exh 10.1

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this "Agreement") is dated as of

January 26, 2010, between Worldwide Energy and Manufacturing USA, Inc., a

Colorado corporation (the "Company"), and each purchaser identified on the

signature pages hereto (each, including its successors and assigns, a

"Purchaser" and collectively, the "Purchasers").

WHEREAS, subject to the terms and conditions set forth in this Agreement

and pursuant to Section 4(2) of the Securities Act of 1933, as amended (the

"Securities Act"), and Rule 506 promulgated thereunder, the Company desires to

issue and sell to each Purchaser, and each Purchaser, severally and not jointly,

desires to purchase from the Company, securities of the Company as more fully

described in this Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this

Agreement, and for other good and valuable consideration, the receipt and

adequacy of which are hereby acknowledged, the Company and each Purchaser agree

as follows:

ARTICLE I.

DEFINITIONS

1.1Definitions. In addition to the terms defined elsewhere in this

Agreement, for all purposes of this Agreement, the following terms have the

meanings set forth in this Section 1.1:

"2008 Share Escrow Agreement" means the Escrow Agreement, dated as

of June 23, 2008, by and among the Company, the Wangs and Company Counsel

as escrow agent, pursuant to which the Wangs deposited 1,620,954 shares of

Common Stock in escrow subject to the terms and conditions of the 2008

Shares Escrow Agreement.

"2010 Form 10-K" shall have the meaning ascribed to such term in

Section 4.19.

"2010 EBITDA Milestone" shall have the meaning ascribed to such term

in Section 4.19(a).

"2010 EBITDA Milestone Date" shall have the meaning ascribed to such

term in Section 4.19(a).

"Acquiring Person" shall have the meaning ascribed to such term in

Section 4.5.

"Action" shall have the meaning ascribed to such term in Section

3.1(j).

"Adjusted EBITDA" means, for the applicable period, earning before

interest, taxes, depreciation and amortization of

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the Company and its consolidated Subsidiaries, determined in accordance

with GAAP, consistently applied, plus (i) any provision for (or less any

benefit from) income taxes, (ii) any deduction for interest expense, net

of interest income, (iii) depreciation and amortization expense and (iv)

non-cash expenditures All determinations of the components of Adjusted

EBITDA shall be derived from the Company's most recently filed Form 10-Q

or Form 10-K, as applicable.

"Affiliate" means any Person that, directly or indirectly through

one or more intermediaries, controls or is controlled by or is under

common control with a Person, as such terms are used in and construed

under Rule 405 under the Securities Act.

"Board of Directors" means the board of directors of the Company.

"Business Day" means any day except any Saturday, any Sunday, any

day which is a federal legal holiday in the United States or any day on

which banking institutions in the State of New York are authorized or

required by law or other governmental action to close.

"Closing" means the closing of the purchase and sale of the

Securities pursuant to Section 2.1.

"Closing Date" means the Trading Day on which all of the Transaction

Documents have been executed and delivered by the applicable parties

thereto, and all conditions precedent to (i) the Purchasers' obligations

to pay the Subscription Amount and (ii) the Company's obligations to

deliver the Securities, in each case, have been satisfied or waived, but

in no event later than the third Trading Day following the date hereof.

"Closing Statement" means the Closing Statement in the form on Annex

A attached hereto.

"Commission" means the United States Securities and Exchange

Commission.

"Common Stock" means the common stock of the Company, no par value

per share, and any other class of securities into which such securities

may hereafter be reclassified or changed.

"Common Stock Equivalents" means any securities of the Company or

the Subsidiaries which would entitle the holder thereof to acquire at any

time Common Stock, including, without limitation, any debt, preferred

stock, rights, options, warrants or other instrument that is at any time

convertible into or exercisable or exchangeable for, or otherwise entitles

the holder thereof to receive, Common Stock.

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"Company Counsel" means Sichenzia Ross Friedman Ference LLP, with

offices located at 61 Broadway, New York, New York 10006.

"Company Make Good Shares" shall have the meaning ascribed to such

term in Section 4.19(b).

"Disclosure Schedules" shall have the meaning ascribed to such term

in Section 3.1.

"Effective Date" means the earlier of the date that (a) all of the

Registrable Securities (as defined in the Registration Rights Agreement)

have been registered for resale by the holders thereof pursuant to a

registration statement(s) declared effective by the Commission and (b) all

of the Registrable Securities have been sold pursuant to Rule 144 or may

be sold pursuant to Rule 144 without the requirement for the Company to be

in compliance with the current public information required under Rule 144

and without volume or manner-of-sale restrictions.

"Evaluation Date" shall have the meaning ascribed to such term in

Section 3.1(r).

"Exchange Act" means the Securities Exchange Act of 1934, as

amended, and the rules and regulations promulgated thereunder.

"Executive Make Good Shares" shall have the meaning ascribed to such

term in Section 4.19(b).

"Exempt Issuance" means the issuance of (a) shares of Common Stock

or options to employees, officers, directors or consultants of the Company

pursuant to any stock or option plan duly adopted for such purpose, by a

majority of the non-employee members of the Board of Directors or a

majority of the members of a committee of non-employee directors

established for such purpose (provided, however, any such issuances to

consultants shall not exceed an aggregate of 100,000 shares, subject to

adjustment for forward and reverse stock splits, stock dividends and

similar transactions of the Common Stock that occur after the Closing

Date, in any 12-month period), (b) securities upon the exercise or

exchange of or conversion of any Securities issued hereunder and/or other

securities exercisable or exchangeable for or convertible into shares of

Common Stock issued and outstanding on the date of this Agreement,

provided that such securities have not been amended since the date of this

Agreement to increase the number of such securities or to decrease the

exercise price, exchange price or conversion price of such securities, (c)

securities issued pursuant to acquisitions or strategic transactions

approved by a majority of the disinterested directors of the Company,

provided that any such issuance shall only be to a Person (or to the

equityholders of a Person) which is, itself or through its subsidiaries,

an operating company or

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an owner of an asset in a business synergistic with the business of the

Company and shall provide to the Company additional benefits in addition

to the investment of funds, but shall not include a transaction in which

the Company is issuing securities primarily for the purpose of raising

capital or to an entity whose primary business is investing in securities

and (d) and (d) with the prior written consent of Ladenburg Thalmann &

Co., Inc., up to an amount of Common Stock and warrants equal to the

difference between $8,000,000 and the aggregate Subscription Amounts

hereunder, on the same terms and conditions and prices as hereunder, with

investors executing definitive agreements for the purchase of such

securities and such transactions having closed on or before January 29,

2010.

"Funds Escrow Agent" means SunTrust Bank, with offices located at

777 Brickell Avenue, Miami, Florida 33131.

"Funds Escrow Agreement" shall mean the Escrow Agreement by and

among the Company, the placement agent and the Funds Escrow Agent, entered

into on or before the date hereof.

"GAAP" shall have the meaning ascribed to such term in Section

3.1(h).

"Indebtedness" shall have the meaning ascribed to such term in

Section 3.1(aa).

"Intellectual Property Rights" shall have the meaning ascribed to

such term in Section 3.1(o).

"Legend Removal Date" shall have the meaning ascribed to such term

in Section 4.1(c).

"Liens" means a lien, charge, security interest, encumbrance, right

of first refusal, preemptive right or other restriction.

"Make Good Shares" shall have the meaning assigned to such term in

Section 4.19(b).

"Material Adverse Effect" shall have the meaning assigned to such

term in Section 3.1(b).

"Material Permits" shall have the meaning ascribed to such term in

Section 3.1(m).

"Per Share Purchase Price" equals $4.50, subject to adjustment for

reverse and forward stock splits, stock dividends, stock combinations and

other similar transactions of the Common Stock that occur after the date

of this Agreement.

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"Person" means an individual or corporation, partnership, trust,

incorporated or unincorporated association, joint venture, limited

liability company, joint stock company, government (or an agency or

subdivision thereof) or other entity of any kind.

"Proceeding" means an action, claim, suit, investigation or

proceeding (including, without limitation, an informal investigation or

partial proceeding, such as a deposition), whether commenced or

threatened.

"Public Information Failure" shall have the meaning ascribed to such

term in Section 4.2(b).

"Public Information Failure Payments" shall have the meaning

ascribed to such term in Section 4.2(b).

"Purchaser Party" shall have the meaning ascribed to such term in

Section 4.8.

"Registration Rights Agreement" means the Registration Rights

Agreement, dated the date hereof, among the Company and the Purchasers, in

the form of Exhibit A attached hereto.

"Registration Statement" means a registration statement meeting the

requirements set forth in the Registration Rights Agreement and covering

the resale by the Purchasers of the Shares and the Warrant Shares.

"Required Approvals" shall have the meaning ascribed to such term in

Section 3.1(e).

"Rule 144" means Rule 144 promulgated by the Commission pursuant to

the Securities Act, as such Rule may be amended from time to time, or any

similar rule or regulation hereafter adopted by the Commission having

substantially the same effect as such Rule.

"Rule 424" means Rule 424 promulgated by the Commission pursuant to

the Securities Act, as such Rule may be amended or interpreted from time

to time, or any similar rule or regulation hereafter adopted by the

Commission having substantially the same purpose and effect as such Rule.

"SEC Reports" shall have the meaning ascribed to such term in

Section 3.1(h).

"Securities" means the Shares, the Warrants and the Warrant Shares.

"Securities Act" means the Securities Act of 1933, as amended, and

the rules and regulations promulgated thereunder.

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"Shares" means the shares of Common Stock issued or issuable to each

Purchaser pursuant to this Agreement.

"Share Escrow Agent" means Sichenzia Ross Friedman Ference LLP, with

offices located at 61 Broadway, New York, New York 10006.

"Share Escrow Agreement" shall mean the Escrow Agreement in

substantially the form of Exhibit D hereto executed and delivered

contemporaneously with this Agreement.

"Short Sales" means all "short sales" as defined in Rule 200 of

Regulation SHO under the Exchange Act (but shall not be deemed to include

the location and/or reservation of borrowable shares of Common Stock).

"Subscription Amount" means, as to each Purchaser, the aggregate

amount to be paid for Shares and Warrants purchased hereunder as specified

below such Purchaser's name on the signature page of this Agreement and

next to the heading "Subscription Amount," in United States dollars and in

immediately available funds.

"Subsidiary" means any subsidiary of the Company as set forth on

Schedule 3.1(a) and shall, where applicable, also include any direct or

indirect subsidiary of the Company formed or acquired after the date

hereof.

"Trading Day" means a day on which the principal Trading Market is

open for trading.

"Trading Market" means any of the following markets or exchanges on

which the Common Stock is listed or quoted for trading on the date in

question: the NYSE AMEX, the Nasdaq Capital Market, the Nasdaq Global

Market, the Nasdaq Global Select Market, the New York Stock Exchange or

the OTC Bulletin Board (or any successors to any of the foregoing).

"Transaction Documents" means this Agreement, the Warrants, the

Registration Rights Agreement, the Share Escrow Agreement, the Funds

Escrow Agreement, all exhibits and schedules thereto and hereto and any

other documents or agreements executed in connection with the transactions

contemplated hereunder.

"Transfer Agent" means Corporate Stock Transfer, the current

transfer agent of the Company, with a mailing address of 3200 Cherry

Creek Dr. South Suite 430, Denver Co. 80209 and a facsimile number of

(303) 282-5800, and any successor transfer agent of the Company.

"Variable Rate Transaction" shall have the meaning ascribed to such

term in Section 4.12(b).

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"VWAP" means, for any date, the price determined by the first of the

following clauses that applies: (a) if the Common Stock is then listed or

quoted on a Trading Market, the daily volume weighted average price of the

Common Stock for such date (or the nearest preceding date) on the Trading

Market on which the Common Stock is then listed or quoted as reported by

Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time)

to 4:02 p.m. (New York City time)), (b) if the OTC Bulletin Board is not

a Trading Market, the volume weighted average price of the Common Stock

for such date (or the nearest preceding date) on the OTC Bulletin Board,

OTC Bulletin Board and if prices for the Common Stock are then reported in

the "Pink Sheets" published by Pink OTC Markets, Inc. (or a similar

organization or agency succeeding to its functions of reporting prices),

the most recent bid price per share of the Common Stock so reported, or

(d) in all other cases, the fair market value of a share of Common Stock

as determined by an independent appraiser selected in good faith by the

Purchasers of a majority in interest of the Shares then outstanding and

reasonably acceptable to the Company, the fees and expenses of which shall

be paid by the Company.

