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<SEC-DOCUMENT>0001178913-09-002353.txt : 20091006
<SEC-HEADER>0001178913-09-002353.hdr.sgml : 20091006
<ACCEPTANCE-DATETIME>20091006124109
ACCESSION NUMBER:		0001178913-09-002353
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20091006
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20091006
DATE AS OF CHANGE:		20091006

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PLURISTEM THERAPEUTICS INC
		CENTRAL INDEX KEY:			0001158780
		STANDARD INDUSTRIAL CLASSIFICATION:	BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836]
		IRS NUMBER:				980351734
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31392
		FILM NUMBER:		091107531

	BUSINESS ADDRESS:	
		STREET 1:		MATAM ADVANCED TECHNOLOGY PARK
		STREET 2:		BUILDING NO. 20
		CITY:			HAIFA
		STATE:			L3
		ZIP:			31905
		BUSINESS PHONE:		972-4-850-1080

	MAIL ADDRESS:	
		STREET 1:		MATAM ADVANCED TECHNOLOGY PARK
		STREET 2:		BUILDING NO. 20
		CITY:			HAIFA
		STATE:			L3
		ZIP:			31905

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PLURISTEM LIFE SYSTEMS INC
		DATE OF NAME CHANGE:	20030701

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AI SOFTWARE INC
		DATE OF NAME CHANGE:	20010906
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>zk97323.htm
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     <!-- Control Number: 97323                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    Pluristem Therapeutics Inc                                       -->
     <!-- Project Name:   8-K                                                              -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
     <TITLE>8-K</TITLE>
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>UNITED STATES </FONT><BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=4>SECURITIES AND
EXCHANGE COMMISSION </FONT><BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=3>Washington, DC 20549 </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>Form 8-K </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Current Report </FONT><BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934 </FONT></H1>

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<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date
of report (Date of earliest event reported): <B>October 6, 2009</B> </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="5"><B>PLURISTEM THERAPEUTICS
INC.</B> </FONT> <BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Exact
name of registrant as specified in its charter) </FONT></P>

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     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=33% ALIGN=CENTER><FONT FACE="Times New Roman" SIZE="2"><B>Nevada</B> </FONT></TD>
     <TD WIDTH=34% ALIGN=CENTER><FONT FACE="Times New Roman" SIZE="2"><B>001-31392</B> </FONT></TD>
     <TD WIDTH=33% ALIGN=CENTER><FONT FACE="Times New Roman" SIZE="2"><B>98-0351734</B> </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman" SIZE=2>(State or other jurisdiction of incorporation)</FONT></TD>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman" SIZE=2>(Commission file number)</FONT></TD>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman" SIZE=2>(I.R.S. Employer Identification Number)</FONT></TD></TR>
</TABLE>
<BR>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH> </TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH> </TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH> </TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH> </TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH> </TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=33% ALIGN=CENTER><FONT FACE="Times New Roman" SIZE="2"><B>MATAM Advanced Technology Park</B> </FONT></TD>
     <TD WIDTH=34%> </TD>
     <TD WIDTH=33% ALIGN=CENTER><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman" SIZE="2"><B>Building No. 20</B> </FONT></TD>
     <TD> </TD>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman" SIZE="2"><B>Haifa, Israel</B> </FONT></TD>
     <TD> </TD>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman" SIZE="2"><B>31905</B> </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman" SIZE=2>(Address of principal executive offices)</FONT></TD>
     <TD> </TD>
     <TD ALIGN=CENTER><FONT FACE="Times New Roman" SIZE=2>(Zip Code)</FONT></TD></TR>
</TABLE>
<BR>


<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Registrant's telephone number, including area code: <B>011 972 74 710 7171</B> </FONT></P>

<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>n/a
</B><BR>(Former name or former address, if changed since last report) </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions: </FONT></P>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><FONT size="3" face="Wingdings">o
</font> </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><FONT size="3" face="Wingdings">o
</font> </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><FONT size="3" face="Wingdings">o
</font> </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><FONT size="3" face="Wingdings">o
</font> </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </FONT></TD>
</TR>
</TABLE>
<BR>

<p align=center>
<font size=2></font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Item 1.01</B> </FONT> </TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Entry into a Material Definitive Agreement</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
October 6, 2009, we entered into securities purchase agreements with certain institutional
investors pursuant to which the investors agreed to purchase 2,702,822 shares of our
common stock (&#147;Common Stock&#148;) and warrants (&#147;Warrants&#148;) to purchase
1,081,129 shares of Common Stock. The price per share of Common Stock is $1.12, and the
exercise price of the warrants is $1.60. The Warrants will be exercisable for a period of
five years commencing six months following the issuance thereof. The closing is scheduled
to take place no later than October 12, 2009 and is subject to customary closing
conditions. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
copy of the form of Warrant is attached as Exhibit 4.1 to this report and is incorporated
herein by reference. The description of the Warrants is a summary only and is qualified in
its entirety by reference to Exhibit 4.1. A copy of the form of securities purchase
agreement is attached as Exhibit 10.1 to this report and is incorporated herein by
reference. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Roth
Capital Partners, LLC acted as placement agent, on a reasonable efforts basis, for the
offering and will receive a placement fee equal to 7% of the gross proceeds of the
offering (excluding any consideration that may be paid in the future upon exercise of the
Warrants). A copy of the Placement Agency Agreement is attached as Exhibit 1.1 to this
report and is incorporated herein by reference. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
offering was made pursuant to our shelf registration statement on Form S-3 (File No.
333-151761). We are filing with the SEC, pursuant to Rule 424(b) under the Securities Act
of 1933, as amended, a prospectus supplement and base prospectus related to the offering. </FONT></P>

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<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Item 9.01</B> </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Financial Statements and Exhibits</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(d) Exhibits: </FONT></H1>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.1  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Placement
Agency Agreement, dated October 6, 2009, by and between the registrant and Roth Capital
Partners, LLC. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Form
of Common Stock Purchase Warrant dated October [__], 2009</FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.1  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Opinion
of Zysman, Aharoni, Gayer &amp; Co./ Sullivan &amp; Worcester LLP</FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.1  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Form
of Securities Purchase Agreement dated October 6, 2009</FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>23.1  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Consent
of Zysman, Aharoni, Gayer &amp; Co./ Sullivan &amp; Worcester LLP (included in Exhibit 5.1).</FONT></TD>
</TR>
</TABLE>
<BR>




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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SIGNATURES </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized. </FONT></P>



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<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR><BR>Date: October 6, 2009 </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>PLURISTEM THERAPEUTICS INC.</B><BR><BR>
<BR>By: /s/ Yaky Yanay<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Yaky Yanay<BR>Chief Financial Officer</FONT></TD>
</TR>
</TABLE>
<BR>

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<TYPE>EX-1.1
<SEQUENCE>2
<FILENAME>exhibit_1-1.htm
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     <!-- Control Number: 97323                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    Pluristem Therapeutics Inc                                       -->
     <!-- Project Name:   8-K                                                              -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
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<P align=right><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><B>Exhibit 1.1</B></U> </FONT> </P>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PLACEMENT AGENCY
AGREEMENT </FONT></H1>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>October 6, 2009 </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Roth Capital Partners, LLC
<BR>24 Corporate Plaza
<BR>Newport Beach, CA 92660</FONT></P>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ladies and Gentlemen: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pluristem
Therapeutics Inc., a Nevada corporation (the &#147;<I>Company</I>&#148;), proposes,
subject to the terms and conditions herein, to issue and sell an aggregate of up to (i)
2,702,822 shares (the &#147;<I>Shares</I>&#148;) of its common stock, $0.00001 par value
per share (the &#147;<I>Common Stock</I>&#148;), and (ii) warrants to purchase 1,081,129
shares of Common Stock (the &#147;<I>Warrants</I>&#148;, and together with the Shares, the
&#147;<I>Securities</I>&#148;), to certain investors (each an &#147;<I>Investor</I>&#148; and,
collectively, the &#147;<I>Investors</I>&#148;), in an offering under its registration
statement on Form&nbsp;S-3 (Registration No.&nbsp;333-151761). The shares of Common Stock
issuable upon exercise of the Warrants are hereinafter referred to as the Warrant Shares.
The Securities are more fully described in the Prospectus (as defined below). The Company
desires to engage Roth Capital Partners, LLC (&#147;<I>Roth Capital</I>&#148;) in
connection with such issuance and sale of the Securities. </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company hereby confirms its agreement with Roth Capital as follows: </FONT></P>

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<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Section 1.</B> </FONT> </TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Agreement to Act as Placement Agent.</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
the basis of the representations, warranties and agreements of the Company
          herein contained, and subject to all the terms and conditions of this Agreement
          between the Company and the Roth Capital, Roth Capital shall be the
          Company&#146;s exclusive placement agent (in such capacity, the           &#147;<I>Placement
Agent</I>&#148;), on a reasonable efforts basis, in           connection with the
issuance and sale by the Company of the Securities to the           Investors in a
proposed takedown under the Registration Statement (as defined           below), with the
terms of each offering to be subject to market conditions and           negotiations
between the Company, Roth Capital and the prospective Investors           (such takedown
shall be referred to herein as the &#147;<I>Offering</I>&#148;).           As
compensation for services rendered, and provided that any of the Securities           are
sold to Investors in the Offering, on the Closing Date (as defined below) of
          the Offering, the Company shall pay to the Placement Agent an amount (the
          &#147;<I>Placement Fee</I>&#148;) equal to (i) 7% of the gross proceeds
received           by the Company from the sale of the Securities minus (ii) $25,000. The
sale of           the Securities shall be made pursuant to securities purchase agreements
in the           form included as <U>Exhibit A</U> hereto (the &#147;<I>Subscription
          Agreements</I>&#148;) on the terms described on <U>Exhibit B</U> hereto. The
          Company shall have the sole right to accept offers to purchase the Securities
          and may reject any such offer in whole or in part. Notwithstanding the
          foregoing, it is understood and agreed that the Placement Agent or any of its
          affiliates may, solely at its discretion and without any obligation to do so,
          purchase Securities as principal; <I>provided, however</I>, that any such
          purchases by the Placement Agent (or its affiliates) shall be fully disclosed
to           the Company and approved by the Company in accordance with the previous
          sentence.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Agreement shall not give rise to any commitment by the Placement Agent to
          purchase any of the Securities, and the Placement Agent shall have no authority
          to bind the Company. The Placement Agent shall act on a reasonable efforts
basis           and does not guarantee that it will be able to raise new capital in the
          Offering. The Placement Agent may retain other brokers or dealers to act as
          sub-agents on its behalf in connection with the Offering, the fees of which
          shall be paid out of the Placement Fee. Prior to the earlier of (i) the date on
          which this Agreement is terminated and (ii) the Closing Date (as defined
below),           the Company shall not, without the prior written consent of the
Placement Agent,           solicit or accept offers to purchase Securities of the Company
(other than           pursuant to the exercise of options or warrants to purchase shares
of Common           Stock that are outstanding at the date hereof) otherwise than through
the           Placement Agent in accordance herewith.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company acknowledges and agrees that the Placement Agent shall act as an
          independent contractor, and not as a fiduciary, and any duties of the Placement
          Agent with respect to investment banking services to the Company, including the
          offering of the Securities contemplated hereby (including in connection with
          determining the terms of the Offering), shall be contractual in nature, as
          expressly set forth herein, and shall be owed solely to the Company. Each party
          disclaims any intention to impose any fiduciary or similar duty on the other.
          Additionally, the Placement Agent has not advised, nor is advising, the Company
          or any other person as to any legal, tax, investment, accounting or regulatory
          matters in any jurisdiction with respect to the transactions contemplated
          hereby. The Company shall consult with its own advisors concerning such matters
          and shall be responsible for making its own independent investigation and
          appraisal of the transactions contemplated hereby, and the Placement Agent
shall           have no responsibility or liability to the Company with respect thereto.
Any           review by the Placement Agent of the Company, the transactions contemplated
          hereby or other matters relating to such transactions has been and will be
          performed solely for the benefit of the Placement Agent and has not been and
          shall not be on behalf of the Company or any other person. It is understood
that           the Placement Agent has not and will not be rendering an opinion to the
Company           as to the fairness of the terms of the Offering. Notwithstanding
anything in           this Agreement to the contrary, the Company acknowledges that the
Placement           Agent may have financial interests in the success of the Offering
contemplated           hereby that are not limited to the Placement Fee. The Company
hereby waives and           releases, to the fullest extent permitted by law, any claims
that the Company           may have against the Placement Agent with respect to any
breach or alleged           breach of fiduciary duty.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment
of the purchase price for, and delivery of, the Securities shall be made           at a
closing (the &#147;<I>Closing</I>&#148;) at the offices of Lowenstein           Sandler
P.C., counsel for the Placement Agent, located at 65 Livingston Avenue,
          Roseland, NJ 07068 at 10:00 a.m., local time, as soon as practicable after the
          determination of the public offering price of the Securities, but not later
than           on October 12, 2009 (such date of payment and delivery being herein called
the           &#147;<I>Closing Date</I>&#148;). All such actions taken at the Closing
shall be           deemed to have occurred simultaneously. No Securities which the
Company has           agreed to sell pursuant to this Agreement and the Subscription
Agreements shall           be deemed to have been purchased and paid for, or sold by the
Company, until           such Securities shall have been delivered to the Investor
thereof against           payment therefore by such Investor. If the Company shall
default in its           obligations to deliver Securities to an Investor whose offer it
has accepted,           the Company shall indemnify and hold the Placement Agent harmless
against any           loss, claim or damage incurred by the Placement Agent arising from
or as a           result of such default by the Company.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
or before the Closing Date, each Investor shall pay by wire transfer of
          immediately available funds to an account specified by the Company an amount
          equal to the product of (x) the number of Securities such Investor has agreed
to           purchase and (y) the purchase price per unit as set forth on the cover page
of           the Prospectus (as defined below) (the &#147;<I>Purchase Amount</I>&#148;).
On           the Closing Date, the Company shall (i) deliver or cause to be delivered the
          Securities to the Investors, with the delivery of the Shares to be made, if
          possible, through the facilities of The Depository Trust Company&#146;s DWAC
          system, and the delivery of the Warrants to be made by mail to the Investors to
          the addresses set forth on the applicable Subscription Agreement, and (ii)_ pay
          to the Placement Agent (A) the Placement Fee as directed by the Placement Agent
          and (B) the expense reimbursement to which the Placement Agent is entitled
          pursuant to Section 4 hereof.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Securities shall be registered in such names and in such denominations as           the
Placement Agent shall request by written notice to the Company.  </FONT></P>

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<TR VALIGN=TOP>
<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Section 2.</B> </FONT> </TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Representations, Warranties and Agreements of the Company.</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company hereby represents, warrants and covenants to the Placement Agent as of the date
hereof, and as of the Closing Date of the Offering, as follows: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Registration
Statement</I>. (i) The Company has prepared and filed with the           Securities and
Exchange Commission (the <I>&#147;Commission&#148;</I>) a           registration
statement on Form S-3 (File No. 333-151761) under the Securities           Act of 1933,
as amended, and the rules and regulations of the Commission           thereunder
(collectively, the &#147;<I>Securities Act</I>&#148;), and such           amendments to
such registration statement as may have been required to the date           of this
Agreement. Such registration statement has been declared effective by           the
Commission. Each part of such registration statement, at any given time,
          including amendments thereto at such time, the exhibits and any schedules
          thereto at such time, the documents incorporated by reference therein pursuant
          to Item 12 of Form S-3 under the Securities Act at such time and the documents
          and information otherwise deemed to be a part thereof or included therein by
          Rule 430A, 430B or 430C under the Securities Act or otherwise pursuant to the
          Securities Act at such time, is herein called the <I>&#147;Registration
          Statement.&#148;</I> Any registration statement filed by the Company pursuant
to           Rule 462(b) under the Securities Act is called the &#147;<I>Rule 462(b)
          Registration Statement</I>&#148; and, from and after the date and time of
filing           of the Rule 462(b) Registration Statement, the term &#147;<I>Registration
          Statement</I>&#148; shall include the Rule 462(b) Registration Statement. The
          Company and the transactions contemplated by this Agreement meet the
          requirements and comply with the conditions for the use of Form S-3 under the
          Securities Act. The offering of the Securities by the Company complies with the
          applicable requirements of Rule 415 under the Securities Act. The Company has
          complied with all requests of the Commission for additional or supplemental
          information.  </FONT></P>

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<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
stop order preventing or suspending use of the Registration Statement, any
          Preliminary Prospectus or the Prospectus or the effectiveness of the
          Registration Statement, has been issued by the Commission, and no proceedings
          for such purpose have been instituted or, to the Company&#146;s knowledge, are
          contemplated or threatened by the Commission.  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company proposes to file with the Commission pursuant to Rule 424 under the
          Securities Act a final prospectus supplement relating to the Securities to a
          form of prospectus included in the Registration Statement relating to the
          Securities in the form heretofore delivered to the Placement Agent. Such
          prospectus included in the Registration Statement at the time it was declared
          effective by the Commission or in the form in which it has been most recently
          filed with the Commission on or prior to the date of this Agreement is
          hereinafter called the <I>&#147;Base Prospectus.&#148;</I> Such prospectus
          supplement, in the form in which it shall be filed with the Commission pursuant
          to Rule 424(b) (including the Base Prospectus as so supplemented) is
hereinafter           called the <I>&#147;Prospectus.&#148;</I> Any preliminary form of
Prospectus           which is filed or used prior to filing of the Prospectus is
hereinafter called a <I>&#147;Preliminary Prospectus.&#148;</I> Any reference herein to
the Base           Prospectus, any Preliminary Prospectus or the Prospectus or to any
amendment or           supplement to any of the foregoing shall be deemed to include any
documents           incorporated by reference therein pursuant to Item 12 of Form S-3
under the           Securities Act as of the date of such prospectus, and, in the case of
any           reference herein to the Prospectus, also shall be deemed to include any
          documents incorporated by reference therein, and any supplements or amendments
          thereto, filed with the Commission after the date of filing of the Prospectus
          under Rule 424(b) under the Securities Act, and prior to the termination of the
          offering of the Securities by the Placement Agent.  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iv) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of this Agreement, all references to the Registration Statement,           the
Base Prospectus, any Preliminary Prospectus, the Prospectus or any amendment           or
supplement to any of the foregoing shall be deemed to include the copy filed
          with the Commission pursuant to its Electronic Data Gathering, Analysis and
          Retrieval System (<I>&#147;EDGAR&#148;</I>). All references in this Agreement
to           amendments or supplements to the Registration Statement, the Base
Prospectus,           any Preliminary Prospectus or the Prospectus shall be deemed to
mean and include           the subsequent filing of any document under the Securities
Exchange Act of 1934,           as amended (collectively with the rules and regulations
promulgated thereunder,           the &#147;<I>Exchange Act</I>&#148;)) and which is
deemed to be incorporated           therein by reference therein or otherwise deemed to
be a part thereof.  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Compliance
with Registration Requirements</I>. As of the time of filing of           the
Registration Statement or any post-effective amendment thereto, at the time           it
became effective (including each deemed effective date with respect to the
          Placement Agent pursuant to Rule 430B under the Securities Act) and as of the
          Closing Date, the Registration Statement complied and will comply, in all
          material respects, with the requirements of the Securities Act and did not and
          will not contain any untrue statement of a material fact or omit to state a
          material fact required to be stated therein or necessary to make the statements
          therein not misleading. Each Preliminary Prospectus and the Prospectus, at the
          time of filing or the time of first use and as of the Closing Date, complied
and           will comply, in all material respects, with the requirements of the
Securities           Act and did not and will not contain an untrue statement of a
material fact or           omit to state a material fact necessary in order to make the
statements therein,           in the light of the circumstances under which they were
made, not misleading; <I>provided</I>, that the Company makes no representations or
warranty in this           paragraph with respect to any Placement Agent Information (as
defined in <U>Section 7</U>).  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Disclosure
Package</I>. As of the Time of Sale (as defined below) and as of           the Closing
Date, neither (A) the Issuer General Free Writing Prospectus(es) (as           defined
below) issued at or prior to the Time of Sale, the Prospectus (as           amended or
supplemented as of the Time of Sale) and the information included on <U>Exhibit B</U> hereto,
all considered together (collectively, the <I>&#147;Disclosure Package&#148;</I>), nor
(B) any individual Issuer           Limited-Use Free Writing Prospectus (as defined
below), when considered together           with the Disclosure Package, included or will
include any untrue statement of a           material fact or omitted or will omit to
state any material fact necessary in           order to make the statements therein, in
the light of the circumstances under           which they were made, not misleading;<I> provided</I>,
that the Company makes no           representations or warranty in this paragraph with
respect to any Placement           Agent Information. No statement of material fact
included in the Prospectus has           been omitted from the Disclosure Package and no
statement of material fact           included in the Disclosure Package that is required
to be included in the           Prospectus has been omitted therefrom. As used in this
paragraph and elsewhere           in this Agreement:  </FONT></P>

