date
stipulated in such amendment(s).  No provision of this Agreement shall
be deemed waived, amended, supplemented or modified by any Party, unless such
wavier, amendment, supplement or modification is in writing and signed by an
authorized representative of the Party against whom it is sought to enforce such
waiver, amendment, supplement or modification.  The Parties
specifically acknowledge that, in entering into and executing this Agreement,
the Parties rely solely upon the representations and agreements contained in
this Agreement and no others.

     

    20.11     Counterparts;
Effectiveness.  The Parties may execute this Agreement in
separate counterparts, each of which shall be deemed an original and all of
which together will constitute one and the same instrument.  To the
extent signed and delivered by means of a facsimile machine or other electronic
transmission (including transmission in portable document format by electronic
mail), this Agreement shall be treated in all manners and respects and for all
purposes as an original and shall have the same binding legal effect as if it
were the original signed version thereof delivered in person.  None of
the undersigned shall raise the use of a facsimile machine or other electronic
transmission to deliver a signature or the fact that such signature was
transmitted or communicated through the use of a facsimile machine or other
electronic transmission as a defense to the enforceability of this Agreement and
each of the undersigned forever waives any such defense.

     

    20.12     Waiver
of Jury Trial.  THE PARTIES HERETO SHALL AND THEY HEREBY DO WAIVE
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE
PARTIES IN ANY MANNER CONNECTED WITH THIS AGREEMENT, AND/OR ANY CLAIM OF INJURY
OR DAMAGE.

     

    [Signature
page follows.]

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****. 

     

    IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the Effective Date.

     

    
      
        
          
            
              
                
                  
                    
                      
                        	 
      	
                                LAW
      OFFICES OF DAVID J. STERN, P.A., a

                                Florida
      professional association

                              
	 
      	 
      
	 
      	
                                By:

                              	
                                        
      

                              
	 	 	
                                David
      J. Stern, President

                              
	 
      	 
      
	 
      	
                                DJS
      PROCESSING, LLC, a Delaware limited

                                liability
      company

                              
	 
      	 
      
	 
      	
                                By:

                              	
                                     
      

                              
	 	 	
                                David
      J. Stern,
President

                              

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.

     

    EXHIBIT
A

     

    DEFINITIONS

     

    “Affiliate” means any other
Person that controls, is controlled by, or is under common control with, such
Person where “control” means the possession, directly or indirectly, of the
power to direct the management and policies of a Person whether through the
ownership of voting securities, by contract or otherwise.

     

    “Agreement” means this Services
Agreement, as amended from time to time in accordance with this
Agreement.

     

    “Applicable Law” means any
federal, state or local law (statutory, common or otherwise), constitution,
treaty, convention, ordinance, code, rule, regulation, order, injunction,
judgment, decree, ruling or other similar requirement enacted, adopted,
promulgated or applied by a Governmental Body and shall include without
limitation the Rules Regulating the Florida Bar or the code of conduct of any
other jurisdiction in which Firm provides Legal Services, as amended from time
to time, for lawyers admitted to practice in the State of Florida or any other
jurisdiction in which Firm provides Legal Services, and any other rules of
professional conduct for lawyers admitted to practice in the State of Florida or
any other jurisdiction in which Firm provides Legal Services, in each case to
the extent binding upon or applicable to such Person, as amended from time to
time.

     

    “Business Days” means days on
which Firm is open for business.

     

    “Client” means any person or
entity for whom Firm provides Legal Services at any time during the
Term.

     

    “Client Confidences and
Secrets” shall mean any “confidences” or “secrets” of a Client, as those
terms are defined in the Rules Regulating the Florida Bar or the code of conduct
of any other jurisdiction in which Firm provides Legal Services, for lawyers
admitted to practice in the State of Florida or any other jurisdiction in which
Firm provides Legal Services or any other rules of professional conduct for
lawyers admitted to practice in the State of Florida or any other jurisdiction
in which Firm provides Legal Services, as amended from time to
time.

     

    “Client Reimbursements” means,
with respect to any Client, those expenses and disbursements, including filing
fees, fees for publication and posting of legal notices, court costs, sheriff
services, fees for title searches and title insurance, fees for service of
process, packaging services, mediation fees, and other expenses, for which such
Client agrees to reimburse Firm.

