Common use of Purchase Price and Closings Clause in Contracts

Purchase Price and Closings. Subject to the terms and conditions of this Agreement, the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Table of Contents Agreement, the Purchasers, severally but not jointly, agree to purchase the Notes and the Warrants for an aggregate purchase price of up to four million two hundred fifty thousand dollars ($4,250,000) (the “Purchase Price”). The initial closing under this Agreement (the “Initial Closing”) shall take place on or about July 2, 2009 (the “Initial Closing Date”). Following the Initial Closing and until the earlier of (i) October 31, 2009 or (ii) such time that the Company shall have issued Notes totaling $4,250,000 in principal, the Company shall have the right, subject to the terms and conditions hereof, to issue Notes and Warrants to existing Purchasers and additional persons who the Company shall be authorized to add to and include in Exhibit A hereto, in such amounts as the Company shall determine. Any additional person added to Exhibit A hereto, shall be deemed a “Purchaser” for all purposes of this Agreement. The subsequent closings under this Agreement shall take place upon the mutual agreement of the Company and the additional Purchasers participating in such Subsequent Closings (the “Subsequent Closings,” and the date of each such Subsequent Closing, a “Subsequent Closing Date”). Each of the Initial Closing and the Subsequent Closing are sometimes referred to in this Agreement as a “Closing” and the date of any such closing, the “Closing Date”. The Initial Closing under this Agreement shall take place at the offices of Vision Opportunity Master Fund, LLP, 00 Xxxx 00xx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000 at 10:00 a.m., New York time; provided, that all of the conditions set forth in Article IV hereof and applicable to the Initial Closing shall have been fulfilled or waived in accordance herewith. In the event that the Company does not receive at least two million seven hundred fifty thousand dollars ($2,750,000) in gross proceeds from the Initial Closing on or prior to July 6, 2009, the Company may terminate this Agreement, the Notes, the Warrants, the Warrant Amendments and the Security Agreement upon written notice to the Purchasers. Subject to the terms and conditions of this Agreement, at each Closing the Company shall deliver or cause to be delivered to each Purchaser (x) its Notes for the principal amount set forth opposite the name of such Purchaser on Exhibit A hereto, (y) its Warrants to purchase such number of shares of Common Stock determined in accordance with the formula set forth herein and (z) any other documents required to be delivered pursuant to Article IV hereof. At each Closing, the applicable Purchasers shall deliver the applicable Purchase Price by wire transfer to the Company. In addition, the parties acknowledge that up to thirty-five thousand ($35,000) dollars of the Purchase Price funded on the Initial Closing Date shall be deducted from the total amount otherwise payable to the Company, and paid over to counsel for the Purchasers in payment of reasonable legal fees and out of pocket expenses of the Purchasers’ counsel. The Company hereby grants to each Purchaser in the Initial Closing the right of first offer to purchase Notes and Warrants which the Company may propose to sell and issue from September 1, 2009 until October 31, 2009. In the event the Company proposes to undertake an issuance of Notes and Warrants during the time period between September 1, 2009 and October 31, 2009, it shall give each Purchaser in the Initial Closing written notice of its intention, describing the amount of such Notes and Warrants and the terms upon which the Company proposes to issue the same. Each such Purchaser shall have ten (10) days from the date of receipt of any such notice to agree to purchase such Notes and Warrants upon the terms specified in such notice by giving written notice to the Company and stating therein the quantity of Notes and Warrants to be purchased. In the event that all of such Notes and Warrants are not elected to be purchased by the Purchasers in the Initial Closing within such ten (10) day period, the Company shall have until October 31, 2009 to sell such Notes and Warrants not elected to be purchased upon the terms no more favorable to the purchasers than specified in the Company’s notice. Table of Contents ARTICLE II

Purchase Price and Closings. Subject to the terms and conditions of this Agreementhereof, the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Table of Contents Agreement, the Purchasers, severally but not jointly, agree to purchase the Notes Preferred Shares and the Warrants for an aggregate purchase price of up to four million two hundred fifty thousand dollars One Million Five Hundred Thousand Dollars ($4,250,0001,500,000) (the “"Purchase Price”"). The Preferred Shares and Warrants shall be sold and funded in two separate closings (each, a "Closing"). The initial closing Closing under this Agreement (the “"Initial Closing”") shall be funded in the amount of One Million Dollars ($1,000,000) and shall take place on or about July 2August __, 2009 2006 (the “"Initial Closing Date”"). Following the Initial The second Closing and until the earlier of (i) October 31, 2009 or (ii) such time that the Company shall have issued Notes totaling $4,250,000 in principal, the Company shall have the right, subject to the terms and conditions hereof, to issue Notes and Warrants to existing Purchasers and additional persons who the Company shall be authorized to add to and include in Exhibit A hereto, in such amounts as the Company shall determine. Any additional person added to Exhibit A hereto, shall be deemed a “Purchaser” for all purposes of this Agreement. The subsequent closings under this Agreement (the "Second Closing") shall be funded in the amount of Five Hundred Thousand Dollars ($500,000) and shall take place upon the mutual agreement earlier to occur of (A) a date that is within ten (10) business days following the date that the Company publicly announces that it has received an order of at least $2,000,000 which requires at least $200,000 of material to complete (the "Second Closing Milestone") and (B) the date that is no later than five (5) business days following the date that the Securities and Exchange Commission (the "Commission") declares the registration statement (the "Registration Statement") providing for the resale of the Company Conversion Shares and the additional Purchasers participating in such Subsequent Closings Warrant Shares effective (the “Subsequent Closings,” "Second Closing Date"). If the Second Closing Milestone is not satisfied by a date that is within five (5) business days after the date that the Commission declares the Registration Statement effective, there shall be no Second Closing. The Initial Closing Date and the date of each such Subsequent Closing, a “Subsequent Second Closing Date”). Each of the Initial Closing and the Subsequent Closing Date are sometimes referred to in this Agreement as a “Closing” and the date of any such closing, the “"Closing Date”". The Initial Each Closing under this Agreement shall take place at the offices of Vision Opportunity Master Fund, Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, 00 Xxxx 00xx Xxxxxx, 0xx Xxxxx0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX Xxx Xxxx 00000 at 10:00 a.m., New York time; provided, that all of the conditions set forth in Article IV hereof and applicable to the Initial Closing shall have been fulfilled or waived in accordance herewith. In the event that the Company does not receive at least two million seven hundred fifty thousand dollars ($2,750,000) in gross proceeds from the Initial Closing on or prior to July 6, 2009, the Company may terminate this Agreement, the Notes, the Warrants, the Warrant Amendments and the Security Agreement upon written notice to the Purchasers. Subject to the terms and conditions of this Agreement, at each Closing the Company shall deliver or cause to be delivered to each Purchaser (x) its Notes a certificate for the principal amount number of Preferred Shares set forth opposite the name of such Purchaser on Exhibit A hereto, (y) its Warrants to purchase such number of shares of Common Stock determined in accordance with the formula as is set forth herein opposite the name of such Purchaser on Exhibit A attached hereto and (z) any other documents required to be delivered pursuant to Article IV hereof. At each Closing, the applicable Purchasers each Purchaser shall deliver the applicable its Purchase Price by wire transfer to an account designated by the Company. In addition, the parties acknowledge that up to thirty-five thousand ($35,000) dollars of the Purchase Price funded on the Initial Closing Date shall be deducted from the total amount otherwise payable to the Company, Representations and paid over to counsel for the Purchasers in payment of reasonable legal fees and out of pocket expenses of the Purchasers’ counsel. The Company hereby grants to each Purchaser in the Initial Closing the right of first offer to purchase Notes and Warrants which the Company may propose to sell and issue from September 1, 2009 until October 31, 2009. In the event the Company proposes to undertake an issuance of Notes and Warrants during the time period between September 1, 2009 and October 31, 2009, it shall give each Purchaser in the Initial Closing written notice of its intention, describing the amount of such Notes and Warrants and the terms upon which the Company proposes to issue the same. Each such Purchaser shall have ten (10) days from the date of receipt of any such notice to agree to purchase such Notes and Warrants upon the terms specified in such notice by giving written notice to the Company and stating therein the quantity of Notes and Warrants to be purchased. In the event that all of such Notes and Warrants are not elected to be purchased by the Purchasers in the Initial Closing within such ten (10) day period, the Company shall have until October 31, 2009 to sell such Notes and Warrants not elected to be purchased upon the terms no more favorable to the purchasers than specified in the Company’s notice. Table of Contents ARTICLE IIWarranties