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               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=10%></TD>
               <TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               <I>&#147;Time of Sale&#148;</I> with respect to any Investor, means the time of
               receipt and acceptance of an executed Subscription Agreement from such Investor. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=10%></TD>
               <TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               <I>&#147;Issuer Free Writing Prospectus&#148;</I> means any &#147;issuer free
               writing prospectus,&#148; as defined in Rule 433 under the Securities Act
               (&#147;<I>Rule 433</I>&#148;), relating to the Securities in the form filed or
               required to be filed with the Commission or, if not required to be filed, in the
               form retained in the Company&#146;s records pursuant to Rule 433(g) under the
               Securities Act. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=10%></TD>
               <TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               <I>&#147;Issuer General Free Writing Prospectus&#148;</I> means any Issuer Free
               Writing Prospectus that is intended for general distribution to prospective
               investors as identified on <U>Schedule I</U> hereto, and does not include a
               &#147;bona fide electronic road show&#148; as defined in Rule 433. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=10%></TD>
               <TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               <I>&#147;Issuer Limited-Use Free Writing Prospectus&#148;</I> means any Issuer
               Free Writing Prospectus that is not an Issuer General Free Writing Prospectus,
               including any &#147;bona fide electronic road show&#148; as defined in Rule 433,
               that is made available without restriction pursuant to Rule 433(d)(8)(ii), even
               though not required to be filed with the Commission. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Conflict
with Registration Statement</I>. Each Issuer Free Writing           Prospectus, as of its
issue date and at all subsequent times through the           completion of the offering
and sale of the Securities or until any earlier date           that the Company notified
or notifies the Placement Agent, did not, does not and           will not include any
information that conflicted, conflicts or will conflict           with the information
contained in the Registration Statement or the Prospectus           including any
document incorporated by reference therein and any prospectus           supplement deemed
to be a part thereof that has not been superseded or modified;           provided, that
the Company makes no representations or warranty in this           paragraph with respect
to any Placement Agent Information.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Distributed
Materials</I>. The Company has not, directly or indirectly,           distributed and
will not distribute any prospectus or other offering material in           connection
with the offering and sale of the Securities other than any           Preliminary
Prospectus, the Disclosure Package or the Prospectus, and other           materials, if
any, permitted under the Securities Act to be distributed and           consistent with
<U>Section 3(d)</U> below. The Company will file with the           Commission all Issuer
Free Writing Prospectuses in the time required under Rule           433(d) under the
Securities Act. The Company has satisfied or will satisfy the           conditions in
Rule 433 under the Securities Act to avoid a requirement to file           with the
Commission any electronic road show. The parties hereto agree and           understand
that the content of any and all &#147;road shows&#148; related to the           offering
of the Securities contemplated hereby is solely the property of the           Company.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Not
an Ineligible Issuer</I>. (1) At the time of filing the Registration           Statement
and (2) at the date hereof and at the Closing Date, the Company was           not, is not
and will not be an &#147;ineligible issuer,&#148; as defined in Rule           405 under
the Securities Act, without taking account of any determination by the
          Commission pursuant to Rule 405 that it is not necessary that the Company be
          considered an ineligible issuer including, without limitation, for purposes of
          Rules 164 and 433 under the Securities Act with respect to the offering of the
          Securities as contemplated by the Registration Statement.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Incorporated
Documents</I>. The documents incorporated by reference in the           Disclosure
Package and in the Prospectus, when they became effective or were           filed with
the Commission, as the case may be, conformed in all material           respects to the
requirements of the Securities Act or the Exchange Act, as           applicable, and were
filed on a timely basis with the Commission and none of           such documents
contained an untrue statement of a material fact or omitted to           state a material
fact necessary to make the statements therein, in the light of           the
circumstances under which they were made, not misleading.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Due
Incorporation</I>. The Company has been duly incorporated and is validly
          existing as a corporation in good standing under the laws of the State of
          Nevada, with the corporate power and authority to own its properties and to
          conduct its business as currently being carried on and as described in the
          Registration Statement, the Disclosure Package and the Prospectus. The Company
          is duly qualified to transact business as a foreign corporation and is in good
          standing under the laws of each other jurisdiction in which its ownership or
          leasing of property or the conduct of its business requires such qualification,
          except where the failure to be so qualified and in good standing would not,
          individually or in the aggregate, result in any material adverse effect upon,
or           material adverse change in, the general affairs, business, operations,
          prospects, properties, financial condition, or results of operations of the
          Company and the Subsidiaries (as defined below) taken as a whole (a
          &#147;<I>Material Adverse Effect</I>&#148;).  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Subsidiaries</I>.
Each subsidiary of the Company (individually a           &#147;<I>Subsidiary</I>&#148; and
collectively, the           &#147;<I>Subsidiaries</I>&#148;) has been duly incorporated
or organized, is           validly existing as a corporation or other legal entity in
good standing (or the           foreign equivalent thereof) under the laws of the
jurisdiction of its           incorporation or organization, has the corporate power and
authority to own its           properties and to conduct its business as currently being
carried on and as           described in the Registration Statement, the Disclosure
Package and the           Prospectus and is duly qualified to transact business and is in
good standing in           each jurisdiction in which the conduct of its business or its
ownership, leasing           or operation of property requires such qualification, except
to the extent that           the failure to be so qualified or be in good standing would
not result in a           Material Adverse Effect. All of the issued and outstanding
shares of capital           stock or other equity interests of each Subsidiary of the
Company have been duly           and validly authorized and issued, are fully paid and
non-assessable and, except           as otherwise described in the Registration
Statement, the Disclosure Package and           in the Prospectus, are owned directly by
the Company or through its wholly-owned           subsidiaries, free and clear of all
liens, encumbrances, equities or claims.           There is no outstanding option, right
or agreement of any kind relating to the           issuance, sale or transfer of any
capital stock or other equity securities of           the Subsidiaries to any person or
entity except the Company, and none of the           outstanding shares of capital stock
or other equity interests of any Subsidiary           was issued in violation of any
preemptive or other rights to subscribe for or to           purchase or acquire any
securities of any of the Subsidiaries. Except for its           Subsidiaries, the Company
owns no beneficial interest, directly or indirectly,           in any corporation,
partnership, joint venture or other business entity. The           Company has no
significant subsidiaries (as such term is defined in Rule 1-02(w)           of Regulation
S-X promulgated by the Commission) other than the Subsidiaries           listed on <U>Schedule
II</U> attached hereto.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Capitalization</I>.
The Company has duly and validly authorized capital stock           as set forth in each
of the Registration Statement, Disclosure Package and           Prospectus; all
outstanding shares of Common Stock of the Company conform, or           when issued will
conform, to the description thereof in the Registration           Statement, the
Disclosure Package and the Prospectus and have been, or, when           issued and paid
for in the manner described herein will be, duly authorized,           validly issued,
fully paid and non-assessable; and except as disclosed in the           Registration
Statement, the Disclosure Package and the Prospectus, the issuance           of the
Securities to be purchased from the Company hereunder is not subject to
          preemptive or other similar rights, or any restriction upon the voting or
          transfer thereof pursuant to applicable law or the Company&#146;s Articles of
          Incorporation, Bylaws or governing documents or any agreement to which the
          Company is a party or by which it may be bound.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Authorization,
Issuance</I>. All corporate action required to be taken by the           Company for the
authorization, issuance and sale of the Securities has been duly           and validly
taken. The Shares and the Warrant Shares have been duly and validly           authorized.
When the Shares and the Warrant Shares have been issued and           delivered against
payment therefor as provided herein and in the Warrant, as the           case may be, the
Shares, when so issued and sold, and the Warrant Shares, when           issued upon
exercise of the Warrants, will be duly and validly issued, fully           paid and
non-assessable and the Investors or other persons in whose names Shares           or
Warrant Shares are registered will acquire good and valid title to such           Shares
or Warrant Shares, in each case free and clear of all liens,           encumbrances,
equities, preemptive rights and other claims. The Shares and the           Warrant Shares
will conform in all material respects to the description thereof           contained in
the Registration Statement, the Disclosure Package and the           Prospectus. No
further approval or authority of the shareholders or the Board of           Directors of
the Company will be required for the issuance and sale of the           Shares, the
Warrants or the Warrant Shares as contemplated herein and in the           Subscription
Agreements. The Warrants conform, or when issued will conform, to           the
description thereof contained in the Disclosure Package and the Prospectus           and
have been duly and validly authorized by the Company and upon delivery to           the
Investors at the Closing Date will be valid and binding obligations of the
          Company, enforceable in accordance with their terms, except as such
          enforceability may be limited by bankruptcy, insolvency, reorganization,
          moratorium or similar laws affecting the rights and remedies of creditors
          generally or subject to general principles of equity. Except as disclosed in
          each of the Disclosure Package and Prospectus, there are no outstanding
          subscriptions, rights, warrants, options, calls, convertible securities,
          commitments of sale or rights related to or entitling any person to purchase or
          otherwise to acquire any shares of, or any security convertible into or
          exchangeable or exercisable for, the capital stock of, or other ownership
          interest in, the Company, except for such options or rights as may have been
          granted by the Company to employees, directors or consultants pursuant to its
          stock option or stock purchase plans.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Registration Rights</I>. Neither the filing of the Registration Statement           nor
the offering or sale of the Securities as contemplated by this Agreement           gives
rise to any rights, other than those which have been waived or satisfied,           for
or relating to the registration of any shares of Common Stock or other
          securities of the Company.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Due
Authorization and Enforceability</I>. This Agreement and each           Subscription
Agreement have been duly authorized, executed and delivered by the           Company, and
each constitutes a valid, legal and binding obligation of the           Company,
enforceable against the Company in accordance with its terms, except as           rights
to indemnity hereunder may be limited by federal or state securities laws           and
except as such enforceability may be limited by applicable bankruptcy,
          insolvency, reorganization or similar laws affecting the rights of creditors
          generally and subject to general principles of equity.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Violation</I>. Neither the Company nor any of the Subsidiaries is in           breach or
violation of or in default (nor has any event occurred which with           notice, lapse
of time or both would result in any breach or violation of, or           constitute a
default) (i) under the provisions of its Articles of Incorporation,           Bylaws or
other governing documents or (ii) except as set forth in the           Registration
Statement, the Disclosure Package and the Prospectus, in the           performance or
observance of any term, covenant, obligation, agreement or           condition contained
in any indenture, mortgage, deed of trust, bank loan or           credit agreement or
other evidence of indebtedness, or any license, lease,           contract or other
agreement or instrument to which the Company or any of the           Subsidiaries is a
party or by which any of them or any of their properties may           be bound or
affected, or (iii) in the performance or observance of any statute,           law, rule,
regulation, ordinance, judgment, order or decree of any court,           regulatory body,
administrative agency, governmental body, arbitrator or other           authority having
jurisdiction over the Company, the Subsidiaries or any of their           respective
properties (including, without limitation, those administered by the           Food and
Drug Administration of the U.S. Department of Health and Human Services           (the
&#147;<I>FDA</I>&#148;) or by any foreign, federal, state or local           regulatory
authority performing functions similar to those preformed by the           FDA), except,
with respect to clauses (ii) and (iii) above, to the extent any           such
contravention would not result in a Material Adverse Effect.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Conflict</I>. Except as set forth in the Registration Statement, the           Disclosure
Package and the Prospectus (and specifically including the           information set
forth under the caption &#147;Risk Factors&#148; in the           prospectus supplement
included in the Prospectus), the execution, delivery and           performance by the
Company of this Agreement and each Subscription Agreement and           the consummation
of the transactions herein contemplated, including the issuance           and sale by the
Company of the Securities, will not conflict with or result in a           breach or
violation of, or constitute a default under (nor constitute any event           which
with notice, lapse of time or both would result in any breach or violation           of
or constitute a default under) (i) the provisions of the Articles of
          Incorporation, Bylaws or other governing documents of the Company or any of the
          Subsidiaries, (ii) any material indenture, mortgage, deed of trust, bank loan
or           credit agreement or other evidence of indebtedness, or any material license,
          lease, contract or other agreement or instrument to which the Company or any of
          the Subsidiaries is a party or by which any of them or any of their respective
          properties may be bound or affected, or (iii) any federal, state, local or
          foreign law, regulation or rule or any decree, judgment or order applicable to
          the Company or any of the Subsidiaries.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Consents Required</I>. No approval, authorization, consent or order of or
          filing with any federal, state, local or foreign governmental or regulatory
          commission, board, body, authority or agency, or of or with any self-regulatory
          organization or other non-governmental regulatory authority (including, without
          limitation, the NASDAQ Capital Market, or approval of the stockholders of the
          Company (including as may be required pursuant to Rule 5635 of the Nasdaq
          Marketplace Rules), is required in connection with the issuance and sale of the
          Securities or the consummation by the Company of the transactions contemplated
          hereby other than (i) as may be required under the Securities Act, and (ii)
          under the rules and regulations of the Financial Industry Regulatory Authority
          (&#147;FINRA&#148;). The Company has full power and authority to enter into
this           Agreement and each Subscription Agreement and to authorize, issue and sell
the           Securities as contemplated by this Agreement and each Subscription
Agreement.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Absence
of Material Changes. </I>Subsequent to the respective dates as of           which
information is given in the Disclosure Package, (a) neither the Company           nor any
of its subsidiaries has incurred any material liability or obligation,           direct
or contingent, or entered into any material transaction not in the           ordinary
course of business; (b) neither the Company nor any of its subsidiaries           has
purchased any of the Company&#146;s outstanding capital stock, or declared,
          paid or otherwise made any dividend or distribution of any kind on the
          Company&#146;s capital stock; (c) there has not been any change in the capital
          stock (other than a change in the number of outstanding shares of Common Stock
          due to the issuance of such share of Common Stock upon the exercise of
          outstanding options or warrants), or material change in the short-term debt or
          long-term debt of the Company and its Subsidiaries or any issue of options,
          warrants, convertible securities or other rights to purchase the capital stock
          (other than grants of stock options under the Company&#146;s stock option plans
          existing on the date hereof) of the Company, or (d) there has not been any
          material adverse change, or any development involving a prospective material
          adverse change, in the business, properties, management, financial condition or
          results of operations of the Company and the Subsidiaries, taken as a whole,
          from that set forth in the Disclosure Package (exclusive of any amendments or
          supplements thereto subsequent to the date of this Agreement).  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Permits</I>.
The Company and each of the Subsidiaries possess all necessary           licenses,
authorizations, consents and approvals and have made all necessary           filings
required under any federal, state, local or foreign law, regulation or           rule
(including, without limitation, those from the FDA and any other foreign,
          federal, state or local government or regulatory authorities performing
          functions similar to those performed by the FDA) in order to conduct its
          business. Neither the Company nor any of the Subsidiaries is in violation of,
or           in default under, or has received notice of any proceedings relating to
          revocation or modification of, any such license, authorization, consent or
          approval. The Company and each of the Subsidiaries is in compliance in all
          material respects with all applicable federal, state, local and foreign laws,
          regulations, orders or decrees.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Legal
Proceedings</I>. There are no legal or governmental proceedings pending           or, to
the Company&#146;s knowledge, threatened or contemplated to which the           Company
or any of the Subsidiaries is or would be a party or of which any of           their
respective properties is or would be subject at law or in equity, before           or by
any federal, state, local or foreign governmental or regulatory           commission,
board, body, authority or agency, or before or by any           self-regulatory
organization or other non-governmental regulatory authority           (including, without
limitation, Nasdaq), except (i) as described in the           Registration Statement, the
Disclosure Package and the Prospectus, (ii) any such           proceeding, which if
resolved adversely to the Company or any Subsidiary, would           not result in a
judgment, decree or order having, individually or in the           aggregate, a Material
Adverse Effect or (iii) any such proceeding that would not           prevent or
materially and adversely affect the ability of the Company to           consummate the
transactions contemplated hereby. The Disclosure Package contains           in all
material respects the same description of the foregoing matters contained           in
the Prospectus.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(t)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Statutes;
Contracts</I>. There are no statutes or regulations applicable to           the Company
or contracts or other documents of the Company which are required to           be
described in the Registration Statement, the Disclosure Package or the
          Prospectus or filed as exhibits to the Registration Statement by the Securities
          Act which have not been so described or filed.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(u)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Independent
Accountants</I>. Kost Forer Gabbay &amp; Kaiserer, a member firm           of Ernst &amp; Young
Global, who has audited the financial statements of the           Company and the
Subsidiaries, is an independent registered public accounting           firm (as defined
in Section 2(a)(12) of the Sarbanes-Oxley Act of 2002 (the           &#147;<I>Sarbanes-Oxley
Act</I>&#148;)) with respect to the Company within the           meaning of the
Securities Act and the applicable rules and regulations           thereunder adopted by
the Commission and the Public Company Accounting Oversight           Board (United
States).  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Financial
Statements</I>. The financial statements of the Company, together           with the
related schedules and notes thereto, set forth or incorporated by           reference in
the Registration Statement, the Disclosure Package and the           Prospectus comply in
all material respects with the applicable requirements of           the Securities Act
and the Exchange Act, as applicable, and present fairly in           all material
respects (i) the financial condition of the Company and the           Subsidiaries, taken
as a whole, as of the dates indicated and (ii) the           consolidated results of
operations, stockholders&#146; equity and changes in           cash flows of the Company
and the Subsidiaries, taken as a whole, for the           periods therein specified; and
such financial statements and related schedules           and notes thereto have been
prepared in conformity with generally accepted           accounting principles as in
effect in the United States, consistently applied           throughout the periods
involved (except as otherwise stated therein and subject,           in the case of
unaudited financial statements, to the absence of footnotes and           normal year-end
adjustments). There are no other financial statements           (historical or pro forma)
that are required to be included in the Registration           Statement, the Disclosure
Package and the Prospectus; and the Company and the           Subsidiaries do not have
any material liabilities or obligations, direct or           contingent (including any
off-balance sheet obligations), not disclosed in the           Registration Statement,
the Disclosure Package and the Prospectus; and all           disclosures contained in the
Registration Statement, the Disclosure Package and           the Prospectus regarding
&#147;non-GAAP financial measures&#148; (as such term           is defined by the rules
and regulations of the Commission), if any, comply with           Regulation G of the
Exchange Act and Item 10(e) of Regulation S-K of the           Commission, to the extent
applicable, and present fairly the information shown           therein and the Company&#146;s
basis for using such measures.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(w)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[reserved].  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Not
an Investment Company</I>. Neither the Company nor any of the           Subsidiaries is
or, after giving effect to the offering and sale of the           Securities and the
application of the proceeds thereof as described in the           Prospectus, will be
required to register as an &#147;investment company&#148; as           defined in the
Investment Company Act of 1940, as amended.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(y)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Good
Title to Property</I>. The Company and each of the Subsidiaries has good           and
valid title to all property (whether real or personal) described in the
          Registration Statement, the Disclosure Package and the Prospectus as being
owned           by each of them, in each case free and clear of all liens, claims,
security           interests, other encumbrances or defects except such as are described
in the           Registration Statement, the Disclosure Package and the Prospectus and
those that           would not, individually or in the aggregate materially and adversely
affect the           value of such property and do not materially and adversely interfere
with the           use made and proposed to be made of such property by the Company and
the           Subsidiaries. All of the property described in the Registration Statement,
the           Disclosure Package and the Prospectus as being held under lease by the
Company           or a Subsidiary is held thereby under valid, subsisting and enforceable
leases,           without any liens, restrictions, encumbrances or claims, except those
that,           individually or in the aggregate, are not material and do not materially
          interfere with the use made and proposed to be made of such property by the
          Company and the Subsidiaries.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(z)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Intellectual
Property Rights</I>. The Company and the Subsidiaries own, or           have obtained
valid and enforceable licenses for, or other rights to use, the           inventions,
patent applications, patents, trademarks (both registered and           unregistered),
tradenames, copyrights, trade secrets and other proprietary           information
described in the Registration Statement, the Disclosure Package and           the
Prospectus as being owned or licensed by them or which are necessary for the
          conduct of their respective businesses (collectively, <I>&#147;Intellectual
          Property</I>&#148;), except where the failure to own, license or have such
          rights would not, individually or in the aggregate, result in a Material
Adverse           Effect. Except as described in the Registration Statement, the
Disclosure           Package and the Prospectus (i) there are no third parties who have
or, to the           Company&#146;s knowledge, will be able to establish rights to any
Intellectual           Property, except for the ownership rights of the owners of the
Intellectual           Property which is licensed to the Company; (ii) to the Company&#146;s
knowledge,           there is no infringement by third parties of any Intellectual
Property; (iii)           there is no pending or, to the Company&#146;s knowledge,
threatened action,           suit, proceeding or claim by others challenging the Company&#146;s
rights in or           to, or the validity, enforceability, or scope of, any Intellectual
Property           owned by or licensed to the Company, and the Company is unaware of any
facts           which could form a reasonable basis for any such claim; (iv) there is no
pending           or, to the Company&#146;s knowledge, threatened action, suit,
proceeding or           claim by others that the Company or any of the Subsidiaries
infringes or           otherwise violates any patent, trademark, copyright, trade secret
or other           proprietary rights of others, and the Company is unaware of any facts
which           could form a reasonable basis for any such claim; (v) to the Company&#146;s
          knowledge, there is no patent or patent application that contains claims that
          interfere with the issued or pending claims of any of the Intellectual
Property;           and (vi) to the Company&#146;s knowledge, there is no prior art that
may render           any patent owned by the Company invalid, nor is there any prior art
known to the           Company that may render any patent application owned by the
Company           unpatentable.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(aa)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Taxes</I>.
The Company and each of the Subsidiaries has timely filed all           material federal,
state, local and foreign income and franchise tax returns (or           timely filed
applicable extensions therefore) that have been required to be           filed and are
not in default in the payment of any taxes which were payable           pursuant to said
returns or any assessments with respect thereto, other than any           which the
Company or any of the Subsidiaries is contesting in good faith and for           which
adequate reserves have been provided and reflected in the Company&#146;s
          financial statements included in the Registration Statement, the Disclosure
          Package and the Prospectus. Neither the Company nor any of its Subsidiaries has
          any tax deficiency that has been or, to the knowledge of the Company, might be
          asserted or threatened against it that would result in a Material Adverse
          Effect.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(bb)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Insurance</I>.
The Company and each of the Subsidiaries maintains insurance           in such amounts
and covering such risks as is adequate for the conduct of its           business and the
value of its properties and as is customary for companies           engaged in similar
businesses in similar industries. All such insurance is fully           in force on the
date hereof and will be fully in force as of the Closing Date.           Neither the
Company nor any of the Subsidiaries 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 at a cost that would not have a Material           Adverse
Effect.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(cc)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Accounting
Controls</I>. The Company and each of the Subsidiaries maintains a           system of
internal accounting controls sufficient to provide reasonable           assurances that
(i) transactions are executed in accordance with           management&#146;s general or
specific authorization; (ii) transactions are           recorded as necessary to permit
preparation of financial statements in           conformity with generally accepted
accounting principles as in effect in the           United States and to maintain
accountability for assets; (iii) access to assets           is permitted only in
accordance with management&#146;s general or specific           authorization; and (iv)
the recorded accountability for assets is compared with           existing assets at
reasonable intervals and appropriate action is taken with           respect to any
differences.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(dd)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Disclosure
Controls</I>. The Company has established, maintains and evaluates           &#147;disclosure
controls and procedures&#148; (as such term is defined in Rule           13a-15(e) and
15d-15(e) under the Exchange Act), which (i) are designed to           ensure that
material information relating to the Company is made known to the           Company&#146;s
principal executive officer and its principal financial officer           by others
within those entities, particularly during the periods in which the           periodic
reports required under the Exchange Act are being prepared, (ii) have           been
evaluated for effectiveness as of the end of the last fiscal period covered           by
the Registration Statement; and (iii) such disclosure controls and procedures
          are effective to perform the functions for which they were established. There
          are no significant deficiencies and material weaknesses in the design or
          operation of internal controls which could adversely affect the Company&#146;s
          ability to record, process, summarize, and report financial data to management
          and the Board of Directors. The Company is not aware of any fraud, whether or
          not material, that involves management or other employees who have a role in
the           Company&#146;s internal controls; and since the date of the most recent
          evaluation of such disclosure controls and procedures, there have been no
          significant changes in internal controls or in other factors that could
          significantly affect internal controls, including any corrective actions with
          regard to significant deficiencies and material weaknesses.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ee)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Corrupt
Practices</I>. Neither the Company nor, to the Company&#146;s           knowledge, any
other person associated with or acting on behalf of the Company,           including
without limitation any director, officer, agent or employee of the           Company or
its Subsidiaries has, directly or indirectly, while acting on behalf           of the
Company or its Subsidiaries (i) used any corporate funds for unlawful
          contributions, gifts, entertainment or other unlawful expenses relating to
          political activity, (ii) made any unlawful payment to foreign or domestic
          government officials or employees or to foreign or domestic political parties
or           campaigns from corporate funds, (iii) violated any provision of the Foreign
          Corrupt Practices Act of 1977, as amended or (iv) made any other unlawful
          payment.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ff)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Price Stabilization</I>. Neither the Company nor any of the Subsidiaries           nor,
to the Company&#146;s knowledge, any of their respective officers,           directors,
affiliates or controlling persons has taken or will take, directly or
          indirectly, any action designed to cause or result in, or which has constituted
          or which might reasonably be expected to constitute the stabilization or
          manipulation of the price of any security of the Company to facilitate the sale
          or resale of the Securities.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(gg)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Undisclosed Relationships</I>. No relationship, direct or indirect, exists
          between or among the Company on the one hand and the directors, officers,
          stockholders, customers or suppliers of the Company on the other hand which is
          required to be described in the Registration Statement, the Disclosure Package
          and the Prospectus which has not been so described. There are no outstanding
          loans, advances (except normal advances for business expenses in the ordinary
          course of business) or guarantees of indebtedness by the Company to or for the
          benefit of any of the officers or directors of the Company or any member of
          their respective immediate families, except as disclosed in the Registration
          Statement, the Disclosure Package and the Prospectus. The Company has not, in
          violation of the Sarbanes Oxley Act, directly or indirectly, extended or
          maintained credit, arranged for the extension of credit, or renewed an
extension           of credit, in the form of a personal loan to or for any director or
executive           officer of the Company.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(hh)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Sarbanes-Oxley
Act</I>. The Company, and to its knowledge all of the           Company&#146;s directors
or officers, in their capacities as such, are in           compliance in all material
respects with all applicable effective provisions of           the Sarbanes-Oxley Act and
any related rules and regulations promulgated by the           Commission.  </FONT></P>