     

    “Confidential Information”
means all non-public, proprietary or confidential information in whatever form
or media (whether written or oral) of Provider, Firm or Other Firms, including
financial information, marketing plans, procedures, policies and personnel
records, client lists and client information, fee schedules and fee
arrangements, Client Confidences and Secrets, trade secrets, financial and other
information received about or from a mortgagor, borrower, guarantor, defendant
or other Person obtained in connection with any File and the terms and
provisions of this Agreement.

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.

     

    “Contribution Agreement” means
the Contribution and Membership Interest Purchase Agreement between Firm and
Affiliates of Provider.

     

    “EBITDA” means the Firm’s
earnings before interest, taxes, depreciation and amortization.

     

    “Effective Date” means the date
upon which all Parties to this Agreement shall have executed a fully executed
copy of this Agreement.

     

    “Excess Attorney Cost” means
the following amount:

     

    A - ((B +
C) x D)

     

    where

     

    
      	
               
      

            	
              A
      =

            	
              Firm’s
      actual attorney salary, bonus and benefits for the Measurement
      Period.

            

    

     

    
      	
               
      

            	
              B
      =

            	
              Firm’s
      per attorney average annual base salary and bonus expense as of the
      Effective Time, calculated by dividing total attorney compensation for the
      twelve months prior to the Effective Time (other than for David J. Stern)
      by the Full-Time Equivalent Attorneys, multiplied by the following
      fraction: the mean annual wages of United States attorneys as of the most
      recently reported date immediately prior to the end of the Measurement
      Period, published by the United States Department of Labor, Bureau of
      Labor Statistics divided by the mean annual wages of United States
      attorneys as of May 2008, published by the United States Department of
      Labor, Bureau of Labor Statistics.

            

    

     

    
      	
               
      

            	
              C
      =

            	
              average
      actual cost per attorney of benefits for the Measurement Period,
      calculated by dividing the total benefits cost to Firm to provide benefits
      to attorneys for the Measurement Period (other than David J. Stern)
      divided by the Full-Time Equivalent
Attorneys.

            

    

     

    
      	
               
      

            	
              D
      =

            	
              actual
      number of new Files referred to Firm during the Measurement Period divided
      by E, rounded up to the next highest whole
  number.

            

    

     

    
      	
               
      

            	
              E
      =

            	
              twelve
      (12) multiplied by ninety (90%) percent of the average number of new Files
      referred to the Firm per attorney employed by Firm, calculated by dividing
      the aggregate number of new Files referred to the Firm in the month of
      February 2010 by the Full-Time Equivalent Attorneys for the month of
      February 2010.

            

    

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

     

    Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.

     

    “Excluded File” is a file of
Firm for which Firm is prohibited from using Provider to provide Services due to
(i) prohibition by the applicable Client by written notice (without Firm or any
of its Affiliates having caused the Client to, or otherwise suggested that the
Client, require Firm to use any Person other than Provider to provide Services
for that File); (ii) prohibition by Applicable Law; or (iii) Provider’s breach
and failure to cure with respect to Performance Metrics.  An existing
File of Firm may become an Excluded File upon Firm’s receipt of written notice
from its Client prohibiting Firm from using Provider to provide Services with
respect to such File.  A File shall be considered an Excluded File as
to a particular Service, but not other Services, if Firm is prohibited from
using Provider to provide the Service for that File for any of the reasons set
forth above.

     

    “Fee Schedule” means the fee
schedule for Services attached hereto as Exhibit
C, as amended from time to time in accordance with this Agreement, and
shall include any amendments to the Fee Schedule.

     

    “File” means a specific matter
of any Client for whom Firm provides Legal Services.

     

    “Full-Time Equivalent
Attorneys” means the full-time equivalent number of attorneys employed by
Firm during the Measurement Period, calculated by dividing the number of
Business Days worked by Firm’s attorneys during the Measurement Period divided
by the number of Business Days in the Measurement Period.  Attorneys
on a part-time status, who do not work full days, shall be deemed to have worked
only a fraction of a Business Day (i.e., an attorney who works half days shall
be treated as working one half (0.5) of a Business Day for each day
worked).

     

    “Fund” means Attorneys’ Title
Insurance Fund, Inc.

     

    “GAAP” means United States
generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or any successor authority) that are applicable as
of the date of determination, consistently applied in accordance with past
practices.

     

    “Governmental Body” means any
governmental body, agency or official of any country or political subdivision of
any country, including any federal, national, supranational, state, local or
other government, governmental, regulatory or administrative authority
(including any self-regulatory organization), agency or commission or any court,
tribunal, or judicial or arbitral body and shall include The Florida Bar, and
the bar of any other jurisdiction in which Firm provides Legal Services, and
their respective disciplinary committees.

