Document:

Unassociated Document

    Exhibit
      10.2

    SERVICES
      AGREEMENT

    

    This
      Services Agreement (“Agreement”) dated as of the 19th day of February, 2008 is
      by and between GEORGE FOREMAN PRODUCTIONS, INC. and GEORGE FOREMAN on the one
      hand (collectively, “Foreman”) and GEORGE FOREMAN VENTURES LLC on the other hand
      (“Company”).

    

    1. Foreman
      agrees to provide to Company, its affiliate(s) or its licensee(s), the personal
      services of George Foreman for three (3) additional days per year (in addition
      to any such services previously agreed to be so provided). Foreman agrees that
      the date, time and place of such services shall be as designated by Company,
      but
      shall be subject to George Foreman’s prior professional contractual commitments
      which as of the date of the request make George Foreman unavailable when and
      where required by Company, its affiliate(s) and/or licensee(s); provided,
      however, that George Foreman shall not be required to perform services on any
      Saturday or Sunday, nor to perform services on any Wednesday outside Houston
      or
      that would conflict with his community and religious obligations on such day.
      Foreman will use its best efforts to cause George Foreman to be available when
      requested by Company, its affiliate(s) or licensee(s) thereof. 

     

    2. In
      full
      consideration for such services, the Company has entered into the Trademark
      License Agreement between the Company and Foreman with respect to personal
      care
      products, of even date herewith.

     

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date first
      set forth above.

     

     

    GEORGE
      FOREMAN PRODUCTIONS, INC.

     

     

    By:
      _______________________________

    Name:
      _____________________________

    Title:
      ______________________________

     

     

    __________________________________

    GEORGE
      FOREMAN

     

     

    GEORGE
      FOREMAN VENTURES LLC

     

     

    By:
      _______________________________

    Name:
      _____________________________

    Title:
      ______________________________SECURITIES
        PURCHASE AGREEMENT

       

      This
        Securities Purchase Agreement (this “Agreement”)
        is
        dated as of February 19, 2008, among Organic To Go Food Corporation, a Delaware
        corporation (the “Company”),
        and
W.Health
        L.P., a limited partnership organized under the laws of the Bahamas (the
        “Investor”).

       

      WHEREAS,
        subject to the terms and conditions set forth in this Agreement and pursuant
        to
        Section 4(2) of the Securities Act (as defined below) and/or Regulation S
        promulgated thereunder, the Company desires to issue and sell to the Investor,
        and the Investor desires to purchase from the Company certain securities
        of the
        Company, as more fully described in this Agreement.

       

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

       

      ARTICLE
        1.

      DEFINITIONS

       

      1.1. Definitions 
        

       

      In
        addition to the terms defined elsewhere in this Agreement, for all purposes
        of
        this Agreement, the following terms shall have the meanings indicated in
        this
        Section 1.1:

       

      “Action”
        means
        any action, suit, inquiry, notice of violation, proceeding (including any
        partial proceeding such as a deposition) or investigation pending or threatened
        in writing against or affecting the Company, any Subsidiary or any of their
        respective properties before or by any court, arbitrator, governmental or
        administrative agency, regulatory authority (federal, state, county, local
        or
        foreign), stock market, stock exchange or trading facility.

       

      “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 144.

       

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

       

      “Buy-In”
has
        the
        meaning set forth in Section 4.1(c).

       

      “Closing”
        means
        the closing of the purchase and sale of the Securities pursuant to Article
        2.

       

      “Closing
        Date”
        means
        the Business Day on which all of the conditions set forth in Sections 5.1
        and
        5.2 hereof are satisfied, or such other date as the parties may
        agree.

       

      “Commission”
        means
        the Securities and Exchange Commission.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

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

       

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

       

      “Company
        Counsel”
        means
        Loeb & Loeb LLP.

       

      “Company
        Deliverables”
        has the
        meaning set forth in Section 2.2(a).

       

      “Conditional
        Warrant” means
        the
        Common Stock purchase warrant in the form of Exhibit
        A
        which is
        issuable to the Investor at the Closing.

       

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

       

      “Deferred
        Registration Rights Agreement”
        means
        the Registration Rights Agreement, dated as of the date of this Agreement,
        among
        the Company and the Investor, in the form of Exhibit
        F
        hereto.

       

      “Deferred
        Registration Statement”
        means a
        registration statement meeting the requirements set forth in the Deferred
        Registration Rights Agreement and covering the resale by the Investor of
        the
        Conditional Warrant Shares.

       

      “Disclosure
        Materials”
        has the
        meaning set forth in Section 3.1(h).

       

      “Effective
        Date”
        means
        the date that the initial Registration Statement required by Section 2(a)
        of the
        Registration Rights Agreement is first declared effective by the
        Commission.

       

      “Evaluation
        Date”
        has the
        meaning set forth in Section 3.1(s).

       

      “Exchange
        Act”
        means
        the Securities Exchange Act of 1934, as amended.

       

      “GAAP”
        means
        U.S. generally accepted accounting principles.

       

      “Indemnification
        Agreement” has
        the
        meaning set forth in Section 5.1(k)

       

      “Intellectual
        Property Rights”
        has the
        meaning set forth in Section 3.1(p).

       

      “Investment
        Amount”
        means
        $10,000,000.

       

      “Investment
        Expenses”
has
        the
        meaning set forth in Section 6.1.

       

      “Investor
        Deliverables”
        has the
        meaning set forth in Section 2.2(b).

       

      
        
          
          

        

        
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      “Investor
        Party”
        has the
        meaning set forth in Section 4.7.

       

      “Lien”
        means
        any lien, charge, encumbrance, security interest, right of first refusal
        or
        other restrictions of any kind.

       

      “Losses”
        has the
        meaning set forth in Section 4.7.

       

      “Material
        Adverse Effect”
        means
        any of (i) a material and adverse effect on the legality, validity or
        enforceability of any Transaction Document, (ii) a material and adverse effect
        on the results of operations, assets, prospects, business or condition
        (financial or otherwise) of the Company and the Subsidiaries, taken as a
        whole,
        or (iii) an adverse impairment to the Company’s ability to perform on a timely
        basis its obligations under any Transaction Document.

       

      “Outside
        Date”
        means
        the thirtieth day following the date of this Agreement.

       

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

       

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

       

      “Registration
        Rights Agreement”
        means
        the Registration Rights Agreement, dated as of the date of this Agreement,
        among
        the Company and the Investor, in the form of Exhibit
        B
        hereto.

       

      “Registration
        Statement”
        means a
        registration statement meeting the requirements set forth in the Registration
        Rights Agreement and covering the resale by the Investor of the Shares and
        the
        Warrant Shares.

       

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

       

      “SEC
        Reports”
        has the
        meaning set forth in Section 3.1(h).

       

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

       

      “Securities
        Act”
        means
        the Securities Act of 1933, as amended.

       

      “Share
        Delivery Date”
has
        the
        meaning set forth in Section 4.1(c).

       

      “Shares”
        means
        7,142,857 shares of Common Stock issuable to the Investor pursuant to this
        Agreement.

       

      
        
          
          

        

        
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      “Short
        Sales”
        include,
        without limitation, all “short sales” as defined in Rule 200 promulgated under
        Regulation SHO under the Exchange Act and all types of direct and indirect
        stock
        pledges, forward sale contracts, options, puts, calls, swaps and similar
        arrangements (including on a total return basis), and sales and other
        transactions through non-US broker dealers or foreign regulated
        brokers.

       

      “Subsidiary”
        means
        any “significant subsidiary” as defined in Rule 1-02(w) of the Regulation S-X
        promulgated by the Commission under the Exchange Act.

       

      “Term
        Sheet”
        means
        the Proposed Term Sheet for Common Stock Financing and Associated Warrants,
        by
        and between the Investor and the Company, dated February 13, 2008.

       

      “Trading
        Day”
        means
        (i) a day on which the Common Stock is traded on a Trading Market (other
        than
        the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading
        Market (other than the OTC Bulletin Board), a day on which the Common Stock
        is
        traded in the over-the-counter market, as reported by the OTC Bulletin Board,
        or
        (iii) if the Common Stock is not quoted on any Trading Market, a day on which
        the Common Stock is quoted in the over-the-counter market as reported by
        the
        Pink Sheets LLC (or any similar organization or agency succeeding to its
        functions of reporting prices); provided, that in the event that the Common
        Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof,
        then
        Trading Day shall mean a Business Day.

       

      “Trading
        Market”
        means
        whichever of the New York Stock Exchange, the American Stock Exchange, the
        NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital
        Market
        or OTC Bulletin Board on which the Common Stock is listed or quoted for trading
        on the date in question.

       

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

       

      “Warrant”
        means
        the
        Common Stock purchase warrant in the form of Exhibit
        C
        which is
        issuable to the Investor at the Closing.

       

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

       

      “Warrants”
        means
        the
        Conditional Warrant and the Warrant, collectively. 

       

      
        
          
          

        

        
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      ARTICLE
        2.

      PURCHASE
        AND SALE

       

      2.1. Closing

       

      Subject
        to the terms and conditions set forth in this Agreement, at the Closing,
        the
        Company shall issue and sell to the Investor, and the Investor shall purchase
        from the Company, the Shares and the Warrants representing such Investor’s
        Investment Amount. The Closing shall take place at the offices of Loeb &
Loeb LLP, 10100 Santa Monica Boulevard, Suite 2200, Los Angeles, CA 90067
        on the
        Closing Date or at such other location or time as the parties may
        agree.