"Wangs" means, collectively, Jimmy Wang and Mindy Wang, residing at

408 N. Canal Street, Unit A&B, South San Francisco, California 94080.

"Warrants" means, collectively, the Common Stock purchase warrants

delivered to the Purchasers at the Closing in accordance with Section

2.2(a) hereof, which Warrants shall be exercisable immediately and have a

term of exercise equal to 5 years, in the form of Exhibit C attached

hereto.

"Warrant Shares" means the shares of Common Stock issuable upon

exercise of the Warrants.

"WS" means Weinstein Smith LLP with offices located at 420 Lexington

Avenue, Suite 2620, New York, New York 10170-0002.

ARTICLE II.

PURCHASE AND SALE

2.1Closing. On the Closing Date, upon the terms and subject to the

conditions set forth herein, substantially concurrent with the execution and

delivery of this Agreement by the parties hereto, the Company agrees to sell,

and the Purchasers, severally and not jointly, agree to purchase, up to an

aggregate of $8,000,000 of Shares and Warrants. Each Purchaser shall deliver to

the Company via wire transfer or a certified check of immediately available

funds equal to such Purchaser's Subscription Amount as set forth on the

signature page hereto executed by such Purchaser, and the Company shall deliver

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to each Purchaser its respective Shares and a Warrant, as determined pursuant to

Section 2.2(a), and the Company and each Purchaser shall deliver the other items

set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the

covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall

occur at the offices of WS or such other location as the parties shall mutually

agree.

2.2Deliveries.

(a) On or prior to the Closing Date, the Company shall

deliver or cause to be delivered to each Purchaser the following:

(i) this Agreement duly executed by the

Company;

(ii) a legal opinion from Company Counsel and

the Company's PRC counsel addressed to the Purchasers and the

placement agent, substantially in the form of Exhibit B attached

hereto;

(iii) a copy of the irrevocable instructions to

the Transfer Agent instructing the Transfer Agent to deliver, on an

expedited basis, a certificate evidencing a number of Shares equal

to such Purchaser's Subscription Amount divided by the Per Share

Purchase Price, registered in the name of such Purchaser;

(iv) a Warrant registered in the name of such

Purchaser to purchase up to a number of shares of Common Stock equal

to 100% of such Purchaser's Shares, with an exercise price equal to

$5.65, subject to adjustment therein;

(v) the Share Escrow Agreement duly executed by

the Company, the Share Escrow Agent and the Wangs;

(vi) instruction letter instructing the transfer

agent to issue the Company Make Good Shares, which shall be

delivered on or before April 22, 2010 duly executed by the Company;

and

(vii) the Registration Rights Agreement duly

executed by the Company.

(b) On or prior to the Closing Date, each Purchaser shall

deliver or cause to be delivered to the Company the following:

(i) this Agreement duly executed by such

Purchaser;

(ii) such Purchaser's Subscription Amount by

wire transfer to the Funds Escrow Agent;

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(iii) the Share Escrow Agreement duly executed by

such Purchaser;

(iv) the Registration Rights Agreement duly

executed by such Purchaser; and

(v) the Selling Shareholder Questionnaire

attached to the Registration Rights Agreement, duly executed by such

Purchaser.

2.3Closing Conditions.

(a) The obligations of the Company hereunder in connection with

the Closing are subject to the following conditions being met:

(i) the accuracy in all material respects on

the Closing Date of the representations and warranties of the

Purchasers contained herein (unless as of a specific date therein);

(ii) all obligations, covenants and agreements

of each Purchaser required to be performed at or prior to the

Closing Date shall have been performed; and

(iii) the delivery by each Purchaser of the items

set forth in Section 2.2(b) of this Agreement.

(b) The respective obligations of the Purchasers hereunder

in connection with the Closing are subject to the following conditions

being met:

(i) the accuracy in all material respects when

made and on the Closing Date of the representations and warranties

of the Company contained herein (unless as of a specific date

therein);

(ii) all obligations, covenants and agreements

of the Company required to be performed at or prior to the Closing

Date shall have been performed;

(iii) the delivery by the Company of the items

set forth in Section 2.2(a) of this Agreement;

(iv) there shall have been no Material Adverse

Effect with respect to the Company since the date hereof; and

(v) from the date hereof to the Closing Date,

trading in the Common Stock shall not have been suspended by the

Commission or the Company's principal Trading Market

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(except for any suspension of trading of limited duration agreed to

by the Company, which suspension shall be terminated prior to the

Closing), and, at any time prior to the Closing Date, trading in

securities generally as reported by Bloomberg L.P. shall not have

been suspended or limited, or minimum prices shall not have been

established on securities whose trades are reported by such service,

or on any Trading Market, nor shall a banking moratorium have been

declared either by the United States or New York State authorities

nor shall there have occurred any material outbreak or escalation of

hostilities or other national or international calamity of such

magnitude in its effect on, or any material adverse change in, any

financial market which, in each case, in the reasonable judgment of

each Purchaser, makes it impracticable or inadvisable to purchase

the Securities at the Closing.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

3.1Representations and Warranties of the Company. Except as set forth in

the Disclosure Schedules, which Disclosure Schedules shall be deemed a part

hereof and shall qualify any representation or otherwise made herein to the

extent of the disclosure contained in the corresponding section of the

Disclosure Schedules, the Company hereby makes the following representations and

warranties to each Purchaser:

(a) Subsidiaries. All of the direct and indirect

subsidiaries of the Company are set forth on Schedule 3.1(a). The Company

owns, directly or indirectly, all of the capital stock or other equity

interests of each Subsidiary free and clear of any Liens, and all of the

issued and outstanding shares of capital stock of each Subsidiary are

validly issued and are fully paid, non-assessable and free of preemptive

and similar rights to subscribe for or purchase securities. If the

Company has no subsidiaries, all other references to the Subsidiaries or

any of them in the Transaction Documents shall be disregarded.

(b) Organization and Qualification. The Company and each

of the Subsidiaries is an entity duly incorporated or otherwise organized,

validly existing and in good standing under the laws of the jurisdiction

of its incorporation or organization, with the requisite power and

authority to own and use its properties and assets and to carry on its

business as currently conducted. Neither the Company nor any Subsidiary

is in violation nor default of any of the provisions of its respective

certificate or articles of incorporation, bylaws or other organizational

or charter documents. Each of the Company and the Subsidiaries is duly

qualified to conduct business and is in good standing as a foreign

corporation or other entity in each jurisdiction in which the nature of

the business conducted or property owned by it

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makes such qualification necessary, except where the failure to be so

qualified or in good standing, as the case may be, could not have or

reasonably be expected to result in: (i) a material adverse effect on the

legality, validity or enforceability of any Transaction Document, (ii) a

material adverse effect on the results of operations, assets, business,

prospects or condition (financial or otherwise) of the Company and the

Subsidiaries, taken as a whole, or (iii) a material adverse effect on the

Company's ability to perform in any material respect on a timely basis its

obligations under any Transaction Document (any of (i), (ii) or (iii), a

"Material Adverse Effect") and no Proceeding has been instituted in any

such jurisdiction revoking, limiting or curtailing or seeking to revoke,

limit or curtail such power and authority or qualification.

requisite corporate power and authority to enter into and to consummate

the transactions contemplated by each of the Transaction Documents and

otherwise to carry out its obligations hereunder and thereunder. The

execution and delivery of each of the Transaction Documents by the Company

and the consummation by it of the transactions contemplated hereby and

thereby have been duly authorized by all necessary action on the part of

the Company and no further action is required by the Company, the Board of

Directors or the Company's stockholders in connection therewith other than

in connection with the Required Approvals. Each Transaction Document to

which it is a party has been (or upon delivery will have been) duly

executed by the Company and, when delivered in accordance with the terms

hereof and thereof, will constitute the valid and binding obligation of

the Company enforceable against the Company in accordance with its terms,

except: (i) as limited by general equitable principles and applicable

bankruptcy, insolvency, reorganization, moratorium and other laws of

general application affecting enforcement of creditors' rights generally,

(ii) as limited by laws relating to the availability of specific

performance, injunctive relief or other equitable remedies and (iii)

insofar as indemnification and contribution provisions may be limited by

applicable law.

(d) No Conflicts. The execution, delivery and performance

by the Company of the Transaction Documents, the issuance and sale of the

Securities and the consummation by it of the transactions contemplated

hereby and thereby to which it is a party do not and will not: (i)

conflict with or violate any provision of the Company's or any

Subsidiary's certificate or articles of incorporation, bylaws or other

organizational or charter documents, (ii) conflict with, or constitute a

default (or an event that with notice or lapse of time or both would

become a default) under, result in the creation of any Lien upon any of

the properties or assets of the Company or any Subsidiary, or give to

others any rights of termination, amendment,

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acceleration or cancellation (with or without notice, lapse of time or

both) of, any agreement, credit facility, debt or other instrument

(evidencing a Company or Subsidiary debt or otherwise) or other

understanding to which the Company or any Subsidiary is a party or by

which any property or asset of the Company or any Subsidiary is bound or

affected, or (iii) subject to the Required Approvals, conflict with or

result in a violation of any law, rule, regulation, order, judgment,

injunction, decree or other restriction of any court or governmental

authority to which the Company or a Subsidiary is subject (including

federal and state securities laws and regulations), or by which any

property or asset of the Company or a Subsidiary is bound or affected;

except in the case of each of clauses (ii) and (iii), such as could not

have or reasonably be expected to result in a Material Adverse Effect.

(e) Filings, Consents and Approvals. The Company is not

required to obtain any consent, waiver, authorization or order of, give

any notice to, or make any filing or registration with, any court or other

federal, state, local or other governmental authority or other Person in

connection with the execution, delivery and performance by the Company of

the Transaction Documents, other than: (i) the filings required pursuant

to Section 4.4 of this Agreement, (ii) the filing with the Commission

pursuant to the Registration Rights Agreement, (iii) the notice and/or

application(s) to each applicable Trading Market for the issuance and sale

of the Securities and the listing of the Securities for trading thereon in

the time and manner required thereby, and (iv) the filing of Form D with

the Commission and such filings as are required to be made under

applicable state securities laws (collectively, the "Required Approvals").

(f) Issuance of the Securities. The Securities are duly

authorized and, when issued and paid for in accordance with the applicable

Transaction Documents, will be duly and validly issued, fully paid and

nonassessable, free and clear of all Liens imposed by the Company other

than restrictions on transfer provided for in the Transaction Documents.

The Warrant Shares, when issued in accordance with the terms of the

Transaction Documents, will be validly issued, fully paid and

nonassessable, free and clear of all Liens imposed by the Company other

than restrictions on transfer provided for in the Transaction Documents.

The Company has reserved from its duly authorized capital stock the

maximum number of shares of Common Stock issuable pursuant to this

Agreement and the Warrants.

(g) Capitalization. The capitalization of the Company is

as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall also include

the number of shares of Common Stock owned beneficially, and of record, by

Affiliates of the Company as of the date

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hereof. Except as disclosed on Schedule 3.1(g), the Company has not issued

any capital stock since its most recently filed periodic report under the

Exchange Act, other than pursuant to the exercise of employee stock

options under the Company's stock option plans, the issuance of shares of

Common Stock to employees pursuant to the Company's employee stock

purchase plans and pursuant to the conversion and/or exercise of Common

Stock Equivalents outstanding as of the date of the most recently filed

periodic report under the Exchange Act. No Person has any right of first

refusal, preemptive right, right of participation, or any similar right to

participate in the transactions contemplated by the Transaction Documents.