     

    “Indemnified Party” means any
Party seeking indemnification.

     

    “Indemnifying Party” means any
Party providing indemnification.

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

     

    Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****. 

     

    “Intellectual Property Rights”
means (i) patents and patent applications (including all reissues, divisions,
continuations, continuations-in-part, extensions and reexaminations thereof)
registered or applied for in the United States and all other nations throughout
the world, all improvements to the inventions disclosed in each such
registration, patent or patent application, (ii) trademarks, service marks,
trade dress, logos, domain names, rights of publicity, trade names and corporate
names (whether or not registered) in the United States and all other nations
throughout the world, including all registrations and applications for
registration of the foregoing and all goodwill associated therewith, (iii)
copyrights (whether or not registered) and registrations and applications for
registration thereof in the United States and all other nations throughout the
world, including all derivative works, moral rights, renewals, extensions,
reversions or restorations associated with such copyrights, now or hereafter
provided by law, regardless of the medium of fixation or means of expression,
(iv) computer software, (v) trade secrets and know-how, (vi) databases and data
collections, (vii) any other similar type of proprietary intellectual property
right and (viii) all rights to sue or recover and retain damages and costs and
attorneys’ fees for past, present and future infringement or misappropriation of
any of the foregoing.

     

    “Included File” means any File
for which Firm performs Legal Services for any Client, other than any Excluded
Files or Files relating to Additional Law Firm Services or Additional Provider
Services for which Provider does not provide Services.

     

    “Legal Services” means services
that are required to be performed by a licensed attorney under Applicable
Law.

     

    “Losses” means any losses,
damages, liabilities, costs, expenses (including reasonable expenses of
investigation and  reasonable legal fees and expenses), fees,
penalties, fines, judgments, settlements and claims of whatever kind and
nature.

     

    “Performance Metrics” means the
measurements of the performance of Provider in providing Services to Firm, as
specified in Exhibit
E to this Agreement, as amended from time to time in accordance with this
Agreement.

     

    “Person” means an individual,
corporation, partnership, association, trust, limited liability company or any
other entity or organization, including a government or political subdivision or
an agency, unit or instrumentality thereof.

     

    “Provider Intellectual Property
Rights” means (i) all Intellectual Property Rights acquired by Provider
pursuant to the Contribution Agreement and (ii) all other Intellectual Property
Rights owned, made, conceived, expressed, developed, and/or reduced to practice
by Provider or its Affiliates, agents or representatives relating to the
Services, subject to any rights or interests of any Client in such Intellectual
Property Rights.

     

    “Service Fees” means the fees
described in Article
VII.

     

    “Services” means all services
for an Included File listed on Exhibit
B that are not Legal Services, including Additional Law Firm Services and
Additional Provider Services that are added to Exhibit
B by amendment to this Agreement.  Services will not include
any Legal Services, services arising out of Additional Law Firm Services for
which Provider has declined to accept the applicable offer in accordance with
Section
4.1, and services arising out of Additional Provider Services for which
Firm has declined to accept the applicable offer in accordance with Section
4.2.

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

     

    Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.

     

    “Termination Date” means the
date of termination in its entirety, or expiration, of this Agreement in
accordance with Article
V.

     

    Additional Definitions.  Each
of the following terms is defined in the Section set forth opposite such
term:

     

    
      
        
          	
                  Item

                	 
      	
                  Article/Section

                
	
                  Access
      Fee

                	 
      	
                  7.3.4

                
	
                  Adjusted
      EBITDA

                	 
      	
                  8.10

                
	
                  Additional
      Law Firm Services

                	 
      	
                  4.1

                
	
                  Additional
      Provider Services

                	 
      	
                  4.2

                
	
                  Additional
      Provider Services Notice

                	 
      	
                  4.2.1

                
	
                  Additional
      Provider Services Offer Period

                	 
      	
                  4.2.2

                
	
                  Agreement

                	 
      	
                  Introductory
      Paragraph

                
	
                  Arbitrator

                	 
      	
                  7.3.3

                
	
                  Assessments

                	 
      	
                  10

                
	
                  Changed
      Services

                	 
      	
                  3.1

                
	
                  Covered
      Action

                	 
      	
                  17.1

                
	
                  Default
      Rate

                	 
      	
                  7.5

                
	
                  Disclosing
      Party

                	 
      	
                  15.1.3

                
	
                  Dispute
      Resolution

                	 
      	
                  19

                
	