       

      2.2. Closing
        Deliveries

       

      (a)
        At the
        Closing, the Company shall deliver or cause to be delivered to the Investor
        the
        following (the “Company
        Deliverables”):

       

      (i) a
        certificate evidencing the Shares, registered in the name of such
        Investor;

       

      (ii) the
        Warrants, registered in the name of such Investor;

       

      (iii) the
        legal
        opinion of Company Counsel, in agreed form, addressed to the
        Investor;

       

      (iv) the
        legal
        opinion of Carr
        McClellan Ingersoll Thompson & Horn Professional Law Corporation,
        in
        agreed form, addressed to the Investor; 

       

      (v) the
        Registration Rights Agreement, duly executed by the Company; 

       

      (vi) the
        Deferred Registration Rights Agreement, duly executed by the
        Company;

       

      (vii) the
        Indemnification Agreement;

       

      (viii) good
        standing certificates from (a) the State of Delaware and (b) the State of
        Washington, dated as of no more than three days prior to the Closing Date,
        certifying that the Company is in good standing and qualified to do business
        in
        these jurisdictions; and

       

      (ix) certificate
        of the Company, dated the Closing Date, signed by the Chief Executive Officer
        of
        the Company, certifying that the conditions specified in Sections 5.1(b),
        5.1(c)
        and 5.1(e) hereof have been fulfilled.

       

      (b) At
        the
        Closing, the Investor shall deliver or cause to be delivered to the Company
        (the
“Investor
        Deliverables”):

       

      (i) the
        Registration Rights Agreement, duly executed by such Investor; 

       

      (ii) the
        Deferred Registration Rights Agreement, duly executed by such Investor;
        and

       

      
        
          
          

        

        
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      (iii) the
        Investment Amount, in United States dollars and in immediately available
        funds,
        by wire transfer to an account designated in writing by the Company. The
        Investor shall deliver to the Company, within seven (7) Business Days after
        the
        date of this Agreement, written evidence confirming the initiation of the
        bank
        wire transfer of the Investment Amount, subject to the satisfaction of the
        conditions in Section 5.1.

       

      ARTICLE
        3.

      REPRESENTATIONS
        AND WARRANTIES

       

      3.1. Representations
        and Warranties of the Company

       

      The
        Company hereby makes the following representations and warranties to the
        Investor:

       

      (a) Subsidiaries.
        The
        Company has no direct or indirect Subsidiaries other than as specified in
        the
        SEC Reports. Except as disclosed in Schedule
        3.1(a),
        the
        Company owns, directly or indirectly, all of the capital stock of each
        Subsidiary free and clear of any and all Liens, and all 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.
        

       

      (b) Organization
        and Qualification.
        The
        Company and each Subsidiary are duly incorporated or otherwise organized,
        validly existing and in good standing under the laws of the jurisdiction
        of its
        incorporation or organization (as applicable), with the requisite power and
        authority to own and use its properties and assets and to carry on its business
        as currently conducted. Neither the Company nor any Subsidiary is in violation
        of any of the provisions of its respective certificate or articles of
        incorporation, bylaws or other organizational or charter documents. The Company
        and each Subsidiary are duly qualified to conduct its respective businesses
        and
        are 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, individually
        or in
        the aggregate, have or reasonably be expected to result in a Material Adverse
        Effect.

       

      (c) Authorization;
        Enforcement.
        The
        Company has the requisite corporate power and authority to enter into and
        to
        consummate the transactions contemplated by each of the Transaction Documents
        and otherwise to carry out its obligations thereunder. The execution and
        delivery of each of the Transaction Documents by the Company and the
        consummation by it of the transactions contemplated thereby have been duly
        authorized by all necessary action on the part of the Company and no further
        action is required by the Company in connection therewith. Each Transaction
        Document has been (or upon delivery will have been) duly executed by the
        Company
        and, when delivered in accordance with the terms hereof, will constitute
        the
        valid and binding obligation of the Company enforceable against the Company
        in
        accordance with its terms, except as such enforceability may be limited by
        applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
        or
        similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general
        application.

       

      (d) No
        Conflicts.
        The
        execution, delivery and performance of the Transaction Documents by the Company
        and the consummation by the Company of the transactions contemplated 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, 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) 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,
        individually or in the aggregate, have or reasonably be expected to result
        in a
        Material Adverse Effect. 

       

       

      
        
          
          

        

        
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      (e) Filings,
        Consents and Approvals.
        Neither
        the Company nor any Subsidiary is 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 filing with the Commission of one or more Registration Statements
        or
        Deferred Registration Statements in accordance with the requirements of the
        Registration Rights Agreement and the Deferred Registration Rights Agreement,
        as
        applicable, (ii) filings required by state securities laws, (iii) the filings
        required in accordance with Section 4.5 and (iv) those that have been made
        or
        obtained prior to the date of this Agreement.

       

      (f) Issuance
        of the Securities.
        The
        Securities have been duly authorized and, when issued and paid for in accordance
        with the Transaction Documents, will be duly and validly issued, fully paid
        and
        nonassessable, free and clear of all Liens. The Company has reserved from
        its
        duly authorized capital stock (i) the shares of Common Stock issuable pursuant
        to this Agreement and the Warrant in order to issue the Shares and the Warrant
        Shares and (ii) twenty percent (20%) of the total number of shares of capital
        stock of Company on a fully diluted basis using the treasury
        method.

       

      (g) Capitalization.
        The
        number of shares and type of all authorized, issued and outstanding capital
        stock of the Company, and all shares of Common Stock reserved for issuance
        under
        the Company’s various option and incentive plans, is specified in the SEC
        Reports, and set forth in Exhibit
        E
        attached
        hereto. Except as specified in the SEC Reports and in Exhibit
        E
        attached
        hereto, no securities of the Company are entitled to preemptive or similar
        rights, and no Person has any right of first refusal, preemptive right, right
        of
        participation, or any similar right to participate in the transactions
        contemplated by the Transaction Documents. Except as specified in the SEC
        Reports
        and
        except as set forth on Schedule 3.1(g),
        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 exchangeable for, or giving any Person any
        right
        to subscribe for or acquire, any shares of Common Stock, or contracts,
        commitments, understandings or arrangements by which the Company or any
        Subsidiary is or may become bound to issue additional shares of Common Stock,
        or
        securities or rights convertible or exchangeable into shares of Common Stock.
        Except
        with respect to 2,229,430 warrants to purchase Common Stock, the
        issue
        and sale of the Securities will not, immediately or with the passage of time,
        obligate the Company or any Subsidiary to issue shares of Common Stock or
        other
        securities to any Person (other than the Investor) and will not result in
        a
        right of any holder of Company or Subsidiary securities to adjust the exercise,
        conversion, exchange or reset price under such securities.

       

      
        
          
          

        

        
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      (h) SEC
        Reports; Financial Statements.
        Except
        as
        set forth on Schedule 3.1(h), the
        Company
        has
        filed all reports required to be filed by it under the Securities Act and
        the
        Exchange Act, including pursuant to Section 13(a) or 15(d)
        thereof, for the twelve months preceding the date hereof (or such shorter
        period
        as the Company was required by law to file such reports) (the foregoing
        materials being collectively referred to herein as the “SEC
        Reports”
        and,
        together with the Schedules to this Agreement (if any), the “Disclosure
        Materials”),
        on a
        timely basis or has timely filed a valid extension of such time of filing
        and
        has filed any such SEC Reports prior to the expiration of any such extension.
        As
        of their respective dates, the SEC Reports complied in all material respects
        with the requirements of the Securities Act and the Exchange Act and the
        rules
        and regulations of the Commission promulgated thereunder, and none of the
        SEC
        Reports, when filed, contained any untrue statement of a material fact or
        omitted to state a material fact required to be stated therein or necessary
        in
        order to make the statements therein, in light of the circumstances under
        which
        they were made, not misleading. The
        Company has not received any material correspondence from the SEC or any
        Trading
        Market concerning the SEC Reports. The
        financial statements of the Company and any Subsidiary 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 GAAP applied on a consistent basis during the periods involved,
        except as may be otherwise specified in such financial statements or the
        notes
        thereto, and fairly present in all material respects the financial position
        of
        the Company and its consolidated Subsidiaries as of and for the dates thereof
        and the results of operations and cash flows for the periods then ended,
        subject, in the case of unaudited statements, to normal, immaterial, year-end
        audit adjustments.

       

      (i) Press
        Releases.
        The
        press releases
        disseminated by the Company since February
        13, 2007
        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.

       

      (j) Material
        Changes.
        Since
        the
        date of the latest audited financial statements included within the SEC Reports,
        except as specifically
        disclosed in the SEC Reports and
        except as disclosed on Schedule 3.1(j),
        (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) neither
        the
        Company nor any Subsidiary has entered into any material contract, agreement
        or
        other transaction that is not in the ordinary course of business, (iii) neither
        the Company nor any Subsidiary has incurred any liabilities or obligations
        (contingent or otherwise) other than (A) trade payables, accrued expenses
        and
        other liabilities incurred in the ordinary course of business consistent
        with
        past practice, (B) liabilities not required to be reflected in the Company’s
        financial statements pursuant to GAAP or required to be disclosed in filings
        made with the Commission, and (C) liabilities not exceeding in the aggregate
        $200,000; (iv) neither the Company nor any Subsidiary has altered its method
        of
        accounting or the identity of its auditors, (v) neither the Company nor any
        Subsidiary has 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 (vi) neither the
        Company
        nor any Subsidiary has issued any equity securities to any officer, director
        or
        Affiliate, except pursuant to existing stock option plans. The Company does
        not
        have pending before the Commission any request for confidential treatment
        of
        information.