<p align=center>
<font size=2>- 11 -</font></p>
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<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Brokers
Fees</I>. Neither the Company nor any of the Subsidiaries is a party           to any
contract, agreement or understanding with any person (other than this
          Agreement) that would give rise to a valid claim against the Company or the
          Subsidiaries or the Placement Agent for a brokerage commission, finder&#146;s
          fee or other like payment in connection with the offering and sale of the
          Securities.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(jj)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exchange
Act Requirements</I>. The Company has filed in a timely manner all           reports
required to be filed pursuant to Sections 13(a), 13(e), 14 and 15(d) of           the
Exchange Act during the preceding 12 months (except to the extent that           Section
15(d) requires reports to be filed pursuant to Sections 13(d) and 13(g)           of the
Exchange Act, which shall be governed by the next clause of this           sentence); and
the Company has filed in a timely manner all reports required to           be filed
pursuant to Sections 13(d) and 13(g) of the Exchange Act since January           1, 2004,
except where the failure to timely file could not reasonably be           expected
individually or in the aggregate to have a Material Adverse Effect.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(kk)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>FINRA
Affiliations</I>. To the Company&#146;s knowledge, there are no           affiliations or
associations between (i) any member of FINRA and (ii) the           Company or any of the
Company&#146;s officers, directors or 5% or greater           securityholders or any
beneficial owner of the Company&#146;s unregistered           equity securities that were
acquired at any time on or after the one hundred           eightieth (180<SUP>th</SUP>)
day immediately preceding the date the Registration           Statement was initially
filed with the Commission, except as set forth in the           Registration Statement,
the Disclosure Package and the Prospectus.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ll)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Compliance
with Environmental Laws</I>. The Company and the Subsidiaries (a)           are in
compliance with any and all applicable foreign, federal, state and local           laws,
orders, rules, regulations, directives, decrees and judgments relating to           the
protection of human health and safety, the environment or hazardous or toxic
          substances or wastes, pollutants or contaminants (&#147;<I>Environmental </I>          Laws&#148;),
(b) have received all permits, licenses or other approvals required           of them
under applicable Environmental Laws to conduct their respective           businesses and
(c) are in compliance with all terms and conditions of any such           permit, license
or approval, except where such noncompliance with Environmental           Laws, failure
to receive required permits, licenses or other approvals or           failure to comply
with the terms and conditions of such permits, licenses or           approvals would not,
individually or in the aggregate, result in a Material           Adverse Effect. There
are no costs or liabilities associated with Environmental           Laws (including,
without limitation, any capital or operating expenditures           required for
clean-up, closure of properties or compliance with Environmental           Laws or any
permit, license or approval, any related constraints on operating           activities
and any potential liabilities to third parties) which would,           individually or in
the aggregate, result in a Material Adverse Effect.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(mm)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Labor Disputes</I>. Neither the Company nor any Subsidiary is engaged in           any
unfair labor practice; except for matters that would not, individually or in
          the aggregate, result in a Material Adverse Effect. (i) There is (A) no unfair
          labor practice complaint pending or, to the Company&#146;s knowledge after due
          inquiry, threatened against the Company or any Subsidiary before the National
          Labor Relations Board, and no grievance or arbitration proceeding arising out
of           or under collective bargaining agreements is pending or threatened, (B) no
          strike, labor dispute, slowdown or stoppage pending or, to the Company&#146;s
          knowledge after due inquiry, threatened against the Company or any Subsidiary
          and (C) no union representation dispute currently existing concerning the
          employees of the Company or any Subsidiary, and (ii) to the Company&#146;s
          knowledge no union organizing activities are currently taking place concerning
          the employees of the Company or any Subsidiary. The Company has at all times
          been, and is currently, in compliance in all respects with all federal, state,
          local or foreign law relating to discrimination in the hiring, promotion or pay
          of employees or any applicable wage or hour laws concerning the employees of
the           Company or any Subsidiary, except where the failure to be in such
compliance           would not, individually or in the aggregate, result in a Material
Adverse           Effect.  </FONT></P>

<p align=center>
<font size=2>- 12 -</font></p>
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<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(nn)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>ERISA</I>.
The Company is in compliance in all material respects with all           presently
applicable provisions of the Employee Retirement Income Security Act           of 1974,
as amended, including the regulations and published interpretations           thereunder (&#147;<I>ERISA</I>&#148;);
no &#147;reportable event&#148; (as           defined in ERISA) has occurred with respect
to any &#147;pension plan&#148; (as           defined in ERISA) for which the Company
would have any liability; the Company           has not incurred and does not expect to
incur liability under (i) Title IV of           ERISA with respect to termination of, or
withdrawal from, any &#147;pension           plan&#148; or (ii) Sections 412 or 4971 of
the Internal Revenue Code of 1986, as           amended, including the regulations and
published interpretations thereunder (the           &#147;<I>Code</I>&#148;); and each
&#147;pension plan&#148; for which the           Company would have any liability that is
intended to be qualified under Section           401(a) of the Code is so qualified in
all material respects and nothing has           occurred, whether by action or by failure
to act, which would cause the loss of           such qualification.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(oo)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Nasdaq;
Exchange Act Registration</I>. The Common Stock is registered           pursuant to
Section 12(b) of the Exchange Act and accepted for listing on the           NASDAQ
Capital Market, and the Company has taken no action designed to, or           likely to
have the effect of, terminating the registration of the Common Stock           under the
Exchange Act or delisting the Common Stock from the NASDAQ Capital           Market, nor
has the Company received any notification that the Commission or           FINRA is
contemplating terminating such registration or listing. The Company has
          complied in all material respects with the applicable requirements of the
NASDAQ           Capital Market for maintenance of listing of the Common Stock thereon.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(pp)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>PFIC
Status</I>. The Company is not, for the taxable year ended December 31,           2008,
and upon consummation of the transactions described hereby and the           application
of the proceeds as described in the Registration Statement, the           Disclosure
Package and the Prospectus is not expected to become, a Passive           Foreign
Investment Company within the meaning of Section 1297 of the Internal           Revenue
Code, as amended.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(qq)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Statistical
or Market-Related Data</I>. Any statistical, industry-related and
          market-related data included or incorporated by reference in the Registration
          Statement, the Disclosure Package and the Prospectus, are based on or derived
          from sources that the Company reasonably and in good faith believes to be
          reliable and accurate, and such data agree with the sources from which they are
          derived.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(rr)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Clinical
Studies</I>. Neither the Company nor any Subsidiary has received any           notices,
correspondence or other communication from the FDA or any other           governmental
authority requiring the termination, suspension or material           modification of any
ongoing or planned clinical trials conducted by, or on           behalf of, the Company
or any Subsidiary, or in which the Company or any           Subsidiary has participated,
and the Company has no knowledge or reason to           believe that the FDA or any other
governmental authority is considering such           action.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ss)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Descriptions
of Documents</I>. The statements set forth in each of the           Registration
Statement, the Disclosure Package and the Prospectus describing the           Securities
and this Agreement, insofar as they purport to describe the           provisions of the
laws and documents referred to therein, are accurate, complete           and fair in all
material respects.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(tt)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Money
Laundering Laws. </I>The operations of the Company are and have been           conducted
at all times in compliance in all material respects with applicable           financial
recordkeeping and reporting requirements of the Currency and Foreign
          Transactions Reporting Act of 1970, as amended, the money laundering statutes
of           all jurisdictions, the rules and regulations thereunder and any related or
          similar rules, regulations or guidelines, issued, administered or enforced by
          any governmental agency (collectively, the &#147;<I>Money Laundering </I>          Laws&#148;)
and no action, suit or proceeding by or before 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.  </FONT></P>

<p align=center>
<font size=2>- 13 -</font></p>
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<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(uu)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>OFAC.
</I>Neither the Company nor any of its Subsidiaries nor, to the           knowledge of
the Company, any director, officer, agent, employee or affiliate of           the Company
or any of its Subsidiaries is currently subject to any U.S.           sanctions
administered by the Office of Foreign Assets Control of the U.S.           Treasury
Department (&#147;<I>OFAC</I>&#148;); and the Company will not directly           or
indirectly use the proceeds of the offering, or lend, contribute or otherwise
          make available such proceeds to any subsidiary, joint venture partner or other
          person or entity that, to the Company&#146;s knowledge, will use such proceeds,
          for the purpose of financing the activities of any person currently subject to
          any U.S. sanctions administered by OFAC.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
certificate signed by any officer of the Company or a Subsidiary and delivered to the
Placement Agent or to counsel for the Placement Agent in connection with the offering of
the Securities shall be deemed a representation and warranty by the Company (and not such
officer in an individual capacity) to the Placement Agent and the Investors as to the
matters covered thereby. </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Section 3.</B> </FONT> </TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Covenants.</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company covenants and agrees with the Placement Agent as follows: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Reporting
Obligations; Exchange Act Compliance</I>. The Company will (i) file           the
Preliminary Prospectus, if any, and the Prospectus with the Commission           within
the time periods specified by Rule 424(b) and Rules 430A, 430B and 430C,           as
applicable under the Securities Act, (ii) file any Issuer Free Writing
          Prospectus to the extent required by Rule 433 under the Securities Act, if
          applicable, (iii) file promptly all reports required to be filed by the Company
          with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange
          Act subsequent to the date of the Prospectus and during such period as the
          Prospectus would be required by law to be delivered (whether physically or
          through compliance with Rule 172 under the Securities Act or any similar rule)
          (the <I>&#147;Prospectus Delivery Period</I>&#148;), and (iv) furnish copies of
          each Issuer Free Writing Prospectus, if any, (to the extent not previously
          delivered) to the Placement Agent prior to 11:00 a.m. Eastern time, on the
          second business day next succeeding the date of this Agreement in such
          quantities as the Placement Agent shall reasonably request.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Abbreviated
Registration Statement</I>. If the Company elects to rely upon           Rule 462(b)
under the Securities Act, the Company shall file a registration           statement under
Rule 462(b) with the Commission in compliance with Rule 462(b)           by 8:00 a.m.,
Eastern time, on the business day next succeeding the date of this           Agreement,
and the Company shall at the time of filing either pay to the           Commission the
filing fee for such Rule 462(b) registration statement or give           irrevocable
instructions for the payment of such fee pursuant to the Rules and           Regulations.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Amendments
or Supplements</I>. The Company will not, during the Prospectus Delivery Period in
connection with the Offering contemplated by this           Agreement, file any amendment
or supplement to the Registration Statement or the           Prospectus unless a copy
thereof shall first have been submitted to the           Placement Agent within a
reasonable period of time prior to the filing thereof           and the Placement Agent
shall not have reasonably objected thereto in good           faith.  </FONT></P>