Except as a result of the purchase and sale of the Securities, there are

no outstanding options, warrants, scrip rights to subscribe to, calls or

commitments of any character whatsoever relating to, or securities, rights

or obligations convertible into or exercisable or exchangeable for, or

giving any Person any right to subscribe for or acquire any shares of

Common Stock, or contracts, commitments, understandings or arrangements by

which the Company or any Subsidiary is or may become bound to issue

additional shares of Common Stock or Common Stock Equivalents. The

issuance and sale of the Securities will not obligate the Company to issue

shares of Common Stock or other securities to any Person (other than the

Purchasers) and will not result in a right of any holder of Company

securities to adjust the exercise, conversion, exchange or reset price

under any of such securities. All of the outstanding shares of capital

stock of the Company are validly issued, fully paid and nonassessable,

have been issued in compliance with all federal and state securities laws,

and none of such outstanding shares was issued in violation of any

preemptive rights or similar rights to subscribe for or purchase

securities. No further approval or authorization of any stockholder, the

Board of Directors or others is required for the issuance and sale of the

Securities. There are no stockholders agreements, voting agreements or

other similar agreements with respect to the Company's capital stock to

which the Company is a party or, to the knowledge of the Company, between

or among any of the Company's stockholders.

(h) SEC Reports; Financial Statements. Except as set forth

on Schedule 3.1(h), the Company has filed all reports, schedules, forms,

statements and other documents required to be filed by the Company under

the Securities Act and the Exchange Act, including pursuant to Section

13(a) or 15(d) thereof, for the two years preceding the date hereof (or

such shorter period as the Company was required by law or regulation to

file such material) (the foregoing materials, including the exhibits

thereto and documents incorporated by reference therein, being

collectively referred to herein as the "SEC Reports") on a timely basis or

has received a valid extension of such time of filing and has filed any

such SEC Reports prior to the expiration of any such extension. As of

their respective dates, the SEC Reports complied in all material

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respects with the requirements of the Securities Act and the Exchange Act,

as applicable, and none of the SEC Reports, when filed, contained any

untrue statement of a material fact or omitted to state a material fact

required to be stated therein or necessary in order to make the statements

therein, in the light of the circumstances under which they were made, not

misleading. Except as set forth on Schedule 3.1(h), the Company has never

been an issuer subject to Rule 144(i) under the Securities Act. The

financial statements of the Company included in the SEC Reports comply in

all material respects with applicable accounting requirements and the

rules and regulations of the Commission with respect thereto as in effect

at the time of filing. Such financial statements have been prepared in

accordance with United States generally accepted accounting principles

applied on a consistent basis during the periods involved ("GAAP"), except

as may be otherwise specified in such financial statements or the notes

thereto and except that unaudited financial statements may not contain all

footnotes required by GAAP, and fairly present in all material respects

the financial position of the Company and its consolidated Subsidiaries as

of and for the dates thereof and the results of operations and cash flows

for the periods then ended, subject, in the case of unaudited statements,

to normal, immaterial, year-end audit adjustments.

(i) Material Changes; Undisclosed Events, Liabilities or

Developments. Since the date of the latest audited financial statements

included within the SEC Reports, except as specifically disclosed in a

subsequent SEC Report filed prior to the date hereof: (i) there has been

no event, occurrence or development that has had or that could reasonably

be expected to result in a Material Adverse Effect, (ii) the Company has

not incurred any liabilities (contingent or otherwise) other than (A)

trade payables and accrued expenses incurred in the ordinary course of

business consistent with past practice and (B) liabilities not required to

be reflected in the Company's financial statements pursuant to GAAP or

disclosed in filings made with the Commission, (iii) the Company has not

altered its method of accounting, (iv) the Company has not declared or

made any dividend or distribution of cash or other property to its

stockholders or purchased, redeemed or made any agreements to purchase or

redeem any shares of its capital stock and (v) except as disclosed on

Schedule 3.1(i), the Company has not issued any equity securities to any

officer, director or Affiliate, except pursuant to existing Company stock

option plans. The Company does not have pending before the Commission any

request for confidential treatment of information. Except for the

issuance of the Securities contemplated by this Agreement or as set forth

on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence or

development has occurred or exists, or is reasonably expected to occur or

exist, with respect to the

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<PAGE>

Company or its Subsidiaries or their respective business, properties,

operations, assets or financial condition, that would be required to be

disclosed by the Company under applicable securities laws at the time this

representation is made or deemed made that has not been publicly disclosed

at least 1 Trading Day prior to the date that this representation is made.

(j) Litigation. There is no action, suit, inquiry, notice

of violation, proceeding or investigation pending or, to the knowledge of

the Company, threatened against or affecting the Company, any Subsidiary

or any of their respective properties before or by any court, arbitrator,

governmental or administrative agency or regulatory authority (federal,

state, county, local or foreign) (collectively, an "Action") which (i)

adversely affects or challenges the legality, validity or enforceability

of any of the Transaction Documents or the Securities or (ii) could, if

there were an unfavorable decision, have or reasonably be expected to

result in a Material Adverse Effect. Neither the Company nor any

Subsidiary, nor any director or officer thereof, is or has been the

subject of any Action involving a claim of violation of or liability under

federal or state securities laws or a claim of breach of fiduciary duty.

There has not been, and to the knowledge of the Company, there is not

pending or contemplated, any investigation by the Commission involving the

Company or any current or former director or officer of the Company. The

Commission has not issued any stop order or other order suspending the

effectiveness of any registration statement filed by the Company or any

Subsidiary under the Exchange Act or the Securities Act.

(k) Labor Relations. No material labor dispute exists or,

to the knowledge of the Company, is imminent with respect to any of the

employees of the Company, which could reasonably be expected to result in

a Material Adverse Effect. None of the Company's or its Subsidiaries'

employees is a member of a union that relates to such employee's

relationship with the Company or such Subsidiary, and neither the Company

nor any of its Subsidiaries is a party to a collective bargaining

agreement, and the Company and its Subsidiaries believe that their

relationships with their employees are good. No executive officer, to the

knowledge of the Company, is, or is now expected to be, in violation of

any material term of any employment contract, confidentiality, disclosure

or proprietary information agreement or non-competition agreement, or any

other contract or agreement or any restrictive covenant in favor of any

third party, and the continued employment of each such executive officer

does not subject the Company or any of its Subsidiaries to any liability

with respect to any of the foregoing matters. The Company and its

Subsidiaries are in compliance with all U.S. federal, state, local and

foreign laws and regulations relating to employment and employment

practices, terms and conditions of employment and

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<PAGE>

wages and hours, except where the failure to be in compliance could not,

individually or in the aggregate, reasonably be expected to have a

Material Adverse Effect.

(l) Compliance. Neither the Company nor any Subsidiary:

(i) is in default under or in violation of (and no event has occurred that

has not been waived that, with notice or lapse of time or both, would

result in a default by the Company or any Subsidiary under), nor has the

Company or any Subsidiary received notice of a claim that it is in default

under or that it is in violation of, any indenture, loan or credit

agreement or any other agreement or instrument to which it is a party or

by which it or any of its properties is bound (whether or not such default

or violation has been waived), (ii) is in violation of any judgment,

decree, or order of any court, arbitrator or governmental body or (iii) is

or has been in violation of any statute, rule, ordinance or regulation of

any governmental authority, including without limitation all foreign,

federal, state and local laws relating to taxes, environmental protection,

occupational health and safety, product quality and safety and employment

and labor matters, except in each case as could not have or reasonably be

expected to result in a Material Adverse Effect.

(m) Regulatory Permits. The Company and the Subsidiaries

possess all certificates, authorizations and permits issued by the

appropriate federal, state, local or foreign regulatory authorities

necessary to conduct their respective businesses as described in the SEC

Reports, except where the failure to possess such permits could not

reasonably be expected to result in a Material Adverse Effect ("Material

Permits"), and neither the Company nor any Subsidiary has received any

notice of proceedings relating to the revocation or modification of any

Material Permit.

(n) Title to Assets. The Company and the Subsidiaries have

good and marketable title in fee simple to all real property owned by them

and good and marketable title in all personal property owned by them that

is material to the business of the Company and the Subsidiaries, in each

case free and clear of all Liens, except for Liens as do not materially

affect the value of such property and do not materially interfere with the

use made and proposed to be made of such property by the Company and the

Subsidiaries and Liens for the payment of federal, state or other taxes,

the payment of which is neither delinquent nor subject to penalties. Any

real property and facilities held under lease by the Company and the

Subsidiaries are held by them under valid, subsisting and enforceable

leases with which the Company and the Subsidiaries are in compliance.

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<PAGE>

(o) Patents and Trademarks. The Company and the

Subsidiaries have, or have rights to use, all patents, patent

applications, trademarks, trademark applications, service marks, trade

names, trade secrets, inventions, copyrights, licenses and other

intellectual property rights and similar rights as described in the SEC

Reports as necessary or material for use in connection with their

respective businesses and which the failure to so have could have a

Material Adverse Effect (collectively, the "Intellectual Property

Rights"). None of, and neither the Company nor any Subsidiary has

received a notice (written or otherwise) that any of, the Intellectual

Property Rights has expired, terminated or been abandoned, or is expected

to expire or terminate or be abandoned, within two (2) years from the date

of this Agreement. Neither the Company nor any Subsidiary has received,

since the date of the latest audited financial statements included within

the SEC Reports, a written notice of a claim or otherwise has any

knowledge that the Intellectual Property Rights violate or infringe upon

the rights of any Person, except as would not have a Material Adverse

Effect. To the knowledge of the Company, all such Intellectual Property

Rights are enforceable and there is no existing infringement by another

Person of any of the Intellectual Property Rights. The Company and its

Subsidiaries have taken reasonable security measures to protect the

secrecy, confidentiality and value of all of their intellectual

properties, except where failure to do so could not, individually or in

the aggregate, reasonably be expected to have a Material Adverse Effect.

(p) Insurance. The Company and the Subsidiaries are

insured by insurers of recognized financial responsibility against such

losses and risks and in such amounts as are prudent and customary in the

businesses in which the Company and the Subsidiaries are engaged,

including, but not limited to, directors and officers insurance coverage

at least equal to the aggregate Subscription Amount. Neither the Company

nor any Subsidiary has any reason to believe that it will not be able to

renew its existing insurance coverage as and when such coverage expires or

to obtain similar coverage from similar insurers as may be necessary to

continue its business without a significant increase in cost.

(q) Transactions With Affiliates and Employees. Except as

set forth in the SEC Reports, none of the officers or directors of the

Company and, to the knowledge of the Company, none of the employees of the

Company is presently a party to any transaction with the Company or any

Subsidiary (other than for services as employees, officers and directors),

including any contract, agreement or other arrangement providing for the

furnishing of services to or by, providing for rental of real or personal

property to or from, or otherwise requiring payments to or from any

officer, director or such employee or, to the knowledge of

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<PAGE>

the Company, any entity in which any officer, director, or any such

employee has a substantial interest or is an officer, director, trustee or

partner, in each case in excess of $120,000 other than for: (i) payment of

salary or consulting fees for services rendered, (ii) reimbursement for

expenses incurred on behalf of the Company and (iii) other employee

benefits, including stock option agreements under any stock option plan of

the Company.

(r) Sarbanes-Oxley; Internal Accounting Controls. Except

as disclosed in Exhibit 31.1 to the Company's most recently filed periodic

SEC Report, the Company is in compliance with any and all applicable

requirements of the Sarbanes-Oxley Act of 2002 that are effective as of

the date hereof, and any and all applicable rules and regulations

promulgated by the Commission thereunder that are effective as of the date

hereof and as of the Closing Date. The Company and the Subsidiaries

maintain a system of internal accounting controls sufficient to provide

reasonable assurance that: (i) transactions are executed in accordance

with management's general or specific authorizations, (ii) transactions

are recorded as necessary to permit preparation of financial statements in

conformity with GAAP and to maintain asset accountability, (iii) access to

assets is permitted only in accordance with management's general or

specific authorization, and (iv) the recorded accountability for assets is

compared with the existing assets at reasonable intervals and appropriate

action is taken with respect to any differences. The Company has

established disclosure controls and procedures (as defined in Exchange Act

Rules 13a-15(e) and 15d-15(e)) for the Company and designed such

disclosure controls and procedures to ensure that information required to

be disclosed by the Company in the reports it files or submits under the

Exchange Act is recorded, processed, summarized and reported, within the

time periods specified in the Commission's rules and forms. The Company's

certifying officers have evaluated the effectiveness of the Company's

disclosure controls and procedures as of the end of the period covered by

the Company's most recently filed periodic report under the Exchange Act

(such date, the "Evaluation Date"). The Company presented in its most

recently filed periodic report under the Exchange Act the conclusions of

the certifying officers about the effectiveness of the disclosure controls

and procedures based on their evaluations as of the Evaluation Date.