Purchase Price and Closings. Subject to In consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Agreement, the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Table of Contents Agreement, the Purchasers, severally but not jointly, agree to purchase the Notes number of Shares and the Warrants for an aggregate purchase price of up to four million set forth opposite their respective names on Exhibit A. The Shares and Warrants shall be sold and funded in two hundred fifty thousand dollars separate closings ($4,250,000) (the each, a “Purchase PriceClosing”). The initial closing Closing under this Agreement (the “Initial Closing”) shall take place on or about July 2June 26, 2009 2008 (the “Initial Closing Date”) and shall be funded in the amount of Three Million Dollars ($3,000,000). Following the Initial The second Closing and until the earlier of (i) October 31, 2009 or (ii) such time that the Company shall have issued Notes totaling $4,250,000 in principal, the Company shall have the right, subject to the terms and conditions hereof, to issue Notes and Warrants to existing Purchasers and additional persons who the Company shall be authorized to add to and include in Exhibit A hereto, in such amounts as the Company shall determine. Any additional person added to Exhibit A hereto, shall be deemed a “Purchaser” for all purposes of this Agreement. The subsequent closings under this Agreement (the “Second Closing”) shall take place upon the mutual agreement of the Company and the additional Purchasers participating any subsequent Purchaser, but in such Subsequent Closings no event later than July 26, 2008 (the “Subsequent Closings,” and the date of each such Subsequent Closing, a “Subsequent Second Closing Date”), and shall be funded in the amount of One Million Dollars ($1,000,000). Each subsequent Purchaser shall execute this Agreement and the other applicable Transaction Documents (as hereafter defined) in the capacity of a Purchaser and Exhibit A shall be supplemented to reflect the sale of such additional Shares and Warrants. The Initial Closing Date and the Subsequent Second Closing Date are sometimes referred to in this Agreement as a “Closing” and the date of any such closing, the “Closing Date”. The Initial Each Closing under this Agreement shall take place at the offices of Vision Opportunity Master Fund, Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, 00 Xxxx 00xx Xxxxxx, 0xx Xxxxx0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000 at 10:00 a.m.Xxx Xxxx 00000, New York time; provided, that all of the conditions set forth in Article IV hereof and applicable to the Initial such Closing shall have been fulfilled or waived in accordance herewith. In the event that At each Closing and upon receipt by the Company does not receive at least two million seven hundred fifty thousand dollars of the appropriate purchase price from each Purchaser ($2,750,000) in gross proceeds from the Initial Closing on or prior to July 6i.e., 2009, the Company may terminate this Agreement, the Notes, the Warrants, the Warrant Amendments and the Security Agreement upon written notice a purchase price equal to the Purchasers. Subject number of Shares to be purchased by such Purchaser multiplied by the terms and conditions of this AgreementPer Share Purchase Price), at each Closing the Company shall deliver or cause to be delivered to each such Purchaser (x) its Notes a certificate for the principal amount number of Shares set forth opposite the name of such Purchaser on Exhibit A hereto, (y) its Warrants a Warrant to purchase such number of shares of Common Stock determined in accordance with the formula as is set forth herein opposite the name of such Purchaser on Exhibit A attached hereto and (z) any other documents required to be delivered pursuant to Article IV hereof. At each Closing, the applicable Purchasers Each Purchaser shall deliver each of the applicable documents required to be delivered by it pursuant to Article IV hereof as well as its portion of the Purchase Price by wire transfer to an escrow account designated by the Company. In addition, the parties acknowledge that up to thirty-five thousand ($35,000) dollars of the Purchase Price funded on the Initial Closing Date shall be deducted from the total amount otherwise payable to the Company, and paid over to counsel for the Purchasers in payment of reasonable legal fees and out of pocket expenses of the Purchasers’ counsel. The Company hereby grants escrow agent prior to each Purchaser in the Initial Closing the right of first offer to purchase Notes and Warrants which the Company may propose to sell and issue from September 1, 2009 until October 31, 2009. In the event the Company proposes to undertake an issuance of Notes and Warrants during the time period between September 1, 2009 and October 31, 2009, it shall give each Purchaser in the Initial Closing written notice of its intention, describing the amount of such Notes and Warrants and the terms upon which the Company proposes to issue the same. Each such Purchaser shall have ten (10) days from the date of receipt of any such notice to agree to purchase such Notes and Warrants upon the terms specified in such notice by giving written notice to the Company and stating therein the quantity of Notes and Warrants to be purchased. In the event that all of such Notes and Warrants are not elected to be purchased by the Purchasers in the Initial Closing within such ten (10) day period, the Company shall have until October 31, 2009 to sell such Notes and Warrants not elected to be purchased upon the terms no more favorable to the purchasers than specified in the Company’s notice. Table of Contents ARTICLE IIClosing.

Purchase Price and Closings. Subject to the terms and conditions of this Agreementhereof, the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Table of Contents Agreement, the Purchasers, severally but not jointly, agree to purchase the Notes Preferred Shares and the Warrants for an aggregate purchase price of up to four million two hundred fifty thousand dollars ($4,250,000) 10,000,000 (the “Purchase Price”). The initial closing under this Agreement (of the “Initial Closing”) shall take place on or about July 2, 2009 (purchase and sale of the “Initial Closing Date”). Following Preferred Shares and the Initial Closing and until Warrants to be acquired by the earlier of (i) October 31, 2009 or (ii) such time that Purchasers from the Company shall have issued Notes totaling $4,250,000 in principal, the Company shall have the right, subject to the terms and conditions hereof, to issue Notes and Warrants to existing Purchasers and additional persons who the Company shall be authorized to add to and include in Exhibit A hereto, in such amounts as the Company shall determine. Any additional person added to Exhibit A hereto, shall be deemed a “Purchaser” for all purposes of this Agreement. The subsequent closings under this Agreement shall take place upon the mutual agreement of the Company and the additional Purchasers participating in such Subsequent Closings (the “Subsequent Closings,” and the date of each such Subsequent Closing, a “Subsequent Closing Date”). Each of the Initial Closing and the Subsequent Closing are sometimes referred to in this Agreement as a “Closing” and the date of any such closing, the “Closing Date”. The Initial Closing under this Agreement shall take place at the offices of Vision Opportunity Master FundLeser, LLPHunter, 00 Xxxx 00xx Taubman & Taubman, 10 Xxxxx Xxxxxx, 0xx XxxxxXxxxx 00, Xxx Xxxx, XX Xxx Xxxx 00000 (the “Closing”) at 10:00 a.m., New York timetime (i) on or before October 31, 2007; provided, that all of the conditions set forth in Article IV hereof and applicable to the Initial Closing shall have been fulfilled or waived in accordance herewith. In , or (ii) at such other time and place or on such date as the event that the Company does not receive at least two million seven hundred fifty thousand dollars ($2,750,000) in gross proceeds from the Initial Closing on or prior to July 6, 2009, Purchasers and the Company may terminate this Agreement, agree upon in writing signed by the Notes, the Warrants, the Warrant Amendments Company and the Security Agreement upon written notice to Purchasers (the Purchasers"Closing Date"). Subject to the terms and conditions of this Agreement, at each the Closing the Company shall deliver or cause to be delivered to each Purchaser (x) its Notes a certificate for the principal amount number of Preferred Shares set forth opposite the name of such Purchaser on Exhibit A hereto, (y) its Warrants to purchase such number of shares of Common Stock determined in accordance with the formula as is set forth herein opposite the name of such Purchaser on Exhibit A attached hereto and (z) any other documents required to be delivered pursuant to Article IV hereof. At each ClosingAs of the date hereof, the applicable Purchasers shall deliver the applicable Purchase Price has been deposited into an escrow account with Leser, Hunter, Taubman & Taubman, pursuant to the Escrow Agreement, dated September 17, 2007, by wire transfer and among Xi’an Baorun Industrial Development Co., Ltd., Vision Opportunity Master Funds, LP and Leser, Hunter, Taubman & Taubman, as escrow agent. On the Closing Date, the parties to the Escrow Agreement shall issue instructions to the Escrow Agent Shall to disburse such funds to the Company. In addition, the parties acknowledge that up to thirty-five thousand ($35,000) dollars of the Purchase Price funded on the Initial Closing Date shall be deducted from the total amount otherwise payable to the Company, and paid over to counsel for the Purchasers in payment of reasonable legal fees and out of pocket expenses of the Purchasers’ counsel. The Company hereby grants to each Purchaser in the Initial Closing the right of first offer to purchase Notes and Warrants which the Company may propose to sell and issue from September 1, 2009 until October 31, 2009. In the event the Company proposes to undertake an issuance of Notes and Warrants during the time period between September 1, 2009 and October 31, 2009, it shall give each Purchaser in the Initial Closing written notice of its intention, describing the amount of such Notes and Warrants and the terms upon which the Company proposes to issue the same. Each such Purchaser shall have ten (10) days from the date of receipt of any such notice to agree to purchase such Notes and Warrants upon the terms specified in such notice by giving written notice to the Company and stating therein the quantity of Notes and Warrants to be purchased. In the event that all of such Notes and Warrants are not elected to be purchased by the Purchasers in the Initial Closing within such ten (10) day period, the Company shall have until October 31, 2009 to sell such Notes and Warrants not elected to be purchased upon the terms no more favorable to the purchasers than specified in the Company’s notice. Table of Contents ARTICLE II.