       

      
        
          
          

        

        
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      (k) Litigation.
        Except
        as set forth on Schedule
        3.1(k),
        there
        is no Action which (i) adversely affects or challenges the legality, validity
        or
        enforceability of any of the Transaction Documents or the Securities or (ii)
        except as specifically disclosed in the SEC Reports, could, if there were
        an
        unfavorable decision, individually or in the aggregate, have or reasonably
        be
        expected to result in a Material Adverse Effect. Neither the Company nor
        any
        Subsidiary, nor any director or officer thereof (in his or her capacity as
        such), 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, except as specifically disclosed in the SEC Reports. There
        has
        not been, and to the knowledge of the Company, there is not pending any
        investigation by the Commission involving the Company, any Subsidiary or
        any
        current or former director or officer of the Company (in his or her capacity
        as
        such). 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.

       

      (l) Labor
        Relations.
        Except
        as set forth on Schedule
        3.1(l),
        no
        material labor dispute exists or, to the knowledge of the Company, is imminent
        with respect to any of the employees of the Company or any
        Subsidiary.

       

      (m) Compliance.
        Except
        as set forth on Schedule
        3.1(m),
        neither
        the Company nor any Subsidiary (i) is in default under or in violation of
        (and
        no event has occurred that has not been waived that, with notice or lapse
        of
        time or both, would result in a default by the Company or any Subsidiary
        under),
        nor has the Company or any Subsidiary received notice of a claim that it
        is in
        default under or that it is in violation of, any indenture, loan or credit
        agreement or any other agreement or instrument to which it is a party or
        by
        which it or any of its properties is bound (whether or not such default or
        violation has been waived), (ii) is in violation of any order of any court,
        arbitrator or governmental body, or (iii) is or has been in violation of
        any
        statute, rule or regulation of any governmental authority, including without
        limitation all foreign, federal, state and local laws 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,
        individually or in the aggregate, have or reasonably be expected to result
        in a
        Material Adverse Effect. The Company is in compliance with all effective
        requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules
        and
        regulations thereunder, that are applicable to it, except where such
        noncompliance could not have or reasonably be expected to result in a Material
        Adverse Effect.

       

      (n) 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,
        individually or in the aggregate, have or reasonably be expected to result
        in a
        Material Adverse Effect, and neither the Company nor any Subsidiary has received
        any notice of proceedings relating to the revocation or modification of any
        such
        permits.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      (o) Title
        to Assets.
        Except
        as set forth on Schedule
        3.1(o),
        the
        Company and the Subsidiaries have good and marketable title in fee simple
        to all
        real property owned by them that is material to their respective businesses
        and
        good and marketable title in all personal property owned by them that is
        material to their respective businesses, in each case free and clear of all
        Liens, except for Liens as do not materially affect the value of such property
        and do not materially interfere with the use made and proposed to be made
        of
        such property by the Company and the Subsidiaries. Any real property and
        facilities held under lease by the Company and the Subsidiaries are held
        by them
        under valid, subsisting and enforceable leases of which the Company and the
        Subsidiaries are in compliance, except as could not, individually or in the
        aggregate, have or reasonably be expected to result in a Material Adverse
        Effect.

       

      (p) Patents
        and Trademarks.
        The
        Company and the Subsidiaries have, or have rights to use, all patents, patent
        applications, trademarks, trademark applications, service marks, trade names,
        copyrights, licenses and other similar rights that are necessary or material
        for
        use in connection with their respective businesses as described in the SEC
        Reports and which the failure to so have could, individually or in the
        aggregate, have or reasonably be expected to result in a Material Adverse
        Effect
        (collectively, the “Intellectual
        Property Rights”).
        Except
        as set forth on Schedule
        3.1(p),
        neither
        the Company nor any Subsidiary has received a written notice that the
        Intellectual Property Rights used by the Company or any Subsidiary violates
        or
        infringes upon the rights of any Person. Except as set forth in the SEC Reports,
        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.

       

      (q) 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. The Company is the named beneficiary of a key-man life insurance
        policy
        with respect to its Chief Executive Officer for a coverage amount of no less
        than $1,000,000. The Company has a directors and officers liability insurance
        policy with respect to the Company’s Board of Directors for a coverage amount of
        no less than $5,000,000. The Company has no reason to believe that it will
        not
        be able to renew its and the Subsidiaries’ 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 on terms consistent with market
        for
        the Company’s and such Subsidiaries’ respective lines of business.

       

      (r) Transactions
        With Affiliates and Employees.
        Except
        as set forth in or otherwise not required to be disclosed in the SEC Reports,
        none of the officers or directors of the Company and, to the knowledge of
        the
        Company, none of the employees of the Company 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, or otherwise
        requiring payments to or from any officer, director or such employee or,
        to the
        knowledge of the Company, any entity in which any officer, director, or any
        such
        employee has a substantial interest or is an officer, director, trustee or
        partner.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      (s) Internal
        Accounting Controls.
        The
        Company and the Subsidiaries maintain a system of internal accounting controls
        sufficient to provide reasonable assurance that (i) transactions are executed
        in
        accordance with management’s general or specific authorizations, (ii)
        transactions are recorded as necessary to permit preparation of financial
        statements in conformity with 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 has established disclosure
        controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
        15d-15(e)) for the Company and designed such disclosure controls and procedures
        to ensure that material information relating to the Company, including its
        Subsidiaries, is made known to the certifying officers by others within those
        entities, particularly during the period in which the Company’s Form 10-KSB or
        10-QSB, as the case may be, is being prepared. The Company’s certifying officers
        have evaluated the effectiveness of the Company’s controls and procedures in
        accordance with Item 307 of Regulation S-B under the Exchange Act for the
        Company’s most recently ended fiscal quarter or fiscal year-end (such date, the
“Evaluation
        Date”).
        The
        Company presented in its most recently filed Form 10-KSB or Form 10-QSB 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 significant changes in the
        Company’s internal controls (as such term is defined in Item 308(c) of
        Regulation S-B under the Exchange Act) or, to the Company’s knowledge, in other
        factors that could significantly affect the Company’s internal
        controls.

       

      (t) Solvency.
        Based
        on the financial condition of the Company and each Subsidiary as of the Closing
        Date (and assuming that the Closing shall have occurred), (i) the Company’s and
        each Subsidiary’s fair saleable value of its assets exceeds the amount that will
        be required to be paid on or in respect of the Company’s and each Subsidiary’s
        existing debts and other liabilities (including known contingent liabilities)
        as
        they mature, (ii) the Company’s and each Subsidiary’s assets do not constitute
        unreasonably small capital to carry on its business for the current fiscal
        year
        as now conducted and as proposed to be conducted including its capital needs
        taking into account the particular capital requirements of the business
        conducted by the Company and each Subsidiary, and projected capital requirements
        and capital availability thereof, and (iii) the current cash flow of the
        Company
        and each Subsidiary, together with the proceeds the Company and each Subsidiary
        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 debt when such amounts are required to be paid. The Company
        and each Subsidiary 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). 

       

      (u) Certain
        Fees.
        Except
        as described in Schedule
        3.1(u),
        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 this Agreement. The Investor shall have no
        obligation with respect to any fees or with respect to any claims (other
        than
        such fees or commissions owed by the Investor pursuant to written agreements
        executed by the Investor which fees or commissions shall be the sole
        responsibility of the Investor) 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 this Agreement.

       

      
        
          
          

        

        
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      (v) Certain
        Registration Matters.
        Assuming the accuracy of the Investor’s representations and warranties set forth
        in Section 3.2, no registration under the Securities Act is required for
        the
        offer and sale of the Shares and Warrants, and the offer of the Warrant Shares
        and the Conditional Warrant Shares, by the Company to the Investor under
        the
        Transaction Documents. The Company is eligible to register its Common Stock
        for
        resale by the Investor under Form S-1 promulgated under the Securities Act.
        Except as specified in the SEC Reports and except as set forth on Schedule
        3.1(v),
        neither
        the Company nor any Subsidiary has granted or agreed to grant to any Person
        any
        rights (including “piggy-back” registration rights) to have any securities of
        the Company registered with the Commission or any other governmental authority
        that have not been satisfied.

       

      (w) Listing
        and Maintenance Requirements.
        Except
        as specified in the SEC Reports, the Company has not, since February 13,
        2007,
        received notice from any Trading Market to the effect that the Company is
        not in
        compliance with the listing, quoting or maintenance requirements thereof.
        The
        Company is, and has no reason to believe that it will not in the foreseeable
        future continue to be, in compliance with the listing, quoting or maintenance
        requirements for continued listing or quoting of the Common Stock on the
        Trading
        Market on which the Common Stock is currently listed or quoted. The issuance
        and
        sale of the Securities under the Transaction Documents does not contravene
        the
        rules and regulations of the Trading Market on which the Common Stock is
        currently listed or quoted, and no approval of the shareholders of the Company
        thereunder is required for the Company to issue and deliver to the Investor
        the
        Securities contemplated by Transaction Documents.

       

      (x) Investment
        Company.
        The
        Company and each Subsidiary is not, and is not an Affiliate of, and immediately
        following the Closing will not have become, an “investment company” within the
        meaning of the Investment Company Act of 1940, as amended.

       

      (y) Application
        of Takeover Protections.
        The
        Company has 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 Investor as a result of the Investor and the Company fulfilling their
        obligations or exercising their rights under the Transaction Documents,
        including without limitation the Company’s issuance of the Securities and the
        Investor’s ownership of the Securities.

       

      (z) No
        Additional Agreements.
        The
        Company does not have any agreement or understanding with the Investor with
        respect to the transactions contemplated by the Transaction Documents other
        than
        as specified in the Transaction Documents.