                  Effective
      Date

                	 
      	
                  Introductory
      Paragraph

                
	
                  Facilities
      Agreement

                	 
      	
                  6

                
	
                  Firm

                	 
      	
                  Introductory
      Paragraph

                
	
                  Improvements

                	 
      	
                  14.3.1

                
	
                  Initial
      Term

                	 
      	
                  5.2

                
	
                  Insurance
      Policies

                	 
      	
                  16.1

                
	
                  Invoice

                	 
      	
                  7.4

                
	
                  Malpractice
      Insurance Policies

                	 
      	
                  16.2

                
	
                  Measurement
      Period

                	 
      	
                  8.10

                
	
                  Non-Firm
      Clients

                	 
      	
                  8.4

                
	
                  Non-Foreclosure
      Invoice

                	 
      	
                  7.4

                
	
                  Notice

                	 
      	
                  4.1.1

                
	
                  Offer
      Period

                	 
      	
                  4.1.2

                
	
                  Other
      Firms

                	 
      	
                  2.3

                
	
                  Party
      or Parties

                	 
      	
                  Introductory
      Paragraph

                
	
                  Performance
      Notice

                	 
      	
                  5.6

                
	
                  Permitted
      Title Insurance Activities

                	 
      	
                  15.3

                
	
                  Privileged
      Information

                	 
      	
                  15.2.1

                
	
                  Provider

                	 
      	
                  Introductory
      Paragraph

                
	
                  Provider
      Intellectual Property Rights

                	 
      	
                  14.3.1

                
	
                  Receiving
      Party

                	 
      	
                  15.1

                
	
                  Renewal
      Period

                	 
      	
                  5.3

                
	
                  Representatives

                	 
      	
                  15.1

                
	
                  Sales
      Tax

                	 
      	
                  7.7.1

                

        

      

    

     

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

     

    Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.

    

      
        	
                Item

              	 
      	
                Article/Section

              
	
                Service
      Fees

              	 
      	
                7.1

              
	
                SOPs

              	 
      	
                2.6

              
	
                Subcontractor

              	 
      	
                12.1

              
	
                Supervised
      Services

              	 
      	
                12.2

              
	
                Temporary
      Service Fees

              	 
      	
                7.6

              
	
                Term

              	 
      	
                5.3

              
	
                Third
      Party Claim

              	 
      	
                17.4.1

              

      

    

     

    
      
        
        

      

      
        A-6

        
          

        

      

      
        
        

      

    

     

    Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.

     

    EXHIBIT
B

     

    Description of
Services

     

    
      	
               
      

            	
              1.

            	
              Foreclosure

            

    

     

    
      	
               
      

            	
              2.

            	
              Bankruptcy
      – Florida

            

    

     

    
      	
               
      

            	
              3.

            	
              Bankruptcy
      – Puerto Rico

            

    

     

    
      	
               
      

            	
              4.

            	
              Eviction

            

    

     

    
      	
               
      

            	
              5.

            	
              Closings

            

    

     

    
      	
               
      

            	
              6.

            	
              Monitor
      Junior Lien Positions

            

    

     

    
      	
               
      

            	
              7.

            	
              Loss
      Mitigation

            

    

     

    
      	
               
      

            	
              8.

            	
              Litigation/Other

            

    

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

    
    

     

    Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.

       

    EXHIBIT
C

       

    Fee
Schedule

       

    
      
        
          
            
              	
                      Services

                    	 	
                      Per File Processing Fee 

                    
	 
      	 	 
      
	
                      Foreclosure

                    	 	
                      [*****]

                    
	 
      	 	 
      
	
                      Bankruptcy
      – Florida

                    	 	
                      [*****]

                    
	 
      	 	 
      
	
                      Bankruptcy
      – Puerto Rico

                    	 	
                      [*****]

                    
	 
      	 	 
      
	
                      Eviction

                    	 	
                      [*****]

                    
	 
      	 	 
      
	
                      Closings

                    	 	
                      [*****]

                    
	 
      	 	 
      
	
                      Monitor
      Junior Lien Positions

                    	 	
                      [*****]

                    
	 
      	 	 
      
	
                      Loss
      Mitigation

                    	 	
                      [*****]

                    
	 
      	 	 
      
	
                      Litigation/Other

                    	 	
                      [*****]

                    

            

          

        

      

    

     

    
      
        
          
            	
                    Access Fee

                  	 	
                    Per Excluded File

                  
	 
      	 	 
      
	
                    Foreclosure

                  	 	
                    [*****]