Since the Evaluation Date, there have been no changes in the Company's

internal control over financial reporting (as such term is defined in the

Exchange Act) that has materially affected, or is reasonably likely to

materially affect, the Company's internal control over financial

reporting.

(s) Certain Fees. Except as set forth in Schedule 3.1(s)

attached hereto, no brokerage or finder's fees or commissions are or will

be payable by the Company to any broker, financial

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<PAGE>

advisor or consultant, finder, placement agent, investment banker, bank or

other Person with respect to the transactions contemplated by the

Transaction Documents. The Purchasers shall have no obligation with

respect to any fees or with respect to any claims made by or on behalf of

other Persons for fees of a type contemplated in this Section that may be

due in connection with the transactions contemplated by the Transaction

Documents.

(t) Private Placement. Assuming the accuracy of the

Purchasers' representations and warranties set forth in Section 3.2, no

registration under the Securities Act is required for the offer and sale

of the Securities by the Company to the Purchasers as contemplated hereby.

The issuance and sale of the Securities hereunder does not contravene the

rules and regulations of the Trading Market.

(u) Investment Company. The Company is not, and is not an

Affiliate of, and immediately after receipt of payment for the Securities,

will not be or be an Affiliate of, an "investment company" within the

meaning of the Investment Company Act of 1940, as amended. The Company

shall conduct its business in a manner so that it will not become an

"investment company" subject to registration under the Investment Company

Act of 1940, as amended.

(v) Registration Rights. Other than each of the

Purchasers, no Person has any right to cause the Company to effect the

registration under the Securities Act of any securities of the Company.

(w) Listing and Maintenance Requirements. The Common Stock

is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and

the Company has taken no action designed to, or which to its knowledge is

likely to have the effect of, terminating the registration of the Common

Stock under the Exchange Act nor has the Company received any notification

that the Commission is contemplating terminating such registration. The

Company has not, in the 12 months preceding the date hereof, received

notice from any Trading Market on which the Common Stock is or has been

listed or quoted to the effect that the Company is not in compliance with

the listing or maintenance requirements of such Trading Market. The

Company is, and has no reason to believe that it will not in the

foreseeable future continue to be, in compliance with all such listing and

maintenance requirements.

(x) Application of Takeover Protections. The Company and

the Board of Directors have taken all necessary action, if any, in order

to render inapplicable any control share acquisition, business

combination, poison pill (including any distribution under a rights

agreement) or other similar anti-takeover provision under the Company's

certificate of incorporation (or

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<PAGE>

similar charter documents) or the laws of its state of incorporation that

is or could become applicable to the Purchasers as a result of the

Purchasers and the Company fulfilling their obligations or exercising

their rights under the Transaction Documents, including without limitation

as a result of the Company's issuance of the Securities and the

Purchasers' ownership of the Securities.

(y) Disclosure. Except with respect to the material terms

and conditions of the transactions contemplated by the Transaction

Documents, the Company confirms that neither it nor any other Person

acting on its behalf has provided any of the Purchasers or their agents or

counsel with any information that it believes constitutes or might

constitute material, non-public information. The Company understands and

confirms that the Purchasers will rely on the foregoing representation in

effecting transactions in securities of the Company. All of the

disclosure furnished by or on behalf of the Company to the Purchasers

regarding the Company, its business and the transactions contemplated

hereby, including the Disclosure Schedules to this Agreement, is true and

correct and does not contain any untrue statement of a material fact or

omit to state any material fact necessary in order to make the statements

made therein, in light of the circumstances under which they were made,

not misleading. The press releases disseminated by the Company during the

twelve months preceding the date of this Agreement taken as a whole do not

contain any untrue statement of a material fact or omit to state a

material fact required to be stated therein or necessary in order to make

the statements therein, in light of the circumstances under which they

were made and when made, not misleading. The Company acknowledges and

agrees that no Purchaser makes or has made any representations or

warranties with respect to the transactions contemplated hereby other than

those specifically set forth in Section 3.2 hereof.

(z) No Integrated Offering. Assuming the accuracy of the

Purchasers' representations and warranties set forth in Section 3.2,

neither the Company, nor any of its Affiliates, nor any Person acting on

its or their behalf has, directly or indirectly, made any offers or sales

of any security or solicited any offers to buy any security, under

circumstances that would cause this offering of the Securities to be

integrated with prior offerings by the Company for purposes of (i) the

Securities Act which would require the registration of any such securities

under the Securities Act, or (ii) any applicable shareholder approval

provisions of any Trading Market on which any of the securities of the

Company are listed or designated.

(aa) Solvency. Based on the consolidated financial

condition of the Company as of the Closing Date, after giving effect to

the receipt by the Company of the proceeds from the

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<PAGE>

sale of the Securities hereunder: (i) the fair saleable value of the

Company's assets exceeds the amount that will be required to be paid on or

in respect of the Company's existing debts and other liabilities

(including known contingent liabilities) as they mature, (ii) the

Company's assets do not constitute unreasonably small capital to carry on

its business as now conducted and as proposed to be conducted including

its capital needs taking into account the particular capital requirements

of the business conducted by the Company, and projected capital

requirements and capital availability thereof, and (iii) the current cash

flow of the Company, together with the proceeds the Company would receive,

were it to liquidate all of its assets, after taking into account all

anticipated uses of the cash, would be sufficient to pay all amounts on or

in respect of its liabilities when such amounts are required to be paid.

The Company does not intend to incur debts beyond its ability to pay such

debts as they mature (taking into account the timing and amounts of cash

to be payable on or in respect of its debt). The Company has no knowledge

of any facts or circumstances which lead it to believe that it will file

for reorganization or liquidation under the bankruptcy or reorganization

laws of any jurisdiction within one year from the Closing Date. Schedule

3.1(aa) sets forth as of the date hereof all outstanding secured and

unsecured Indebtedness of the Company or any Subsidiary, or for which the

Company or any Subsidiary has commitments. For the purposes of this

Agreement, "Indebtedness" means (x) any liabilities for borrowed money or

amounts owed in excess of $50,000 (other than trade accounts payable

incurred in the ordinary course of business), (y) all guaranties,

endorsements and other contingent obligations in respect of indebtedness

of others, whether or not the same are or should be reflected in the

Company's balance sheet (or the notes thereto), except guaranties by

endorsement of negotiable instruments for deposit or collection or similar

transactions in the ordinary course of business; and (z) the present value

of any lease payments in excess of $50,000 due under leases required to be

capitalized in accordance with GAAP. Neither the Company nor any

Subsidiary is in default with respect to any Indebtedness.

(bb) Tax Status. Except for matters that would not,

individually or in the aggregate, have or reasonably be expected to result

in a Material Adverse Effect, the Company and each Subsidiary (i) has made

or filed all United States federal and state income and all foreign income

and franchise tax returns, reports and declarations required by any

jurisdiction to which it is subject, (ii) has paid all taxes and other

governmental assessments and charges that are material in amount, shown or

determined to be due on such returns, reports and declarations and (iii)

has set aside on its books provision reasonably adequate for the payment

of all material taxes for periods subsequent to the periods to which such

returns, reports or

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<PAGE>

declarations apply. There are no unpaid taxes in any material amount

claimed to be due by the taxing authority of any jurisdiction, and the

officers of the Company or of any Subsidiary know of no basis for any such

claim.

(cc) No General Solicitation. Neither the Company nor any

person acting on behalf of the Company has offered or sold any of the

Securities by any form of general solicitation or general advertising.

The Company has offered the Securities for sale only to the Purchasers and

certain other "accredited investors" within the meaning of Rule 501 under

the Securities Act.

(dd) Foreign Corrupt Practices. Neither the Company, nor to

the knowledge of the Company, any agent or other person acting on behalf

of the Company, has: (i) directly or indirectly, used any funds for

unlawful contributions, gifts, entertainment or other unlawful expenses

related to foreign or domestic political activity, (ii) made any unlawful

payment to foreign or domestic government officials or employees or to any

foreign or domestic political parties or campaigns from corporate funds,

(iii) failed to disclose fully any contribution made by the Company (or

made by any person acting on its behalf of which the Company is aware)

which is in violation of law or (iv) violated in any material respect any

provision of the Foreign Corrupt Practices Act of 1977, as amended.

(ee) Accountants. The Company's accounting firm is set

forth on Schedule 3.1(ee) of the Disclosure Schedules. To the knowledge

and belief of the Company, such accounting firm: (i) is a registered

public accounting firm as required by the Exchange Act and (ii) shall

express its opinion with respect to the financial statements to be

included in the Company's Annual Report for the year ending December 31,

2009.

(ff) No Disagreements with Accountants and Lawyers.

There are no disagreements of any kind presently existing, or reasonably

anticipated by the Company to arise, between the Company and the

accountants and lawyers formerly or presently employed by the Company and

the Company is current with respect to any fees owed to its accountants

and lawyers which could affect the Company's ability to perform any of its

obligations under any of the Transaction Documents.

(gg) Acknowledgment Regarding Purchasers' Purchase of

Securities. The Company acknowledges and agrees that each of the

Purchasers is acting solely in the capacity of an arm's length purchaser

with respect to the Transaction Documents and the transactions

contemplated thereby. The Company further acknowledges that no Purchaser

is acting as a financial advisor or fiduciary of the Company (or in any

similar capacity) with respect to the Transaction Documents and the

transactions

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<PAGE>

contemplated thereby and any advice given by any Purchaser or any of their

respective representatives or agents in connection with the Transaction

Documents and the transactions contemplated thereby is merely incidental

to the Purchasers' purchase of the Securities. The Company further

represents to each Purchaser that the Company's decision to enter into

this Agreement and the other Transaction Documents has been based solely

on the independent evaluation of the transactions contemplated hereby by

the Company and its representatives.

(hh) Acknowledgment Regarding Purchaser's Trading Activity.

Anything in this Agreement or elsewhere herein to the contrary

notwithstanding (except for Sections 3.2(f) and 4.15 hereof), it is

understood and acknowledged by the Company that: (i) none of the

Purchasers have been asked by the Company to agree, nor has any Purchaser

agreed, to desist from purchasing or selling, long and/or short,

securities of the Company, or "derivative" securities based on securities

issued by the Company or to hold the Securities for any specified term,

(ii) past or future open market or other transactions by any Purchaser,

specifically including, without limitation, Short Sales or "derivative"

transactions, before or after the closing of this or future private

placement transactions, may negatively impact the market price of the

Company's publicly-traded securities, (iii) any Purchaser, and counter-

parties in "derivative" transactions to which any such Purchaser is a

party, directly or indirectly, may presently have a "short" position in

the Common Stock and (iv) each Purchaser shall not be deemed to have any

affiliation with or control over any arm's length counter-party in any

"derivative" transaction. The Company further understands and

acknowledges that (y) one or more Purchasers may engage in hedging

activities at various times during the period that the Securities are

outstanding, including, without limitation, during the periods that the

value of the Warrant Shares deliverable with respect to Securities are

being determined, and (z) such hedging activities (if any) could reduce

the value of the existing stockholders' equity interests in the Company at

and after the time that the hedging activities are being conducted. The

Company acknowledges that such aforementioned hedging activities do not

constitute a breach of any of the Transaction Documents.

(ii) Regulation M Compliance. The Company has not, and to

its knowledge no one acting on its behalf has, (i) taken, directly or

indirectly, any action designed to cause or to result in the stabilization

or manipulation of the price of any security of the Company to facilitate

the sale or resale of any of the Securities, (ii) sold, bid for,

purchased, or paid any compensation for soliciting purchases of, any of

the Securities, or (iii) paid or agreed to pay to any Person any

compensation for soliciting another to purchase any other securities of

the Company, other than, in the case of clauses (ii) and (iii),

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<PAGE>

compensation paid to the Company's placement agent in connection with the

placement of the Securities.