Purchase Price and Closings. Subject to In consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Agreement, the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Table of Contents Agreement, the Purchasers, severally but not jointly, agree to purchase the Notes numbers of Preferred Shares and Warrants set forth opposite their respective names on Exhibit A. The minimum purchase price paid at the Initial Closing (as defined below) will be $3,000,000 (excluding any Purchase Price paid by cancellation of Series A Convertible Preferred Stock) and the Warrants for an maximum aggregate purchase price paid at all closings (including by cancellation of up to four million two hundred fifty thousand dollars Series A Convertible Preferred Stock) will be $19,800,000 ($4,250,000) (the aggregate of all such purchase prices paid at any Closing, the “Purchase Price”). The Shares shall be sold and funded in separate closings (each, a “Closing”), in each case pursuant to terms of this Agreement and provided that each Purchaser executes a signature page hereto and to each of the other Transaction Documents (as defined in Section 2.1(b) hereof) to which the Purchasers are a party, and thereby agrees to be bound by and subject to the terms and conditions hereof and thereof. The initial closing Closing under this Agreement (the “Initial Closing”) shall take place on or about July 2September 24, 2009 2007, or as soon thereafter as the Company has identified Purchasers to purchase at least 3,000 Preferred Shares and all other conditions to closing have been satisfied or waived (the “Initial Closing Date”). Following the Initial Each subsequent Closing and until the earlier of (i) October 31, 2009 or (ii) such time that the Company shall have issued Notes totaling $4,250,000 in principal, the Company shall have the right, subject to the terms and conditions hereof, to issue Notes and Warrants to existing Purchasers and additional persons who the Company shall be authorized to add to and include in Exhibit A hereto, in such amounts as the Company shall determine. Any additional person added to Exhibit A hereto, shall be deemed a “Purchaser” for all purposes of this Agreement. The subsequent closings under this Agreement (each, a “Subsequent Closing”) shall take place upon the mutual agreement of the Company and the additional Purchasers participating in such Subsequent Closings Closing, but in no event later than October 26, 2007 (the “Subsequent Closings,” and the date of each such Subsequent Closingeach, a “Subsequent Closing Date”). Each of the The Initial Closing Date and the each Subsequent Closing Date are sometimes referred to in this Agreement as a “Closing” and the date of any such closing, the “Closing Date”. The Initial Each Closing under this Agreement shall take place at the offices of Vision Opportunity Master Fund, Sadis & Xxxxxxxx LLP, 00 Xxxx 00xx 000 Xxxxx Xxxxxx, 0xx 00xx Xxxxx, Xxx Xxxx, XX Xxx Xxxx 00000 at 10:00 a.m., New York time; provided, that all of the conditions set forth in Article IV hereof or at such other time and applicable to the Initial Closing shall have been fulfilled or waived in accordance herewith. In the event that the Company does not receive at least two million seven hundred fifty thousand dollars ($2,750,000) in gross proceeds from the Initial Closing on or prior to July 6, 2009, the Company place as may terminate this Agreement, the Notes, the Warrants, the Warrant Amendments and the Security Agreement upon written notice to the Purchasersbe mutually agreed upon. Subject to the terms and conditions of this Agreement, at each Closing the Company shall deliver or cause to be delivered to each Purchaser participating in such Closing (x) its Notes a certificate for the principal amount number of Shares set forth opposite the name of such Purchaser on Exhibit A hereto, hereto and (y) its Warrants to purchase such number of shares of Common Stock determined in accordance with the formula set forth herein and (z) any other documents required to be delivered pursuant to Article IV hereof. At each Closing, the applicable Purchasers each Purchaser participating in such Closing shall deliver its portion of the applicable Purchase Price by wire transfer to the Company. In additionNotwithstanding the foregoing, in lieu of paying in cash, the parties acknowledge that up to thirty-five thousand holders of the Company’s Series A Convertible Preferred Stock and associated warrants ($35,000the “Series A Holders”) dollars shall pay their respective portion of the Purchase Price funded hereunder through the cancellation of such holders’ Series A Convertible Preferred Stock (and associated warrants) in the respective individual amounts set forth on Exhibit A hereto; provided, however, that such payments shall not be considered for purposes of determining whether the Initial Closing Date minimum purchase price obligation has been satisfied. The portion of the Purchase Price to be paid by the Series A Holders by virtue of the cancellation of such Purchasers’ Series A Convertible Preferred Stock (and associated warrants) shall be deducted from the total amount otherwise payable to original cash purchase price paid by such Purchasers under the CompanySecurities Purchase Agreement dated as of November 27, and paid over to counsel for the Purchasers in payment of reasonable legal fees and out of pocket expenses of the Purchasers’ counsel. The Company hereby grants to each Purchaser in the Initial Closing the right of first offer to purchase Notes and Warrants which the Company may propose to sell and issue from September 1, 2009 until October 31, 2009. In the event the Company proposes to undertake an issuance of Notes and Warrants during the time period between September 1, 2009 and October 31, 2009, it shall give each Purchaser in the Initial Closing written notice of its intention, describing the amount of such Notes and Warrants and the terms upon which the Company proposes to issue the same. Each such Purchaser shall have ten (10) days from the date of receipt of 2006 plus any such notice to agree to purchase such Notes and Warrants upon the terms specified in such notice by giving written notice to the Company and stating therein the quantity of Notes and Warrants to be purchased. In the event that all of such Notes and Warrants are not elected to be purchased by the Purchasers in the Initial Closing within such ten (10) day period, the Company shall have until October 31, 2009 to sell such Notes and Warrants not elected to be purchased upon the terms no more favorable to the purchasers than specified in the Company’s notice. Table of Contents ARTICLE IIunpaid dividends accrued thereunder.

Purchase Price and Closings. Subject to The consummation of the terms and conditions transactions contemplated hereby in respect of this Agreement, the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Table of Contents Agreement, the Purchasers, severally but not jointly, agree to purchase the Notes and to be issued in the Warrants for an aggregate purchase price principal amount of up to four million two hundred fifty thousand dollars the Tranche A Purchase Price ($4,250,000as defined in Exhibit A hereto) (the “Purchase Price”). The initial closing under this Agreement (the “Initial Tranche A Closing”) shall take place on or about July 2the first business day following the Company’s receipt of the Tranche A Purchase Price in full in immediately available funds pursuant to the escrow agreement, 2009 in substantially the form attached hereto as Exhibit C (the “Initial Closing DatePRC Escrow Agreement”). Following the Initial Closing , it being understood, acknowledged and until the earlier of (i) October 31, 2009 or (ii) such time agreed that the Company Investors shall have issued Notes totaling $4,250,000 in principal, pay such Tranche A Purchase Price to the Company shall have no later than December 18, 2009. The consummation of the right, subject transactions contemplated hereby in respect of the Notes to be issued in the terms and conditions hereof, to issue Notes and Warrants to existing Purchasers and additional persons who principal amount of the Company shall be authorized to add to and include Tranche B Purchase Price (as defined in Exhibit A hereto) (the “Tranche B Closing” and, together with the Tranche A Closing, the “Closings” and, each, a “Closing”) shall take place on the first business day following the Company’s receipt of the Tranche B Purchase Price in full in immediately available funds pursuant to the escrow agreement, in substantially the form attached hereto as Exhibit D (the “U.S. Escrow Agreement”) and, together with this Agreement, the Notes and the PRC Escrow Agreement, the “Transaction Documents”), it being understood, acknowledged and agreed that the Investors shall pay such amounts as Tranche B Purchase Price to the Company shall determineno later than the first business day following the completion of the audit of the Company’s financial statements (the “Audit Completion”) in connection with the Share Exchange (as defined below). Any additional person added to Exhibit A heretoFor all purposes, each Closing shall be deemed a “Purchaser” for all purposes of this Agreement. The subsequent closings under this Agreement shall take place upon the mutual agreement of the Company and the additional Purchasers participating in such Subsequent Closings (the “Subsequent Closings,” and the date of each such Subsequent Closing, a “Subsequent Closing Date”). Each of the Initial Closing and the Subsequent Closing are sometimes referred to in this Agreement as a “Closing” and the date of any such closing, the “Closing Date”. The Initial Closing under this Agreement shall take place at the offices of Vision Opportunity Master Fund, LLP, 00 Xxxx 00xx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000 have occurred at 10:00 a.m., New York City time; provided, that all of the conditions set forth in Article IV hereof or such later date and applicable to the Initial Closing shall have been fulfilled or waived in accordance herewith. In the event that the Company does not receive at least two million seven hundred fifty thousand dollars ($2,750,000) in gross proceeds from the Initial Closing on or prior to July 6, 2009, the Company time as may terminate this Agreement, the Notes, the Warrants, the Warrant Amendments and the Security Agreement be mutually agreed upon written notice to the Purchasers. Subject to the terms and conditions of this Agreement, at each Closing the Company shall deliver or cause to be delivered to each Purchaser (x) its Notes for the principal amount set forth opposite the name of such Purchaser on Exhibit A hereto, (y) its Warrants to purchase such number of shares of Common Stock determined in accordance with the formula set forth herein and (z) any other documents required to be delivered pursuant to Article IV hereof. At each Closing, the applicable Purchasers shall deliver the applicable Purchase Price by wire transfer to the Company. In addition, the parties acknowledge that up to thirty-five thousand ($35,000) dollars of the Purchase Price funded on the Initial Closing Date shall be deducted from the total amount otherwise payable to the Company, and paid over to counsel for the Purchasers in payment of reasonable legal fees and out of pocket expenses of the Purchasers’ counsel. The Company hereby grants to each Purchaser in the Initial Closing the right of first offer to purchase Notes and Warrants which the Company may propose to sell and issue from September 1, 2009 until October 31, 2009. In the event the Company proposes to undertake an issuance of Notes and Warrants during the time period between September 1, 2009 and October 31, 2009, it shall give each Purchaser in the Initial Closing written notice of its intention, describing the amount of such Notes and Warrants and the terms upon which the Company proposes to issue the same. Each such Purchaser shall have ten (10) days from the date of receipt of any such notice to agree to purchase such Notes and Warrants upon the terms specified in such notice by giving written notice to the Company and stating therein Investor, at the quantity offices of Notes and Warrants to be purchased. In the event that all of such Notes and Warrants are not elected to be purchased by the Purchasers in the Initial Closing within such ten (10) day periodXxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, the Company shall have until October 310000 Xxxxxx xx xxx Xxxxxxxx, 2009 to sell such Notes and Warrants not elected to be purchased upon the terms no more favorable to the purchasers than specified in the Company’s notice. Table of Contents ARTICLE IIXxx Xxxx, Xxx Xxxx 00000.

Purchase Price and Closings. Subject to the terms and conditions of this Agreementhereof, the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Table of Contents Agreement, the Purchasers, severally but not jointly, agree to purchase the Notes and the Warrants for an aggregate purchase price of up to four million two hundred fifty thousand dollars ($4,250,000) 3,622,142.86 (the “"Purchase Price”"). The Notes and Warrants shall be sold and funded in two separate closings (each, a "Closing"). The initial closing Closing under this Agreement (the “"Initial Closing”") shall be funded in the amount of $2,112,916.67 and shall take place on or about July 2August 11, 2009 2006 (the “"Initial Closing Date”"). Following the Initial The second Closing and until the earlier of (i) October 31, 2009 or (ii) such time that the Company shall have issued Notes totaling $4,250,000 in principal, the Company shall have the right, subject to the terms and conditions hereof, to issue Notes and Warrants to existing Purchasers and additional persons who the Company shall be authorized to add to and include in Exhibit A hereto, in such amounts as the Company shall determine. Any additional person added to Exhibit A hereto, shall be deemed a “Purchaser” for all purposes of this Agreement. The subsequent closings under this Agreement (the "Second Closing") shall be funded in the amount of $1,509,226.19 and shall take place upon no later than five (5) business days following the mutual agreement date that the Securities and Exchange Commission (the "Commission") declares the registration statement (the "Registration Statement") providing for the resale of the Company Conversion Shares and the additional Purchasers participating in such Subsequent Closings Warrant Shares effective (the “Subsequent Closings,” "Second Closing Date"). The Initial Closing Date and the date of each such Subsequent Closing, a “Subsequent Second Closing Date”). Each of the Initial Closing and the Subsequent Closing Date are sometimes referred to in this Agreement as a “Closing” and the date of any such closing, the “"Closing Date”". The Initial Each Closing under this Agreement shall take place at the offices of Vision Opportunity Master FundKramer Levin Naftalis & Frankxx XXX, LLP, 00 Xxxx 00xx Xxxxxx, 0xx Xxxxx0000 Xxxxxx xf txx Xxxxicas, Xxx Xxxx, XX Xxx Xxxx 00000 at 10:00 a.m., New York timexx 00:00 x.x. Xxx Xxxx xxxx; provided, that all of the conditions set forth in Article IV hereof and applicable to the Initial such Closing shall have been fulfilled or waived in accordance herewith. In the event that the Company does not receive at least two million seven hundred fifty thousand dollars ($2,750,000) in gross proceeds from the Initial Closing on or prior to July 6, 2009, the Company may terminate this Agreement, the Notes, the Warrants, the Warrant Amendments and the Security Agreement upon written notice to the Purchasers. Subject to the terms and conditions of this Agreement, at each Closing the Company shall deliver or cause to be delivered to each Purchaser (x) its Notes for the principal amount set forth opposite the name of such Purchaser on Exhibit A hereto, (y) its Warrants to purchase such number of shares of Common Stock determined in accordance with the formula as is set forth herein opposite the name of such Purchaser on Exhibit A attached hereto and (z) any other documents required to be delivered pursuant to Article IV hereof. At each Closing, the applicable Purchasers each Purchaser shall deliver the applicable its Purchase Price by wire transfer to an account designated by the Company. In addition, the parties acknowledge that up to thirty-five thousand ($35,000) dollars of the Purchase Price funded on the Initial Closing Date shall be deducted from the total amount otherwise payable to the Company, and paid over to counsel for the Purchasers in payment of reasonable legal fees and out of pocket expenses of the Purchasers’ counsel. The Company hereby grants to each Purchaser in the Initial Closing the right of first offer to purchase Notes and Warrants which the Company may propose to sell and issue from September 1, 2009 until October 31, 2009. In the event the Company proposes to undertake an issuance of Notes and Warrants during the time period between September 1, 2009 and October 31, 2009, it shall give each Purchaser in the Initial Closing written notice of its intention, describing the amount of such Notes and Warrants and the terms upon which the Company proposes to issue the same. Each such Purchaser shall have ten (10) days from the date of receipt of any such notice to agree to purchase such Notes and Warrants upon the terms specified in such notice by giving written notice to the Company and stating therein the quantity of Notes and Warrants to be purchased. In the event that all of such Notes and Warrants are not elected to be purchased by the Purchasers in the Initial Closing within such ten (10) day period, the Company shall have until October 31, 2009 to sell such Notes and Warrants not elected to be purchased upon the terms no more favorable to the purchasers than specified in the Company’s notice. Table of Contents ARTICLE II.