       

      (aa) Consultation
        with Auditors.
        The
        Company and each Subsidiary has consulted its independent auditors concerning
        the accounting treatment of the transactions contemplated by the Transaction
        Documents, and in connection therewith has furnished such auditors complete
        copies of the Transaction Documents.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      (bb) Foreign
        Corrupt Practices Act.
        Neither
        the Company nor any Subsidiary, nor to the knowledge of the Company, any
        agent
        or other person acting on behalf of any of the Company or any Subsidiary,
        has,
        directly or indirectly, (i) used any funds, or will use any proceeds from
        the
        sale of the Securities, 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 their behalf of
        which
        the Company is aware) which is in violation of law, or (iv) has violated
        in any
        material respect any provision of the Foreign Corrupt Practices Act of 1977,
        as
        amended, and the rules and regulations thereunder.

       

      (cc) PFIC.
        Neither
        the Company nor any Subsidiary is or intends to become a “passive foreign
        investment company” within the meaning of Section 1297 of the U.S. Internal
        Revenue Code of 1986, as amended.

       

      (dd) OFAC.
        Neither
        the Company nor any Subsidiary nor, to the knowledge of the Company, any
        director, officer, agent, employee, Affiliate or Person acting on behalf
        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”);
        and
        the Company will not directly or indirectly use the proceeds of the sale
        of the
        Securities, or lend, contribute or otherwise make available such proceeds
        to any
        Subsidiary, joint venture partner or other Person or entity, towards any
        sales
        or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country
        sanctioned by OFAC or for the purpose of financing the activities of any
        Person
        currently subject to any U.S. sanctions administered by OFAC.

       

      (ee) Money
        Laundering Laws.
        The
        operations of each of the Company and any Subsidiary are and have been conducted
        at all times in compliance with the money laundering statutes of applicable
        jurisdictions, the rules and regulations thereunder and any related or similar
        rules, regulations or guidelines, issued, administered or enforced by any
        applicable governmental agency (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 and/or any Subsidiary
        with respect to the Money Laundering Laws is pending or, to the best knowledge
        of the Company, threatened.

       

      (ff) Dependence
        on Major Customers.
        No
        single customer of the Company or any of its Subsidiaries accounted for more
        than 10% of the Company’s or any of its Subsidiaries’ total sales during the
        calendar year of 2007.

       

      (gg) Disclosure.
        The
        Company (on behalf of each Subsidiary) confirms that neither it nor any Person
        acting on its behalf has provided the Investor or its respective agents or
        counsel with any information that the Company believes constitutes material,
        non-public information except insofar as the existence and terms of the proposed
        transactions hereunder may constitute such information. The Company understands
        and confirms that the Investor will rely on the foregoing representations
        and
        covenants in effecting transactions in securities of the Company. All disclosure
        provided to the Investor regarding the Company (including each Subsidiary),
        its
        and any Subsidiary’s business and the transactions contemplated hereby,
        furnished by or on behalf of the Company (including the Company’s
        representations and warranties set forth in this Agreement) are true and
        correct
        and do not contain any untrue statement of a material fact or omit to state
        any
        material fact necessary in order to make the statements made therein, in
        light
        of the circumstances under which they were made, not misleading.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      3.2. Representations
        and Warranties of the Investor

       

      The
        Investor hereby represents and warrants to the Company as follows:

       

      (a) This
        Agreement is made by the Company with the Investor who is a Non-U.S. Person
        in
        reliance upon such Non-U.S. Person’s representations, warranties and covenants
        made in this Section 3.2.

       

      (b) Such
        Non-U.S. Person has been advised and acknowledges that (i) the Securities
        have
        not been, and when issued, will not be registered under the Securities Act,
        the
        securities laws of any state of the United States or the securities laws
        of any
        other country; (ii) in issuing and selling the Securities to such Non-U.S.
        Person pursuant hereto, the Company is relying upon the “safe harbor” provided
        by Regulation S and/or on Section 4(2) under the Securities Act; (iii) it
        is a condition to the availability of the Regulation S “safe harbor” that the
        Securities not be offered or sold in the United States or to a U.S. Person
        until
        the expiration of a period of six (6) months following the Closing Date;
        (iv)
        notwithstanding the foregoing, prior to the expiration of six (6) months
        after
        the Closing (the “Restricted
        Period”),
        the
        Securities may be offered and sold by the holder thereof only if such offer
        and
        sale is made in compliance with the terms of this Agreement and either: (A)
        if
        the offer or sale is within the United States or to or for the account of
        a U.S.
        Person, the securities are offered and sold pursuant to an effective
        registration statement or pursuant to Rule 144 under the Securities Act or
        pursuant to an exemption from the registration requirements of the Securities
        Act; or (B) the offer and sale is outside the United States and to other
        than a
        U.S. Person.

       

      (c) As
        used
        in this Agreement, the term “United
        States”
        means
        and includes the United States of America, its territories and possessions,
        any
        State of the United States, and the District of Columbia, the term “U.S.
        Person”
        means:
        (i) a natural person resident in the United States; (ii) any partnership
        or
        corporation organized or incorporated under the laws of the United States;
        (iii)
        any estate of which any executor or administrator is a U.S. person.; (iv)
        any
        trust of which any trustee is a U.S. person; (v) any agency or branch of
        a
        foreign entity located in the United States; (vi) any nondiscretionary account
        or similar account (other than an estate or trust) held by a dealer or other
        fiduciary for the benefit or account of a U.S. person; (vii) any discretionary
        account or similar account (other than an estate or trust) held by a dealer
        or
        other fiduciary organized, incorporated and (if an individual) resident in
        the
        United States; or (viii) A corporation or partnership organized under the
        laws
        of any foreign jurisdiction and formed by a U.S. person principally for the
        purpose of investing in securities not registered under the Securities Act,
        unless it is organized or incorporated, and owned, by accredited investors
        (as
        defined in Rule 501(a) under the Securities Act) who are not natural persons,
        estates or trusts, and the term “Non-U.S.
        Person”
        means
        any person who is not a U.S. Person or is deemed not to be a U.S. Person
        under
        Rule 902(k)(2) of the Securities Act.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      (d) Such
        Non-U.S. Person agrees that with respect to the Securities until the expiration
        of the Restricted Period: (i) such Non-U.S. Person, its agents or its
        representatives have not and will not solicit offers to buy, offer for sale
        or
        sell any of the securities, or any beneficial interest therein in the United
        States or to or for the account of a U.S. Person during the Restricted Period;
        (ii) notwithstanding the foregoing, prior to the expiration of the Restricted
        Period, the securities may be offered and sold by the holder thereof only
        if
        such offer and sale is made in compliance with the terms of this Agreement
        and
        either: (A) if the offer or sale is within the United States or to or for
        the
        account of a U.S. Person, the securities are offered and sold pursuant to
        an
        effective registration statement or pursuant to Rule 144 under the Securities
        Act or pursuant to an exemption from the registration requirements of the
        Securities Act; or (B) the offer and sale is outside the United States and
        to
        other than a U.S. Person; and (iii) such Non-U.S. Person shall not engage
        in
        hedging transactions with regard to the securities unless in compliance with
        the
        Securities Act. The foregoing restrictions are binding upon subsequent
        transferees of the securities, except for transferees pursuant to an effective
        registration statement. Such Non-U.S. Person agrees that after the Restricted
        Period, the securities may be offered or sold within the United States or
        to or
        for the account of a U.S. Person only pursuant to applicable securities
        laws.

       

      (e) Such
        Non-U.S. Person has not engaged, nor is it aware that any party has engaged,
        and
        such Non-U.S. Person will not engage or cause any third party to engage,
        in any
        directed selling efforts (as such term is defined in Regulation S) in the
        United
        States with respect to the Securities.

       

      (f) Such
        Non-U.S. Person: (i) is domiciled and has its principal place of business
        outside the United States; (ii) certifies it is not a U.S. Person and is
        not
        acquiring the Common Stock or Warrants for the account or benefit of any
        U.S.
        Person; and (iii) at the time of the Closing Date, the Non-U.S. Person or
        persons acting on Non-U.S. Person’s behalf in connection therewith will be
        located outside the United States.

       

      (g) At
        the
        time of offering to such Non-U.S. Person and communication of such Non-U.S.
        Person’s order to purchase the Common Stock and Warrants and at the time of such
        Non-U.S. Person’s execution of this Agreement, the Non-U.S. Person or persons
        acting on Non-U.S. Person’s behalf in connection therewith were located outside
        the United States.

       

      (h) Such
        Non-U.S. Person is not a “distributor” (as defined in Regulation S) or a
“dealer” (as defined in the Securities Act).

       

      (i) Such
        Non-U.S. Person acknowledges that the Company shall make a notation in its
        stock
        books regarding the restrictions on transfer set forth in this Section 3.2
        and shall transfer such securities on the books of the Company only to the
        extent consistent therewith. In particular, such Non-U.S. Person acknowledges
        that the Company shall refuse to register any transfer of the Securities
        not
        made in accordance with the provisions of Regulation S, pursuant to registration
        under the Securities Act or pursuant to an available exemption from
        registration.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (j) The
        Investor understands and agrees that the certificates for the Common Stock
        being
        purchased hereunder shall bear substantially the following legend until (i)
        such
        securities shall have been registered under the Securities Act pursuant to
        a
        registration statement that has been declared effective or (ii) in the opinion
        of counsel reasonably acceptable to the Company, such securities may be sold
        without registration under the Securities Act as well as any applicable “Blue
        Sky” or state securities laws:

       

      THE
        SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
        ACT
        OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE SOLD, TRANSFERRED,
        ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT IN ACCORDANCE WITH THE PROVISIONS
        OF
        REGULATION S PROMULGATED UNDER THE SECURITIES ACT, PURSUANT TO REGISTRATION
        UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
        REGISTRATION. HEDGING TRANSACTIONS INVOLVING THE SHARES REPRESENTED HEREBY
        MAY
        NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT. THIS
        CERTIFICATE MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A
        CONDITION PRECEDENT TO THE SALE, PLEDGE, HYPOTHECATION OR ANY OTHER TRANSFER
        OF
        ANY INTEREST IN ANY OF THE SHARES REPRESENTED BY THIS CERTIFICATE.