(jj) Stock Option Plans. Each stock option granted by the

Company under the Company's stock option plan was granted (i) in

accordance with the terms of the Company's stock option plan and (ii) with

an exercise price at least equal to the fair market value of the Common

Stock on the date such stock option would be considered granted under GAAP

and applicable law. No stock option granted under the Company's stock

option plan has been backdated. The Company has not knowingly granted,

and there is no and has been no Company policy or practice to knowingly

grant, stock options prior to, or otherwise knowingly coordinate the grant

of stock options with, the release or other public announcement of

material information regarding the Company or its Subsidiaries or their

financial results or prospects.

(kk) Office of Foreign Assets Control. Neither the Company

nor, to the Company's knowledge, any director, officer, agent, employee or

affiliate of the Company is currently subject to any U.S. sanctions

administered by the Office of Foreign Assets Control of the U.S. Treasury

Department ("OFAC").

(ll) U.S. Real Property Holding Corporation. The Company is

not and has never been a U.S. real property holding corporation within the

meaning of Section 897 of the Internal Revenue Code of 1986, as amended,

and the Company shall so certify upon Purchaser's request.

(mm) Bank Holding Company Act. Neither the Company nor any

of its Subsidiaries or Affiliates is subject to the Bank Holding Company

Act of 1956, as amended (the "BHCA") and to regulation by the Board of

Governors of the Federal Reserve System (the "Federal Reserve"). Neither

the Company nor any of its Subsidiaries or Affiliates owns or controls,

directly or indirectly, five percent (5%) or more of the outstanding

shares of any class of voting securities or twenty-five percent or more of

the total equity of a bank or any entity that is subject to the BHCA and

to regulation by the Federal Reserve. Neither the Company nor any of its

Subsidiaries or Affiliates exercises a controlling influence over the

management or policies of a bank or any entity that is subject to the BHCA

and to regulation by the Federal Reserve.

(nn) Money Laundering. The operations of the Company are

and have been conducted at all times in compliance with applicable

financial record-keeping and reporting requirements of the Currency and

Foreign Transactions Reporting Act of 1970, as amended, applicable money

laundering statutes and applicable rules and regulations thereunder

(collectively, the "Money Laundering Laws"), and no action, suit or

proceeding by or before

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<PAGE>

any court or governmental agency, authority or body or any arbitrator

involving the Company with respect to the Money Laundering Laws is pending

or, to the knowledge of the Company, threatened.

3.2Representations and Warranties of the Purchasers. Each Purchaser, for

itself and for no other Purchaser, hereby represents and warrants as of the date

hereof and as of the Closing Date to the Company as follows (unless as of a

specific date therein):

(a) Organization; Authority. Such Purchaser is either an

individual or an entity duly organized, validly existing and in good

standing under the laws of the jurisdiction of its organization with full

right, corporate or partnership power and authority to enter into and to

consummate the transactions contemplated by the Transaction Documents and

otherwise to carry out its obligations hereunder and thereunder. The

execution and delivery of the Transaction Documents and performance by

such Purchaser of the transactions contemplated by the Transaction

Documents have been duly authorized by all necessary corporate,

partnership, limited liability company or similar action, as applicable,

on the part of such Purchaser. Each Transaction Document to which it is a

party has been duly executed by such Purchaser, and when delivered by such

Purchaser in accordance with the terms hereof, will constitute the valid

and legally binding obligation of such Purchaser, enforceable against it

in accordance with its terms, except: (i) as limited by general equitable

principles and applicable bankruptcy, insolvency, reorganization,

moratorium and other laws of general application affecting enforcement of

creditors' rights generally, (ii) as limited by laws relating to the

availability of specific performance, injunctive relief or other equitable

remedies and (iii) insofar as indemnification and contribution provisions

may be limited by applicable law.

(b) Own Account. Such Purchaser understands that the

Securities are "restricted securities" and have not been registered under

the Securities Act or any applicable state securities law and is acquiring

the Securities as principal for its own account and not with a view to or

for distributing or reselling such Securities or any part thereof in

violation of the Securities Act or any applicable state securities law,

has no present intention of distributing any of such Securities in

violation of the Securities Act or any applicable state securities law and

has no direct or indirect arrangement or understandings with any other

persons to distribute or regarding the distribution of such Securities in

violation of the Securities Act or any applicable state securities law

(this representation and warranty not limiting such Purchaser's right to

sell the Securities pursuant to the Registration Statement or otherwise in

compliance with applicable federal and state

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<PAGE>

securities laws). Such Purchaser is acquiring the Securities hereunder in

the ordinary course of its business.

offered the Securities, it was, and as of the date hereof it is, and on

each date on which it exercises any Warrants, it will be either: (i) an

"accredited investor" as defined in Rule 501 under the Securities Act or

(ii) a "qualified institutional buyer" as defined in Rule 144A(a) under

the Securities Act. Such Purchaser is not required to be registered as a

broker-dealer under Section 15 of the Exchange Act.

(d) Experience of Such Purchaser. Such Purchaser, either

alone or together with its representatives, has such knowledge,

sophistication and experience in business and financial matters so as to

be capable of evaluating the merits and risks of the prospective

investment in the Securities, and has so evaluated the merits and risks of

such investment. Such Purchaser is able to bear the economic risk of an

investment in the Securities and, at the present time, is able to afford a

complete loss of such investment.

(e) General Solicitation. Such Purchaser is not purchasing

the Securities as a result of any advertisement, article, notice or other

communication regarding the Securities published in any newspaper,

magazine or similar media or broadcast over television or radio or

presented at any seminar or any other general solicitation or general

advertisement.

(f) Certain Transactions and Confidentiality. Other than

consummating the transactions contemplated hereunder, such Purchaser has

not directly or indirectly, nor has any Person acting on behalf of or

pursuant to any understanding with such Purchaser, executed any purchases

or sales, including Short Sales, of the securities of the Company during

the period commencing as of the time that such Purchaser first received a

term sheet (written or oral) as of the Company or any other Person

representing the Company setting forth the material terms of the

transactions contemplated hereunder and ending immediately prior to the

execution hereof. Notwithstanding the foregoing, in the case of a

Purchaser that is a multi-managed investment vehicle whereby separate

portfolio managers manage separate portions of such Purchaser's assets and

the portfolio managers have no direct knowledge of the investment

decisions made by the portfolio managers managing other portions of such

Purchaser's assets, the representation set forth above shall only apply

with respect to the portion of assets managed by the portfolio manager

that made the investment decision to purchase the Securities covered by

this Agreement. Other than to other Persons party to this Agreement, such

Purchaser has maintained the confidentiality of all disclosures made to it

in connection with this transaction

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<PAGE>

(including the existence and terms of this transaction). Notwithstanding

the foregoing, for avoidance of doubt, nothing contained herein shall

constitute a representation or warranty, or preclude any actions, with

respect to the identification of the availability of, or securing of,

available shares to borrow in order to effect Short Sales or similar

transactions in the future.

The Company acknowledges and agrees that the representations contained in

Section 3.2 shall not modify, amend or affect such Purchaser's right to rely on

the Company's representations and warranties contained in this Agreement or any

representations and warranties contained in any other Transaction Document or

any other document or instrument executed and/or delivered in connection with

this Agreement or the consummation of the transaction contemplated hereby.

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

4.1Transfer Restrictions.

(a) The Securities may only be disposed of in compliance

with state and federal securities laws. In connection with any transfer

of Securities other than pursuant to an effective registration statement

or Rule 144, to the Company or to an Affiliate of a Purchaser or in

connection with a pledge as contemplated in Section 4.1(b), the Company

may require the transferor thereof to provide to the Company an opinion of

counsel selected by the transferor and reasonably acceptable to the

Company, the form and substance of which opinion shall be reasonably

satisfactory to the Company, to the effect that such transfer does not

require registration of such transferred Securities under the Securities

Act. As a condition of transfer, any such transferee shall agree in

writing to be bound by the terms of this Agreement and the Registration

Rights Agreement and shall have the rights and obligations of a Purchaser

under this Agreement and the Registration Rights Agreement.

(b) The Purchasers agree to the imprinting, so long as is

required by this Section 4.1, of a legend on any of the Securities in the

following form:

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE

COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN

EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED

(THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD

EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE

SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A

TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE

SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS

EVIDENCED BY A LEGAL

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OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF

WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE

PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED

BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN

"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT

OR OTHER LOAN SECURED BY SUCH SECURITIES.

The Company acknowledges and agrees that a Purchaser may from time

to time pledge pursuant to a bona fide margin agreement with a registered

broker-dealer or grant a security interest in some or all of the

Securities to a financial institution that is an "accredited investor" as

defined in Rule 501(a) under the Securities Act and who agrees to be bound

by the provisions of this Agreement and the Registration Rights Agreement

and, if required under the terms of such arrangement, such Purchaser may

transfer pledged or secured Securities to the pledgees or secured parties.

Such a pledge or transfer would not be subject to approval of the Company

and no legal opinion of legal counsel of the pledgee, secured party or

pledgor shall be required in connection therewith. Further, no notice

shall be required of such pledge. At the appropriate Purchaser's expense,

the Company will execute and deliver such reasonable documentation as a

pledgee or secured party of Securities may reasonably request in

connection with a pledge or transfer of the Securities, including, if the

Securities are subject to registration pursuant to the Registration Rights

Agreement, the preparation and filing of any required prospectus

supplement under Rule 424(b)(3) under the Securities Act or other

applicable provision of the Securities Act to appropriately amend the list

of Selling Stockholders (as defined in the Registration Rights Agreement)

thereunder.

shall not contain any legend (including the legend set forth in Section

4.1(b) hereof), (i) while a registration statement (including the

Registration Statement) covering the resale of such security is effective

under the Securities Act, (ii) following any sale of such Shares or

Warrant Shares pursuant to Rule 144, (iii) if such Shares or Warrant

Shares are eligible for sale under Rule 144, without the requirement for

the Company to be in compliance with the current public information

required under Rule 144 as to such Shares and Warrant Shares and without

volume or manner-of-sale restrictions, or (iv) if such legend is not

required under applicable requirements of the Securities Act (including

judicial interpretations and pronouncements issued by the staff of the

Commission). The Company shall cause its counsel to issue a legal opinion

to the Transfer Agent promptly after the Effective Date if required by the

Transfer Agent to effect the removal of the legend hereunder. If all or

any portion of a Warrant is exercised at a time when there is an

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<PAGE>

effective registration statement to cover the resale of the Warrant

Shares, or if such Shares or Warrant Shares may be sold under Rule 144 and

the Company is then in compliance with the current public information

required under Rule 144, or if the Shares or Warrant Shares may be sold

under Rule 144 without the requirement for the Company to be in compliance

with the current public information required under Rule 144 as to such

Shares or Warrant Shares or if such legend is not otherwise required under

applicable requirements of the Securities Act (including judicial

interpretations and pronouncements issued by the staff of the Commission)

then such Warrant Shares shall be issued free of all legends. The Company

agrees that following the Effective Date or at such time as such legend is

no longer required under this Section 4.1(c), it will, no later than three

Trading Days following the delivery by a Purchaser to the Company or the

Transfer Agent of (y) a certificate representing Shares or Warrant Shares,

as the case may be, issued with a restrictive legend and (z) solely in

connection with the removal of a legend under clauses (ii) and (iii)

herein, a customary Rule 144 representation letter confirming acquisition

date and affiliate status (such third Trading Day after the delivery of

(y) and, as applicable, (z) herein, the "Legend Removal Date"), deliver or

cause to be delivered to such Purchaser a certificate representing such

shares that is free from all restrictive and other legends. The Company

may not make any notation on its records or give instructions to the

Transfer Agent that enlarge the restrictions on transfer set forth in this

Section 4. Certificates for Securities subject to legend removal

hereunder shall be transmitted by the Transfer Agent to the Purchaser by

crediting the account of the Purchaser's prime broker with the Depository

Trust Company System as directed by such Purchaser.