Purchase Price and Closings. Subject to the terms and conditions of this Agreementhereof, the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Table of Contents Agreement, the Purchasers, severally but not jointly, agree to purchase the Notes and the Warrants Units for an aggregate purchase price of up to four million two hundred fifty thousand dollars ($4,250,000) 3.11 per Unit (the “Purchase Price”). The initial closing under this Agreement (of the “Initial Closing”) shall take place on or about July 2, 2009 (purchase and sale of the “Initial Closing Date”). Following Units to be acquired by the Initial Closing and until the earlier of (i) October 31, 2009 or (ii) such time that Purchasers from the Company shall have issued Notes totaling $4,250,000 in principal, the Company shall have the right, subject to the terms and conditions hereof, to issue Notes and Warrants to existing Purchasers and additional persons who the Company shall be authorized to add to and include in Exhibit A hereto, in such amounts as the Company shall determine. Any additional person added to Exhibit A hereto, shall be deemed a “Purchaser” for all purposes of this Agreement. The subsequent closings under this Agreement shall take place upon the mutual agreement of the Company and the additional Purchasers participating in such Subsequent Closings (the “Subsequent Closings,” and the date of each such Subsequent Closing, a “Subsequent Closing Date”). Each of the Initial Closing and the Subsequent Closing are sometimes referred to in this Agreement as a “Closing” and the date of any such closing, the “Closing Date”. The Initial Closing under this Agreement shall take place at the offices of Vision Opportunity Master FundGuzov Ofsink, LLPLLC , 00 Xxxx 00xx 000 Xxxxxxx Xxxxxx, 0xx 00xx Xxxxx, Xxx Xxxx, XX 00000 (the “Initial Closing”) at 10:00 a.m.2:00 p.m., New York timetime on such date as the Purchasers and the Company may agree upon; provided, that all of the conditions set forth in Article IV hereof and applicable to the Initial Closing shall have been fulfilled or waived in accordance herewithherewith (the “Initial Closing Date”). In The Purchasers and the event Company acknowledge and agree that the Company does not receive may consummate the sale of additional Units to Purchasers or other purchasers, on the terms set forth in this Agreement and the other Transaction Documents (as defined in Section 2.1(b) hereof), at least two million seven hundred fifty thousand dollars a closing or additional closings ($2,750,000) in gross proceeds from each, an “Additional Closing”; the Initial Closing on or prior and any Additional Closing are also sometimes referred to July 6herein as a “Closing”), 2009all of which Additional Closings shall occur not later than June 13, 2008 (the Company may terminate this Agreement, the Notes, the Warrants, the Warrant Amendments date of any Additional Closing is hereinafter referred to as an Additional Closing Date” and the Security Agreement upon written notice Initial Closing Date and any Additional Closing Date are also sometimes referred to the Purchasersherein as a “Closing Date”). Subject to the terms and conditions of this Agreement, at each Closing the Company shall deliver or cause to be delivered to each Purchaser (x) its Notes a certificate for the principal amount number of Preferred Shares set forth opposite the name of such Purchaser on Exhibit A heretohereto (or as such Exhibit A may be amended to add additional purchasers at an Additional Closing), (y) its Warrants to purchase such number of shares of Common Stock determined in accordance with the formula as is set forth herein opposite the name of such Purchaser on Exhibit A attached hereto (or as such Exhibit A may be amended to add additional purchasers at an Additional Closing) and (z) any other documents required to be delivered pursuant to Article IV hereof. At each For the Initial Closing, the applicable Purchasers each Purchaser shall deliver the applicable its Purchase Price for the number of Units purchased by wire transfer to the escrow account pursuant to the Closing Escrow Agreement (as hereafter defined). For Additional Closings, each Purchaser shall deliver its Purchase Price for the number of Units purchased directly to the Company. In addition, the parties acknowledge that up to thirty-five thousand Three Hundred Thousand Dollars ($35,000300,000) dollars of the Purchase Price funded on the Initial Closing Date shall be deducted from the total amount otherwise payable deposited in an escrow account pursuant to the Company, and paid over General Escrow Agreement (as hereafter defined) to counsel for the Purchasers in payment of reasonable legal fees and out of pocket expenses of the Purchasers’ counsel. The Company hereby grants to each Purchaser in the Initial Closing the right of first offer to purchase Notes and Warrants which be used by the Company may propose to sell in connection with investor and issue from September 1, 2009 until October 31, 2009. In the event the Company proposes to undertake an issuance of Notes and Warrants during the time period between September 1, 2009 and October 31, 2009, it shall give each Purchaser in the Initial Closing written notice of its intention, describing the amount of such Notes and Warrants and the terms upon which the Company proposes to issue the same. Each such Purchaser shall have ten (10) days from the date of receipt of any such notice to agree to purchase such Notes and Warrants upon the terms specified in such notice by giving written notice to the Company and stating therein the quantity of Notes and Warrants to be purchased. In the event that all of such Notes and Warrants are not elected to be purchased by the Purchasers in the Initial Closing within such ten (10) day period, the Company shall have until October 31, 2009 to sell such Notes and Warrants not elected to be purchased upon the terms no more favorable to the purchasers than specified in the Company’s notice. Table of Contents ARTICLE IIpublic relations.

Purchase Price and Closings. Subject to the terms and conditions of this Agreementhereof, the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Table of Contents Agreement, the Purchasers, severally but not jointly, agree to purchase the Notes and the Warrants for an aggregate purchase price of up to four million two hundred fifty thousand dollars Two Million Dollars ($4,250,0002,000,000) (the “"Purchase Price”"). The Notes and Warrants shall be sold and funded in four separate closings (each, a "Closing" and collectively, the "Closings"). The initial closing Closing under this Agreement (the “"Initial Closing”") shall be funded in an amount equal to twenty-five percent (25%) of the aggregate Purchase Price hereunder and shall take place on or about July 2December 4, 2009 2006 (the “"Initial Closing Date”"). Following The second Closing under this Agreement (the Initial Closing "Second Closing") shall be funded in an amount equal to twenty-five percent (25%) of the aggregate Purchase Price hereunder and until shall take place no later than five (5) business days following the earlier of (i) October 31, 2009 or (ii) such time date that the Company files the Proxy Statement (as defined in Section 3.19 hereof) with the Securities and Exchange Commission (the "Commission") (the "Second Closing Date"). The third Closing under this Agreement (the "Third Closing") shall have issued Notes totaling $4,250,000 be funded in principal, an amount equal to twenty-five percent (25%) of the aggregate Purchase Price hereunder and shall take place no later than five (5) business days following the date that the Company's stockholders approve the Reverse Split (as defined in Section 3.19 hereof) and the Share Increase (as defined in Section 3.19 hereof) and the Company files the Charter Amendment (as defined in Section 3.19 hereof) effecting the Share Increase (the "Third Closing Date"). The final Closing under this Agreement (the "Final Closing") shall have be funded in an amount equal to twenty-five percent (25%) of the right, subject aggregate Purchase Price hereunder and shall take place no later than five (5) business days following the date that the Commission declares the initial registration statement (the "Registration Statement") providing for the resale of the Conversion Shares and the Warrant Shares pursuant to the terms and conditions hereof, to issue Notes and Warrants to existing Purchasers and additional persons who of the Company shall be authorized to add to and include Registration Rights Agreement (as defined in Exhibit A hereto, in such amounts as Section 2.1(b)) effective (the Company shall determine. Any additional person added to Exhibit A hereto, shall be deemed a “Purchaser” for all purposes of this Agreement"Final Closing Date"). The subsequent closings under this Agreement shall take place upon Initial Closing Date, the mutual agreement of Second Closing Date, the Company Third Closing Date and the additional Purchasers participating in such Subsequent Closings (the “Subsequent Closings,” and the date of each such Subsequent Closing, a “Subsequent Final Closing Date”). Each of the Initial Closing and the Subsequent Closing Date are sometimes referred to in this Agreement as a “Closing” and the date of any such closing, the “"Closing Date”". The Initial Each Closing under this Agreement shall take place at the offices of Vision Opportunity Master FundKramer Levin Naftalis & Frankxx XXX, LLP, 00 Xxxx 00xx Xxxxxx, 0xx Xxxxx0000 Xxxxxx xf txx Xxxxicas, Xxx Xxxx, XX Xxx Xxxx 00000 at 10:00 a.m., New York timexx 00:00 x.x. Xxx Xxxx xxxx; provided, that all of the conditions set forth in Article IV hereof and applicable to the Initial such Closing shall have been fulfilled or waived in accordance herewith. In the event that the Company does not receive at least two million seven hundred fifty thousand dollars ($2,750,000) in gross proceeds from the Initial Closing on or prior to July 6, 2009, the Company may terminate this Agreement, the Notes, the Warrants, the Warrant Amendments and the Security Agreement upon written notice to the Purchasers. Subject to the terms and conditions of this Agreement, at or prior to each Closing the Company shall deliver or cause to be delivered to each Purchaser (x) its Notes for the principal amount set forth opposite the name of such Purchaser on Exhibit A hereto, (y) its Warrants to purchase such number of shares of Common Stock determined in accordance with the formula as is set forth herein opposite the name of such Purchaser on Exhibit A attached hereto and (z) any other documents required to be delivered pursuant to Article IV hereof. At each Closing, the applicable Purchasers each Purchaser shall deliver the applicable its Purchase Price by wire transfer to the Company. In addition, the parties acknowledge that up to thirty-five thousand ($35,000) dollars of the Purchase Price funded on the Initial Closing Date shall be deducted from the total amount otherwise payable escrow account pursuant to the Company, and paid over to counsel for the Purchasers in payment of reasonable legal fees and out of pocket expenses of the Purchasers’ counsel. The Company hereby grants to each Purchaser in the Initial Closing the right of first offer to purchase Notes and Warrants which the Company may propose to sell and issue from September 1, 2009 until October 31, 2009. In the event the Company proposes to undertake an issuance of Notes and Warrants during the time period between September 1, 2009 and October 31, 2009, it shall give each Purchaser in the Initial Closing written notice of its intention, describing the amount of such Notes and Warrants and the terms upon which the Company proposes to issue the same. Each such Purchaser shall have ten Escrow Deposit Agreement (10) days from the date of receipt of any such notice to agree to purchase such Notes and Warrants upon the terms specified in such notice by giving written notice to the Company and stating therein the quantity of Notes and Warrants to be purchased. In the event that all of such Notes and Warrants are not elected to be purchased by the Purchasers in the Initial Closing within such ten (10) day period, the Company shall have until October 31, 2009 to sell such Notes and Warrants not elected to be purchased upon the terms no more favorable to the purchasers than specified in the Company’s notice. Table of Contents ARTICLE IIas hereafter defined).