       

      (k) The
        Investor understands and agrees that the Warrants being issued hereunder
        shall
        bear the legend set forth on the forms attached hereto as Exhibits A
        and
C,
        until
        (i) the shares of Common Stock underlying the Warrants shall have been
        registered under the Securities Act pursuant to a registration statement
        that
        has been declared effective or (ii) in the opinion of counsel reasonably
        acceptable to the Company, such securities may be sold without registration
        under the Securities Act as well as any applicable “Blue Sky” or state
        securities laws.

       

      (l) The
        Investor hereby represents that the Investor is satisfied as to the full
        observance of the laws of such Investor’s jurisdiction in connection with any
        invitation to subscribe for the securities, including (i) the legal requirements
        within such Investor’s jurisdiction for the purchase of the securities, (ii) any
        foreign exchange restrictions applicable to such purchase, (iii) any
        governmental or other consents that may need to be obtained and (iv) the
        income
        tax and other tax consequences, if any, that may be relevant to the purchase,
        holding, redemption, sale or transfer of such securities. Such Investor’s
        subscription and payment for, and such Investor’s continued beneficial ownership
        of, the Securities, will not violate any applicable securities or other laws
        of
        such Investor’s jurisdiction.

       

      (m) The
        Investor has full power and authority to enter into this Agreement, the
        execution and delivery of which has been duly authorized, if applicable,
        and
        this Agreement constitutes a valid and legally binding obligation of the
        Investor enforceable against the Investor in accordance with its terms, except
        as such enforceability may be limited by general principles of equity or
        to
        applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
        and
        other similar laws relating to, or affecting generally, the enforcement of
        applicable creditors’ rights and remedies.

       

      
        
          
          

        

        
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      (n) The
        information in the “Investor Questionnaire,” attached hereto as Exhibit
        D,
        completed and executed by the Investor (the “Investor Questionnaire”) is
        accurate and true in all material respects.

       

      (o) The
        Investor is not relying on the Company or its affiliates with respect to
        economic considerations involved in this investment.

       

      (p) The
        Investor understands and agrees that the Investor must bear the economic
        risk of
        the Investor’s purchase because, among other reasons, neither the Common Stock
        nor the Common Stock underlying the Warrants have been registered under the
        Securities Act or under the securities laws of any state and, therefore,
        cannot
        be resold, assigned or otherwise disposed of unless they are subsequently
        registered under the Securities Act and under the applicable securities laws
        of
        such states, or an exemption from such registration is available. 

       

      (q) No
        representations or warranties have been made to the Investor by the Company
        or
        any of its officers, employees, agents, affiliates or subsidiaries, other
        than
        any representations of the Company contained herein, and in subscribing for
        the
        Common Stock and Warrants the Investor is not relying upon any representations
        other than any contained herein; provided that nothing contained herein shall
        modify, amend or affect the Investor’s right to rely on the Company’s
        representations and warranties contained herein.

       

      (r) The
        Investor understands and acknowledges that the Investor’s purchase of the Common
        Stock and Warrants is a speculative investment that involves a high degree
        of
        risk and the potential loss of the Investor’s entire investment.

       

      (s) Neither
        the Commission nor any state securities commission has approved the Common
        Stock
        or Warrants, or passed upon or endorsed the merits of this offering or confirmed
        the accuracy or determined the adequacy of any information provided to the
        Investor by the Company.

       

      (t) The
        Investor and the Investor’s advisors, if any, have had a reasonable opportunity
        to ask questions of and receive answers from a person or persons acting on
        behalf of the Company concerning the offering and the business, financial
        condition, results of operations and prospects of the Company, and all such
        questions have been answered to the reasonable satisfaction of the Investor
        and
        the Investor’s advisors, if any.

       

      (u) The
        Investor is unaware of, is in no way relying on, and did not become aware
        of the
        offering through or as a result of, any article, notice, advertisement or
        other
        communication published in any newspaper, magazine or similar media or broadcast
        over television, radio or over the Internet, in connection with the offering
        and
        sale of the Common Stock and Warrants and is not subscribing for the securities
        and did not become aware of the offering of the securities through or as
        a
        result of any seminar or meeting to which the Investor was invited by, or
        any
        solicitation of a subscription by, a person not previously known to the Investor
        in connection with investments in securities generally.

       

      (v) The
        Investor has not engaged any placement agent, financial advisor or broker,
        which
        would give rise to any claim by any person for brokerage commissions, finders’
fees or the like relating to this Agreement or the transactions contemplated
        hereby and, in turn, to be paid to other selected dealers.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      (w) The
        foregoing representations, warranties and agreements shall survive the
        Closing.

       

      ARTICLE
        4.

      OTHER
        AGREEMENTS OF THE PARTIES

       

      4.1.
        (a)
        Securities
        may only be disposed of in compliance with state and federal securities laws.
        In
        connection with any transfer of the Securities other than pursuant to an
        effective registration statement, to the Company, to an Affiliate of the
        Investor or in connection with a pledge as contemplated in Section 4.1(b),
        the
        Company may require the transferor thereof to provide to the Company an opinion
        of counsel selected by the transferor, the form and substance of which opinion
        shall be reasonably satisfactory to the Company, to the effect that such
        transfer does not require registration of such transferred Securities under
        the
        Securities Act.

       

      (b) The
        Company acknowledges and agrees that the Investor may from time to time pledge,
        and/or grant a security interest in some or all of the Securities pursuant
        to a
        bona fide margin agreement in connection with a bona fide margin account
        and, if
        required under the terms of such agreement or account, such Investor may
        transfer pledged or secured Securities to the pledgees or secured parties.
        Such
        a pledge or transfer would not be subject to approval or consent of the Company
        and no legal opinion of legal counsel to the pledgee, secured party or pledgor
        shall be required in connection with the pledge, but such legal opinion may
        be
        required in connection with a subsequent transfer following default by the
        Investor transferee of the pledge. No notice shall be required of such pledge.
        At the appropriate Investor’s expense, the Company will execute and deliver such
        reasonable documentation as a pledgee or secured party of Securities may
        reasonably request in connection with a pledge or transfer of the Securities
        including the preparation and filing of any required prospectus supplement
        under
        Rule 424(b)(3) of the Securities Act or other applicable provision of the
        Securities Act to appropriately amend the list of Selling Stockholders
        thereunder. Except as otherwise provided in Section 4.1(c), any Shares subject
        to a pledge or security interest as contemplated by this Section 4.1(b) shall
        continue to bear the legend set forth in this Section 4.1(b) and be subject
        to
        the restrictions on transfer set forth in Section 4.1(a).

       

      (c) Certificates
        evidencing Shares shall not contain any legend (including the legend set
        forth
        in Section 3.2(j)): (i) following a sale or transfer of such Shares pursuant
        to
        an effective registration statement (including a Registration Statement and
        a
        Deferred Registration Statement), or (ii) following a sale or transfer of
        such
        Shares pursuant to Rule 144 (assuming the transferee is not an Affiliate
        of the
        Company). If
        the
        Investor shall make a sale or transfer of Shares either (x) pursuant to Rule
        144
        or (y) pursuant to a registration statement and in each case shall have
        delivered to the Company or the Company’s transfer agent the certificate
        representing Shares containing a restrictive legend which are the subject
        of
        such sale or transfer
        and a representation letter in customary form (the
        date of
        such sale or transfer and Share delivery being the “Share
        Delivery Date”)
        and (1)
        the Company shall fail to deliver or cause to be delivered to such Investor
        a
        certificate representing such Shares that is free from all restrictive or
        other
        legends by the third Trading Day following the Share Delivery Date and (2)
        following such third Trading Day after the Share Delivery Date and prior
        to the
        time such Shares are received free from restrictive legends, the Investor,
        or
        any third party on behalf of such Investor, purchases (in an open market
        transaction or otherwise) shares of Common Stock to deliver in satisfaction
        of a
        sale by the Investor of such Shares (a "Buy-In"),
        then
        the Company shall pay in cash to the Investor (for costs incurred either
        directly by such Investor or on behalf of a third party) the amount by which
        the
        total purchase price paid for Common Stock as a result of the Buy-In (including
        brokerage commissions, if any) exceed the proceeds received by such Investor
        as
        a result of the sale to which such Buy-In relates. The Investor shall provide
        the Company written notice indicating the amounts payable to the Investor
        in
        respect of the Buy-In.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      4.2. Furnishing
        of Information.
        

       

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

       

      4.3. Integration

       

      The
        Company shall not, and shall use its best efforts to ensure that no Affiliate
        of
        the Company shall, sell, offer for sale or solicit offers to buy or otherwise
        negotiate in respect of any security (as defined in Section 2 of the Securities
        Act) that would be integrated with the offer or sale of the Securities in
        a
        manner that would require the registration under the Securities Act of the
        sale
        of the Securities to the Investor, or that would be integrated with the offer
        or
        sale of the Securities for purposes of the rules and regulations of any Trading
        Market in a manner that would require stockholder approval of the sale of
        the
        securities to the Investor.