(d) In addition to such Purchaser's other available

remedies, the Company shall pay to a Purchaser, in cash, as partial

liquidated damages and not as a penalty, for each $1,000 of Shares or

Warrant Shares (based on the VWAP of the Common Stock on the date such

Securities are submitted to the Transfer Agent) delivered for removal of

the restrictive legend and subject to Section 4.1(c), $10 per Trading Day

(increasing to $20 per Trading Day five (5) Trading Days after such

damages have begun to accrue) for each Trading Day after the Legend

Removal Date until such certificate is delivered without a legend. Nothing

herein shall limit such Purchaser's right to pursue actual damages for the

Company's failure to deliver certificates representing any Securities as

required by the Transaction Documents, and such Purchaser shall have the

right to pursue all remedies available to it at law or in equity

including, without limitation, a decree of specific performance and/or

injunctive relief.

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<PAGE>

(e) Each Purchaser, severally and not jointly with the

other Purchasers, agrees with the Company that such Purchaser will sell

any Securities pursuant to either the registration requirements of the

Securities Act, including any applicable prospectus delivery requirements,

or an exemption therefrom, and that if Securities are sold pursuant to a

Registration Statement, they will be sold in compliance with the plan of

distribution set forth therein, and acknowledges that the removal of the

restrictive legend from certificates representing Securities as set forth

in this Section 4.1 is predicated upon the Company's reliance upon this

understanding.

4.2Furnishing of Information; Public Information.

(a) If the Common Stock is not registered under Section

12(b) or 12(g) of the Exchange Act on the date hereof, the Company agrees

to cause the Common Stock to be registered under Section 12(g) of the

Exchange Act on or before the 60[th] calendar day following the date

hereof. Until the time that no Purchaser owns Securities (other than

Warrants that have expired pursuant to their terms), the Company covenants

to maintain the registration of the Common Stock under Section 12(b) or

12(g) of the Exchange Act and to timely file (or obtain extensions in

respect thereof and file within the applicable grace period) all reports

required to be filed by the Company after the date hereof pursuant to the

Exchange Act even if the Company is not then subject to the reporting

requirements of the Exchange Act. As long as any Purchaser owns

Securities (other than Warrants that have expired pursuant to their

terms), if the Company is not required to file reports pursuant to the

Exchange Act, it will prepare and furnish to the Purchasers and make

publicly available in accordance with Rule 144(c) such information as is

required for the Purchasers to sell the Securities, including without

limitation, under Rule 144. The Company further covenants that it will

take such further action as any holder of Securities may reasonably

request, to the extent required from time to time to enable such Person to

sell such Securities without registration under the Securities Act,

including without limitation, within the requirements of the exemption

provided by Rule 144.

(b) At any time during the period commencing from the six

(6) month anniversary of the date hereof and ending at such time that all

of the Securities may be sold without the requirement for the Company to

be in compliance with Rule 144(c)(1) and otherwise without restriction or

limitation pursuant to Rule 144, if the Company shall fail for any reason

to satisfy the current public information requirement under Rule 144(c) (a

"Public Information Failure") then, in addition to such Purchaser's other

available remedies, the Company shall pay to a Purchaser, in cash, as

partial liquidated damages and not as a penalty, by reason of any such

delay in or reduction of its ability to sell

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<PAGE>

the Securities, an amount in cash equal to one and one-half percent (1.5%)

of the aggregate Subscription Amount of such Purchaser's Securities on the

day of a Public Information Failure and on every thirtieth (30[th]) day

(pro rated for periods totaling less than thirty days) thereafter until

the earlier of (a) the date such Public Information Failure is cured and

(b) such time that such public information is no longer required for the

Purchasers to transfer the Shares and Warrant Shares pursuant to Rule

144. The payments to which a Purchaser shall be entitled pursuant to this

Section 4.2(b) are referred to herein as "Public Information Failure

Payments." Public Information Failure Payments shall be paid on the

earlier of (i) the last day of the calendar month during which such Public

Information Failure Payments are incurred and (ii) the third (3[rd])

Business Day after the event or failure giving rise to the Public

Information Failure Payments is cured. In the event the Company fails to

make Public Information Failure Payments in a timely manner, such Public

Information Failure Payments shall bear interest at the rate of 1.5% per

month (prorated for partial months) until paid in full. Nothing herein

shall limit such Purchaser's right to pursue actual damages for the Public

Information Failure, and such Purchaser shall have the right to pursue all

remedies available to it at law or in equity including, without

limitation, a decree of specific performance and/or injunctive relief.

4.3Integration. The Company shall not sell, offer for sale or solicit

offers to buy or otherwise negotiate in respect of any security (as defined in

Section 2 of the Securities Act) that would be integrated with the offer or sale

of the Securities in a manner that would require the registration under the

Securities Act of the sale of the Securities or that would be integrated with

the offer or sale of the Securities for purposes of the rules and regulations of

any Trading Market such that it would require shareholder approval prior to the

closing of such other transaction unless shareholder approval is obtained before

the closing of such subsequent transaction.

4.4Securities Laws Disclosure; Publicity. The Company shall, by 8:30 a.m.

(New York City time) on the Trading Day immediately following the date hereof,

issue a Current Report on Form 8-K and press release disclosing the material

terms of the transactions contemplated hereby, and including the Transaction

Documents as exhibits thereto. From and after the issuance of such press

release, the Company shall have publicly disclosed all material, non-public

information delivered to any of the Purchasers by the Company or any of its

subsidiaries, or any of their respective officers, directors, employees or

agents in connection with the transactions contemplated by the Transaction

Documents. The Company and each Purchaser shall consult with each other in

issuing any other press releases with respect to the transactions contemplated

hereby, and neither the Company nor any Purchaser shall issue any such press

release nor

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<PAGE>

otherwise make any such public statement without the prior consent of the

Company, with respect to any press release of any Purchaser, or without the

prior consent of each Purchaser, with respect to any press release of the

Company, which consent shall not unreasonably be withheld or delayed, except if

such disclosure is required by law, in which case the disclosing party shall

promptly provide the other party with prior notice of such public statement or

communication. Notwithstanding the foregoing, the Company shall not publicly

disclose the name of any Purchaser, or include the name of any Purchaser in any

filing with the Commission or any regulatory agency or Trading Market, without

the prior written consent of such Purchaser, except: (a) as required by federal

securities law in connection with (i) any registration statement contemplated by

the Registration Rights Agreement and (ii) the filing of final Transaction

Documents (including signature pages thereto) with the Commission and (b) to the

extent such disclosure is required by law or Trading Market regulations, in

which case the Company shall provide the Purchasers with prior notice of such

disclosure permitted under this clause (b).

4.5Shareholder Rights Plan. No claim will be made or enforced by the

Company or, with the consent of the Company, any other Person, that any

Purchaser is an "Acquiring Person" under any control share acquisition, business

combination, poison pill (including any distribution under a rights agreement)

or similar anti-takeover plan or arrangement in effect or hereafter adopted by

the Company, or that any Purchaser could be deemed to trigger the provisions of

any such plan or arrangement, by virtue of receiving Securities under the

Transaction Documents or under any other agreement between the Company and the

Purchasers.

4.6Non-Public Information. Except with respect to the material terms and

conditions of the transactions contemplated by the Transaction Documents, the

Company covenants and agrees that neither it, nor any other Person acting on its

behalf, will provide any Purchaser or its agents or counsel with any information

that the Company believes constitutes material non-public information, unless

prior thereto such Purchaser shall have executed a written agreement with the

Company regarding the confidentiality and use of such information. The Company

understands and confirms that each Purchaser shall be relying on the foregoing

covenant in effecting transactions in securities of the Company.

4.7Use of Proceeds. Except as set forth on Schedule 4.7 attached hereto,

the Company shall use the net proceeds from the sale of the Securities hereunder

for working capital purposes and shall not use such proceeds for: (a) the

satisfaction of any portion of the Company's debt (other than payment of trade

payables in the ordinary course of the Company's business and prior practices),

(b) the redemption of any Common Stock or Common Stock Equivalents, (c) the

settlement of any outstanding litigation or (d) in violation of the FCPA or OFAC

regulations.

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<PAGE>

4.8Indemnification of Purchasers. Subject to the provisions of this

Section 4.8, the Company will indemnify and hold each Purchaser and its

directors, officers, shareholders, members, partners, employees and agents (and

any other Persons with a functionally equivalent role of a Person holding such

titles notwithstanding a lack of such title or any other title), each Person who

controls such Purchaser (within the meaning of Section 15 of the Securities Act

and Section 20 of the Exchange Act), and the directors, officers, shareholders,

agents, members, partners or employees (and any other Persons with a

functionally equivalent role of a Person holding such titles notwithstanding a

lack of such title or any other title) of such controlling persons (each, a

"Purchaser Party") harmless from any and all losses, liabilities, obligations,

claims, contingencies, damages, costs and expenses, including all judgments,

amounts paid in settlements, court costs and reasonable attorneys' fees and

costs of investigation that any such Purchaser Party may suffer or incur as a

result of or relating to (a) any breach of any of the representations,

warranties, covenants or agreements made by the Company in this Agreement or in

the other Transaction Documents or (b) any action instituted against a Purchaser

in any capacity, or any of them or their respective Affiliates, by any

stockholder of the Company who is not an Affiliate of such Purchaser, with

respect to any of the transactions contemplated by the Transaction Documents

(unless such action is based upon a breach of such Purchaser's representations,

warranties or covenants under the Transaction Documents or any agreements or

understandings such Purchaser may have with any such stockholder or any

violations by such Purchaser of state or federal securities laws or any conduct

by such Purchaser which constitutes fraud, gross negligence, willful misconduct

or malfeasance). If any action shall be brought against any Purchaser Party in

respect of which indemnity may be sought pursuant to this Agreement, such

Purchaser Party shall promptly notify the Company in writing, and the Company

shall have the right to assume the defense thereof with counsel of its own

choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party

shall have the right to employ separate counsel in any such action and

participate in the defense thereof, but the fees and expenses of such counsel

shall be at the expense of such Purchaser Party except to the extent that (i)

the employment thereof has been specifically authorized by the Company in

writing, (ii) the Company has failed after a reasonable period of time to assume

such defense and to employ counsel or (iii) in such action there is, in the

reasonable opinion of counsel, a material conflict on any material issue between

the position of the Company and the position of such Purchaser Party, in which

case the Company shall be responsible for the reasonable fees and expenses of no

more than one such separate counsel. The Company will not be liable to any

Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party

effected without the Company's prior written consent, which shall not be

unreasonably withheld or delayed; or (z) to the extent, but only to the extent

that a loss, claim, damage or liability is attributable to any Purchaser Party's

breach of any of the representations,

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<PAGE>

warranties, covenants or agreements made by such Purchaser Party in this

Agreement or in the other Transaction Documents. The indemnification required

by this Section 4.8 shall be made by periodic payments of the amount thereof

during the course of the investigation or defense, as and when bills are

received or are incurred. The indemnity agreements contained herein shall be in

addition to any cause of action or similar right of any Purchaser Party against

the Company or others, and (y) any liabilities the Company may be subject to

pursuant to law.

4.9Reservation of Common Stock. As of the date hereof, the Company has

reserved and the Company shall continue to reserve and keep available at all

times, free of preemptive rights, a sufficient number of shares of Common Stock

for the purpose of enabling the Company to issue Shares pursuant to this

Agreement and Warrant Shares pursuant to any exercise of the Warrants.

4.10 Listing of Common Stock. The Company hereby agrees to use best

efforts to maintain the listing or quotation of the Common Stock on the Trading

Market on which it is currently listed, and concurrently with the Closing, the

Company shall apply to list or quote all of the Shares and Warrant Shares on

such Trading Market and promptly secure the listing of all of the Shares and

Warrant Shares on such Trading Market. The Company further agrees, if the

Company applies to have the Common Stock traded on any other Trading Market, it

will then include in such application all of the Shares and Warrant Shares, and

will take such other action as is necessary to cause all of the Shares and

Warrant Shares to be listed or quoted on such other Trading Market as promptly

as possible. The Company will then take all action reasonably necessary to

continue the listing or quotation and trading of its Common Stock on a Trading

Market and will comply in all respects with the Company's reporting, filing and

other obligations under the bylaws or rules of the Trading Market.