Purchase Price and Closings. Subject to the terms and conditions of this Agreementhereof, the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Table of Contents Agreement, the Purchasers, severally but not jointly, agree to purchase the Notes Preferred Shares and the Warrants for an aggregate purchase price of up to four million two hundred fifty thousand dollars One Million Five Hundred Thousand Dollars ($4,250,0001,500,000) (the “"Purchase Price”"). The Preferred Shares and Warrants shall be sold and funded in two separate closings (each, a "Closing"). The initial closing Closing under this Agreement (the “"Initial Closing”") shall be funded in the amount of One Million Dollars ($1,000,000) and shall take place on or about July 2August 8, 2009 2006 (the “"Initial Closing Date”"). Following the Initial The second Closing and until the earlier of (i) October 31, 2009 or (ii) such time that the Company shall have issued Notes totaling $4,250,000 in principal, the Company shall have the right, subject to the terms and conditions hereof, to issue Notes and Warrants to existing Purchasers and additional persons who the Company shall be authorized to add to and include in Exhibit A hereto, in such amounts as the Company shall determine. Any additional person added to Exhibit A hereto, shall be deemed a “Purchaser” for all purposes of this Agreement. The subsequent closings under this Agreement (the "Second Closing") shall be funded in the amount of Five Hundred Thousand Dollars ($500,000) and shall take place upon the mutual agreement earlier to occur of (A) a date that is within ten (10) business days following the date that the Company publicly announces that it has received an order of at least $2,000,000 which requires at least $200,000 of material to complete (the "Second Closing Milestone") and (B) the date that is no later than five (5) business days following the date that the Securities and Exchange Commission (the "Commission") declares the registration statement (the "Registration Statement") providing for the resale of the Company Conversion Shares and the additional Purchasers participating in such Subsequent Closings Warrant Shares effective (the “Subsequent Closings,” "Second Closing Date"). If the Second Closing Milestone is not satisfied by a date that is within five (5) business days after the date that the Commission declares the Registration Statement effective, there shall be no Second Closing. The Initial Closing Date and the date of each such Subsequent Closing, a “Subsequent Second Closing Date”). Each of the Initial Closing and the Subsequent Closing Date are sometimes referred to in this Agreement as a “Closing” and the date of any such closing, the “"Closing Date”". The Initial Each Closing under this Agreement shall take place at the offices of Vision Opportunity Master Fund, Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, 00 Xxxx 00xx Xxxxxx, 0xx Xxxxx0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX Xxx Xxxx 00000 at 10:00 a.m., New York time; provided, that all of the conditions set forth in Article IV hereof and applicable to the Initial Closing shall have been fulfilled or waived in accordance herewith. In the event that the Company does not receive at least two million seven hundred fifty thousand dollars ($2,750,000) in gross proceeds from the Initial Closing on or prior to July 6, 2009, the Company may terminate this Agreement, the Notes, the Warrants, the Warrant Amendments and the Security Agreement upon written notice to the Purchasers. Subject to the terms and conditions of this Agreement, at each Closing the Company shall deliver or cause to be delivered to each Purchaser (x) its Notes a certificate for the principal amount number of Preferred Shares set forth opposite the name of such Purchaser on Exhibit A hereto, (y) its Warrants to purchase such number of shares of Common Stock determined in accordance with the formula as is set forth herein opposite the name of such Purchaser on Exhibit A attached hereto and (z) any other documents required to be delivered pursuant to Article IV hereof. At each Closing, the applicable Purchasers each Purchaser shall deliver the applicable its Purchase Price by wire transfer to an account designated by the Company. In addition, the parties acknowledge that up to thirty-five thousand ($35,000) dollars of the Purchase Price funded on the Initial Closing Date shall be deducted from the total amount otherwise payable to the Company, Representations and paid over to counsel for the Purchasers in payment of reasonable legal fees and out of pocket expenses of the Purchasers’ counsel. The Company hereby grants to each Purchaser in the Initial Closing the right of first offer to purchase Notes and Warrants which the Company may propose to sell and issue from September 1, 2009 until October 31, 2009. In the event the Company proposes to undertake an issuance of Notes and Warrants during the time period between September 1, 2009 and October 31, 2009, it shall give each Purchaser in the Initial Closing written notice of its intention, describing the amount of such Notes and Warrants and the terms upon which the Company proposes to issue the same. Each such Purchaser shall have ten (10) days from the date of receipt of any such notice to agree to purchase such Notes and Warrants upon the terms specified in such notice by giving written notice to the Company and stating therein the quantity of Notes and Warrants to be purchased. In the event that all of such Notes and Warrants are not elected to be purchased by the Purchasers in the Initial Closing within such ten (10) day period, the Company shall have until October 31, 2009 to sell such Notes and Warrants not elected to be purchased upon the terms no more favorable to the purchasers than specified in the Company’s notice. Table of Contents ARTICLE IIWarranties

Purchase Price and Closings. Subject to the terms and conditions of this Agreementhereof, the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Table of Contents Agreement, the Purchasers, severally but not jointly, agree to purchase the Notes Preferred Shares and the Warrants for an aggregate purchase price of up to four million two hundred fifty thousand dollars Three Million Nine Hundred Thousand Dollars ($4,250,0003,900,000) (the “Purchase Price”). The Preferred Shares and Warrants shall be sold and funded in separate closings (each, a “Closing”). The initial closing Closing under this Agreement (the “Initial Closing”) shall take place on or about July 2May 30, 2009 2006 (the “Initial Closing Date”) and shall be funded in the amount of One Million Five Hundred Thousand Dollars ($1,500,000). Following the Initial Each subsequent Closing and until the earlier of (i) October 31, 2009 or (ii) such time that the Company shall have issued Notes totaling $4,250,000 in principal, the Company shall have the right, subject to the terms and conditions hereof, to issue Notes and Warrants to existing Purchasers and additional persons who the Company shall be authorized to add to and include in Exhibit A hereto, in such amounts as the Company shall determine. Any additional person added to Exhibit A hereto, shall be deemed a “Purchaser” for all purposes of this Agreement. The subsequent closings under this Agreement (each, a “Subsequent Closing”) shall take place upon the mutual agreement of the Company and the additional Purchasers participating Purchasers, but in such Subsequent Closings no event later than June 30, 2006 (the “Subsequent Closings,” and the date of each such Subsequent Closingeach, a “Subsequent Closing Date”), and shall be funded in the aggregate amount of Two Million Four Hundred Thousand Dollars ($2,400,000). Each of the The Initial Closing Date and the each Subsequent Closing Date are sometimes referred to in this Agreement as a “Closing” and the date of any such closing, the “Closing Date”. The Initial Each Closing under this Agreement shall take place at the offices of Vision Opportunity Master Fund, Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, 00 Xxxx 00xx Xxxxxx, 0xx Xxxxx0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX Xxx Xxxx 00000 at 10:00 a.m., New York time; provided, that all of the conditions set forth in Article IV hereof and applicable to the Initial Closing shall have been fulfilled or waived in accordance herewith. In the event that the Company does not receive at least two million seven hundred fifty thousand dollars ($2,750,000) in gross proceeds from the Initial Closing on or prior to July 6, 2009, the Company may terminate this Agreement, the Notes, the Warrants, the Warrant Amendments and the Security Agreement upon written notice to the Purchasers. Subject to the terms and conditions of this Agreement, at each Closing the Company shall deliver or cause to be delivered to each Purchaser (x) its Notes a certificate for the principal amount number of Preferred Shares set forth opposite the name of such Purchaser on Exhibit A hereto, (y) its Warrants to purchase such number of shares of Common Stock determined in accordance with the formula as is set forth herein opposite the name of such Purchaser on Exhibit A attached hereto and (z) any other documents required to be delivered pursuant to Article IV hereof. At each Closing, the applicable Purchasers each Purchaser shall deliver the applicable its Purchase Price by wire transfer to an account designated by the Company. In addition, the parties acknowledge that up to thirty-five thousand ($35,000) dollars of the Purchase Price funded on the Initial Closing Date shall be deducted from the total amount otherwise payable to the Company, and paid over to counsel for the Purchasers in payment of reasonable legal fees and out of pocket expenses of the Purchasers’ counsel. The Company hereby grants to each Purchaser in the Initial Closing the right of first offer to purchase Notes and Warrants which the Company may propose to sell and issue from September 1, 2009 until October 31, 2009. In the event the Company proposes to undertake an issuance of Notes and Warrants during the time period between September 1, 2009 and October 31, 2009, it shall give each Purchaser in the Initial Closing written notice of its intention, describing the amount of such Notes and Warrants and the terms upon which the Company proposes to issue the same. Each such Purchaser shall have ten (10) days from the date of receipt of any such notice to agree to purchase such Notes and Warrants upon the terms specified in such notice by giving written notice to the Company and stating therein the quantity of Notes and Warrants to be purchased. In the event that all of such Notes and Warrants are not elected to be purchased by the Purchasers in the Initial Closing within such ten (10) day period, the Company shall have until October 31, 2009 to sell such Notes and Warrants not elected to be purchased upon the terms no more favorable to the purchasers than specified in the Company’s notice. Table of Contents ARTICLE II.