                  
	 
      	 	 
      
	
                    Bankruptcy
      – Florida

                  	 	
                    [*****]

                  
	 
      	 	 
      
	
                    Bankruptcy
      – Puerto Rico

                  	 	
                    [*****]

                  
	 
      	 	 
      
	
                    Eviction

                  	 	
                    [*****]

                  
	 
      	 	 
      
	
                    Closings

                  	 	
                    [*****]

                  
	 
      	 	 
      
	
                    Monitor
      Junior Lien Positions

                  	 	
                    [*****]

                  
	 
      	 	 
      
	
                    Loss
      Mitigation

                  	 	
                    [*****]

                  
	 
      	 	 
      
	
                    Litigation/Other

                  	 	
                    [*****]

                  

          

        

      

    

     

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        

      

    

     

    Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.

     

    EXHIBIT
D

     

    Expenses

     

    
      	
              1.

            	
              Provided by
      Firm.  Firm will be responsible for providing, during the
      Term at its expense, (a) all items and costs relating to the Excluded
      Files and (b) all items and costs that are not the responsibility of
      Provider under the item no. 2 below, and that are necessary for, or
      incidental to, the provision of Legal Services for Included Files or other
      activities of Firm including the
following:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      cost of engaging consultants and advisors to
  Firm;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              continuing
      legal education expenses for employees and personnel of
    Firm;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              outsourcing
      fees paid to Persons who transmit initial File information to
      Firm;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              expenses,
      out-of-pocket fees, and other disbursements of Firm incurred in providing
      Legal Services for the Included Files that are not Client
      Reimbursements;

            

    

     

    
      	
               
      

            	
              (v)

            	
              the
      cost of recruiting and hiring attorneys for
  Firm;

            

    

     

    
      	
               
      

            	
              (vi)

            	
              the
      compensation and benefits of employees and personnel of
    Firm;

            

    

     

    
      	
               
      

            	
              (vii)

            	
              all
      taxes, including payroll, income, excise, property or value added taxes,
      to the extent related to the services or activities of Firm,
      and

            

    

     

    
      	
               
      

            	
              (viii)

            	
              the
      law library and legal research data base expenses of Firm, including costs
      associated with subscribing to the Lexis-Nexis or similar
      databases.

            

    

     

    
      	
              2.

            	
              Provided by
      Provider.  Provider will be responsible for the costs
      associated with the provision of Services for Included Files, during the
      Term, including the following
costs:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      cost of recruiting and hiring personnel of
  Provider;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      compensation and benefits of employees and personnel of
      Provider;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      cost of engaging consultants and advisors to
  Provider;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              expenses,
      out-of-pocket fees, and other disbursements of Provider incurred in
      providing Services for the Included Files that are not Client
      Reimbursements;

            

    

     

    
      	
               
      

            	
              (v)

            	
              all
      taxes, including payroll, income, excise, property or value added taxes,
      to the extent related to the services provided by, or activities of,
      Provider;.

            

    

     

    
      	
               
      

            	
              (vi)

            	
              Client
      Reimbursements for filing fees, court costs and mediation fees, subject to
      reimbursement as provided in Section
      7.2 of the Agreement; and

            

    

     

    
      	
               
      

            	
              (vii)

            	
              File
      communication fees such as fees for accessing Client
    systems.

            

    

     

    
      
        
        

      

      
        D-1

        
          

        

      

      
        
        

      

    

     

    Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.

     

    EXHIBIT
E

     

    Performance
Metrics

     

    The
provisions of foreclosure Services within the time frames set forth
below:

     

    
      	
               
      

            	
              1.

            	
              Filing
      of complaint within thirty (30) days of receipt of
  File.

            

    

     

    
      	
               
      

            	
              2.

            	
              Service
      of complaint on defendant within thirty (30) days after complaint is
      filed.

            

    

     

    
      	
               
      

            	
              3.

            	
              Entry
      of judgment on complaint, if uncontested, within sixty (60) days after
      complaint is served.

            

    

     

    
      	
               
      

            	
              4.

            	
              Foreclosure
      sale conducted within thirty (30) days after judgment is
      entered.

            

    

     

    
      	
               
      

            	
              5.

            	
              Certificate
      of Title issued within ten (10) days after judgment is
      entered.

            

    

     

    
      	
               
      

            	
              6.

            	
              In
      contested cases, Certificate of Title issued within one hundred fifty
      (150) days of receipt of File.

            

    

     

    
      
        
        

      

      
        E-1

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