4.11 [RESERVED]

4.12 Subsequent Equity Sales.

(a)From the date hereof until seventy five (75) days after the

Effective Date, neither the Company nor any Subsidiary shall issue, enter into

any agreement to issue or announce the issuance or proposed issuance of any

shares of Common Stock or Common Stock Equivalents; provided, however, that the

75-day period set forth in this Section 4.12 shall be extended for the number of

Trading Days during such period in which (i) trading in the Common Stock is

suspended by any Trading Market, or (ii) following the Effective Date, the

Registration Statement is not effective or the prospectus included in the

Registration Statement may not be used by the Purchasers for the resale of the

Shares and Warrant Shares.

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(b)From the date hereof until such time as no Purchaser holds any of

the Securities, the Company shall be prohibited from effecting or entering into

an agreement to effect any issuance by the Company or any of its Subsidiaries of

Common Stock or Common Stock Equivalents for cash consideration (or a

combination of units thereof) involving a Variable Rate Transaction. "Variable

Rate Transaction" means a transaction in which the Company (i) issues or sells

any debt or equity securities that are convertible into, exchangeable or

exercisable for, or include the right to receive, additional shares of Common

Stock either (A) at a conversion price, exercise price or exchange rate or other

price that is based upon, and/or varies with, the trading prices of or

quotations for the shares of Common Stock at any time after the initial issuance

of such debt or equity securities or (B) with a conversion, exercise or exchange

price that is subject to being reset at some future date after the initial

issuance of such debt or equity security or upon the occurrence of specified or

contingent events directly or indirectly related to the business of the Company

or the market for the Common Stock or (ii) enters into any agreement, including,

but not limited to, an equity line of credit, whereby the Company may sell

securities at a future determined price. Any Purchaser shall be entitled to

obtain injunctive relief against the Company to preclude any such issuance,

which remedy shall be in addition to any right to collect damages.

(c)Notwithstanding the foregoing, this Section 4.12 shall not apply

in respect of an Exempt Issuance, except that no Variable Rate Transaction shall

be an Exempt Issuance.

4.13 Equal Treatment of Purchasers. No consideration (including any

modification of any Transaction Document) shall be offered or paid to any Person

to amend or consent to a waiver or modification of any provision of any of the

Transaction Documents unless the same consideration is also offered to all of

the parties to the Transaction Documents. For clarification purposes, this

provision constitutes a separate right granted to each Purchaser by the Company

and negotiated separately by each Purchaser, and is intended for the Company to

treat the Purchasers as a class and shall not in any way be construed as the

Purchasers acting in concert or as a group with respect to the purchase,

disposition or voting of Securities or otherwise.

4.14 Certain Transactions and Confidentiality. Each Purchaser, severally

and not jointly with the other Purchasers, covenants that neither it, nor any

Affiliate acting on its behalf or pursuant to any understanding with it will

execute any purchases or sales, including Short Sales, of any of the Company's

securities during the period commencing with the execution of this Agreement and

ending at such time that the transactions contemplated by this Agreement are

first publicly announced pursuant to the initial press release as described in

Section 4.4. Each Purchaser, severally and not jointly with the other

Purchasers, covenants that until such time as the transactions contemplated by

this Agreement are publicly disclosed by the Company

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pursuant to the initial press release as described in Section 4.4, such

Purchaser will maintain the confidentiality of the existence and terms of this

transaction and the information included in the Transaction Documents and the

Disclosure Schedules. Notwithstanding the foregoing, and notwithstanding

anything contained in this Agreement to the contrary, the Company expressly

acknowledges and agrees that (i) no Purchaser makes any representation, warranty

or covenant hereby that it will not engage in effecting transactions in any

securities of the Company after the time that the transactions contemplated by

this Agreement are first publicly announced pursuant to the initial press

release as described in Section 4.4, (ii) no Purchaser shall be restricted or

prohibited from effecting any transactions in any securities of the Company in

accordance with applicable securities laws from and after the time that the

transactions contemplated by this Agreement are first publicly announced

pursuant to the initial press release as described in Section 4.4 and (iii) no

Purchaser shall have any duty of confidentiality to the Company or its

Subsidiaries after the issuance of the initial press release as described in

Section 4.4. Notwithstanding the foregoing, in the case of a Purchaser that is

a multi-managed investment vehicle whereby separate portfolio managers manage

separate portions of such Purchaser's assets and the portfolio managers have no

direct knowledge of the investment decisions made by the portfolio managers

managing other portions of such Purchaser's assets, the covenant set forth above

shall only apply with respect to the portion of assets managed by the portfolio

manager that made the investment decision to purchase the Securities covered by

this Agreement.

4.15 Form D; Blue Sky Filings. The Company agrees to timely file a Form

D with respect to the Securities as required under Regulation D and to provide a

copy thereof, promptly upon request of any Purchaser. The Company shall take

such action as the Company shall reasonably determine is necessary in order to

obtain an exemption for, or to qualify the Securities for, sale to the

Purchasers at the Closing under applicable securities or "Blue Sky" laws of the

states of the United States, and shall provide evidence of such actions promptly

upon request of any Purchaser.

4.16 Capital Changes. Until the nine month anniversary of the Effective

Date, the Company shall not undertake a reverse or forward stock split or

reclassification of the Common Stock without the prior written consent of the

Purchasers holding a majority in interest of the Shares.

4.17 Delivery of Securities After Closing. The Company shall deliver, or

cause to be delivered, the respective Securities purchased by each Purchaser to

such Purchaser within 3 Trading Days of the Closing Date.

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4.18 Acknowledgment of Dilution. The Company acknowledges that the

issuance of the Securities may result in dilution of the outstanding shares of

Common Stock, which dilution may be substantial under certain market conditions.

The Company further acknowledges that its obligations under the Transaction

Documents, including, without limitation, its obligation to issue the Shares and

Warrant Shares pursuant to the Transaction Documents, are unconditional and

absolute and not subject to any right of set off, counterclaim, delay or

reduction, regardless of the effect of any such dilution or any claim the

Company may have against any Purchaser and regardless of the dilutive effect

that such issuance may have on the ownership of the other stockholders of the

Company.

4.19 Corporate Milestone.

(a)The Company shall achieve at least $4,000,000 in Adjusted EBITDA,

on a consolidated basis with each of the Subsidiaries for the fiscal year ending

December 31, 2010, as disclosed in the Company's Form 10-K for the fiscal year

ending December 31, 2010 (the "2010 EBITDA Milestone", the date of disclosure of

such 2010 EBITDA Milestone, including any permitted extensions, the "2010 EBITDA

Milestone Date" and such 10-K, the "2010 10-K"). If the Company fails to

achieve the 2010 EBITDA Milestone, then, in accordance with the terms of the

Share Escrow Agreement, the Share Escrow Agent will transfer to the Purchasers

from such escrow account, on a pro-rata basis (based on such Purchaser's

Subscription Amount and the aggregate Subscription Amount hereunder), an

aggregate number of shares of Common Stock equal to the following formula:

E MINUS C

_________

((A/B)*D)

For the purposes of the foregoing formula:

A = 2010 Adjusted EBITDA

B = 2010 EBITDA Milestone

C = Total number of Shares issued to the Purchasers

hereunder

D = $4.50

E = Total Subscription Amount

In the event that the Company fails to file the 2010 10-K with the

Commission on or before the last date that such form is required to be filed

(after any permitted extensions under the Exchange Act), the Company shall be

irrevocably deemed to have failed to achieve the 2010 EBITDA Milestone, and the

2010 EBITDA Milestone Date shall be deemed to be the last date that the Company

was permitted to file the 2010 10-K (after any permitted extensions under the

Exchange Act). In addition, notwithstanding anything herein to the contrary, in

the event that the Company reports an Adjusted EBITDA

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for the fiscal year ending December 31, 2010 of $2,000,000 or less or the

Company fails to file its 2010 10-K with the Commission on or before the last

date that such form is required to be filed (after any permitted extensions

under the Exchange Act), all of the Make Good Shares (as defined below) shall be

issued pro-rata to the Purchasers (based on such Purchaser's Subscription Amount

and the aggregate Subscription Amount hereunder).

(b) On or before April 22, 2010, the Company shall deliver newly

issued shares of Common Stock, which, added to the Executive Make Good Shares,

shall equal the number of Shares issued to the Purchasers hereunder (the

"Company Make Good Shares"), to the Share Escrow Agent for deposit in the escrow

account pursuant to the Share Escrow Agreement. The parties hereto acknowledge

that, as of the date hereof and pursuant to the 2008 Share Escrow Agreement,

Company counsel as escrow agent holds in escrow 1,620,954 shares of Common Stock

that were deposited by the Wangs (such shares, "Executive Make Good Shares" and,

together with the Company Make Good Shares, the "Make Good Shares") and that,

subject to the terms and conditions of the 2008 Share Escrow Agreement, all or a

portion of the Executive Make Good Shares shall be transferred by Company

counsel as escrow agent to the Share Escrow Agent to be held in escrow and

distributed in accordance with the terms and conditions of the Share Escrow

Agreement.

(d) Within five days after the determination of the number of

Escrow Shares to which the Purchasers are entitled calculated in the manner set

forth above the Purchasers and the Company shall give joint written instructions

to the Share Escrow Agent to, and upon receipt of such written instructions, the

Share Escrow Agent shall, within five Business Days after receipt of such

instructions deliver to the Purchasers on a "pro rata" basis (based on such

Purchaser's Subscription Amount and the aggregate Subscription Amount hereunder)

such number of Make Good Shares. If less than all of the Make Good Shares are

delivered to the Purchasers, the Share Escrow Agent shall return the

undistributed Make Good Shares to the Wangs, or the Company, as the case may be,

pursuant to the joint instructions of the Purchasers and the Company.

(e) Notwithstanding anything to the contrary set forth herein,

only those Purchasers who own the Shares issued hereunder and remain

shareholders of the Company at the time that any of the Make Good Shares become

deliverable hereunder shall be entitled to their pro rata portion of the Make

Good Shares calculated based on their ownership interest at the time when the

applicable Make Good Shares become deliverable.

(f) For clarity and avoidance of doubt, all references to share

prices and shares of Common Stock in this Section 4.19 shall be subject to

adjustment for reverse and forward stock splits, stock

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<PAGE>

dividends, stock combinations and other similar transactions of the Common Stock

that occur after the date of this Agreement.

ARTICLE V.

MISCELLANEOUS

5.1Termination. This Agreement may be terminated by any Purchaser, as to

such Purchaser's obligations hereunder only and without any effect whatsoever on

the obligations between the Company and the other Purchasers, by written notice

to the other parties, if the Closing has not been consummated on or before

February 3, 2010; provided, however, that such termination will not affect the

right of any party to sue for any breach by the other party (or parties).

5.2Fees and Expenses. At the Closing, the Company has agreed to reimburse

Ladenburg Thalmann & Co., Inc. ("Ladenburg") the non-accountable sum of $20,000

for its legal fees and expenses, $10,000 of which has been paid prior to the

Closing. Except as expressly set forth in the Transaction Documents to the

contrary, each party shall pay the fees and expenses of its advisers, counsel,

accountants and other experts, if any, and all other expenses incurred by such

party incident to the negotiation, preparation, execution, delivery and

performance of this Agreement. The Company shall pay all Transfer Agent fees,

stamp taxes and other taxes and duties levied in connection with the delivery of

any Securities to the Purchasers.

5.3Entire Agreement. The Transaction Documents, together with the

exhibits and schedules thereto, contain the entire understanding of the parties

with respect to the subject matter hereof and supersede all prior agreements and

understandings, oral or written, with respect to such matters, which the parties

acknowledge have been merged into such documents, exhibits and schedules.