Purchase Price and Closings. Subject to the terms and conditions of this Agreementhereof, the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Table of Contents Agreement, the Purchasers, severally but not jointly, agree to purchase the Notes Series A Preferred Stock and the Warrants for an aggregate purchase price of up to four million two hundred fifty thousand dollars Two Million Five Hundred Thousand Dollars ($4,250,0002,500,000) (the “Purchase Price”); provided that, the total Purchase Price may be increased to up to Four Million Dollars ($4,000,000) solely at the Company’s discretion. The sale of the Series A Preferred Stock and the Warrants shall be sold and funded in separate closings (each, a “Closing”). The initial closing Closing under this Agreement (the “Initial Closing”) shall take place on or about July 2before April 15, 2009 2010 (the “Initial Closing Date”). Following the Initial Each subsequent Closing and until the earlier of (i) October 31, 2009 or (ii) such time that the Company shall have issued Notes totaling $4,250,000 in principal, the Company shall have the right, subject to the terms and conditions hereof, to issue Notes and Warrants to existing Purchasers and additional persons who the Company shall be authorized to add to and include in Exhibit A hereto, in such amounts as the Company shall determine. Any additional person added to Exhibit A hereto, shall be deemed a “Purchaser” for all purposes of this Agreement. The subsequent closings under this Agreement (each, a “Subsequent Closing”) shall take place on a date (each, a “Subsequent Closing Date”) upon the mutual agreement of the Company and the additional Purchasers participating any subsequent Purchaser, but in such Subsequent Closings no event later than May 31, 2010 (the “Subsequent Closings,” and the date of each such Subsequent Closing, a “Subsequent Final Closing Date”). Each There is no minimum number of shares or dollar amount of Series A Preferred Stock and Warrants that must be sold at the Initial Closing or any Subsequent Closing, nor is there any minimum number of shares or dollar amount of Series A Preferred Stock and Warrants that must be sold by the Final Closing Date. The Initial Closing, each Subsequent Closing and the Subsequent Final Closing are sometimes referred to in this Agreement as a the “Closing” and the date of any such closingInitial Closing Date, each Subsequent Closing Date and the Final Closing Date are sometimes referred to in this Agreement as the “Closing Date”. The Initial Each Closing under this Agreement shall take place at the offices of Vision Opportunity Master Fund, Hxxxxxx Xxxx LLP, 00 Xxxx 1000 Xxxxxxxx, 00xx Xxxxxx, 0xx Xxxxxxxxxx, Xxx Xxxx, XX Xxx Xxxx 00000 at 10:00 a.m., New York time; provided, that all of the conditions set forth in Article IV hereof and applicable to the Initial Closing shall have been fulfilled or waived in accordance herewith. In the event that the Company does not receive at least two million seven hundred fifty thousand dollars ($2,750,000) in gross proceeds from the Initial Closing on or prior to July 6, 2009, the Company may terminate this Agreement, the Notes, the Warrants, the Warrant Amendments and the Security Agreement upon written notice to the Purchasers. Subject to the terms and conditions of this Agreement, at each the Closing the Company shall deliver or cause to be delivered to each Purchaser (x) its Notes a certificate for the principal amount set number of Series A Preferred Shares sand Warrants et forth opposite the name of such Purchaser on Exhibit A hereto, and (y) its Warrants to purchase such number of shares of Common Stock determined in accordance with the formula set forth herein and (z) any other documents required to be delivered pursuant to Article IV hereof. At each the Closing, the applicable Purchasers Purchaser shall deliver the applicable its Purchase Price by wire transfer to an escrow account designated by the Company. In addition, the parties acknowledge that up escrow agent pursuant to thirty-five thousand ($35,000) dollars a certain Escrow Agreement dated as of the Purchase Price funded on the Initial Closing Date shall be deducted from the total amount otherwise payable to date hereof by and among the Company, and paid over to counsel for the Purchasers in payment of reasonable legal fees and out of pocket expenses of the Purchasers’ counsel. The Company hereby grants to each Purchaser in the Initial Closing the right of first offer to purchase Notes and Warrants which the Company may propose to sell and issue from September 1, 2009 until October 31, 2009. In the event the Company proposes to undertake an issuance of Notes and Warrants during the time period between September 1, 2009 and October 31, 2009, it shall give each Purchaser in the Initial Closing written notice of its intention, describing the amount of such Notes and Warrants escrow agent and the terms upon which Placement Agent (the Company proposes to issue the same. Each such Purchaser shall have ten (10) days from the date of receipt of any such notice to agree to purchase such Notes and Warrants upon the terms specified in such notice by giving written notice to the Company and stating therein the quantity of Notes and Warrants to be purchased. In the event that all of such Notes and Warrants are not elected to be purchased by the Purchasers in the Initial Closing within such ten (10) day period, the Company shall have until October 31, 2009 to sell such Notes and Warrants not elected to be purchased upon the terms no more favorable to the purchasers than specified in the Company’s notice. Table of Contents ARTICLE II“Escrow Agreement”).

Purchase Price and Closings. Subject to the terms and conditions of this Agreementhereof, the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Table of Contents Agreement, the Purchasers, severally but not jointly, agree to purchase the Notes Preferred Shares and the Warrants for an aggregate purchase price of up to four million two hundred fifty thousand dollars ($4,250,000) 2,000,000 (the “Purchase Price”). The Preferred Shares and Warrants shall be sold and funded in separate closings (each, a “Closing”). The initial closing Closing under this Agreement (the “Initial Closing”) shall take place on or about July 2March 9, 2009 2007 (the “Initial Closing Date”) and shall be funded in the amount of One Million Five Hundred Thousand Dollars ($1,500,000). Following the Initial Each subsequent Closing and until the earlier of (i) October 31, 2009 or (ii) such time that the Company shall have issued Notes totaling $4,250,000 in principal, the Company shall have the right, subject to the terms and conditions hereof, to issue Notes and Warrants to existing Purchasers and additional persons who the Company shall be authorized to add to and include in Exhibit A hereto, in such amounts as the Company shall determine. Any additional person added to Exhibit A hereto, shall be deemed a “Purchaser” for all purposes of this Agreement. The subsequent closings under this Agreement (each, a “Subsequent Closing”) shall take place upon the mutual agreement of the Company and the additional Purchasers participating Purchasers, but in such Subsequent Closings no event later than March 31, 2007 (the “Subsequent Closings,” and the date of each such Subsequent Closingeach, a “Subsequent Closing Date”), and shall be funded in the aggregate amount of up to Five Hundred Thousand Dollars ($500,000). Each of the The Initial Closing Date and the each Subsequent Closing Date are sometimes referred to in this Agreement as a “Closing” and the date of any such closing, the “Closing Date”. The Initial Each Closing under this Agreement shall take place at the offices of Vision Opportunity Master Fund, Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, 00 Xxxx 00xx Xxxxxx, 0xx Xxxxx0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX Xxx Xxxx 00000 at 10:00 a.m., New York time; provided, that all of the conditions set forth in Article IV hereof and applicable to the Initial Closing shall have been fulfilled or waived in accordance herewith. In the event that the Company does not receive at least two million seven hundred fifty thousand dollars ($2,750,000) in gross proceeds from the Initial Closing on or prior to July 6, 2009, the Company may terminate this Agreement, the Notes, the Warrants, the Warrant Amendments and the Security Agreement upon written notice to the Purchasers. Subject to the terms and conditions of this Agreement, at each the Closing the Company shall deliver or cause to be delivered to each Purchaser (x) its Notes a certificate for the principal amount number of Preferred Shares set forth opposite the name of such Purchaser on Exhibit A hereto, (y) its Warrants to purchase such number of shares of Common Stock determined in accordance with the formula as is set forth herein opposite the name of such Purchaser on Exhibit A attached hereto and (z) any other documents required to be delivered pursuant to Article IV hereof. At each the Closing, the applicable Purchasers each Purchaser shall deliver the applicable its Purchase Price by wire transfer to the Company. In addition, the parties acknowledge that up to thirty-five thousand ($35,000) dollars of the Purchase Price funded on the Initial Closing Date shall be deducted from the total amount otherwise payable to the Company, and paid over to counsel for the Purchasers in payment of reasonable legal fees and out of pocket expenses of the Purchasers’ counsel. The Company hereby grants to each Purchaser in the Initial Closing the right of first offer to purchase Notes and Warrants which the Company may propose to sell and issue from September 1, 2009 until October 31, 2009. In the event the Company proposes to undertake an issuance of Notes and Warrants during the time period between September 1, 2009 and October 31, 2009, it shall give each Purchaser in the Initial Closing written notice of its intention, describing the amount of such Notes and Warrants and the terms upon which the Company proposes to issue the same. Each such Purchaser shall have ten (10) days from the date of receipt of any such notice to agree to purchase such Notes and Warrants upon the terms specified in such notice by giving written notice to the Company and stating therein the quantity of Notes and Warrants to be purchased. In the event that all of such Notes and Warrants are not elected to be purchased escrow account designated by the Purchasers in the Initial Closing within such ten (10) day period, the Company shall have until October 31, 2009 to sell such Notes and Warrants not elected to be purchased upon the terms no more favorable to the purchasers than specified in the Company’s notice. Table of Contents ARTICLE IIescrow agent.