<p align=center>
<font size=2>- 14 -</font></p>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Free
Writing Prospectuses</I>. The Company will (i) not make any offer           relating to
the Securities that would constitute an &#147;issuer free writing           prospectus&#148; (as
defined in Rule 433) or that would otherwise constitute a           &#147;free writing
prospectus&#148; (as defined in Rule 405 under the Securities           Act) required to
be filed by the Company with the Commission under Rule 433           under the Securities
Act unless the Placement Agent approves its use in writing           prior to first use
(each, a &#147;<I>Permitted Free Writing           Prospectus</I>&#148;); provided that
the prior written consent of the Placement           Agent hereto shall be deemed to have
been given in respect of the Issuer Free           Writing Prospectus(es) included in <U>Schedule
I</U> hereto, (ii) treat each           Permitted Free Writing Prospectus as an Issuer
Free Writing Prospectus, (iii)           comply with the requirements of Rules 164 and
433 under the Securities Act           applicable to any Issuer Free Writing Prospectus,
including the requirements           relating to timely filing with the Commission,
legending and record keeping and           (iv) not take any action that would result in
the Placement Agent or the Company           being required to file with the Commission
pursuant to Rule 433(d) under the           Securities Act a free writing prospectus
prepared by or on behalf of such           Placement Agent that such Placement Agent
otherwise would not have been required           to file thereunder. The Company will
satisfy the conditions in Rule 433 under           the Securities Act to avoid a
requirement to file with the Commission any           electronic road show.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Notice
to Placement Agent</I>. The Company will notify the Placement Agent           promptly,
and will, if requested, confirm such notification in writing: (i) the           receipt
of any comments of, or requests for additional information from, the
          Commission; (ii) the time and date of any filing of any post-effective
amendment           to the Registration Statement or any amendment or supplement to the
Disclosure           Package or the Prospectus, (iii) the time and date when any
post-effective           amendment to the Registration Statement becomes effective; (iv)
of the issuance           by the Commission of any stop order suspending the
effectiveness of the           Registration Statement, or any post-effective amendment
thereto or any order           preventing or suspending the use of any Preliminary
Prospectus, the Disclosure           Package, the Prospectus or any Issuer Free Writing
Prospectus, or the initiation           of any proceedings for that purpose or the threat
thereof; (v) of receipt by the           Company of any notification with respect to any
suspension or the approval of           the Shares and Warrant Shares from any securities
exchange upon which it is           listed for trading or included or designated for
quotation, or the initiation or           threatening of any proceeding for such purpose.
The Company will use its           reasonable best efforts to prevent the issuance or
invocation of any such stop           order or suspension by the Commission and, if any
such stop order or suspension           is so issued or invoked, to obtain as soon as
possible the withdrawal or removal           thereof.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Filing
of Amendments or Supplements</I>. If, during the Prospectus Delivery           Period,
any event shall occur or condition exist as a result of which it is           necessary
to amend or supplement the Prospectus (or, if the Prospectus is not           yet
available to prospective purchasers, the Disclosure Package) in order to           make
the statements therein, in the light of the circumstances when the           Prospectus
(or, if the Prospectus is not yet available to prospective           purchasers, the
Disclosure Package) is delivered to an Investor, not misleading,           or if, in the
opinion of counsel for the Placement Agent, it is necessary to           amend or
supplement the Prospectus (or, if the Prospectus is not yet available           to
prospective purchasers, the Disclosure Package) to comply with applicable           law,
forthwith to prepare, file with the Commission and furnish, at its own           expense,
to the Placement Agent, either amendments or supplements to the           Prospectus (or,
if the Prospectus is not yet available to prospective           purchasers, the
Disclosure Package) so that the statements in the Prospectus           (or, if the
Prospectus is not yet available to prospective purchasers, the           Disclosure
Package) as so amended or supplemented will not, in the light of the
          circumstances when the Prospectus (or, if the Prospectus is not yet available
to           prospective purchasers, the Disclosure Package) is delivered to an Investor,
be           misleading or so that the Prospectus (or, if the Prospectus is not yet
available           to prospective purchasers, the Disclosure Package), as amended or
supplemented,           will comply with law. If at any time following issuance of an
Issuer Free           Writing Prospectus there occurred or occurs an event or development
as a result           of which such Issuer Free Writing Prospectus conflicted or would
conflict with           the information contained in the Registration Statement relating
to the           Securities or included or would include an untrue statement of a
material fact           or omitted or would omit to state a material fact necessary in
order to make the           statements therein, in the light of the circumstances
prevailing at that           subsequent time, not misleading, the Company promptly will
notify the Placement           Agent and will promptly amend or supplement, at its own
expense, such Issuer           Free Writing Prospectus to eliminate or correct such
conflict, untrue statement           or omission.  </FONT></P>

<p align=center>
<font size=2>- 15 -</font></p>
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<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Delivery
of Copies</I>. The Company will deliver promptly to the Placement           Agent and its
counsel such number of the following documents as the Placement           Agent shall
reasonably request: (i) conformed copies of the Registration           Statement as
originally filed with the Commission and each amendment thereto (in           each case
excluding exhibits), (ii) copies of any Preliminary Prospectus or           Issuer Free
Writing Prospectus, (iii) during the Prospectus Delivery Period,           copies of the
Prospectus (or any amendments or supplements thereto); (iii) any           document
incorporated by reference in the Prospectus (other than any such           document that
is filed with the Commission electronically via EDGAR or any           successor system)
and (iv) all correspondence to and from, and all documents           issued to and by,
the Commission in connection with the registration of the           Securities under the
Securities Act.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Earnings
Statement</I>. As soon as practicable, but in any event not later           than 15
months after the end of the Company&#146;s current fiscal quarter, the           Company
will make generally available to holders of its securities and deliver           to the
Placement Agent, an earnings statement of the Company (which need not be
          audited) that will satisfy the provisions of Section 11(a) and Rule 158 of the
          Securities Act.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Use
of Proceeds</I>. The Company will apply the net proceeds from the sale of           the
Securities in the manner set forth in the Registration Statement, Disclosure
          Package and the Prospectus under the heading &#147;Use of Proceeds&#148;.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Public
Communications</I>. Prior to the Closing Date, the Company will not           issue any
press release or other communication directly or indirectly or hold           any press
conference with respect to the Company, its condition, financial or           otherwise,
or the earnings, business, operations or prospects of any of them, or           the
offering of the Securities, without the prior written consent of the           Placement
Agent, unless in the reasonable judgment of the Company and its           counsel, and
after notification to the Placement Agent, such press release or           communication
is required by law, in which case the Company shall use its           reasonable best
efforts to allow the Placement Agent reasonable time to comment           on such release
or other communication in advance of such issuance.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Lock-Up
Period</I>. For a period of 30 days after the date hereof (the           &#147;<I>Lock-Up
Period</I>&#148;), the Company will not directly or indirectly,           (1) offer to
sell, hypothecate, pledge, announce the intention to sell, sell,           contract to
sell, sell any option or contract to purchase (to the extent such           option or
contract to purchase is exercisable within one year from the Closing           Date),
purchase any option or contract to sell, grant any option, right or           warrant to
purchase or otherwise transfer or dispose of, directly or indirectly,           or
establish or increase a put equivalent position or liquidate or decrease a           call
equivalent position within the meaning of Section 16 of the Exchange Act,           with
respect to, any shares of Common Stock, or any securities convertible into           or
exercisable or exchangeable for shares of Common Stock; (2) file or cause to
          become effective a registration statement under the Securities Act relating to
          the offer and sale of any shares of Common Stock or securities convertible into
          or exercisable or exchangeable for shares of Common Stock or (3) enter into any
          swap or other agreement that transfers, in whole or in part, any of the
economic           consequences of ownership of the Common Stock, whether any such
transaction           described in clauses (1), (2) or (3) above is to be settled by
delivery of           shares of Common Stock or such other securities, in cash or
otherwise, without           the prior written consent of the Placement Agent (which
consent may be withheld           in its sole discretion), other than (i) the Securities
to be sold hereunder,           (ii) the issuance of stock options or shares of
restricted stock to employees,           directors and consultants pursuant to equity
compensation plans described in the           Registration Statement (excluding the
exhibits thereto) and the Disclosure           Package and the Prospectus, (iii)
issuances of shares of Common Stock upon the           exercise of options or warrants
disclosed as outstanding in the Registration           Statement (excluding the exhibits
thereto) and the Disclosure Package and the           Prospectus or upon the conversion
or exchange of convertible or exchangeable           securities outstanding as of the
date of this Agreement; (iv) the issuance by           the Company of any shares of
Common Stock as consideration for mergers,           acquisitions, other business
combinations, or strategic alliances, occurring           after the date of this
Agreement; <I>provided</I> that each recipient of shares           pursuant to this
clause (iv) agrees that all such shares remain subject to           restrictions
substantially similar to those contained in this <U>subsection           3(k)</U>; or (v)
the purchase or sale of the Company&#146;s securities pursuant           to a plan,
contract or instruction that satisfies all of the requirements of           Rule
10b5-1(c)(1)(i)(B) that was in effect prior to the date hereof.           Notwithstanding
the foregoing, for the purpose of allowing the Placement Agent           to comply with
FINRA Rule 2711(f)(4), if (1) during the last 17 days of the           Lock-Up Period,
the Company releases earnings results or publicly announces           other material news
or a material event relating to the Company occurs or (2)           prior to the
expiration of the Lock-Up Period, the Company announces that it           will release
earnings results during the 16 day period beginning on the last day           of the
Lock-Up Period, then in each case the Lock-Up Period will be extended           until the
expiration of the 18 day period beginning on the date of release of           the
earnings results or the public announcement regarding the material news or           the
occurrence of the material event, as applicable, unless the Placement Agent
          waives, in writing, such extension. The Placement Agent agrees to waive such
          extension if the provisions of FINRA Rule 2711(f)(4) are not applicable to the
          Offering. The Company agrees not to accelerate the vesting of any option or
          warrant or the lapse of any repurchase right prior to the expiration of the
          Lock-Up Period.  </FONT></P>

<p align=center>
<font size=2>- 16 -</font></p>
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<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Stabilization</I>.
The Company will not take directly or indirectly any           action designed, or that
might reasonably be expected to cause or result in, or           that will constitute,
stabilization or manipulation of the price of any security           of the Company to
facilitate the sale or resale of any of the Securities.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Transfer
Agent</I>. The Company shall engage and maintain, at its expense, a           transfer
agent and, if necessary under the jurisdiction of incorporation of the           Company,
a registrar for the Shares and Warrant Shares.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Investment
Company Act</I>. The Company shall not invest, or otherwise use           the proceeds
received by the Company from its sale of the Securities in such a           manner as
would require the Company to register as an investment company under           the
Investment Company Act.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Sarbanes-Oxley
Act</I>. The Company will comply with all effective applicable           provisions of
the Sarbanes Oxley Act.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Periodic
Reports</I>. The Company will file with the Commission such periodic           and
special reports as required by the Exchange Act.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Nasdaq.</I> The
Company will use its reasonable best efforts to obtain           approval for, and
maintain the listing of the Shares and the Warrant Shares on           the NASDAQ Capital
Market for so long as the Common Stock is listed thereon.  </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Section 4.</B> </FONT> </TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Costs and Expenses.</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company, whether or not the transactions contemplated hereunder are consummated or this
Agreement is terminated, will pay or reimburse if paid by the Placement Agent all actual
out-of-pocket costs and expenses incident to the performance of the obligations of the
Company under this Agreement and in connection with the transactions contemplated hereby,
including but not limited to costs and expenses of or relating to (i) the preparation,
printing, filing, delivery and shipping of the Registration Statement, any Issuer Free
Writing Prospectus, each Preliminary Prospectus, the Disclosure Package and the
Prospectus, and any amendment or supplement to any of the foregoing and the printing and
furnishing of copies of each thereof to the Placement Agent and dealers (including costs
of mailing and shipment), (ii) the registration, issue, sale and delivery of the
Securities including any stock or transfer taxes and stamp or similar duties payable upon
the sale, issuance or delivery of the Securities and the printing, delivery, and shipping
of the certificates representing the Securities, (iii) the fees and expenses of any
transfer agent or registrar for the Shares and Warrant Shares, (iv) the filing fees
required to be paid by the Placement Agent or the Company with FINRA (including all
COBRADesk fees), (v) fees, disbursements and other charges of counsel to the Company, (vi)
listing fees, if any, for the listing or quotation of the Shares and Warrant Shares on the
NASDAQ Capital Market, (vii) fees and disbursements of the Company&#146;s auditor incurred
in delivering the letter(s) described in <U>Section 5(i)</U> of this Agreement, (viii)
reasonable fees and disbursements of counsel to the Placement Agent, and (ix) the costs
and expenses of the Company and the Placement Agent in connection with the marketing of
the offering and the sale of the Securities to prospective investors including, but not
limited to, those related to any presentations or meetings undertaken in connection
therewith including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged with the written
consent of the Company in connection with the road show presentations, travel, lodging and
other expenses incurred by the officers of the Company and any such consultants, and the
cost of any aircraft or other transportation chartered by the Company in connection with
the road show. Notwithstanding the foregoing, the expenses of the Placement Agent (other
than the filing fees set forth in clause (iv) above), including attorneys fees and
expenses, which the Company shall be obligated to reimburse hereunder shall not exceed 8%
of the gross proceeds received by the Company from the sale of the Securities, less the
Placement Fee if the Offering is consummated. It is understood that except as provided in
this <U>Section 4</U>, <U>Section 6</U> and <U>Section 8(b)</U>, the Placement Agent shall
pay all of its own expenses. </FONT></P>

<p align=center>
<font size=2>- 17 -</font></p>
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<page>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Section 5.</B> </FONT> </TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Conditions of Placement Agent&#146;s Obligations.</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
obligations of the Placement Agent hereunder are subject to the following conditions: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Filings
with the Commission</I>. The Prospectus shall have been filed with           the
Commission pursuant to Rule 424(b) under the Securities Act at or before           5:30
p.m., Eastern time, on the second full business day after the date of this
          Agreement (or such earlier time as may be required under the Securities Act).  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Abbreviated
Registration Statement</I>. If the Company has elected to rely           upon Rule
462(b), the registration statement filed under Rule 462(b) shall have           become
effective under the Securities Act by 8:00 a.m., Eastern time, on the           business
day next succeeding the date of this Agreement.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Stop Orders</I>. Prior to the Closing: (i) no stop order suspending the
          effectiveness of the Registration Statement shall have been issued under the
          Securities Act and no proceedings initiated under Section 8(d) or 8(e) of the
          Securities Act for that purpose shall be pending or threatened by the
          Commission, and (ii) any request for additional information on the part of the
          Commission (to be included in the Registration Statement, the Disclosure
          Package, the Prospectus or any Issuer Free Writing Prospectus or otherwise)
          shall have been complied with to the reasonable satisfaction of the Placement
          Agent.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Action
Preventing Issuance</I>. No action shall have been taken and no           statute, rule,
regulation or order shall have been enacted, adopted or issued by           any
governmental agency or body which would, as of the Closing Date, prevent the
          issuance or sale of the Securities; and no injunction, restraining order or
          order of any other nature by any federal or state court of competent
          jurisdiction shall have been issued as of the Closing Date which would prevent
          the issuance or sale of the Securities.  </FONT></P>

<p align=center>
<font size=2>- 18 -</font></p>
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<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Objection
of Placement Agent</I>. No Prospectus or amendment or supplement to           the
Registration Statement shall have been filed to which the Placement Agent           shall
have objected in writing, which objection shall not be unreasonable. The
          Placement Agent shall not have advised the Company that the Registration
          Statement, the Disclosure Package or the Prospectus, or any amendment thereof
or           supplement thereto, or any Issuer Free Writing Prospectus contains an untrue
          statement of fact which, in its opinion, is material, or omits to state a fact
          which, in its opinion, is material and is required to be stated therein or
          necessary to make the statements therein, in light of the circumstances under
          which they were made, not misleading.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Material Adverse Change</I>. (i) Prior to the Closing, there shall not           have
occurred any change, or any development involving a prospective change, in           the
condition, financial or otherwise, or in the earnings, business or           operations
of the Company from that set forth in the Disclosure Package and the           Prospectus
that, in the Placement Agent&#146;s judgment, is material and adverse           and that
makes it, in the Placement Agent&#146;s judgment, impracticable to           market the
Securities on the terms and in the manner contemplated in the           Disclosure
Package.  </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
shall not have occurred any of the following: (i)&nbsp;a suspension or           material
limitation in trading in securities generally on the New York Stock           Exchange,
the NASDAQ Stock Market, the NASDAQ Global Select Market, the NASDAQ           Global
Market, the NASDAQ Capital Market, US Alternext LLC or the over the           counter
market or the establishing on such exchanges or market by the SEC or by           such
exchanges or markets of minimum or maximum prices that are not in force and
          effect on the date hereof; (ii)&nbsp;a suspension or material limitation in
          trading in the Company&#146;s securities on the NASDAQ Capital Market or any
          other exchange or market or the establishing on any such market or exchange by
          the SEC or by such market of minimum or maximum prices that are not in force
and           effect on the date hereof; (iii)&nbsp;a general moratorium on commercial
banking           activities declared by either federal or any state authorities; (iv)&nbsp;the
          outbreak or escalation of hostilities involving the United States or the
          declaration by the United States of a national emergency or war, which in the
          Placement Agent&#146;s judgment makes it impracticable or inadvisable to
proceed           with the public offering or the delivery of the Securities in the
manner           contemplated in the Prospectus; or (v)&nbsp;any calamity or crisis,
change in           national, international or world affairs, act of God, change in the
          international or domestic markets, or change in the existing financial,
          political or economic conditions in the United States or elsewhere, that in the
          Placement Agent&#146;s judgment makes it impracticable or inadvisable to
proceed           with the public offering or the delivery of the Securities in the
manner           contemplated in each of the Disclosure Package and the Prospectus.  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Representations
and Warranties</I>. Each of the representations and           warranties of the Company
contained herein shall be true and correct when made           and on and as of the
Closing Date, as if made on such date (except that those           representations and
warranties that address matters only as of a particular date           shall remain true
and correct as of such date), and all covenants and agreements           herein contained
to be performed on the part of the Company and all conditions           herein contained
to be fulfilled or complied with by the Company at or prior to           the Closing Date
shall have been duly performed, fulfilled or complied with.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Opinion
of Counsel to the Company</I>. The Placement Agent shall have           received from,
Zysman, Aharoni, Gayer &amp; Co./Sullivan &amp; Worcester LLP,           such counsel&#146;s
written opinion, addressed to the Placement Agent and the           Investors and dated
the Closing Date, in form and substance as is set forth on <U>Exhibit C</U> attached
hereto. Such counsel shall also have furnished to the           Placement Agent a written
statement, addressed to the Placement Agent and dated           the Closing Date, in form
and substance as set forth in <U>Exhibit D</U>          attached hereto.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>[reserved]</I>.  </FONT></P>