       

      4.4. Subsequent
        Registrations

       

      Other
        than pursuant to the Registration Statement, prior to the Effective Date,
        the
        Company may not file any registration statement (other than on Form S-8)
        with
        the Commission with respect to any securities of the Company.

       

      4.5. Securities
        Laws Disclosure; Publicity

       

      By
        9:00
        a.m. (New York time) four (4) Trading Days following the execution of this
        Agreement, and by 9:00 a.m. (New York time) four (4) Trading Days following
        the
        Closing Date, the Company shall issue press releases disclosing the transactions
        contemplated hereby and the Closing. Within four (4) Trading Days following
        the
        execution of this Agreement the Company will file a Current Report on Form
        8-K
        disclosing the material terms of the Transaction Documents (and attach as
        exhibits thereto the Transaction Documents), and within four (4) Trading
        Days
        following the Closing Date the Company will file an additional Current Report
        on
        Form 8-K to disclose the Closing (unless this Agreement is executed on the
        same
        date as the Closing Date, in which case only one Form 8-K disclosing the
        execution of this Agreement and the Closing need be filed). In addition,
        the
        Company will make such other filings and notices in the manner and time required
        by the Commission and the Trading Market on which the Common Stock is quoted
        or
        listed. Except as otherwise provided herein or to the extent such disclosure
        is
        required by law or Trading Market regulations, the Company shall keep the
        existence and content of its negotiations with the Investor, including the
        terms
        of the proposed offering, confidential and will not disclose to any third
        party
        any information relating to this Agreement or the proposed offering, except
        to
        its agents and counsel

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      4.6. Limitation
        on Issuance of Future Priced Securities

       

      During
        the six months following the Closing Date, the Company shall not issue any
        “Future Priced Securities” as such term is described by NASD
        IM-4350-1.

       

      4.7. Indemnification
        of Investor

       

      In
        addition to the indemnity provided in the Registration Rights Agreement and
        the
        Deferred Registration Rights Agreement, the Company will indemnify and hold
        the
        Investor and its directors, officers, shareholders, partners, employees and
        agents (each, an “Investor
        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 (collectively, “Losses”)
        that
        any such Investor Party may suffer or incur as a result of or relating to
        any
        misrepresentation, breach or inaccuracy of any representation, warranty,
        covenant or agreement made by the Company in any Transaction Document. In
        addition to the indemnity contained herein, the Company will reimburse each
        Investor Party for its reasonable legal and other expenses (including the
        cost
        of any investigation, preparation and travel in connection therewith) incurred
        in connection therewith, as such expenses are incurred. Except as otherwise
        set
        forth herein, the mechanics and procedures with respect to the rights and
        obligations under this Section 4.7 shall be the same as those set forth in
        Section 5 of the Registration Rights Agreement.

       

      4.8. Non-Public
        Information

       

      The
        Company covenants and agrees that neither it nor any other Person acting
        on its
        behalf will provide the Investor or its agents or counsel with any information
        that the Company believes constitutes material non-public information, unless
        prior thereto such Investor shall have executed a written agreement regarding
        the confidentiality and use of such information. The Company understands
        and
        confirms that the Investor shall be relying on the foregoing representations
        in
        effecting transactions in securities of the Company.

       

      4.9. Listing
        of Securities

       

      The
        Company agrees, (i) if the Company applies to have the Common Stock listed
        or
        quoted on any Trading Market, other than the Trading Market on which the
        Common
        Stock is currently listed or quoted, it will include in such application
        the
        Shares, the Warrant Shares and the Conditional Warrant Shares, and will take
        such other action as is necessary or desirable to cause the Shares, the Warrant
        Shares and the Conditional Warrant Shares to be listed or quoted on such
        other
        Trading Market as promptly as possible, and (ii) it will take all action
        reasonably necessary to continue the listing or quoting of its Common Stock
        on a
        Trading Market and will comply in all material respects with the Company’s
        reporting, filing and other obligations under the bylaws or rules of the
        Trading
        Market.

       

      4.10. Use
        of
        Proceeds

       

      The
        Company shall not use the Investor's Investment Amount for the
        repayment of any loans incurred by the Company or its Subsidiaries prior to
        Closing, other than the repayment of $500,000 in term debt which matures
        in
        March 2008. The Company shall continue to pay its other obligations and
        liabilities in the ordinary course of its business as such obligations and
        liabilities come due.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      4.11. Right
        of First Refusal.

       

      (a)
        During the thirty-six (36) month period immediately following the Closing,
        the
        Investor shall be given not less than ten (10) Business Days prior written
        notice (the “Company
        Notice”)
        of any
        proposed sale by the Company of Common Stock or Common Stock Equivalents,
        except
        any Excluded Issuances (as defined below). The Investor shall have the right
        to
        purchase such number of the shares of Common Stock or Common Stock Equivalents
        being offered in such proposed sale equal to the number of shares of Common
        Stock or Common Stock Equivalents being offered times a fraction, the numerator
        of which is the number of shares of Common Stock owned by the Investor
        immediately after the Closing multiplied by two (2) and the denominator of
        which
        is the number of shares of Common Stock of the Company outstanding immediately
        after the Closing determined on a fully diluted basis in accordance with
        the
        treasury stock method under the United States Generally Accepted Accounting
        Principles, at the same price and on the same terms as such shares are offered
        to other investors (the “Right
        of First Refusal”).
        If the
        Investor elects to exercise the Right of First Refusal, the Investor shall,
        within ten (10) Business Days after the Investor receives the Company Notice,
        provide written notice to the Company of such election, specifying the number
        of
        shares the Investor desires to purchase (the “Investor
        Notice”).
        Payment of the purchase price for the shares purchased by the Investor pursuant
        to the Right of First Refusal shall be made within seven (7) Business Days
        after
        the Company receives the Investor Notice. The Right of First Refusal described
        in this Section 4.11 shall terminate upon the issuance by the Company of
        Common
        Stock or Common Stock Equivalents which the Investor has had the opportunity
        to
        purchase in one or multiple financings having an aggregate purchase price
        of
        $10.0 million. 

       

      (b) For
        purposes of this Section 4.11, the Right of First Refusal will not apply
        to any
        securities issued to (i) to directors, officers, employees, or consultants
        of
        the Company and its Subsidiaries pursuant to any stock option or stock incentive
        plan approved by the Board of Directors of the Company, (ii) pursuant to
        any
        stock split, recapitalization, reclassification or payment of any dividend
        or
        distribution with respect to the Company's issued and outstanding capital
        stock,
        (iii) upon the conversion or exercise of convertible or exercisable securities
        outstanding as of the Closing Date, (iv) in connection with bona fide business
        acquisitions, or (v) with unanimous approval of the Company’s Board of Directors
        (collectively, the “Excluded
        Issuances”).

       

      4.12
        Restrictive
        Covenants. 
        

       

      The
        Company covenants that prior to Closing, it shall not, without
        the Investor's prior written consent:  (i) change the nature of its
        business; (ii) issue any equity, equity securities (other than stock options
        issued pursuant to the Company’s stock option or stock incentive plan in the
        ordinary course of business) or debt in any form; (iii) divest, acquire,
        change
        the structure of its assets or otherwise decrease the value of its assets;
        or
        (iv) enter into any collaboration, partnership, distribution or other agreement
        binding the Company to any future payments, services or other contractual
        obligations exceeding $250,000.

       

      4.13 Observer
        Rights.
        

       

      Prior
        to
        the Closing, the Investor shall designate one representative to serve as
        an
        observer (the “Observer”)
        who
        shall be entitled to attend all meetings of the Company's Board of Directors
        in
        a nonvoting, observer capacity, and to receive electronic copies of all notices,
        minutes, consents and other materials that the Company provides to its
        directors, as and when such materials are provided to directors; provided,
        however, that the Observer shall agree in writing to be bound by the same
        duties
        of confidentiality, good faith and loyalty as if such Observer were a director
        of the Company, with respect to all information provided to him or her in
        such
        materials and in the course of his or her attendance at any meeting of the
        Company's Board of Directors. Notwithstanding the foregoing, the Company
        reserves the right to withhold any information and exclude such Observer
        from
        any meeting of the Board of Directors, or any portion thereof, only to the
        extent that access to such information or attendance at such meeting would
        adversely affect the attorney-client privilege, or would cause the Company
        to
        violate a confidentiality agreement with a third party, or would give rise
        to a
        conflict of interest with such Observer. The Observer shall not be entitled
        to
        vote on any matter as to which action of the Board of Directors is to be
        taken.
        The right of the Observer to attend the Company's Board meetings and receive
        materials shall cease and be of no further force or effect at such time as
        the
        Investor and its Affiliates collectively own less than 5.0% of the issued
        and
        outstanding shares of the Company's Common Stock.

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      4.14 Board
        of Directors.
        

       

      Prior
        to
        the Closing, the Investor shall designate one representative to serve as
        a
        director of the Company (the “Investor
        Director”)
        who
        shall upon or prior to the Closing be elected to the Company's Board of
        Directors. The Company shall provide the Investor Director with copies of
        all
        notices, minutes, consents and other materials that the Company provides
        to its
        other directors. The Investor Director shall have the right to sit on any
        committee established by the Board of Directors. The Company shall maintain
        adequate directors' and officers' liability insurance covering all directors
        and
        officers (including without limitation the Investor Director) in an amount,
        form
        and substance reasonably satisfactory to the Investor Director. The Board
        of
        Directors of the Company shall not take any action to remove the Investor
        Director without the written consent of the Investor, and shall nominate
        the
        Investor Director for election or re-election at each annual meeting of the
        Company’s stockholders. If the Investor Director resigns or dies, the remaining
        directors of the Company shall elect a new designee of the Investor to serve
        on
        the Company’s Board of Directors as the Investor Director. This Section 4.11
        shall terminate and no longer be of any force or effect if at any time the
        Investor and its Affiliates collectively own less than 5.0% of the issued
        and
        outstanding shares of the Company's Common Stock.