5.4Notices. Any and all notices or other communications or deliveries

required or permitted to be provided hereunder shall be in writing and shall be

deemed given and effective on the earliest of: (a) the date of transmission, if

such notice or communication is delivered via facsimile at the facsimile number

set forth on the signature pages attached hereto prior to 5:30 p.m. (New York

City time) on a Trading Day, (b) the next Trading Day after the date of

transmission, if such notice or communication is delivered via facsimile at the

facsimile number set forth on the signature pages attached hereto on a day that

is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading

Day, (c) the second (2[nd]) Trading Day following the date of mailing, if sent

by U.S. nationally recognized overnight courier service or (d) upon actual

receipt by the party to whom such notice is required to be given. The address

for such notices and communications shall be as set forth on the signature pages

attached hereto.

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<PAGE>

5.5Amendments; Waivers. No provision of this Agreement may be waived,

modified, supplemented or amended except in a written instrument signed, in the

case of an amendment, by the Company and the Purchasers holding at least 67% in

interest of the Shares then outstanding or, in the case of a waiver, by the

party against whom enforcement of any such waived provision is sought. No

waiver of any default with respect to any provision, condition or requirement of

this Agreement shall be deemed to be a continuing waiver in the future or a

waiver of any subsequent default or a waiver of any other provision, condition

or requirement hereof, nor shall any delay or omission of any party to exercise

any right hereunder in any manner impair the exercise of any such right.

5.6Headings. The headings herein are for convenience only, do not

constitute a part of this Agreement and shall not be deemed to limit or affect

any of the provisions hereof.

5.7Successors and Assigns. This Agreement shall be binding upon and inure

to the benefit of the parties and their successors and permitted assigns. The

Company may not assign this Agreement or any rights or obligations hereunder

without the prior written consent of each Purchaser (other than by merger). Any

Purchaser may assign any or all of its rights under this Agreement to any Person

to whom such Purchaser assigns or transfers any Securities, provided that such

transferee agrees in writing to be bound, with respect to the transferred

Securities, by the provisions of the Transaction Documents that apply to the

"Purchasers."

5.8No Third-Party Beneficiaries. This Agreement is intended for the

benefit of the parties hereto and their respective successors and permitted

assigns and is not for the benefit of, nor may any provision hereof be enforced

by, any other Person, except as otherwise set forth in Section 4.8.

Notwithstanding the foregoing, the parties hereto agree and acknowledge that

Ladenburg shall be a third party beneficiary of the representations and

warranties of the Company that are set forth in Section 3.1 herein.

5.9Governing Law. All questions concerning the construction, validity,

enforcement and interpretation of the Transaction Documents shall be governed by

and construed and enforced in accordance with the internal laws of the State of

New York, without regard to the principles of conflicts of law thereof. Each

party agrees that all legal proceedings concerning the interpretations,

enforcement and defense of the transactions contemplated by this Agreement and

any other Transaction Documents (whether brought against a party hereto or its

respective affiliates, directors, officers, shareholders, employees or agents)

shall be commenced exclusively in the state and federal courts sitting in the

City of New York. Each party hereby irrevocably submits to the exclusive

jurisdiction of the state and federal courts sitting in the City of New York,

borough of Manhattan for the adjudication of any dispute hereunder or in

connection

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<PAGE>

herewith or with any transaction contemplated hereby or discussed herein

(including with respect to the enforcement of any of the Transaction Documents),

and hereby irrevocably waives, and agrees not to assert in any suit, action or

proceeding, any claim that it is not personally subject to the jurisdiction of

any such court, that such suit, action or proceeding is improper or is an

inconvenient venue for such proceeding. Each party hereby irrevocably waives

personal service of process and consents to process being served in any such

suit, action or proceeding by mailing a copy thereof via registered or certified

mail or overnight delivery (with evidence of delivery) to such party at the

address in effect for notices to it under this Agreement and agrees that such

service shall constitute good and sufficient service of process and notice

thereof. Nothing contained herein shall be deemed to limit in any way any right

to serve process in any other manner permitted by law. If either party shall

commence an action or proceeding to enforce any provisions of the Transaction

Documents, then in addition to the obligations of the Company under Section 4.8,

the prevailing party in such action or proceeding shall be reimbursed by the

other party for its reasonable attorneys' fees and other costs and expenses

incurred with the investigation, preparation and prosecution of such action or

proceeding.

5.10 Survival. The representations and warranties contained herein shall

survive the Closing and the delivery of the Securities.

5.11 Execution. This Agreement may be executed in two or more

counterparts, all of which when taken together shall be considered one and the

same agreement and shall become effective when counterparts have been signed by

each party and delivered to the other party, it being understood that both

parties need not sign the same counterpart. In the event that any signature is

delivered by facsimile transmission or by e-mail delivery of a ".pdf" format

data file, such signature shall create a valid and binding obligation of the

party executing (or on whose behalf such signature is executed) with the same

force and effect as if such facsimile or ".pdf" signature page were an original

thereof.

5.12 Severability. If any term, provision, covenant or restriction of

this Agreement is held by a court of competent jurisdiction to be invalid,

illegal, void or unenforceable, the remainder of the terms, provisions,

covenants and restrictions set forth herein shall remain in full force and

effect and shall in no way be affected, impaired or invalidated, and the parties

hereto shall use their commercially reasonable efforts to find and employ an

alternative means to achieve the same or substantially the same result as that

contemplated by such term, provision, covenant or restriction. It is hereby

stipulated and declared to be the intention of the parties that they would have

executed the remaining terms, provisions, covenants and restrictions without

including any of such that may be hereafter declared invalid, illegal, void or

unenforceable.

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<PAGE>

5.13 Rescission and Withdrawal Right. Notwithstanding anything to the

contrary contained in (and without limiting any similar provisions of) any of

the other Transaction Documents, whenever any Purchaser exercises a right,

election, demand or option under a Transaction Document and the Company does not

timely perform its related obligations within the periods therein provided, then

such Purchaser may rescind or withdraw, in its sole discretion from time to time

upon written notice to the Company, any relevant notice, demand or election in

whole or in part without prejudice to its future actions and rights; provided,

however, that in the case of a rescission of an exercise of a Warrant, the

applicable Purchaser shall be required to return any shares of Common Stock

subject to any such rescinded exercise notice concurrently with the return to

such Purchaser of the aggregate exercise price paid to the Company for such

shares and the restoration of such Purchaser's right to acquire such shares

pursuant to such Purchaser's Warrant (including, issuance of a replacement

warrant certificate evidencing such restored right).

5.14 Replacement of Securities. If any certificate or instrument

evidencing any Securities is mutilated, lost, stolen or destroyed, the Company

shall issue or cause to be issued in exchange and substitution for and upon

cancellation thereof (in the case of mutilation), or in lieu of and substitution

therefor, a new certificate or instrument, but only upon receipt of evidence

reasonably satisfactory to the Company of such loss, theft or destruction. The

applicant for a new certificate or instrument under such circumstances shall

also pay any reasonable third-party costs (including customary indemnity)

associated with the issuance of such replacement Securities.

5.15 Remedies. In addition to being entitled to exercise all rights

provided herein or granted by law, including recovery of damages, each of the

Purchasers and the Company will be entitled to specific performance under the

Transaction Documents. The parties agree that monetary damages may not be

adequate compensation for any loss incurred by reason of any breach of

obligations contained in the Transaction Documents and hereby agree to waive and

not to assert in any action for specific performance of any such obligation the

defense that a remedy at law would be adequate.

5.16 Payment Set Aside. To the extent that the Company makes a payment

or payments to any Purchaser pursuant to any Transaction Document or a Purchaser

enforces or exercises its rights thereunder, and such payment or payments or the

proceeds of such enforcement or exercise or any part thereof are subsequently

invalidated, declared to be fraudulent or preferential, set aside, recovered

from, disgorged by or are required to be refunded, repaid or otherwise restored

to the Company, a trustee, receiver or any other person under any law

(including, without limitation, any bankruptcy law, state or federal law, common

law or equitable cause of action), then to the extent of any such restoration

the obligation or part thereof originally

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<PAGE>

intended to be satisfied shall be revived and continued in full force and effect

as if such payment had not been made or such enforcement or setoff had not

occurred.

5.17 Independent Nature of Purchasers' Obligations and Rights. The

obligations of each Purchaser under any Transaction Document are several and not

joint with the obligations of any other Purchaser, and no Purchaser shall be

responsible in any way for the performance or non-performance of the obligations

of any other Purchaser under any Transaction Document. Nothing contained herein

or in any other Transaction Document, and no action taken by any Purchaser

pursuant thereto, shall be deemed to constitute the Purchasers as a partnership,

an association, a joint venture or any other kind of entity, or create a

presumption that the Purchasers are in any way acting in concert or as a group

with respect to such obligations or the transactions contemplated by the

Transaction Documents. Each Purchaser shall be entitled to independently

protect and enforce its rights, including, without limitation, the rights

arising out of this Agreement or out of the other Transaction Documents, and it

shall not be necessary for any other Purchaser to be joined as an additional

party in any proceeding for such purpose. Each Purchaser has been represented

by its own separate legal counsel in their review and negotiation of the

Transaction Documents. For reasons of administrative convenience only, each

Purchaser and its respective counsel have chosen to communicate with the Company

through WS. WS does not represent any of the Purchasers and only represents

Ladenburg as placement agent. The Company has elected to provide all Purchasers

with the same terms and Transaction Documents for the convenience of the Company

and not because it was required or requested to do so by any of the Purchasers.

5.18 Liquidated Damages. The Company's obligations to pay any partial

liquidated damages or other amounts owing under the Transaction Documents is a

continuing obligation of the Company and shall not terminate until all unpaid

partial liquidated damages and other amounts have been paid notwithstanding the

fact that the instrument or security pursuant to which such partial liquidated

damages or other amounts are due and payable shall have been canceled.

5.19 Saturdays, Sundays, Holidays, etc. If the last or appointed

day for the taking of any action or the expiration of any right required or

granted herein shall not be a Business Day, then such action may be taken or

such right may be exercised on the next succeeding Business Day.

5.20 Construction. The parties agree that each of them and/or their

respective counsel has reviewed and had an opportunity to revise the Transaction

Documents and, therefore, the normal rule of construction to the effect that any

ambiguities are to be resolved against the drafting party shall not be employed

in the interpretation of the Transaction Documents or any amendments hereto. In

addition,

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<PAGE>

each and every reference to share prices and shares of Common Stock in any

Transaction Document shall be subject to adjustment for reverse and forward

stock splits, stock dividends, stock combinations and other similar transactions

of the Common Stock that occur after the date of this Agreement.

5.21 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY

JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH

KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,

HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER

TRIAL BY JURY.

(Signature Pages Follow)

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<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Securities

Purchase Agreement to be duly executed by their respective authorized

signatories as of the date first indicated above.

<TABLE>

WORLDWIDE ENERGY AND MANUFACTURING USA, INC. Address for Notice:

Mr. Jimmy Wang

President and Chief Executive Officer

Worldwide Manufacturing USA, Inc.

408 N. Canal Street, Unit A&B,

South San Francisco, California 94080

<S> <C>

By:__________________________________________ Fax: (650) 794-9878

Name: Jimmy Wang

Title: Chief Executive Officer

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

DARRIN M. OCASIO

SICHENZIA ROSS FRIEDMAN FERENCE LLP

61 BROADWAY, NEW YORK, NEW YORK 10006

FAX (212 ) 930-9725

</TABLE>

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

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<PAGE>

[PURCHASER SIGNATURE PAGES TO WEMU SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase

Agreement to be duly executed by their respective authorized signatories as of

the date first indicated above.

Name of Purchaser: __________________________________________

Signature of Authorized Signatory of Purchaser: __________________

Name of Authorized Signatory: __________________

Title of Authorized Signatory: ________________

Email Address of Authorized Signatory: __________

Facsimile Number of Authorized Signatory:_______________

Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser

(if not same as address for notice):

Subscription Amount: $_________________

Shares: _________________

Warrant Shares: __________________

EIN Number: [PROVIDE THIS UNDER SEPARATE COVER]

[SIGNATURE PAGES CONTINUE]

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<PAGE>