<p align=center>
<font size=2>- 19 -</font></p>
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<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Officer&#146;s
Certificate</I>. The Placement Agent shall have received on           the Closing Date a
certificate, addressed to the Placement Agent and dated the           Closing Date, of
the chief executive or chief operating officer and the chief           financial officer
or chief accounting officer of the Company to the effect that:  </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;each
of the representations, warranties and agreements of the Company in this
          Agreement were true and correct when originally made and are true and correct
as           of the Time of Sale and the Closing Date (except that those representations
and           warranties that address matters only as of a particular date shall remain
true           and correct as of such date); and the Company has complied with all
agreements           and satisfied all the conditions on its part required under this
Agreement to be           performed or satisfied at or prior to the Closing Date;  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;subsequent
to the respective dates as of which information is given in the           Disclosure
Package, there has not been (A) a material adverse change or any           development
involving a prospective material adverse change in the general           affairs,
business, properties, management, financial condition or results of           operations
of the Company and the Subsidiaries taken as a whole, (B) any           transaction that
is material to the Company and the Subsidiaries taken as a           whole, except
transactions entered into in the ordinary course of business, (C)           any
obligation, direct or contingent, that is material to the Company and the
          Subsidiaries taken as a whole, incurred by the Company or the Subsidiaries,
          except obligations incurred in the ordinary course of business, (D) except as
          disclosed in the Disclosure Package and in the Prospectus, any change in the
          capital stock (other than a change in the number of outstanding shares of
Common           Stock due to the issuance of shares upon the exercise of outstanding
options or           warrants) or any material change in the short term or long term
indebtedness of           the Company or any of the Subsidiaries taken as a whole, (E)
any dividend or           distribution of any kind declared, paid or made on the capital
stock of the           Company or any of the Subsidiaries or (F) any loss or damage
(whether or not           insured) to the property of the Company or any of its
Subsidiaries which has           been sustained or will have been sustained which has had
or is reasonably likely           to result in a Material Adverse Effect;  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;no
stop order suspending the effectiveness of the Registration Statement or any
          part thereof or any amendment thereof or the qualification of the Securities
for           offering or sale, nor suspending or preventing the use of the Disclosure
          Package, the Prospectus or any Issuer Free Writing Prospectus shall have been
          issued, and no proceedings for that purpose shall be pending or to their
          knowledge, threatened by the Commission or any state or regulatory body; and  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
signers of said certificate have reviewed the Registration Statement, the
          Disclosure Package and the Prospectus, and any amendments thereof or
supplements           thereto (and any documents filed under the Exchange Act and deemed
to be           incorporated by reference into the Disclosure Package and the
Prospectus), and           (A) (i) each part of the Registration Statement and any
amendment thereof do not           and did not contain when the Registration Statement
(or such amendment) became           effective, any untrue statement of a material fact
or omit to state, and did not           omit to state when the Registration Statement (or
such amendment) became           effective, any material fact required to be stated
therein or necessary to make           the statements therein not misleading and (ii) as
of the Time of Sale, neither           the Disclosure Package nor any individual Issuer
Limited Use Free Writing           Prospectus, when considered together with the
Disclosure Package, contained any           untrue statement of material fact or omits to
state any material fact necessary           to make the statements therein, in light of
the circumstances under which they           were made, not misleading and (iii) the
Prospectus, as amended or supplemented,           does not and did not contain, as of its
issue date and as of the Closing Date,           any untrue statement of material fact or
omit to state and did not omit to state           as of such date, a material fact
necessary to make the statements therein, in           light of the circumstances under
which they were made, not misleading, and (B)           since the Time of Sale, there has
occurred no event required to be set forth in           an amendment or supplement to the
Registration Statement, the Disclosure Package           or the Prospectus which has not
been so set forth and there has been no document           required to be filed under the
Exchange Act that upon such filing would be           deemed to be incorporated by
reference in to the Disclosure Package and into the           Prospectus that has not
been so filed.  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<font size=2>- 20 -</font></p>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Secretary&#146;s
Certificate</I>. On the Closing Date, the Company shall have           furnished to the
Placement Agent a Secretary&#146;s Certificate of the Company.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Other Filings
with the Commission</I>. The Company shall have prepared           and filed with the
Commission a Current Report on Form 8-K with respect to the           transactions
contemplated hereby, including as an exhibit thereto this Agreement           and any
other documents relating thereto.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
FINRA Objection</I>. FINRA shall not have raised any objection with           respect to
the fairness and reasonableness of the placement agency terms and           arrangements
relating to the issuance and sale of the Securities; provided that           if any such
objection is raised, the Company and the Placement Agent shall           negotiate
promptly and in good faith appropriate modifications to such placement           agency
terms and arrangements in order to satisfy such objections.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Nasdaq.</I> The
Shares and the Warrant Shares shall have been approved for           listing on the
NASDAQ Capital Market, subject to official notice of issuance.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Additional
Documents</I>. Prior to the Closing Date, the Company shall have           furnished to
the Placement Agent such further information, certificates or           documents as the
Placement Agent shall have reasonably requested for the purpose           of enabling it
to pass upon the issuance and sale of the Securities as           contemplated herein, or
in order to evidence the accuracy of any of the           representations and warranties,
or the satisfaction of any of the conditions or           agreements, herein contained.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All opinions, letters, evidence and
certificates mentioned above or elsewhere in this Agreement shall be deemed to be in
compliance with the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Placement Agent. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If any condition specified in this
<U>Section 5</U> is not satisfied when and as required to be satisfied, this Agreement may
be terminated by the Placement Agent by notice to the Company at any time prior to the
Closing Date, which termination shall be without liability on the part of any party to any
other party, except that <U>Section 4</U>, <U>Section 6</U> and <U>Section 8</U> shall at
all times be effective and shall survive such termination. </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Section 6.</B> </FONT> </TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Indemnification and Contribution.</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Indemnification
of the Placement Agent</I>. The Company agrees to indemnify,           defend and hold
harmless the Placement Agent, its directors and officers, and           each person, if
any, who controls such Placement Agent within the meaning of           either Section 15
of the Securities Act or Section 20 of the Exchange Act, and           the successors and
assigns of all of the foregoing persons, from and against any           loss, damage,
claim or liability, which, jointly or severally, the Placement           Agent or any
such person may become subject under the Securities Act, the           Exchange Act, or
other federal or state statutory law or regulation, the common           law or
otherwise, (including in settlement of any litigation, if such settlement           is
effected with the written consent of the Company), insofar as such loss,
          damage, claim or liability (or actions in respect thereof as contemplated
below)           arises out of or is based upon: (i) any untrue statement or alleged
untrue           statement of a material fact contained in the Registration Statement, or
any           amendment thereto or the omission or alleged omission to state a material
fact           required to be stated therein or necessary to make the statements therein
not           misleading; (ii) any untrue statement or alleged untrue statement of a
material           fact contained in any Preliminary Prospectus, any Issuer Free Writing
Prospectus           or the Prospectus (or any amendment or supplement thereto), or the
omission or           alleged omission to state therein a material fact required to be
stated therein           or necessary to make the statements made therein, in light of
the circumstances           under which they were made, not misleading; and, in the case
of (i) and (ii)           above, to reimburse the Placement Agent and each such
controlling person for any           and all reasonable expenses (including reasonable
fees and disbursements of           counsel) as such expenses are incurred by such
Placement Agent or such           controlling person in connection with investigating,
defending, settling,           compromising or paying any such loss, claim, damage,
liability, expense or           action; <I>provided, however</I>, that the foregoing
indemnity shall not apply           to any loss, claim, damage, liability or expense to
the extent, but only to the           extent, it arises out of or is based upon any
untrue statement or alleged untrue           statement of a material fact contained in or
omitted from, and in conformity           with information concerning the Placement Agent
furnished in writing by or on           behalf of the Placement Agent to the Company
expressly for use therein, which           information the parties hereto agree is
limited to the Placement Agent           Information (as defined in <U>Section 7</U>),
(iii) any untrue statement or           alleged untrue statement made by the Company in
<U>Section 3</U> hereof or the           failure by the Company to perform when and as
required any agreement or covenant           contained herein or (iv) any untrue
statement or alleged untrue statement of any           material fact contained in any
audio or visual materials provided to Investors           by or with the approval of the
Company or based upon written information           furnished by or on behalf of the
Company with its approval including, without           limitation, slides, videos, films
or tape recordings used in any road show or           investor presentations made to
investors by the Company (whether in person or           electronically) or in connection
with the marketing of the Securities.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Indemnification
of the Company</I>. The Placement Agent will indemnify,           defend and hold
harmless the Company, its directors and officers, and any           person, if any, who
controls the Company within the meaning of either Section 15           of the Securities
Act or Section 20 of the Exchange Act, and the successors and           assigns of all of
the foregoing persons, from and against any loss, claim,           damage, liability or
expense, as incurred to which, jointly or severally, the           Company or any such
person may become subject under the Securities Act, the           Exchange Act, or other
federal or state statutory law or regulation, the common           law or otherwise
(including in settlement of any litigation, if such settlement           is effected with
the written consent of the Placement Agent), insofar as such           loss, claim,
damage, liability or expense (or actions in respect thereof as           contemplated
below) arises out of or is based upon (i) any untrue statement or           alleged
untrue statement of a material fact contained in the Registration           Statement, or
any amendment thereto, or the omission or alleged omission           therefrom to state a
material fact required to be stated therein or necessary to           make the statements
therein not misleading; (ii) any untrue statement or alleged           untrue statement
of a material fact contained in any Preliminary Prospectus, any           Issuer Free
Writing Prospectus or the Prospectus (or any amendment or supplement           thereto),
or the omission or alleged omission to state therein a material fact           required
to be stated therein or necessary to make the statements made therein,           in light
of the circumstances under which they were made, not misleading, in the           case of
each of (i) and (ii) above, to the extent but only to the extent, that           such
untrue statement or alleged untrue statement or omission or alleged           omission
was made in the Registration Statement, any Preliminary Prospectus,           Issuer Free
Writing Prospectus or the Prospectus (or any amendment or supplement           thereto)
in reliance upon and in conformity with information concerning the           Placement
Agent furnished in writing by or on behalf of the Placement Agent to           the
Company expressly for use therein and to reimburse the Company, or any such
          director, officer or controlling person for any legal and other expense
          reasonably incurred by the Company, or any such director, officer or
controlling           person in connection with investigating, defending, settling,
compromising or           paying any such loss, claim, damage, liability, expense or
action; <I>provided</I>, that the parties hereto hereby agree that such written
          information provided by the Placement Agent consists solely of the Placement
          Agent Information. Notwithstanding the provisions of this <U>Section 6(b)</U>,
          in no event shall any indemnity by the Placement Agent under this <U>Section
          6(b)</U> exceed the Placement Fee.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Notice
and Procedures</I>. If any action, suit or proceeding (each, a           &#147;<I>Proceeding</I>&#148;)
is brought against a person (an           &#147;<I>indemnified </I><I>party</I>&#148;) in
respect of which indemnity may           be sought against the Company or the Placement
Agent (as applicable, the           &#147;<I>indemnifying </I> party&#148;) pursuant to
<U>subsection (a)</U> or <U>(b)</U>, respectively, of this <U>Section 6</U>, such
indemnified party shall           promptly notify such indemnifying party in writing of
the institution of such           Proceeding and such indemnifying party shall assume the
defense of such           Proceeding, including the employment of counsel reasonably
satisfactory to such           indemnified party and payment of all fees and expenses; <I>provided,
          however</I>, that the omission to so notify such indemnifying party shall not
          relieve such indemnifying party from any liability which such indemnifying
party           may have to any indemnified party or otherwise, except to the extent the
          indemnifying party does not otherwise learn of the Proceeding and such failure
          results in the forfeiture by the indemnifying party of substantial rights or
          defenses. The indemnified party or parties shall have the right to employ its
or           their own counsel in any such case, but the fees and expenses of such
counsel           shall be at the expense of such indemnified party or parties unless (i)
the           employment of such counsel shall have been authorized in writing by the
          indemnifying party in connection with the defense of such Proceeding, (ii) the
          indemnifying party shall not have, within a reasonable period of time in light
          of the circumstances, employed counsel to defend such Proceeding or (iii) such
          indemnified party or parties shall have reasonably concluded that there may be
          defenses available to it or them which are different from, additional to or in
          conflict with those available to such indemnifying party, in any of which
events           such reasonable fees and expenses shall be borne by such indemnifying
party and           paid as incurred (it being understood, however, that such
indemnifying party           shall not be liable for the expenses of more than one
separate counsel (in           addition to any local counsel) in any one Proceeding or
series of related           Proceedings in the same jurisdiction representing the
indemnified parties who           are parties to such Proceeding). An indemnifying party
shall not be liable for           any settlement of any Proceeding (including by consent
to the entry of any           judgment) effected without its written consent but, if
settled with its written           consent or if there be a final judgment for the
plaintiff, such indemnifying           party agrees to indemnify and hold harmless the
indemnified party or parties           from and against any loss or liability by reason
of such settlement or judgment.           Notwithstanding the foregoing sentence, if at
any time an indemnified party           shall have requested an indemnifying party to
reimburse the indemnified party           for fees and expenses of counsel (which fees
and expenses shall be reasonably           documented) as contemplated by the second
sentence of this <U>Section 6(c)</U>,           then the indemnifying party agrees that
it shall be liable for any settlement of           any Proceeding effected without its
written consent if (i) such settlement is           entered into more than 90 days after
receipt by such indemnifying party of the           aforesaid request, (ii) such
indemnifying party shall not have fully reimbursed           the indemnified party in
accordance with such request prior to the date of such           settlement and (iii)
such indemnified party shall have given the indemnifying           party at least 30 days&#146; prior
notice of its intention to settle. No           indemnifying party shall, without the
prior written consent of the indemnified           party, effect any settlement,
compromise or consent to the entry of judgment in           any pending or threatened
Proceeding in respect of which any indemnified party           is or could have been a
party and indemnity could have been sought hereunder by           such indemnified party,
unless such settlement includes an unconditional release           of such indemnified
party from all liability on claims that are the subject           matter of such
Proceeding and does not include an admission of fault or           culpability or a
failure to act by or on behalf of such indemnified party.  </FONT></P>

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<font size=2>- 23 -</font></p>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Contribution</I>.
If the indemnification provided for in this <U>Section           6</U> is unavailable to
an indemnified party under <U>subsections </U><U>(a)</U> or <U>(b)</U> of this <U>Section
6</U> or insufficient to hold an           indemnified party harmless in respect of any
losses, claims, damages,           liabilities or expenses referred to therein, then each
applicable indemnifying           party shall, in lieu of indemnifying such indemnified
party, shall contribute to           the amount paid or payable by such indemnified party
as a result of the losses,           claims, damages, liabilities or expenses referred to
in s<U>ubsection (a)</U> or <U>(b)</U> above, (i) in such proportion as is appropriate to
reflect the           relative benefits received by the Company on the one hand and the
Placement           Agent on the other from the offering of the Securities or (ii) if the
allocation           provided by clause (i) above is not permitted by applicable law, in
such           proportion as is appropriate to reflect not only the relative benefits
referred           to in clause (i) above but also the relative fault of the indemnifying
party or           parties on the one hand and the indemnified party or parties on the
other hand           in connection with the statements or omissions that resulted in such
losses,           claims, damages, liabilities or expenses, as well as any other relevant
          equitable considerations. The relative benefits received by the Company on the
          one hand and the Placement Agent on the other hand shall be deemed to be in the
          same respective proportions as the total net proceeds from the offering of the
          Securities (before deducting expenses) received by the Company and the total
          Placement Fee received by the Placement Agent, in each case as set forth on the
          cover of the Prospectus, bear to the aggregate public offering price of the
          Securities. The relative fault of the Company on the one hand and the Placement
          Agent on the other hand shall be determined by reference to, among other
things,           whether the untrue or alleged untrue statement of a material fact or
the           omission or alleged omission to state a material fact relates to
information           supplied by the Company, on the one hand, or by the Placement
Agent, on the           other hand, and the parties&#146; relevant intent, knowledge,
access to           information and opportunity to correct or prevent such untrue
statement or           omission. The Company and the Placement Agent agree that it would
not be just           and equitable if contribution pursuant to this <U>subsection (d)</U> were
to be           determined by pro rata allocation or by any other method of allocation
which           does not take account of the equitable considerations referred to in the
first           sentence of this <U>Section 6(d)</U>. The amount paid or payable by an
          indemnified party as a result of the losses, claims, damages or liabilities
          referred to in the first sentence of this <U>Section 6(d)</U> shall be deemed
to           include any legal or other expenses reasonably incurred by such indemnified
          party in connection with investigating or defending against any action or claim
          which is the subject of this <U>Section 6(d)</U>. Notwithstanding the
provisions           of this <U>Section 6(d)</U>, the Placement Agent shall not be
required to           contribute any amount in excess of the total Placement Fee received
by such           Placement Agent in accordance with <U>Section 1(b)</U> less the amount
of any           damages which the Placement Agent has otherwise paid or become liable to
pay by           reason of such untrue statement or alleged untrue statement of omission
or           alleged omission. No person guilty of fraudulent misrepresentation (within
the           meaning of Section 11(f) of the Securities Act) shall be entitled to
          contribution from any person who was not guilty of such fraudulent
          misrepresentation.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Representations
and Agreements to Survive Delivery</I>. The obligations of           the Company under
this <U>Section 6</U> shall be in addition to any liability           which the Company
may otherwise have. The indemnity and contribution agreements           of the parties
contained in this <U>Section 6</U> and the covenants, warranties           and
representations of the Company contained in this Agreement shall remain
          operative and in full force and effect regardless of (i) any termination of
this           Agreement, (ii) any investigation made by or on behalf of the Placement
Agent,           any person who controls the Placement Agent within the meaning of either
Section           15 of the Securities Act or Section 20 of the Exchange Act or any
affiliate of           the Placement Agent, or by or on behalf of the Company, its
directors or           officers or any person who controls the Company within the meaning
of either           Section 15 of the Securities Act or Section 20 of the Exchange Act,
and (iii)           the issuance and delivery of the Securities. The Company and the
Placement Agent           agree promptly to notify each other of the commencement of any
Proceeding           against it and, in the case of the Company, against any of the
Company&#146;s           officers or directors in connection with the issuance and sale
of the           Securities, or in connection with the Registration Statement, the
Disclosure           Package or the Prospectus.  </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Section 7.</B> </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Information Furnished by Placement Agent.</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company acknowledges that the statements set forth in the eighth paragraph under the
heading &#147;Plan of Distribution&#148; in the Prospectus (the &#147;<I>Placement Agent
Information</I>&#148;) constitute the only information relating to the Placement Agent
furnished in writing to the Company by the Placement Agent as such information is referred
to in <U>Sections 2</U> and <U>6</U> hereof. </FONT></P>