      

      4.15 Board
        Meetings. 
        

       

      The Board
        of
        Directors of the Company shall meet at least once every quarter in person
        or via conference telephone upon not less than ten (10) days prior
        notice or upon the written request of any director. The Company shall
        reimburse the
        Investor
        Director
        and the Observer
        for
        reasonable out-of-pocket expenses incurred by them in connection with their
        attendance at Board meetings. This Section 4.15 shall terminate and no longer
        be
        of any force or effect if at any time the Investor and its Affiliates
        collectively own less than 5.0% of the issued and outstanding shares of the
        Company’s Common Stock. 

       

      4.16 Protective
        Agreements. 
        

       

      The
        Company shall cause all of the officers and consultants of the Company and
        its Subsidiaries who have access to proprietary information of the Company
        and its Subsidiaries to execute agreements which contain restrictions
        regarding non-solicitation of employees and customers, non-disclosure of
        information and assignment of technology to the Company, which are each in
        a
        form acceptable to the Investor.

      

      4.17 Confidentiality.
        

       

      The
        Company will keep the existence and
        content of its negotiations with the Investor, including the terms of the
        Transaction Documents, confidential and will not disclose to any third party
        any
        information relating to the transactions hereunder, except to its employees,
        shareholders, affiliates, counsel or consultants, who will each be bound
        by
        confidentiality agreements and who will have a ‘need to know’, and except as
        required by law. Except as required by applicable law, the Company will make
        no
        public statement, press release, or other announcement with respect to the
        transactions hereunder, without the Investor’s prior written approval.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      

      4.18 Warrant
        Adjustment. 

       

      If
        between the date of this Agreement and the Closing Date, (i) the weighted
        average daily trading price of the Company’s Common Stock drops below $1.19 for
        more than two (2) consecutive Trading Days, and (ii) the average trading
        volume
        for each such day exceeds 100,000 shares of Common Stock, then the amount
        of
        Warrant Shares issuable under the Warrant will be increased at Closing from
        4,285,715 Warrant Shares to 5,357,144 Warrant Shares.

      

      4.19 Due
        Diligence.
        

       

      Until
        the
        Closing Date, the Company will continue to furnish to the Investor all
        documents, materials and other information, pursuant to the written due
        diligence request previously sent by the Investor and any updated requests
        provided by the Investor prior to the Closing Date.

      

      ARTICLE
        5.

      CONDITIONS
        PRECEDENT TO CLOSING

       

      5.1. Conditions
        Precedent to the Obligations of the Investor to Purchase
        Securities

       

      The
        obligation of the Investor to acquire Securities at the Closing is subject
        to
        the satisfaction or waiver by the Investor, at or before the Closing, of
        each of
        the following conditions:

       

      (a) Due
        Diligence.
        The
        Investor shall have completed customary due diligence and shall have received
        favorable due diligence reports, including intellectual property, business,
        financial, scientific and legal, without producing any information that would
        have a Material Adverse Effect on the Company.

       

      (b) Representations
        and Warranties.
        The
        representations and warranties of the Company contained herein shall be true
        and
        correct in all material respects as of the date when made and as of the Closing
        as though made on and as of such date;

       

      (c) Performance.
        The
        Company shall have performed, satisfied and complied in all material respects
        with all covenants, agreements and conditions required by the Transaction
        Documents to be performed, satisfied or complied with by it at or prior to
        the
        Closing;

       

      (d) No
        Injunction.
        No
        statute, rule, regulation, executive order, decree, ruling or injunction
        shall
        have been enacted, entered, promulgated or endorsed by any court or governmental
        authority of competent jurisdiction that prohibits the consummation of any
        of
        the transactions contemplated by the Transaction Documents;

       

      (e) Adverse
        Changes.
        Since
        the date of execution of this Agreement, no event or series of events shall
        have
        occurred that reasonably could have or result in a Material Adverse
        Effect;

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      (f) No
        Suspensions of Trading in Common Stock; Listing.
        Trading
        in the Common Stock shall not have been suspended by the Commission or any
        Trading Market (except for any suspensions of trading of not more than one
        Trading Day solely to permit dissemination of material information regarding
        the
        Company) at any time since the date of execution of this Agreement, and the
        Common Stock shall have been at all times since such date listed or quoted
        for
        trading on a Trading Market;

       

      (g) Company
        Deliverables.
        The
        Company shall have delivered the Company Deliverables in accordance with
        Section
        2.2(a); 

       

      (h) Transaction
        Documents.
        The
        Company shall have executed all agreements and documents and satisfied all
        conditions as required to be executed or satisfied at the Closing pursuant
        to
        the Transaction Documents; 

       

      (i) Miscellaneous
        Confirmations.
        The
        Company shall have provided written confirmation, in form reasonably
        satisfactory to the Investor, of the following: (1) the amount of any loans
        or
        other forms of indebtedness between the Company or its Subsidiaries and any
        director, officer, key employee and/or consultant; (2) that the Company has
“key
        man” life insurance for the CEO in the amount of not less than $1,000,000,
        naming the Company as beneficiary; and (3) that the Company has directors’ and
        officers’ liability insurance for members of the Board in a coverage amount of
        no less than $5,000,000;

       

      (j) Board
        of Directors.
        The
        Investor Director shall have been elected to the Board of Directors of the
        Company; 

       

      (k) Indemnification
        Agreement.
        The
        Company and the Investor Director shall have entered into an indemnification
        agreement in form reasonably approved by the Investor (the “Indemnification
        Agreement”);
        

       

      (l) Termination.
        This
        Agreement shall not have been terminated by the Investor in accordance with
        Section 6.5; and

       

      (m) Amendment
        to Agreements.
        The
        Company shall cause to be amended: (i) that certain Securities Purchase
        Agreement dated as of June 26, 2007, among the Company and the investors
        identified on the signature pages thereto; (ii) that certain Securities Purchase
        Agreement dated as of October 12, 2007, among the Company and the investors
        identified on the signature pages thereto; and (iii) that certain Securities
        Purchase Agreement dated as of January 25, 2008, among the Company and the
        investors identified on the signature pages thereto, so that the Right of
        First
        Refusal is not adversely impaired. 

       

      5.2. Conditions
        Precedent to the Obligations of the Company to sell Securities

       

      The
        obligation of the Company to sell Securities at the Closing is subject to
        the
        satisfaction or waiver by the Company, at or before the Closing, of each
        of the
        following conditions:

       

      (a) Representations
        and Warranties.
        The
        representations and warranties of the Investor contained herein shall be
        true
        and correct in all material respects as of the date when made and as of the
        Closing Date as though made on and as of such date;

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      (b) Performance.
        The
        Investor shall have performed, satisfied and complied in all material respects
        with all covenants, agreements and conditions required by the Transaction
        Documents to be performed, satisfied or complied with by such Investor at
        or
        prior to the Closing;

       

      (c) No
        Injunction.
        No
        statute, rule, regulation, executive order, decree, ruling or injunction
        shall
        have been enacted, entered, promulgated or endorsed by any court or governmental
        authority of competent jurisdiction that prohibits the consummation of any
        of
        the transactions contemplated by the Transaction Documents;

       

      (d) Investor
        Deliverables.
        The
        Investor shall have delivered its Investor Deliverables in accordance with
        Section 2.2(b); and

       

      (e) Termination.
        This
        Agreement shall not have been terminated as to such Investor in accordance
        with
        Section 6.5.

       

      ARTICLE
        6.

      MISCELLANEOUS

       

      6.1. Fees
        and Expenses

       

      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 the
        Transaction Documents; provided, however, that the Company shall pay (i)
        at the
        Closing all costs and expenses, including out-of-pocket travel expenses,
        incurred by any and all counsel, attorneys consultants, auditors, experts
        and
        representatives of the Investor, in connection with the performance of due
        diligence and the negotiation, preparation, execution, delivery and
        implementation of the Transaction Documents, up to a maximum of $75,000 (the
        “Investment
        Expenses”)
        and
        (ii) certain compliance expenses agreed to in writing by the parties in the
        Term
        Sheet. The Company shall pay all stamp and other taxes and duties levied
        in
        connection with the issuance of the Securities.

       

      6.2. Entire
        Agreement

       

      The
        Transaction Documents, together with the exhibits and schedules thereto,
        contain
        the entire understanding of the parties with respect to the subject matter
        hereof and, except as provided under Section 6.1, supersede all prior
        agreements, understandings, discussions and representations, oral or written,
        with respect to such matters, which the parties acknowledge have been merged
        into such documents, exhibits and schedules.

       

      6.3. Notices

       

      (a) All
        notices and other communications made pursuant to this Agreement shall be
        in
        writing and shall be conclusively deemed to have been duly given: 

       

      (i) in
        the
        case of hand delivery to the address set forth below, on the next Business
        Day
        after delivery;

       

      (ii) in
        the
        case of delivery by an internationally recognized overnight courier to the
        address set forth below, freight prepaid, on the next Business Day after
        delivery and signed receipt by the recipient; and 

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

      (iii) in
        the
        case of a notice sent by facsimile transmission to the number and addressed
        as
        set forth below, on the next Business Day after delivery, if receipt of such
        facsimile transmission is confirmed. 

       

      (b)For
        all
        notices given pursuant to one of the methods listed in sub-clause (a) above,
        a
        copy of the notice should also be sent by email to the email address set
        forth
        below.