Purchase Price and Closings. Subject to In consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Agreement, the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Table of Contents Agreement, the Purchasers, severally but not jointly, agree to purchase the Notes numbers of Preferred Shares and Warrants set forth opposite their respective names on Exhibit A. The minimum purchase price paid at the Initial Closing (as defined below) will be $10,000,000 (excluding any Purchase Price paid by cancellation of the NovaRay Notes) and the Warrants for an maximum aggregate purchase price paid at all closings (including by cancellation of up to four million two hundred fifty thousand dollars the NovaRay Notes) will be $20,174,399.85 ($4,250,000) (the aggregate of all such purchase prices paid at any Closing, the “Purchase Price”). The Preferred Shares and Warrants shall be sold and funded in separate closings (each, a “Closing”), in each case pursuant to terms of this Agreement and provided that each Purchaser executes a signature page hereto and to each of the other Transaction Documents (as defined in Section 2.1(b) hereof) to which the Purchasers are a party, and thereby agrees to be bound by and subject to the terms and conditions hereof and thereof. All additional new Purchasers and all additional Preferred Shares and Warrants to be purchased hereunder shall be reflected on Exhibit A, which shall automatically be amended without any further action by any party hereto. The initial closing Closing under this Agreement (the “Initial Closing”) shall take place on or about July 2December 27, 2009 2007, or as soon thereafter as the Company has identified Purchasers to invest at least $10,000,000 and all other conditions to closing have been satisfied or waived (the “Initial Closing Date”). Following the Initial Each subsequent Closing and until the earlier of (i) October 31, 2009 or (ii) such time that the Company shall have issued Notes totaling $4,250,000 in principal, the Company shall have the right, subject to the terms and conditions hereof, to issue Notes and Warrants to existing Purchasers and additional persons who the Company shall be authorized to add to and include in Exhibit A hereto, in such amounts as the Company shall determine. Any additional person added to Exhibit A hereto, shall be deemed a “Purchaser” for all purposes of this Agreement. The subsequent closings under this Agreement (each, a “Subsequent Closing”) shall take place upon the mutual agreement of the Company and the additional Purchasers participating in such Subsequent Closings (the “Subsequent Closings,” and the date of each such Subsequent Closing, a “Subsequent Closing Date”). Each of the Initial Closing and the Subsequent Closing are sometimes referred to in this Agreement as a “Closing” and the date of any such closing, the “Closing Date”. The Initial Closing under this Agreement shall take place at the offices of Vision Opportunity Master Fund, LLP, 00 Xxxx 00xx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000 at 10:00 a.m., New York time; provided, that all of the conditions set forth in Article IV hereof and applicable to the Initial Closing shall have been fulfilled or waived in accordance herewith. In the event that the Company does not receive at least two million seven hundred fifty thousand dollars ($2,750,000) in gross proceeds from the Initial Closing on or prior to July 6, 2009, the Company may terminate this Agreement, the Notes, the Warrants, the Warrant Amendments and the Security Agreement upon written notice to the Purchasers. Subject to the terms and conditions of this Agreement, at each Closing the Company shall deliver or cause to be delivered to each Purchaser (x) its Notes for the principal amount set forth opposite the name of such Purchaser on Exhibit A hereto, (y) its Warrants to purchase such number of shares of Common Stock determined in accordance with the formula set forth herein and (z) any other documents required to be delivered pursuant to Article IV hereof. At each Closing, the applicable Purchasers shall deliver the applicable Purchase Price by wire transfer to the Company. In addition, the parties acknowledge that up to thirty-five thousand ($35,000) dollars of the Purchase Price funded on the Initial Closing Date shall be deducted from the total amount otherwise payable to the Company, and paid over to counsel for the Purchasers in payment of reasonable legal fees and out of pocket expenses of the Purchasers’ counsel. The Company hereby grants to each Purchaser in the Initial Closing the right of first offer to purchase Notes and Warrants which the Company may propose to sell and issue from September 1, 2009 until October 31, 2009. In the event the Company proposes to undertake an issuance of Notes and Warrants during the time period between September 1, 2009 and October 31, 2009, it shall give each Purchaser in the Initial Closing written notice of its intention, describing the amount of such Notes and Warrants and the terms upon which the Company proposes to issue the same. Each such Purchaser shall have ten (10) days from the date of receipt of any such notice to agree to purchase such Notes and Warrants upon the terms specified in such notice by giving written notice to the Company and stating therein the quantity of Notes and Warrants to be purchased. In the event that all of such Notes and Warrants are not elected to be purchased by the Purchasers in the Initial Closing within such ten (10) day period, the Company shall have until October 31, 2009 to sell such Notes and Warrants not elected to be purchased upon the terms no more favorable to the purchasers than specified in the Company’s notice. Table of Contents ARTICLE IISubsequent

Purchase Price and Closings. Subject to In consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this AgreementAgreement (including, without limitation, the receipt of the purchase price from each of the Purchasers), the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Table of Contents Agreement, the Purchasers, severally but not jointly, agree to purchase purchase, those numbers of the Notes Series B-2 Preferred Shares and the Warrants for an set forth opposite their respective names in Schedule 1.01. The aggregate purchase price of up to four million two hundred fifty thousand dollars ($4,250,000) (the “Purchase Price”)Securities being acquired by each Purchaser at the Initial Closing and a subsequent Closing is set forth opposite such Purchaser's name in Schedule 1.01. The initial closing closings of the purchase and sale of the Securities to be acquired by the Purchasers from the Company under this Agreement (the “Initial each a "Closing”) shall take place on or about July 2, 2009 (the “Initial Closing Date”). Following the Initial Closing " and until the earlier of (i) October 31, 2009 or (ii) such time that the Company shall have issued Notes totaling $4,250,000 in principaltogether, the Company shall have the right, subject to the terms and conditions hereof, to issue Notes and Warrants to existing Purchasers and additional persons who the Company shall be authorized to add to and include in Exhibit A hereto, in such amounts as the Company shall determine. Any additional person added to Exhibit A hereto, shall be deemed a “Purchaser” for all purposes of this Agreement. The subsequent closings under this Agreement shall take place upon the mutual agreement of the Company and the additional Purchasers participating in such Subsequent Closings (the “Subsequent Closings,” and the date of each such Subsequent "Closing, a “Subsequent Closing Date”). Each of the Initial Closing and the Subsequent Closing are sometimes referred to in this Agreement as a “Closing” and the date of any such closing, the “Closing Date”. The Initial Closing under this Agreement ") shall take place at the offices of Vision Opportunity Master FundISIS Capital Management, LLP, 00 Xxxx 00xx LLC 000 Xxxxxxxx Xxxxxx, 0xx XxxxxXxxxxxxxx, Xxx XxxxXxxxxxxxxxx, XX 00000 00000. One or more Closings shall be scheduled, with the initial Closing at 10:00 a.m.a.m. on August 4, New York time; provided, that all of 2004 (the conditions set forth in Article IV hereof and applicable to the "Initial Closing shall have been fulfilled Date" or waived in accordance herewith. In the event that the Company does not receive at least two million seven hundred fifty thousand dollars ($2,750,000"Initial Closing") in gross proceeds from the Initial Closing on or prior to July 6, 2009, the Company may terminate this Agreement, the Notes, the Warrants, the Warrant Amendments and the Security Agreement upon written notice to the Purchasers. Subject to the terms and conditions of this Agreementfinal Closing no later than September 1, at each Closing the Company shall deliver or cause to be delivered to each Purchaser (x) its Notes for the principal amount set forth opposite the name of such Purchaser on Exhibit A hereto, (y) its Warrants to purchase such number of shares of Common Stock determined in accordance with the formula set forth herein and (z) any other documents required to be delivered pursuant to Article IV hereof2004. At each Closing, the applicable Purchasers shall Company will deliver an irrevocable instruction to its transfer agent to issue to each Purchaser participating in such Closing certificates for the applicable number of Series B-2 Preferred Shares and will deliver to each Purchase Price by wire transfer a Warrant to purchase the Company. In additionnumber of shares of Series B-2 Preferred Stock set forth opposite its name under the headings "Number of Series B-2 Preferred Shares" and "Number of Warrants" in Schedule 1.01, the parties acknowledge that up to thirty-five thousand registered in such Purchaser's name ($35,000) dollars or its nominee), against delivery of the Purchase Price funded on the Initial Closing Date shall be deducted from the total amount otherwise a check or checks payable to the order of the Company, and paid over or a transfer of funds to counsel for the Purchasers in payment of reasonable legal fees and out of pocket expenses account of the Purchasers’ counsel. The Company hereby grants to by wire transfer, representing the net cash consideration set forth opposite each Purchaser such Purchaser's name on Schedule 1.01, as payment in full of the Initial Closing purchase price of the right of first offer to purchase Notes and Warrants which the Company may propose to sell and issue from September 1, 2009 until October 31, 2009. In the event the Company proposes to undertake an issuance of Notes and Warrants during the time period between September 1, 2009 and October 31, 2009, it shall give each Purchaser in the Initial Closing written notice of its intention, describing the amount of such Notes and Warrants and the terms upon which the Company proposes to issue the same. Each such Purchaser shall have ten (10) days from the date of receipt of any such notice to agree to purchase such Notes and Warrants upon the terms specified in such notice by giving written notice to the Company and stating therein the quantity of Notes and Warrants to be purchased. In the event that all of such Notes and Warrants are not elected to be purchased by the Purchasers in the Initial Closing within such ten (10) day period, the Company shall have until October 31, 2009 to sell such Notes and Warrants not elected to be purchased upon the terms no more favorable to the purchasers than specified in the Company’s notice. Table of Contents ARTICLE IISecurities.