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<font size=2>- 24 -</font></p>
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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Section 8.</B> </FONT> </TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Termination.</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Placement Agent shall have the right to terminate this Agreement by giving
          notice as hereinafter specified at any time at or prior to the Closing Date,
          without liability on the part of the Placement Agent to the Company, if (i)
          prior to delivery and payment for the Securities (A) trading in securities
          generally shall have been suspended or materially limited on or by the New York
          Stock Exchange, the NASDAQ Stock Market, the NASDAQ Global Select Market, the
          NASDAQ Global Market, the NASDAQ Capital Market or the US Alternext LLC (each, a
          &#147;<I>Trading Market</I>&#148;), (B) trading in the shares of Common Stock of
          the Company shall have been suspended or materially limited on any exchange or
          in the over-the-counter market, (C) a general moratorium on commercial banking
          activities shall have been declared by federal or New York state authorities,
          (D) there shall have occurred any outbreak or material escalation of hostilities
          or acts of terrorism involving the United States or there shall have been a
          declaration by the United States of a national emergency or war, (E) there shall
          have occurred any other calamity or crisis or any material change in general
          economic, political or financial conditions in the United States or elsewhere,
          if the effect of any such event specified in clause (D) or (E), in the judgment
          of the Placement Agent, makes it impractical or inadvisable to proceed with the
          completion of the sale of and payment for the Securities on the Closing Date on
          the terms and in the manner contemplated by this Agreement, the Disclosure
          Package and the Prospectus, or (ii) since the time of execution of this
          Agreement or the earlier respective dates as of which information is given in
          the Disclosure Package, there has been (A) any Material Adverse Effect or (B)
          the Company shall have sustained a loss by strike, fire, flood, earthquake,
          accident or other calamity of such character that in the judgment of the
          Placement Agent would, individually or in the aggregate, result in a Material
          Adverse Effect and which would, in the judgment of the Placement Agent, make it
          impracticable or inadvisable to proceed with the offering or the delivery of the
          Securities on the terms and in the manner contemplated in the Disclosure
          Package. Any such termination shall be without liability of any party to any
          other party except that the provisions of <U>Section 4</U>, <U>Section 6</U>,
          <U>Section 8(b)</U> and <U>Section 11</U> hereof shall at all times be effective
          notwithstanding such termination. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          If (1) this Agreement shall be terminated by the Placement Agent pursuant to
          <U>Section 5</U>, <U>Section 8(a)(i)(B)</U> or <U>Section 8(a)(ii)(A)</U> or (2)
          the sale of the Securities to Investors is not consummated because of any
          failure, refusal or inability on the part of the Company to comply with the
          terms or perform any agreement or obligation of this Agreement or any
          Subscription Agreement, other than by reason of a default by the Placement
          Agent, the Company will, in addition to paying the amounts described in
          <U>Section 4</U> hereof, reimburse the Placement Agent for all of its reasonable
          and actual out-of-pocket disbursements (including, but not limited to, the
          reasonable fees and disbursements of its counsel). </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Company may terminate this Agreement in the event all of the following
          occur: (i) the Closing has not occurred on or before November 6, 2009; (ii) all
          of the conditions to the Closing have been satisfied on the Closing Date, other
          than those conditions relating to actions to be taken at the Closing by the
          Investors; and (iii) all of the conditions to the Placement Agent&#146;s
          obligations contained in Section 5 hereof have been satisfied on the Closing
          Date. Any such termination shall be without liability of any party to any other
          party except that the provisions of <U>Section 4</U>, <U>Section 6</U>,
          <U>Section 8(b)</U> and <U>Section 11</U> hereof shall at all times be effective
          notwithstanding such termination. </FONT></P>

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<font size=2>- 25 -</font></p>
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<page>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Section 9.</B> </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Notices.</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
statements, requests, notices and agreements hereunder shall be in writing or by
facsimile, and: </FONT></P>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>if
to the Placement Agent, shall be delivered or sent by mail, telex or           facsimile
transmission to: </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Roth Capital Partners, LLC
<BR>24 Corporate Plaza
<BR>Newport Beach, California 92660
<BR>Attention: Managing Director
<BR>Facsimile No.: (949) 720-7223
<BR>
<BR>with a copy (which shall not constitute notice) to:
<BR>
<BR>Lowenstein Sandler PC
<BR>65 Livingston Avenue
<BR>Roseland, New Jersey 07068
<BR>Attention: Steven M. Skolnick, Esq.
<BR>Facsimile No.: (973) 597-2383 </FONT></TD>
</TR>
</TABLE>
<BR>





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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b) </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>if
to the Company shall be delivered or sent by mail, telex or facsimile
          transmission to: </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Pluristem Therapeutics, Inc.
<BR>MATAM Advanced Technology Park, Building No. 20
<BR>Haifa 31905 Israel
<BR>Attention: Chief Executive Officer
<BR>Facsimile No.: 011-972-74-7107171
<BR>
<BR>with a copy (which shall not constitute notice) to:
<BR>
<BR>Zysman, Aharoni, Gayer &amp; Co./Sullivan &amp; Worcester LLP
<BR>One Post Office Square
<BR>Boston, MA 02109
<BR>Attention: Edwin L. Miller, Jr. Esq.
<BR>Facsimile No.: (617) 338-2880 </FONT></TD>
</TR>
</TABLE>
<BR>





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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any such notice shall be effective
only upon receipt. Any party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new address for such purpose. </FONT></P>

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<TR VALIGN=TOP>
<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Section 10.</B> </FONT> </TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Persons Entitled to Benefit of Agreement.</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Agreement shall inure to the benefit of and shall be binding upon the Placement Agent, the
Company and their respective successors and assigns and the controlling persons, officers
and directors referred to in <U>Section 6</U>. Nothing in this Agreement is intended or
shall be construed to give to any other person, firm or corporation, other than the
persons, firms or corporations mentioned in the preceding sentence, any legal or equitable
remedy or claim under or in respect of this Agreement, or any provision herein contained.
The term &#147;successors and assigns&#148; as herein used shall not include any purchaser
of the Securities by reason merely of such purchase. </FONT></P>

<p align=center>
<font size=2>- 26 -</font></p>
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<page>

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<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Section 11.</B> </FONT> </TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Governing Law.</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Agreement shall be governed by and construed in accordance with the laws of the State of
New York, without giving effect to the conflicts of laws provisions thereof. </FONT></P>

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<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Section 12.</B> </FONT> </TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
No Fiduciary Relationship.</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company hereby acknowledges that the Placement Agent is acting solely as a placement agent
in connection with the offering of the Company&#146;s securities. The Company further
acknowledges that the Placement Agent is acting pursuant to a contractual relationship
created solely by this Agreement entered into on an arm&#146;s length basis and in no
event do the parties intend that the Placement Agent act or be responsible as a fiduciary
to the Company, its management, stockholders, creditors or any other person in connection
with any activity that the Placement Agent may undertake or have undertaken in furtherance
of the offering of the Company&#146;s securities, either before or after the date hereof.
The Placement Agent hereby expressly disclaims any fiduciary or similar obligations to the
Company, either in connection with the transactions contemplated by this Agreement or any
matters leading up to such transactions, and the Company hereby confirms its understanding
and agreement to that effect. The Company and the Placement Agent agree that they are each
responsible for making their own independent judgments with respect to any such
transactions, and that any opinions or views expressed by the Placement Agent to the
Company regarding such transactions, including but not limited to any opinions or views
with respect to the price or market for the Company&#146;s securities, do not constitute
advice or recommendations to the Company. The Company hereby waives and releases, to the
fullest extent permitted by law, any claims that the Company may have against the
Placement Agent with respect to any breach or alleged breach of any fiduciary or similar
duty to the Company in connection with the transactions contemplated by this Agreement or
any matters leading up to such transactions. </FONT></P>

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<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Section 13.</B> </FONT> </TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Headings.</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Section headings in this Agreement have been inserted as a matter of convenience of
reference and are not a part of this Agreement. </FONT></P>

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<TR VALIGN=TOP>
<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Section 14.</B> </FONT> </TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Amendments and Waivers.</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
supplement, modification or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. The failure of a party to exercise any right or
remedy shall not be deemed or constitute a waiver of such right or remedy in the future.
No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (regardless of whether similar), nor shall any such
waiver constitute a continuing waiver unless otherwise expressly provided. </FONT></P>

<p align=center>
<font size=2>- 27 -</font></p>
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<page>


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<TR VALIGN=TOP>
<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Section 15.</B> </FONT> </TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Submission to Jurisdiction.</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as set forth below, no Proceeding may be commenced, prosecuted or continued in any court
other than the courts of the State of New York located in the City and County of New York
or in the United States District Court for the Southern District of New York, which courts
shall have jurisdiction over the adjudication of such matters, and the Company hereby
consents to the jurisdiction of such courts and personal service with respect thereto. The
Company hereby consents to personal jurisdiction, service and venue in any court in which
any Proceeding arising out of or in any way relating to this Agreement is brought by any
third party against the Placement Agent. The Company and the Placement Agent each hereby
waives all right to trial by jury in any Proceeding (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. The Company and the
Placement Agent each agrees that a final judgment in any such Proceeding brought in any
such court shall be conclusive and binding upon such party and may be enforced in any
other courts in the jurisdiction of which such party is or may be subject, by suit upon
such judgment. </FONT></P>


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<TR VALIGN=TOP>
<TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Section 16.</B> </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></TD>
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Counterparts.</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Agreement may be executed in one or more counterparts and, if executed in more than one
counterpart, the executed counterparts shall each be deemed to be an original and all such
counterparts shall together constitute one and the same instrument. Delivery of an
executed counterpart by facsimile shall be effective as delivery of a manually executed
counterpart thereof. </FONT></P>

<p align=center>
<font size=2>- 28 -</font></p>
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<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the foregoing is in accordance with your understanding of the agreement between the
Company and the Placement Agent, kindly indicate your acceptance in the space provided for
that purpose below. </FONT></P>




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<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Very truly yours,<BR><BR>PLURISTEM THERAPEUTICS INC.<BR><BR>
<BR>By: /s/ Yaky Yanay<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Name: Yaky Yanay<BR>Title: Chief Executive Officer </FONT> </TD>
</TR>
</TABLE>
<BR>



<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Accepted as of
<BR>the date first above written:</FONT></P>




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<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE="2">ROTH CAPITAL PARTNERS, LLC<BR><BR>
<BR>By: /s/ John Dalfonsi<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Name: John Dalfonsi <BR>Title: Managing Director </FONT> </TD>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
</TR>
</TABLE>
<BR>



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<font size=2>- 29 -</font></p>
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<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>3
<FILENAME>exhibit_4-1.htm
<TEXT>
<HTML>
<HEAD>
     <!-- Created by EDGAR Ease Plus (EDGAR Ease+) -->
     <!-- Project:        \\Backup\EDGAR Filing\Pluristem Therapeutics Inc\97323\a97323.eep -->
     <!-- Control Number: 97323                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    Pluristem Therapeutics Inc                                       -->
     <!-- Project Name:   8-K                                                              -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
     <TITLE>8-K</TITLE>
</HEAD>
<BODY>

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<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><B>Exhibit 4.1</B></U> </FONT> </P>



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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>COMMON STOCK PURCHASE
WARRANT </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PLURISTEM THERAPEUTICS
INC. </FONT></H1>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=70% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Warrant Shares: _______</FONT></TD>
     <TD WIDTH=30% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Initial Exercise Date: April [__], 2010</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Issue Date: October [__], 2009</FONT></TD></TR>
</TABLE>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS
COMMON STOCK PURCHASE WARRANT (the &#147;<U>Warrant</U>&#148;) certifies that, for value
received, _____________ (the &#147;<U>Holder</U>&#148;) is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth, at any
time on or after April [__], 2010 (the &#147;<U>Initial Exercise Date</U>&#148;)
and on or prior to the close of business on the five year anniversary of the Initial
Exercise Date (the &#147;<U>Termination Date</U>&#148;) but not thereafter, to subscribe
for and purchase from Pluristem Therapeutics Inc., a Nevada corporation (the
&#147;<U>Company</U>&#148;), up to ______ shares (the &#147;<U>Warrant Shares</U>&#148;)
of Common Stock. The purchase price of one share of Common Stock under this Warrant shall
be equal to the Exercise Price, as defined in Section 2(b). </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;<U>Section 1.</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Definitions.</U> Capitalized terms used and not otherwise defined herein shall have the
meanings set forth in that certain Securities Purchase Agreement (the &#147;<U>Purchase
Agreement</U>&#148;), dated October [__], 2009, among the Company and the
purchasers signatory thereto. </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; <U>Section 2.</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Exercise.</U> </FONT> </P>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Exercise of Warrant</U>. Exercise of the purchase rights represented by this Warrant
may be made, in whole or in part, at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to the Company
(or such other office or agency of the Company as it may designate by notice in
writing to the registered Holder at the address of the Holder appearing on the
books of the Company) of: (i) a completed and duly executed copy of the Notice
of Exercise Form annexed hereto; and (ii) payment of the aggregate Exercise
Price of the shares thereby purchased by wire transfer or bank or certified
check drawn on a United States bank. The date such items are delivered to the
Company (as determined in accordance with the notice provisions hereof) is an
&#147;Exercise Date.&#148; The Holder shall not be required to deliver the
original Warrant in order to effect an exercise hereunder, but if it is not so
delivered then such exercise shall constitute an agreement by the Holder to
deliver the original Warrant to the Company as soon as practicable thereafter
and in any event, within three (3) Trading Days of the Exercise Date. Execution
and delivery of the Exercise Notice shall have the same effect as cancellation
of the original Warrant and issuance of a new Warrant evidencing the right to
purchase the remaining number of Warrant Shares, if any, and the Company shall
issue such new Warrant as soon as possible after receipt and cancellation of the
original Warrant. The Company shall maintain records showing the number of
Warrant Shares purchased and the date of such purchases. The Company shall
deliver any objection to any Notice of Exercise Form within three (3) Trading
Days of receipt of such notice. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Exercise Price</U>. The exercise price per share of the Common Stock under this
Warrant shall be $1.60, subject to adjustment hereunder (the &#147;<U>Exercise
Price</U>&#148;). </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Cashless Exercise</U>. If at any time during the term of this Warrant there is no
effective Registration Statement registering, or no current prospectus available
for, the issuance or resale of the Warrant Shares by the Holder, then this
Warrant may also be exercised at such time by means of a &#147;cashless
exercise&#148; in which the Holder shall be entitled to receive a certificate
for the number of Warrant Shares equal to the quotient obtained by dividing
[(A-B) (X)] by (A), where: </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>      (A) </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>=
the VWAP (as defined below) on the Trading Day immediately preceding the date of such
election;</FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>      (B) </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>=
the Exercise Price of this Warrant, as adjusted; and</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>      (X) </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>=
the number of Warrant Shares issuable upon exercise of this Warrant in accordance with
the terms of             this Warrant by means of a cash exercise rather than a cashless
exercise.</FONT></TD>
</TR>
</TABLE>
<BR>


<p align=center>
<font size=2></font></p>
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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%>
<FONT FACE="Times New Roman, Times, Serif" SIZE="2">The
term &#147;<U>VWAP</U>&#148; 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 (as defined below), the daily volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time), (b) if the OTC
Bulletin Board is not a Trading Market, the volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the
Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if
prices for the Common Stock are then reported in the &#147;Pink Sheets&#148; published by
Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of
reporting prices), the most recent bid price per share of the Common Stock so reported, or
(d) in all other cases, the fair market value of a share of Common Stock as determined by
an independent appraiser selected in good faith by the 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. <BR><BR>The term &#147;<U>Trading
Market</U>&#148; 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 Alternext, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York
Stock Exchange (or any successors to any of the foregoing). </FONT> </TD>
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               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Holder&#146;s Restrictions</U>. The Company shall not effect any exercise of this
Warrant, and a Holder shall not have the right to exercise any portion of this
Warrant, pursuant to Section 2 or otherwise, to the extent that after giving
effect to such issuance after exercise as set forth on the applicable Notice of
Exercise, the Holder (together with the Holder&#146;s Affiliates, and any other
person or entity acting as a group together with the Holder or any of the
Holder&#146;s Affiliates), would beneficially own in excess of the Beneficial
Ownership Limitation (as defined below). For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by the Holder and its
Affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which such determination is being made,
but shall exclude the number of shares of Common Stock which would be issuable
upon (A) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates and (B) exercise or
conversion of the unexercised or nonconverted portion of any other securities of
the Company (including, without limitation, any other Common Stock Equivalents)
subject to a limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by the Holder or any of its affiliates.
Except as set forth in the preceding sentence, for purposes of this Section
2(d)(i), beneficial ownership shall be calculated in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated thereunder,
it being acknowledged by the Holder that the Company is not representing to the
Holder that such calculation is in compliance with Section 13(d) of the Exchange
Act and the Holder is solely responsible for any schedules required to be filed
in accordance therewith. To the extent that the limitation contained in this
Section 2(d) applies, the determination of whether this Warrant is exercisable
(in relation to other securities owned by the Holder together with any
Affiliates) and of which portion of this Warrant is exercisable shall be in the
sole discretion of the Holder, and the submission of a Notice of Exercise shall
be deemed to be the Holder&#146;s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder together with
any Affiliates) and of which portion of this Warrant is exercisable, in each
case subject the Beneficial Ownership Limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination. In addition,
a determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. For purposes of this Section 2(d), in
determining the number of outstanding shares of Common Stock, a Holder may rely
on the number of outstanding shares of Common Stock as reflected in (A) the
Company&#146;s most recent periodic annual report as the case may be, (B) a more
recent public announcement by the Company or (C) any other notice by the Company
or the Transfer Agent setting forth the number of shares of Common Stock
outstanding. Upon the written or oral request of a Holder, the Company shall
within three (3) Trading Days confirm orally and in writing to the Holder the
number of shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including this Warrant,
by the Holder or its Affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. The &#147;<U>Beneficial
Ownership Limitation</U>&#148; shall be 4.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of
shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon
not less than sixty one (61) days&#146; prior notice to the Company, may
increase or decrease the Beneficial Ownership Limitation provisions of this
Section 2(d), provided that the Beneficial Ownership Limitation in no event
exceeds 9.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock upon
exercise of this Warrant held by the Holder and the provisions of this Section
2(d) shall continue to apply. Any such increase or decrease will not be
effective until the 61st day after such notice is delivered to the Company. The
provisions of this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section 2(d) to
correct this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation herein contained
or to make changes or supplements necessary or desirable to properly give effect
to such limitation. The limitations contained in this paragraph shall apply to a
successor holder of this Warrant. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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<font size=2>- 2 -</font></p>
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               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Mechanics of Exercise</U>. </FONT> </P></TD>
               </TR>
               </TABLE>
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<TD ALIGN=RIGHT WIDTH=10%></TD>
<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;i. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Delivery
of Certificates Upon Exercise</U>. Certificates for shares purchased hereunder
shall be transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder&#146;s prime broker with the Depository Trust Company
through its Deposit Withdrawal Agent Commission (&#147;DWAC&#148;) system
if the Company is then a participant in such system and either (A) there
is an effective Registration Statement permitting the resale of the
Warrant Shares by the Holder or this Warrant is being exercised via
cashless exercise, and otherwise by physical delivery to the address
specified by the Holder in the Notice of Exercise within three (3) Trading
Days from the delivery to the Company of the Notice of Exercise Form,
surrender of this Warrant (if required) and payment of the aggregate
Exercise Price as set forth above (the &#147;<U>Warrant Share Delivery Date</U>&#148;).
This Warrant shall be deemed to have been exercised on the date the
Exercise Price is received by the Company. The Warrant Shares shall be
deemed to have been issued, and Holder or any other person so designated
to be named therein shall be deemed to have become a holder of record of
such shares for all purposes, as of the date the Warrant has been
exercised by payment to the Company of the Exercise Price (or by cashless
exercise, if permitted) and all taxes required to be paid by the Holder,
if any, pursuant to Section 2(e)(vi) prior to the issuance of such shares,
have been paid. </FONT> </P></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;ii. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Delivery
of New Warrants Upon Exercise</U>. If this Warrant shall have been exercised
in part, the Company shall, at the request of a Holder and upon surrender
of this Warrant certificate, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to Holder a new Warrant
evidencing the rights of Holder to purchase the unpurchased Warrant Shares
called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant. </FONT> </P></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;iii. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Rescission
Rights</U>. If the Company fails to cause the Transfer Agent to transmit to
the Holder a certificate or the certificates representing the Warrant Shares
pursuant to Section 2(e)(i) by the Warrant Share Delivery Date, then the
Holder will have the right to rescind such exercise. </FONT> </P></TD>
</TR>
</TABLE>
<BR>