       

      (c) Contact
        details:

       

                  If
        to Investor:

       

      Address
        for notices being delivered by hand/courier: 

       

      c/o
        Inventages Whealth Management Inc.

      Winterbotham
        Place, Marlborough & Queen Streets

      P.
        O. Box
        N-3026

      Nassau,
        The Bahamas, Attn: Dr. Gunnar Weikert

       

      Always
        with a copy to: IVC SA, Route de Coppet 26A, 1291 - Commugny, Switzerland,
        Attn:
        Dr. Bogdan von Rueckmann

       

      Always
        with a copy to:  weikert@inventages.com
        and
portfolio@inventages.com

       

      Number
        for notices being delivered by facsimile transmission:

       

      To:
        IVC
        SA, Attn: Dr. Bogdan von Rueckmann, at: +41 21 823 0001

       

      Always
        with a copy to: weikert@inventages.com
        and
portfolio@inventages.com

       

      If
        to the
        Company:  

       

       Address
        for notices being delivered by hand/courier:

       

      Organic
        To Go Food Corporation

      3317
        Third Avenue South

      Seattle,
        Washington 98134

      Attn:
        Chief Financial Officer

      

      Always
        with a copy to:

      

      Loeb
        & Loeb LLP

      10100
        Santa Monica Boulevard

      Suite
        2200

      Los
        Angeles, California 90067

      Attention:
        Lawrence Venick, Esq.

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      

      Number
        for notices being delivered by facsimile transmission:

      

      To:
        Organic To Go Food Corporation, Attn: Chief Financial Officer, at: +1 206
        299
        3707 

       

      Always
        with a copy to: Loeb & Loeb LLP, Attn: Lawrence Venick, Esq, at: +1 310 282
        2200

       

      (d) A
        party
        may change or supplement the contact details for service of any notice pursuant
        to this Agreement, or designate additional addresses, facsimile numbers and
        email addresses for the purposes of this Section 6.3 by giving the other
        parties
        written notice of the new contact details in the manner set forth
        above.

       

      6.4. Amendments;
        Waivers; No Additional Consideration

       

      No
        provision of this Agreement may be waived or amended except in a written
        instrument signed by the Company and the Investor. No waiver of any default
        with
        respect to any provision, condition or requirement of this Agreement shall
        be
        deemed to be a continuing waiver in the future or a waiver of any subsequent
        default or a waiver of any other provision, condition or requirement hereof,
        nor
        shall any delay or omission of either party to exercise any right hereunder
        in
        any manner impair the exercise of any such right. Without the written consent
        of
        the Investor, an amendment or waiver under this Section 6.4 may not waive
        or
        amend any Transaction Document the effect of which would be to permit the
        Company to (1) name the Investor as an underwriter in a Registration Statement
        or the Deferred Registration Statement without such Investor’s specific written
        consent thereto, or (2) not include any Registrable Securities (as defined
        in
        the Registration Rights Agreement and in the Deferred Registration Rights
        Agreement) of an Investor in a Registration Statement or a Deferred Registration
        Statement due to their refusal to be named as an underwriter
        therein.

       

      6.5. Termination

       

      This
        Agreement may be terminated prior to Closing:

       

      (a) by
        written agreement of the Investor and the Company; and

       

      (b) by
        the
        Company or the Investor upon written notice to the other, if the Closing
        shall
        not have taken place by 6:30 p.m. Eastern time on the Outside Date; provided,
        that
        the right to terminate this Agreement under this Section 6.5(b) shall not
        be available to any Person whose failure to comply with its obligations under
        this Agreement has been the cause of or resulted in the failure of the Closing
        to occur on or before such time.

       

      Upon
        a
        termination in accordance with this Section 6.5, the Company and the Investor
        shall not have any further obligation or liability (including as arising
        from
        such termination) to the other under the Transaction Documents as a result
        therefrom; provided, however, that the Company shall pay to the Investor
        a cash
        amount equal to the Investor Expenses, together with all costs and expenses,
        including reasonable legal fees, incurred by the Investor in collecting payment
        of the Investment Expenses, in the event that the Closing does not occur
        due to
        the Company’s failure to comply with all the closing conditions listed in
        Section 5.1 hereof.

       

      6.6. Construction

       

      The
        headings herein are for convenience only, do not constitute a part of this
        Agreement and shall not be deemed to limit or affect any of the provisions
        hereof. The language used in this Agreement will be deemed to be the language
        chosen by the parties to express their mutual intent, and no rules of strict
        construction will be applied against any party. This Agreement shall be
        construed as if drafted jointly by the parties, and no presumption or burden
        of
        proof shall arise favoring or disfavoring any party by virtue of the authorship
        of any provisions of this Agreement or any of the Transaction
        Documents.

       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

       

      6.7. Successors
        and Assigns

       

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

       

      6.8. 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 4.7 (as to each Investor Party).

       

      6.9. Governing
        Law. 

       

      All
        questions concerning the construction, validity, enforcement and interpretation
        of this Agreement shall be governed by and construed and enforced in accordance
        with the internal laws of the State of California, without regard to the
        principles of conflicts of law thereof. 

       

      6.10. Arbitration. 

       

      Each
        party agrees that any dispute, controversy, or claim arising in relation
        to this
        Agreement, including with regard to its validity, invalidity, breach,
        enforcement or termination, shall be resolved by binding arbitration in London,
        England, in accordance with the rules of arbitration which are in force in
        the
        United Kingdom on the date when the notice of arbitration is submitted. The
        arbitrability of such dispute, claim or controversy shall also be determined
        in
        such arbitration. Such arbitration proceeding shall be conducted in the English
        language before one (1) arbitrator agreed to by the parties. Both the foregoing
        agreement of the parties to arbitrate any and all such disputes, claims and
        controversies, and the results, determinations, findings, judgments and/or
        awards rendered through any such arbitration shall be final and binding on
        the
        parties hereto and may be specifically enforced by legal
        proceedings.

       

      6.11. Survival.
        

       

      The
        representations, warranties, agreements and covenants contained herein shall
        survive the Closing and the delivery of the Securities.

       

      6.12. Execution

       

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

       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

       

      6.13. Severability

       

      If
        any
        provision of this Agreement is held to be invalid or unenforceable in any
        respect, the validity and enforceability of the remaining terms and provisions
        of this Agreement shall not in any way be affected or impaired thereby and
        the
        parties will attempt to agree upon a valid and enforceable provision that
        is a
        reasonable substitute therefor, and upon so agreeing, shall incorporate such
        substitute provision in this Agreement.

       

      6.14. Rescission
        and Withdrawal Right

       

      Notwithstanding
        anything to the contrary contained in (and without limiting any similar
        provisions of) the Transaction Documents, whenever the Investor exercises
        a
        right, election, demand or option under a Transaction Document and the Company
        does not timely perform its related obligations within the periods therein
        provided, then such Investor may rescind or withdraw, in its sole discretion
        from time to time upon written notice to the Company, any relevant notice,
        demand or election in whole or in part without prejudice to its future actions
        and rights.

       

      6.15. 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, or in lieu of and substitution
        therefor, a new certificate or instrument, but only upon receipt of evidence
        reasonably satisfactory to the Company of such loss, theft or destruction
        and
        customary and reasonable indemnity, if requested. The applicants for a new
        certificate or instrument under such circumstances shall also pay any reasonable
        third-party costs associated with the issuance of such replacement Securities.
        If a replacement certificate or instrument evidencing any Securities is
        requested due to a mutilation thereof, the Company may require delivery of
        such
        mutilated certificate or instrument as a condition precedent to any issuance
        of
        a replacement.

       

      6.16. Remedies

       

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

       

      6.17. Payment
        Set Aside

       

      To
        the
        extent that the Company makes a payment or payments to the Investor pursuant
        to
        any Transaction Document or an Investor 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.

       

      6.18. Limitation
        of Liability

       

      Notwithstanding
        anything herein to the contrary, the Company acknowledges and agrees that
        the
        liability of the Investor arising directly or indirectly, under any Transaction
        Document of any and every nature whatsoever shall be satisfied solely out
        of the
        assets of such Investor, and that no trustee, officer, other investment vehicle
        or any other Affiliate of such Investor or any investor, shareholder or holder
        of shares of beneficial interest of such a Investor shall be personally liable
        for any liabilities of such Investor.

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK

      SIGNATURE
        PAGES FOLLOW]

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

      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.

       

      
        	 	 	 
	 	ORGANIC TO GO FOOD
                CORPORATION
	 
 	 
 	 
 
	
              	By:  	/s/
                Jason Brown
	 	
                
Name:
                Jason Brown 
	 	Title:
                Chairman and Chief Executive Officer 

      

       

       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK

      SIGNATURE
        PAGE FOR THE INVESTOR FOLLOWS]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      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.

      
         

        
          	 	 	 
	 	W.HEALTH L.P.
	 	 
	 	 

                  

                
	 
 	 
 	 
 
	
                	By:  	/s/ 
Dr.
                  Gunnar Weikert
	 	
                  

                  Dr.
                    Gunnar Weikert

                  Director,
                    Inventages Whealth Management, Inc.,

                  as
                    General Partner of W.Health
                    L.P.

                

        

      

       

      
        	 	 	 
	 
 	 
 	 
 
	
              	By:  	/s/
                Dr.
                Wolfgang Reichenberger
	 	
                

                Dr.
                  Wolfgang Reichenberger

                Director,
                  Inventages Whealth Management, Inc.,

                as
                  General Partner of W.Health
                  L.P.

              

      

    

     

     

    
      
        
        

      

      
        2

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