Purchase Price and Closings. Subject to In consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Agreement, the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Table of Contents Agreement, the Purchasers, severally but not jointly, agree to purchase the Notes numbers of Preferred Shares and Warrants set forth opposite their respective names on Exhibit A. The minimum purchase price paid at the Initial Closing (as defined below) will be $3,000,000 (excluding any Purchase Price paid by cancellation of the NovaRay Notes) and the Warrants for an maximum aggregate purchase price paid at all closings (including by cancellation of up to four million two hundred fifty thousand dollars the NovaRay Notes) will be $10,000,000 ($4,250,000) (the aggregate of all such purchase prices paid at any Closing, the “Purchase Price”). The Preferred Shares and Warrants may be sold and funded in separate closings (each, a “Closing”), in each case pursuant to terms of this Agreement and provided that each Purchaser executes a signature page hereto and to each of the other Transaction Documents (as defined in Section 2.1(b) hereof) to which the Purchasers are a party, and thereby agrees to be bound by and subject to the terms and conditions hereof and thereof. All additional new Purchasers and all additional Preferred Shares and Warrants to be purchased hereunder shall be reflected on Exhibit A, which shall automatically be amended without any further action by any party hereto. The initial closing Closing under this Agreement (the “Initial Closing”) shall take place on or about July 2October 27, 2009 2009, or as soon thereafter as the Company has identified Purchasers to invest at least $3,000,000 and all other conditions to closing have been satisfied or waived (the “Initial Closing Date”). Following the Initial Each subsequent Closing and until the earlier of (i) October 31, 2009 or (ii) such time that the Company shall have issued Notes totaling $4,250,000 in principal, the Company shall have the right, subject to the terms and conditions hereof, to issue Notes and Warrants to existing Purchasers and additional persons who the Company shall be authorized to add to and include in Exhibit A hereto, in such amounts as the Company shall determine. Any additional person added to Exhibit A hereto, shall be deemed a “Purchaser” for all purposes of this Agreement. The subsequent closings under this Agreement (each, a “Subsequent Closing”) shall take place upon the mutual agreement of the Company and the additional Purchasers participating in such Subsequent Closings Closing, but in no event later than forty-five (45) days from the “Subsequent Closings,” and the date of each such Subsequent ClosingInitial Closing Date (each, a “Subsequent Closing Date”). Each of the The Initial Closing Date and the each Subsequent Closing Date are sometimes referred to in this Agreement as a “Closing” and the date of any such closing, the “Closing Date”. The Initial Each Closing under this Agreement shall take place at the offices of Vision Opportunity Master Fund, Sadis & Xxxxxxxx LLP, 00 Xxxx 00xx 000 Xxxxx Xxxxxx, 0xx 00xx Xxxxx, Xxx Xxxx, XX Xxx Xxxx 00000 at 10:00 a.m., New York time; provided, that all of the conditions set forth in Article IV hereof or at such other time and applicable to the Initial Closing shall have been fulfilled or waived in accordance herewith. In the event that the Company does not receive at least two million seven hundred fifty thousand dollars ($2,750,000) in gross proceeds from the Initial Closing on or prior to July 6, 2009, the Company place as may terminate this Agreement, the Notes, the Warrants, the Warrant Amendments and the Security Agreement upon written notice to the Purchasersbe mutually agreed upon. Subject to the terms and conditions of this Agreement, at each Closing the Company shall deliver or cause to be delivered to each Purchaser (x) its Notes for the principal amount set forth opposite the name of such Purchaser on Exhibit A hereto, (y) its Warrants to purchase such number of shares of Common Stock determined in accordance with the formula set forth herein and (z) any other documents required to be delivered pursuant to Article IV hereof. At each Closing, the applicable Purchasers shall deliver the applicable Purchase Price by wire transfer to the Company. In addition, the parties acknowledge that up to thirty-five thousand ($35,000) dollars of the Purchase Price funded on the Initial Closing Date shall be deducted from the total amount otherwise payable to the Company, and paid over to counsel for the Purchasers in payment of reasonable legal fees and out of pocket expenses of the Purchasers’ counsel. The Company hereby grants to each Purchaser in the Initial Closing the right of first offer to purchase Notes and Warrants which the Company may propose to sell and issue from September 1, 2009 until October 31, 2009. In the event the Company proposes to undertake an issuance of Notes and Warrants during the time period between September 1, 2009 and October 31, 2009, it shall give each Purchaser in the Initial Closing written notice of its intention, describing the amount of such Notes and Warrants and the terms upon which the Company proposes to issue the same. Each such Purchaser shall have ten (10) days from the date of receipt of any such notice to agree to purchase such Notes and Warrants upon the terms specified participating in such notice by giving written notice to the Company and stating therein the quantity of Notes and Warrants to be purchased. In the event that all of such Notes and Warrants are not elected to be purchased by the Purchasers in the Initial Closing within such ten (10) day period, the Company shall have until October 31, 2009 to sell such Notes and Warrants not elected to be purchased upon the terms no more favorable to the purchasers than specified in the Company’s notice. Table of Contents ARTICLE IIClosing

Purchase Price and Closings. Subject to the terms and conditions of this Agreementhereof, the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Table of Contents Agreement, the Purchasers, severally but not jointly, agree to purchase the Notes and the Warrants Series D Preferred Shares for an aggregate purchase price of up to four million two hundred fifty thousand dollars Four Million Dollars ($4,250,0004,000,000) (the “Purchase Price”). The Series D Preferred Shares and Warrants shall be sold and funded in separate ­ closings (each, a “Closing”). The initial closing Closing under this Agreement (the “Initial Closing”) shall take place on or about July 2May 29, 2009 2008 (the “Initial Closing Date”). Following , at which the Initial Closing Purchasers shall purchase and until the earlier of (i) October 31, 2009 or (ii) such time that the Company shall have issued Notes totaling sell an aggregate of not less than 37,500 Series D Preferred Shares for the amount of not less than One Million Five Hundred Thousand Dollars ($4,250,000 in principal, the Company shall have the right, subject to the terms and conditions hereof, to issue Notes and Warrants to existing Purchasers and additional persons who the Company shall be authorized to add to and include in Exhibit A hereto, in such amounts as the Company shall determine1,500,000). Any additional person added to Exhibit A hereto, shall be deemed a “Purchaser” for all purposes of this Agreement. The Each subsequent closings Closing under this Agreement (each, a “Subsequent Closing”) shall take place on a date (each, a “Subsequent Closing Date”) upon the mutual agreement of the Company and the additional Purchasers participating any subsequent Purchaser, but in such Subsequent Closings no event later than June 30, 2008 (the “Subsequent Closings,” and the date of each such Subsequent Closing, a “Subsequent Outside Closing Date”). Each subsequent Purchaser shall execute this Agreement and the other applicable Transaction Documents (as hereafter defined) in the capacity of a Purchaser and Exhibit A shall be supplemented to reflect the sale of such additional Series D Preferred Shares. At each Subsequent Closing, such subsequent Purchasers shall purchase and the Company shall sell an aggregate of up to 50,000 Series D Preferred Shares for $2,000,000, and by the Outside Closing Date, all of the Purchasers shall have purchased and the Company shall have sold (inclusive of the Series D Preferred Shares sold and Purchase Price paid at the Initial Closing) an aggregate of up to 87,500 Series D Preferred Shares for an aggregate Purchase Price of Three Million Five Hundred Thousand Dollars ($3,500,000). Notwithstanding the foregoing to the contrary, there shall be one final closing (the “Final Closing”) which shall take place within ninety (90) days following the Initial Closing Date (the “Final Closing Date”), at which Vision Opportunity Master Fund, Ltd. shall purchase and the Company shall sell an aggregate of 12,500 Series D Preferred Shares for the amount of Five Hundred Thousand Dollars ($500,000), provided that the Company has hired a chief operating officer acceptable to Vision Capital Advisors, LLC. The Initial Closing, each Subsequent Closing and the Final Closing are sometimes referred to in this Agreement as a the “Closing” and the date of any such closingInitial Closing Date, each Subsequent Closing Date and the Final Closing Date are sometimes referred to in this Agreement as the “Closing Date”. The Initial Each Closing under this Agreement shall take place at the offices of Vision Opportunity Master Fund, Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, 00 Xxxx 00xx Xxxxxx, 0xx Xxxxx0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX Xxx Xxxx 00000 at 10:00 a.m., New York time; provided, that all of the conditions set forth in Article IV hereof and applicable to the Initial Closing shall have been fulfilled or waived in accordance herewith. In the event that the Company does not receive at least two million seven hundred fifty thousand dollars ($2,750,000) in gross proceeds from the Initial Closing on or prior to July 6, 2009, the Company may terminate this Agreement, the Notes, the Warrants, the Warrant Amendments and the Security Agreement upon written notice to the Purchasers. Subject to the terms and conditions of this Agreement, at each the Closing the Company shall deliver or cause to be delivered to each Purchaser (x) its Notes a certificate for the principal amount number of Series D Preferred Shares set forth opposite the name of such Purchaser on Exhibit A hereto, and (y) its Warrants to purchase such number of shares of Common Stock determined in accordance with the formula set forth herein and (z) any other documents required to be delivered pursuant to Article IV hereof. At each the Closing, the applicable Purchasers each Purchaser shall deliver the applicable its Purchase Price by wire transfer to the Company. In addition, the parties acknowledge that up to thirty-five thousand ($35,000) dollars of the Purchase Price funded on the Initial Closing Date shall be deducted from the total amount otherwise payable to the Company, and paid over to counsel for the Purchasers in payment of reasonable legal fees and out of pocket expenses of the Purchasers’ counsel. The Company hereby grants to each Purchaser in the Initial Closing the right of first offer to purchase Notes and Warrants which the Company may propose to sell and issue from September 1, 2009 until October 31, 2009. In the event the Company proposes to undertake an issuance of Notes and Warrants during the time period between September 1, 2009 and October 31, 2009, it shall give each Purchaser in the Initial Closing written notice of its intention, describing the amount of such Notes and Warrants and the terms upon which the Company proposes to issue the same. Each such Purchaser shall have ten (10) days from the date of receipt of any such notice to agree to purchase such Notes and Warrants upon the terms specified in such notice by giving written notice to the Company and stating therein the quantity of Notes and Warrants to be purchased. In the event that all of such Notes and Warrants are not elected to be purchased escrow account designated by the Purchasers in the Initial Closing within such ten (10) day period, the Company shall have until October 31, 2009 to sell such Notes and Warrants not elected to be purchased upon the terms no more favorable to the purchasers than specified in the Company’s notice. Table of Contents ARTICLE IIescrow agent.