<p align=center>
<font size=2>- 3 -</font></p>
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<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=10%></TD>
<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;iv. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Exercise</U>. In
addition to any other rights available to the Holder, if the Company fails to
cause the Transfer Agent to transmit to the Holder a certificate or the
certificates representing the Warrant Shares pursuant to an exercise on or
before the Warrant Share Delivery Date, and if after such date the Holder
is required by its broker to purchase (in an open market transaction or
otherwise) or the Holder&#146;s brokerage firm otherwise purchases, shares
of Common Stock to deliver in satisfaction of a sale by the Holder of the
Warrant Shares which the Holder anticipated receiving upon such exercise
(a &#147;<U>Buy-In</U>&#148;), then the Company shall (A) pay in cash to
the Holder the amount by which (x) the Holder&#146;s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock
so purchased exceeds (y) the amount obtained by multiplying (1) the number
of Warrant Shares that the Company was required to deliver to the Holder
in connection with the exercise at issue times (2) the price at which the
sell order giving rise to such purchase obligation was executed, and (B)
at the option of the Holder, either reinstate the portion of the Warrant
and equivalent number of Warrant Shares for which such exercise was not
honored or deliver to the Holder the number of shares of Common Stock that
would have been issued had the Company timely complied with its exercise
and delivery obligations hereunder. For example, if the Holder purchases
Common Stock having a total purchase price of $11,000 to cover a Buy-In
with respect to an attempted exercise of shares of Common Stock with an
aggregate sale price giving rise to such purchase obligation of $10,000,
under clause (1) of the immediately preceding sentence the Company shall
be required to pay the Holder $1,000. The Holder shall provide the Company
written notice indicating the amounts payable to the Holder in respect of
the Buy-In and, upon request of the Company, evidence of the amount of
such loss. Nothing herein shall limit a Holder&#146;s right to pursue any
other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive
relief with respect to the Company&#146;s failure to timely deliver
certificates representing shares of Common Stock upon exercise of the
Warrant as required pursuant to the terms hereof. </FONT> </P></TD>
</TR>
</TABLE>
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<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;v. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Fractional Shares or Scrip</U>. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to
any fraction of a share which Holder would otherwise be entitled to
purchase upon such exercise, the Company shall, at its election, either
pay a cash adjustment in respect of such final fraction in an amount equal
to such fraction multiplied by the Exercise Price or round up to the next
whole share. </FONT> </P></TD>
</TR>
</TABLE>
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<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;vi. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Charges,
Taxes and Expenses</U>. Issuance of certificates for Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of
which taxes and expenses shall be paid by the Company, and such
certificates shall be issued in the name of the Holder or in such name or
names as may be directed by the Holder; <U>provided</U>, <U>however</U>,
that in the event certificates for Warrant Shares are to be issued in a
name other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached hereto duly
executed by the Holder and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any transfer
tax incidental thereto. </FONT> </P></TD>
</TR>
</TABLE>
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<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;vii. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Closing
of Books</U>. The Company will not close its stockholder books or records in
any manner which prevents the timely exercise of this Warrant, pursuant to
the terms hereof. </FONT> </P></TD>
</TR>
</TABLE>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; <U>Section 3.</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Certain Adjustments.</U> </FONT> </P>

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               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Stock Dividends and Splits</U>. If the Company, at any time while this Warrant is
outstanding: (i) pays a stock dividend or otherwise make a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for avoidance of
doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock
into a larger number of shares, (iii) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares,
or (iv) issues by reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock (excluding treasury shares, if any) outstanding immediately before
such event and of which the denominator shall be the number of shares of Common
Stock outstanding immediately after such event and the number of shares issuable
upon exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment
made pursuant to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or re-classification. </FONT> </P></TD>
               </TR>
               </TABLE>
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               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               Intentionally Omitted. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Subsequent Rights Offerings</U>. If the Company, at any time while the Warrant is
outstanding, shall issue rights, options or warrants to all holders of Common
Stock (and not to Holders) entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the VWAP at the record date
mentioned below, then, the Exercise Price shall be multiplied by a fraction, of
which the denominator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of additional shares of Common Stock offered for subscription or purchase, and
of which the numerator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of shares which the aggregate offering price of the total number of shares so
offered (assuming receipt by the Company in full of all consideration payable
upon exercise of such rights, options or warrants) would purchase at such VWAP.
Such adjustment shall be made whenever such rights or warrants are issued, and
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such rights, options or warrants. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Pro Rata Distributions</U>. If the Company, at any time while this Warrant is
outstanding, shall distribute to all holders of Common Stock (and not to Holders
of the Warrants) evidences of its indebtedness or assets (including cash and
cash dividends) or rights or warrants to subscribe for or purchase any security
other than the Common Stock (which shall be subject to Section 3(b)), then in
each such case the Exercise Price shall be adjusted by multiplying the Exercise
Price in effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution by a fraction of which the
denominator shall be the VWAP determined as of the record date mentioned above,
and of which the numerator shall be such VWAP on such record date less the then
per share fair market value at such record date of the portion of such assets or
evidence of indebtedness so distributed applicable to one outstanding share of
the Common Stock as determined by the Board of Directors in good faith. In
either case the adjustments shall be described in a statement provided to the
Holder of the portion of assets or evidences of indebtedness so distributed or
such subscription rights applicable to one share of Common Stock. Such
adjustment shall be made whenever any such distribution is made and shall become
effective immediately after the record date mentioned above. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Fundamental Transaction</U>. If, at any time while this Warrant is outstanding, (i)
the Company effects any merger or consolidation of the Company with or into
another Person, (ii) the Company effects any sale of all or substantially all of
its assets in one or a series of related transactions, (iii) any tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (each &#147;<U>Fundamental Transaction</U>&#148;),
then, upon any subsequent exercise of this Warrant, the Holder shall have the
right to receive, for each Warrant Share that would have been issuable upon such
exercise immediately prior to the occurrence of such Fundamental Transaction,
the number of shares of Common Stock of the successor or acquiring corporation
or of the Company, if it is the surviving corporation, and any additional
consideration (the &#147;<U>Alternate Consideration</U>&#148;) receivable as a
result of such merger, consolidation or disposition of assets by a holder of the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to
such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as
to the Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. To the extent necessary to effectuate
the foregoing provisions, any successor to the Company or surviving entity in
such Fundamental Transaction shall issue to the Holder a new warrant consistent
with the foregoing provisions and evidencing the Holder&#146;s right to exercise
such warrant into Alternate Consideration. The terms of any agreement pursuant
to which a Fundamental Transaction is effected shall include terms requiring any
such successor or surviving entity to comply with the provisions of this Section
3(e) and insuring that this Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction. Notwithstanding anything to the contrary, in the event of a
Fundamental Transaction that is (1) an all cash transaction, (2) a &#147;Rule
13e-3 transaction&#148; as defined in Rule 13e-3 under the Exchange Act, or (3)
a Fundamental Transaction involving a person or entity not traded on a national
securities exchange, the Nasdaq Global Select Market, the Nasdaq Global Market,
or the Nasdaq Capital Market, the Company or any successor entity shall pay at
the Holder&#146;s option, exercisable at any time concurrently with or within 30
days after the consummation of the Fundamental Transaction, an amount of cash
equal to the value of this Warrant as determined in accordance with the Black
Scholes Option Pricing Model obtained from the &#147;OV&#148; function on
Bloomberg L.P. using (A) a price per share of Common Stock equal to the VWAP of
the Common Stock for the Trading Day immediately preceding the date of
consummation of the applicable Fundamental Transaction, (B) a risk-free interest
rate corresponding to the U.S. Treasury rate for 30 day period immediately prior
to the consummation of the applicable Fundamental Transaction, (C) an expected
volatility equal to the 100 day volatility obtained from the &#147;HVT&#148;
function on Bloomberg L.P. determined as of the Trading Day immediately
following the public announcement of the applicable Fundamental Transaction, and
(D) a remaining option time equal to the time between the date of the public
announcement of such transaction and the Termination Date. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

<p align=center>
<font size=2>- 5 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Calculations</U>. All calculations under this Section 3 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be. For purposes of this
Section 3, the number of shares of Common Stock deemed to be issued and
outstanding as of a given date shall be the sum of the number of shares of
Common Stock (excluding treasury shares, if any) issued and outstanding. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Notice to Holder</U>. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=10%></TD>
<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;i. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Adjustment
to Exercise Price</U>. Whenever the Exercise Price is adjusted pursuant to any
provision of this Section 3, the Company shall promptly mail to the Holder
a notice setting forth the Exercise Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment. </FONT> </P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=10%></TD>
<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;ii. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Notice
to Allow Exercise by Holder</U>. If (A) the Company shall declare a dividend
(or any other distribution in whatever form) on the Common Stock, (B) the
Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock, (C) the Company shall authorize the
granting to all holders of the Common Stock rights or warrants to
subscribe for or purchase any shares of capital stock of any class or of
any rights, (D) the approval of any stockholders of the Company shall be
required in connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property, or (E) the Company shall authorize the
voluntary or involuntary dissolution, liquidation or winding up of the
affairs of the Company, then, in each case, the Company shall cause to be
mailed to the Holder at its last address as it shall appear upon the
Warrant Register of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution, redemption, rights or warrants, or if a
record is not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on
which such reclassification, consolidation, merger, sale, transfer or
share exchange is expected to become effective or close, and the date as
of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities,
cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided that the
failure to mail such notice or any defect therein or in the mailing
thereof shall not affect the validity of the corporate action required to
be specified in such notice. The Holder is entitled to exercise this
Warrant during the period commencing on the date of such notice to the
effective date of the event triggering such notice. </FONT> </P></TD>
</TR>
</TABLE>
<BR>

<p align=center>
<font size=2>- 6 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; <U>Section 4.</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Transfer of Warrant.</U> </FONT> </P>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Transferability</U>. This Warrant and all rights hereunder (including, without
limitation, any registration rights) are transferable, in whole or in part, upon
surrender of this Warrant at the principal office of the Company or its
designated agent, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by the Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer. Upon such surrender and, if required, such payment,
the Company shall execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees, as applicable, and in the denomination or
denominations specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not so assigned,
and this Warrant shall promptly be cancelled. The Warrant, if properly assigned,
may be exercised by a new holder for the purchase of Warrant Shares without
having a new Warrant issued. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>New Warrants</U>. This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice. All Warrants issued on transfers or exchanges shall
be dated the Original Issue Date and shall be identical with this Warrant except
as to the number of Warrant Shares issuable pursuant thereto. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Warrant Register</U>. The Company shall register this Warrant, upon records to be
maintained by the Company for that purpose (the &#147;<U>Warrant
Register</U>&#148;), in the name of the record Holder hereof from time to time.
The Company may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, absent actual notice to the contrary. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; <U>Section 5.</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Miscellaneous.</U> </FONT> </P>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>No Rights as Stockholder Until Exercise</U>. This Warrant does not entitle the
Holder to any voting rights or other rights as a stockholder of the Company
prior to the exercise hereof as set forth in Section 2(e)(i). </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Loss, Theft, Destruction or Mutilation of Warrant</U>. The Company covenants that
upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant or any stock certificate
relating to the Warrant Shares, and in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it (which, in the case of the
Warrant, shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock certificate. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

<p align=center>
<font size=2>- 7 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Saturdays, Sundays, Holidays, etc</U>. 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. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Authorized Shares</U>. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company covenants that, during the period the Warrant is outstanding, it will reserve
from its authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Warrant Shares upon the exercise of any purchase rights under
this Warrant. The Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of executing
stock certificates to execute and issue the necessary certificates for the Warrant Shares
upon the exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares may be
issued as provided herein without violation of any applicable law or regulation, or of
any requirements of the Trading Market upon which the Common Stock may be listed. The
Company covenants that all Warrant Shares which may be issued upon the exercise of the
purchase rights represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges created by the Company in
respect of the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).  </FONT>
</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
and to the extent as waived or consented to by the Holder, the Company shall not by any
action, including, without limitation, amending its certificate of incorporation or
through any reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate to protect the rights of Holder as set forth
in this Warrant against impairment. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any Warrant Shares above the amount
payable therefor upon such exercise immediately prior to such increase in par value, (ii)
take all such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise
of this Warrant and (iii) use commercially reasonable efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof, as may be, necessary to enable the Company to perform its
obligations under this Warrant.  </FONT>
</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Before
taking any action which would result in an adjustment in the number of Warrant Shares for
which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all
such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.  </FONT>
</TD>
</TR>
</TABLE>
<BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Jurisdiction</U>. All questions concerning the construction, validity, enforcement
and interpretation of this Warrant shall be determined in accordance with the
provisions of the Purchase Agreement. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Restrictions</U>. The Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered, will have restrictions upon resale
imposed by state and federal securities laws. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Nonwaiver and Expenses</U>. No course of dealing or any delay or failure to exercise
any right hereunder on the part of Holder shall operate as a waiver of such
right or otherwise prejudice Holder&#146;s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date. If the Company willfully and knowingly fails to comply with any provision
of this Warrant, which results in any material damages to the Holder, the
Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys&#146;
fees, including those of appellate proceedings, incurred by Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights,
powers or remedies hereunder. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

<p align=center>
<font size=2>- 8 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Notices</U>. Any notice, request or other document required or permitted to be given
or delivered to the Holder by the Company shall be delivered in accordance with
the notice provisions of the Purchase Agreement. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Limitation of Liability</U>. No provision hereof, in the absence of any affirmative
action by Holder to exercise this Warrant to purchase Warrant Shares, and no
enumeration herein of the rights or privileges of Holder, shall give rise to any
liability of Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Remedies</U>. The Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Warrant and hereby agrees to waive and
not to assert the defense in any action for specific performance that a remedy
at law would be adequate. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Successors and Assigns</U>. Subject to applicable securities laws, this Warrant and
the rights and obligations evidenced hereby shall inure to the benefit of and be
binding upon the successors of the Company and the successors and permitted
assigns of Holder. The provisions of this Warrant are intended to be for the
benefit of all Holders from time to time of this Warrant and shall be
enforceable by the Holder or holder of Warrant Shares. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Amendment</U>. This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and Holders holding Warrants at
least equal to 67% of the Warrant Shares issuable upon exercise of all then
outstanding Warrants. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Severability</U>. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
               <TR VALIGN=TOP>
               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Headings</U>. The headings used in this Warrant are for the convenience of reference
only and shall not, for any purpose, be deemed a part of this Warrant. </FONT> </P></TD>
               </TR>
               </TABLE>
               <BR>

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<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=center>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>(Signature Pages
Follow) </I></FONT></P>

<p align=center>
<font size=2>- 9 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer
thereunto duly authorized as of the date first above indicated. </FONT></P>



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<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>PLURISTEM THERAPEUTICS INC.</B><BR><BR>
<BR>By:<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Name:<BR>Title:</FONT></TD>
</TR>
</TABLE>
<BR>

<p align=center>
<font size=2>- 10 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTICE OF EXERCISE </FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TO:   PLURISTEM THERAPEUTICS INC.</FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)
          The undersigned hereby elects to purchase ________ Warrant Shares of the
Company           pursuant to the terms of the attached Warrant (only if exercised in
full), and           tenders herewith payment of the exercise price in full, together
with all           applicable transfer taxes, if any.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)
          Payment shall take the form of (check applicable box):  </FONT></P>


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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<FONT size="3" face="Wingdings">o</font>
in lawful money of the United States; or  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<FONT size="3" face="Wingdings">o</font>
[if permitted] the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in subsection 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the cashless
exercise procedure set forth in subsection 2(c).  </FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)
          Please issue a certificate or certificates representing said Warrant Shares in
          the name of the undersigned or in such other name as is specified below:  </FONT></P>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
____________________________ </FONT></TD>
</TR>
</TABLE>
<BR>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Warrant Shares shall be delivered
to the following DWAC Account Number or by physical delivery of a certificate to: </FONT></P>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
____________________________ </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
____________________________ </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
____________________________ </FONT></TD>
</TR>
</TABLE>
<BR>




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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[SIGNATURE OF HOLDER] </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Name of Investing Entity: ________________________________________________________________________
<BR><I>Signature of Authorized Signatory of Investing Entity:</I> __________________________________________________
<BR>Name of Authorized Signatory: ____________________________________________________________________
<BR>Title of Authorized Signatory: _____________________________________________________________________
<BR>Date: _________________________________________________________________________________________ </FONT></P>

<p align=center>
<font size=2>- 11 -</font></p>
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<page>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ASSIGNMENT FORM </FONT></H1>

<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(To assign the foregoing warrant, execute
<BR>this form and supply required information.
<BR>Do not use this form to exercise the warrant.)</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FOR
VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights
evidenced thereby are hereby assigned to </FONT></P>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>_______________________________________________ whose address is</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>_______________________________________________________________________________.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>_______________________________________________________________________________</FONT></P>

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<TD WIDTH=40%>&nbsp;</TD>
<TD WIDTH=60%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Dated:
______________, _______</FONT></TD>
</TR>
</TABLE>
<BR>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH> </TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH> </TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH> </TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH> </TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH> </TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=5%> </TD>
     <TD WIDTH=20% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Holder's Signature:</FONT></TD>
     <TD WIDTH=75% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>_____________________________</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD> </TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD> </TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Holder's Address:</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>_____________________________</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD> </TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD> </TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>_____________________________</FONT></TD></TR>
</TABLE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Signature Guaranteed: ___________________________________________</FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTE: The signature to this
Assignment Form must correspond with the name as it appears on the face of the Warrant,
without alteration or enlargement or any change whatsoever, and must be guaranteed by a
bank or trust company. Officers of corporations and those acting in a fiduciary or other
representative capacity should file proper evidence of authority to assign the foregoing
Warrant. </FONT></P>

<p align=center>
<font size=2>- 12 -</font></p>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>4
<FILENAME>exhibit_5-1.htm
<TEXT>
<HTML>
<HEAD>
     <!-- Created by EDGAR Ease Plus (EDGAR Ease+) -->
     <!-- Project:        \\Backup\EDGAR Filing\Pluristem Therapeutics Inc\97323\a97323.eep -->
     <!-- Control Number: 97323                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    Pluristem Therapeutics Inc                                       -->
     <!-- Project Name:   8-K                                                              -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
     <TITLE>8-K</TITLE>
</HEAD>
<BODY>

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<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><B>Exhibit 5.1</B></U> </FONT> </P>

<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Zysman, Aharoni, Gayer &amp; Co./Sullivan &amp; Worcester LLP
<BR>One Post Office Square
<BR>Boston, MA 02109</FONT></P>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>October 6, 2009
<BR>Pluristem Therapeutics Inc.
<BR>Matam Advanced Technology Park
<BR>Building No. 20
<BR>Haifa 31905, Israel</FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Re: Sale of Shares and Warrants
pursuant to Registration Statement on Form S-3 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ladies and Gentlemen: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This opinion is furnished to you in
connection with a shelf Registration Statement on Form S-3 (<U>Registration No.
333-151761,</U> the &#147;<U>Registration Statement</U>&#148;) and related
prospectus supplement (the &#147;<U>Prospectus Supplement</U>&#148;) filed or to be filed
with the Securities and Exchange Commission (the &#147;<U>Commission</U>&#148;) under the
Securities Act of 1933, as amended (the &#147;<U>Securities Act</U>&#148;), with respect
to the sale &#147;off the shelf&#148; of 2,700,895 shares of your common stock (the
&#147;<U>Shares</U>&#148;) and warrants to purchase 1,080,358 shares of common stock (the
&#147;<U>Warrants</U>&#148; and, together with the Shares, the
&#147;<U>Securities</U>&#148;). You are a Nevada corporation and are referred to herein as
the &#147;<U>Company</U>.&#148; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We are acting as counsel for the
Company in connection with the registration and sale of the Securities. We have examined
copies of the Registration Statement and Prospectus Supplement filed or to be filed with
the Commission. We have also examined and relied upon minutes of meetings of the
stockholders and the Board of Directors of the Company as provided to us by the Company,
stock record books of the Company as provided to us by the Company, the Certificate of
Incorporation and By-Laws of the Company, each as restated and/or amended to date
(collectively the &#147;<U>Charter Documents</U>&#148;), and such other documents as we
have deemed necessary for purposes of rendering the opinions hereinafter set forth. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In our examination of the foregoing
documents, we have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of all
documents submitted to us as copies, the authenticity of the originals of such latter
documents and the legal competence of all signatories to such documents. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For purposes of our opinion, we have
examined an official compilation of &#147;Title 7 &#150; Business Associations;
Securities; Commodities, Chapter &#150; 78 &#150; Private Corporations&#148; of the Nevada
Revised Statutes (such examination being limited to the provisions of such statutes only,
and not including any annotations or commentary). We do not purport to be experts on the
laws of the State of Nevada, and with your permission our opinion is based upon such
limited experience. Other than such examination and our examination of the documents
indicated above, we have made no other examination in connection with this opinion. We
express no opinion herein concerning the federal laws of the United States of America or
any state securities or blue sky laws. We express no opinion herein concerning any state
securities or &#147;blue sky&#148; laws. </FONT></P>


<p align=center>
<font size=2></font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based upon and subject to the
foregoing, we are of the opinion that: (i) when issued at the closing for the sale of the
Securities against receipt of the purchase price therefor, the Shares and the Warrants
will be validly issued, fully paid and nonassessable, (ii) the shares of common stock
issued upon proper exercise of the Warrants and receipt of the exercise price therefor,
will be validly issued, fully paid and nonassessable, and (iii) the Warrants will
constitute valid and legally binding obligations of the Company, enforceable against the
Company in accordance with their terms.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Please note that we are opining only
as to the matters expressly set forth herein, and no opinion should be inferred as to any
other matters. This opinion is based upon currently existing statutes, rules, regulations
and judicial decisions, as further limited above, and we disclaim any obligation to advise
you of any change in any of these sources of law or subsequent legal or factual
developments which might affect any matters or opinions set forth herein. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We hereby consent to the filing of
this opinion with the Commission as an exhibit to the Form 8-K of the Company being filed
on the date hereof in accordance with the requirements of Item 601(b)(5) of Regulation S-K
under the Securities Act and to the reference to our firm in the prospectus forming a
 part of the Registration Statement. In giving such consent, we do not
hereby admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act or the rules and regulations of the Commission.</FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=50%>&nbsp;</TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Very truly yours,
<BR>
<BR>/s/ Zysman, Aharoni, Gayer &amp; Co./
<BR>Sullivan &amp; Worcester LLP </FONT></TD>
</TR>
</TABLE>
<BR>

<p align=center>
<font size=2>2</font></p>
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<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>5
<FILENAME>exhibit_10-1.htm
<TEXT>
<HTML>
<HEAD>
     <!-- Created by EDGAR Ease Plus (EDGAR Ease+) -->
     <!-- Project:        \\Backup\EDGAR Filing\Pluristem Therapeutics Inc\97323\a97323.eep -->
     <!-- Control Number: 97323                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    Pluristem Therapeutics Inc                                       -->
     <!-- Project Name:   8-K                                                              -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
     <TITLE>8-K</TITLE>
</HEAD>
<BODY>

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<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><B>Exhibit 10.1</B></U> </FONT> </P>




<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SECURITIES PURCHASE
AGREEMENT </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Securities Purchase Agreement (this &#147;<U>Agreement</U>&#148;) is dated as of October
6, 2009, between Pluristem Therapeutics Inc., a Nevada corporation (the
&#147;<U>Company</U>&#148;), and each purchaser identified on the signature pages hereto
(each, including its successors and assigns, a &#147;<U>Purchaser</U>&#148; and
collectively the &#147;<U>Purchasers</U>&#148;). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to an
effective registration statement under the Securities Act of 1933, as amended (the
&#147;<U>Securities Act</U>&#148;), 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. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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: </FONT></P>

<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ARTICLE I.


</B><BR>DEFINITIONS </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Definitions</U>.
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:  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Acquiring
Person</U>&#148; shall have the meaning ascribed to such term in Section 4.5. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Action</U>&#148;
 shall have the meaning ascribed to such term in Section 3.1(j). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Affiliate</U>&#148;
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. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Board
of Directors</U>&#148; means the board of directors of the Company. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Business
Day</U>&#148; means any day except Saturday, 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. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Closing</U>&#148;
means the closing of the purchase and sale of the Securities pursuant to Section 2.1. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Commission</U>&#148;
means the United States Securities and Exchange Commission. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Closing
Date</U>&#148; shall have the meaning ascribed to such term in Section 2.1. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Common
Stock</U>&#148; means the common stock of the Company, par value $0.00001 per share, and
any other class of securities into which such securities may hereafter be reclassified or
changed into. </FONT></P>

<p align=center>
<font size=2>- 1 -</font></p>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Common
Stock Equivalents</U>&#148; 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. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Company
Counsel</U>&#148; means Zysman, Aharoni, Gayer &amp; Co./Sullivan &amp; Worcester LLP,
with offices located at One Post Office Square, Boston, MA 02109. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Disclosure
Schedules</U>&#148; means the Disclosure Schedules of the Company delivered concurrently
herewith. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Discussion
Time</U>&#148; shall have the meaning ascribed to such term in Section 3.2(e). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Evaluation Date</U>&#148;
shall have the meaning ascribed to such term in Section 3.1(r). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Exchange
Act</U>&#148; means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Exempt
Issuance</U>&#148; means the issuance of (a) shares of Common Stock or options to
employees, officers, consultants, advisors or directors of the Company pursuant to any
stock or option plan duly adopted for such purpose, by a majority of the non-employee
members of the Board of Directors or a majority of the members of a committee of
non-employee directors established for such purpose, (b) securities received 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, exchange or conversion price of such securities,
and (c) securities issued pursuant to acquisitions or strategic transactions approved by a
majority of the disinterested directors of the Company, provided that any such issuance
shall only be to a Person which is, itself or through its subsidiaries, an operating
company in a business synergistic with the business of the Company and in which the
Company receives benefits in addition to the investment of funds, but shall not include a
transaction in which the Company is issuing securities primarily for the purpose of
raising capital or to an entity whose primary business is investing in securities. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>LSPC</U>&#148;
means Lowenstein Sandler PC with offices located at 65 Livingston Avenue, Roseland, NJ
07068. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>GAAP</U>&#148;
shall have the meaning ascribed to such term in Section 3.1(h). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Indebtedness</U>&#148;
shall have the meaning ascribed to such term in Section 3.1(z). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Intellectual
Property Rights</U>&#148; shall have the meaning ascribed to such term in Section 3.1(o). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Liens</U>&#148;
means a lien, charge, security interest, encumbrance, right of first refusal, preemptive
right or other restriction. </FONT></P>

<p align=center>
<font size=2>- 2 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Material
Adverse Effect</U>&#148; shall have the meaning assigned to such term in Section 3.1(b). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Material Permits</U>&#148;
shall have the meaning ascribed to such term in Section 3.1(m). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Per
Share Purchase Price</U>&#148; equals $1.12. </FONT> </P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Person</U>&#148;
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. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Proceeding</U>&#148;
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. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Prospectus</U>&#148;
means the final prospectus filed for the Registration Statement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Prospectus
Supplement</U>&#148; means the supplement to the Prospectus complying with Rule 424(b) of
the Securities Act that is filed with the Commission prior to the Closing. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Purchaser
Party</U>&#148; shall have the meaning ascribed to such term in Section 4.8. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Registration
Statement</U>&#148; means the effective registration statement with Commission file No.
333- 151761 which registers the sale of the Shares, the Warrants and the Warrant Shares to
the Purchasers. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Required
Approvals</U>&#148; shall have the meaning ascribed to such term in Section 3.1(e). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Rule
144</U>&#148; 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. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>SEC
Reports</U>&#148; shall have the meaning ascribed to such term in Section 3.1(h). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Securities</U>&#148;
means the Shares, the Warrants and the Warrant Shares. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Securities
Act</U>&#148; means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Shares</U>&#148;
means the shares of Common Stock issued or issuable to each Purchaser pursuant to this
Agreement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Short
Sales</U>&#148; means all &#147;short sales&#148; 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). </FONT></P>

<p align=center>
<font size=2>- 3 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Subscription
Amount</U>&#148; means, as to each Purchaser, the aggregate amount to be paid for Shares
and Warrants purchased hereunder as specified below such Purchaser&#146;s name on the
signature page of this Agreement and next to the heading &#147;Subscription Amount&#148;
in United States dollars and in immediately available funds. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Subsidiary</U>&#148;
means any subsidiary of the Company as set forth on <U>Schedule 3.1(a</U>),  and
shall, where applicable, also include any direct or indirect subsidiary of the Company
formed or acquired after the date hereof. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Trading
Day</U>&#148; means a day on which the New York Stock Exchange is open for trading. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Trading Market</U>&#148;
means the following markets or exchanges on which the Common Stock is listed or quoted for
trading on the date in question: the American Stock Exchange, the Nasdaq Capital Market,
the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Transaction
Documents</U>&#148; means this Agreement, the Warrants and any other documents or
agreements executed in connection with the transactions contemplated hereunder. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Transfer
Agent</U>&#148; means American Stock Transfer &amp; Trust Company, the current transfer
agent of the Company, and any successor transfer agent of the Company. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>VWAP</U>&#148;
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 for trading
as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time)
to 4:02 p.m. (New York City time); (b) if the OTC Bulletin Board is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then listed or
quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then
reported in the &#147;Pink Sheets&#148; published by Pink Sheets, LLC (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent
bid price per share of the Common Stock so reported; or (d) in all other cases, the fair
market value of a share of Common Stock as determined by an independent appraiser selected
in good faith by the 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. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Warrants</U>&#148;
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 181
days from the date hereof and have a term of exercise equal to 5 years from the date they
are first exercisable, in the form of <U>Exhibit A</U> attached hereto. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Warrant
Shares</U>&#148; means the shares of Common Stock issuable upon exercise of the Warrants. </FONT></P>

<p align=center>
<font size=2>- 4 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ARTICLE II.


</B><BR>PURCHASE AND SALE </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Closing</U>.
The completion of the purchase and sale of the Shares and Warrants shall occur at a place
and time (the &#147;<U>Closing Date</U>&#148;) to be specified by the Company and the
Placement Agent. 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 $3,027,160.64 of Shares and Warrants. On
or before the Closing Date, each Purchaser shall deliver to the Company, via wire
transfer, immediately available funds equal to its Subscription Amount and the Company
shall, on the Closing Date, deliver or cause to be delivered 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.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;2.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Deliveries</U>. </FONT> </P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
or prior to the Closing Date, the Company shall deliver or cause to be
               delivered to each Purchaser the following:  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=10%></TD>
<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;this
Agreement duly executed by the Company;  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=10%></TD>
<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
legal opinion of Company Counsel, substantially in the form of <U>Exhibit                B</U> attached
hereto;  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=10%></TD>
<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
copy of the irrevocable instructions to the Company&#146;s transfer agent
               instructing the transfer agent to deliver via the Depository Trust Company
               Deposit Withdrawal Agent Commission System (&#147;<U>DWAC</U>&#148;)
Shares                equal to such Purchaser&#146;s Subscription Amount divided by the
Per Share                Purchase Price, registered in the name of such Purchaser;  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=10%></TD>
<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iv) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
Warrant registered in the name of such Purchaser to purchase up to a number of
               shares of Common Stock equal to 40% of such Purchaser&#146;s Shares, with
an                exercise price equal to $1.60, subject to adjustment therein (such
Warrant                certificate may be delivered within three Trading Days of the
Closing Date); and  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=10%></TD>
<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(v) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Prospectus and Prospectus Supplement (which may be delivered in accordance
               with Rule 172 under the Securities Act).  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
or prior to the Closing Date, each Purchaser shall deliver or cause to be
               delivered to the Company the following:  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=10%></TD>
<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;this
Agreement duly executed by such Purchaser; and  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=10%></TD>
<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;such
Purchaser&#146;s Subscription Amount by wire transfer to the account as
               specified in writing by the Company.  </FONT></P></TD>
</TR>
</TABLE>
<BR>

<p align=center>
<font size=2>- 5 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;2.3 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Closing
Conditions</U>. </FONT> </P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
obligations of the Company hereunder in connection with the Closing are
               subject to the following conditions being met:  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=10%></TD>
<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
accuracy in all material respects on the Closing Date of the representations
               and warranties of the Purchasers contained herein;  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=10%></TD>
<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all
obligations, covenants and agreements of each Purchaser required to be
               performed at or prior to the Closing Date shall have been performed; and  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this
               Agreement.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
respective obligations of the Purchasers hereunder in connection with the
               Closing are subject to  </FONT></P></TD>
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<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
following conditions being met:  </FONT></P></TD>
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<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
accuracy in all material respects on the Closing Date of the representations
               and warranties of the Company contained herein;  </FONT></P></TD>
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<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all
obligations, covenants and agreements of the Company required to be
               performed at or prior to the Closing Date shall have been performed;  </FONT></P></TD>
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<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(iv) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
delivery by the Company of the items set forth in Section 2.2(a) of this
               Agreement;  </FONT></P></TD>
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<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(v) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;there
shall have been no Material Adverse Effect with respect to the Company
               since the date hereof; and  </FONT></P></TD>
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<TD WIDTH=90%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(vi) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;from
the date hereof to the Closing Date, trading in the Common Stock shall not
               have been suspended by the Commission or the Company&#146;s principal
Trading                Market (except for any suspension of trading of limited duration
agreed to by                the Company, which suspension shall be terminated prior to
the Closing), and, at                any time prior to the Closing Date, trading in
securities generally as reported                by Bloomberg L.P. shall not have been
suspended or limited, or minimum prices                shall not have been established on
securities whose trades are reported by such                service, or on any Trading
Market, nor shall a banking moratorium have been                declared either by the
United States or New York State authorities nor shall                there have occurred
any material outbreak or escalation of hostilities or other                national or
international calamity of such magnitude in its effect on, or any                material
adverse change in, any financial market which, in each case, in the
               reasonable judgment of each Purchaser, makes it impracticable or
inadvisable to                purchase the Securities at the Closing.  </FONT></P></TD>
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<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ARTICLE III.

</B><BR>REPRESENTATIONS AND WARRANTIES </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Representations
and Warranties of the Company</U>. 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:  </FONT></P>

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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Subsidiaries</U>.
All of the direct and indirect subsidiaries of the Company           are set forth on <U>Schedule
</U><U>3.1(a</U>). 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, then all other           references to the Subsidiaries or
any of them in the Transaction Documents shall           be disregarded.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Organization
and Qualification</U>. The Company and each of the Subsidiaries           is an entity
duly incorporated or otherwise organized, validly existing and in           good standing
under the laws of the jurisdiction of its incorporation or           organization, with
the requisite power and authority to own and use its           properties and assets and
to carry on its business as currently conducted.           Neither the Company nor any
Subsidiary is in violation nor default of any of the           provisions of its
respective certificate or articles of incorporation, bylaws or           other
organizational or charter documents. Each of the Company and the           Subsidiaries
is duly qualified to conduct business and is in good standing as a           foreign
corporation or other entity in each jurisdiction in which the nature of           the
business conducted or property owned by it makes such qualification           necessary,
except where the failure to be so qualified or in good standing, as           the case
may be, could not have or reasonably be expected to result in: (i) a           material
adverse effect on the legality, validity or enforceability of any           Transaction
Document, (ii) a material adverse effect on the results of           operations, assets,
business, prospects or condition (financial or otherwise) of           the Company and
the Subsidiaries, taken as a whole, or (iii) a material adverse           effect on the
Company&#146;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 &#147;<U>Material
Adverse Effect</U>&#148;) 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.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Authorization;
Enforcement</U>. The Company has the requisite corporate power           and authority to
enter into and to consummate the transactions contemplated by           each of the
Transaction Documents and otherwise to carry out its obligations           hereunder and
thereunder. The execution and delivery of each of the Transaction           Documents by
the Company and the consummation by it of the transactions           contemplated hereby
and thereby have been duly authorized by all necessary           action on the part of
the Company and no further action is required by the           Company, the Board of
Directors or the Company&#146;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&#146; 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.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Conflicts</U>. The execution, delivery and performance by the Company of           the
Transaction Documents, the issuance and sale of the Securities and the
          consummation by it to which it is a party of the other transactions
contemplated           hereby and thereby do not and will not (i) conflict with or
violate any           provision of the Company&#146;s or any Subsidiary&#146;s
certificate or articles           of incorporation, bylaws or other organizational or
charter documents, or (ii)           conflict with, or constitute a default (or an event
that with notice or lapse of           time or both would become a default) under, result
in the creation of any Lien           upon any of the properties or assets of the Company
or any Subsidiary, or give           to others any rights of termination, amendment,
acceleration or cancellation           (with or without notice, lapse of time or both)
of, any agreement, credit           facility, debt or other instrument (evidencing a
Company or Subsidiary debt or           otherwise) or other understanding to which the
Company or any Subsidiary is a           party or by which any property or asset of the
Company or any Subsidiary is           bound or affected, or (iii) subject to the
Required Approvals, conflict with or           result in a violation of any law, rule,
regulation, order, judgment, injunction,           decree or other restriction of any
court or governmental authority to which the           Company or a Subsidiary is subject
(including federal and state securities laws           and regulations), or by which any
property or asset of the Company or a           Subsidiary is bound or affected; except
in the case of each of clauses (ii) and           (iii), such as could not have or
reasonably be expected to result in a Material           Adverse Effect.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Filings,
Consents and Approvals</U>. The Company is not required to obtain           any consent,
waiver, authorization or order of, give any notice to, or make any           filing or
registration with, any court or other federal, state, local or other
          governmental authority or other Person in connection with the execution,
          delivery and performance by the Company of the Transaction Documents, other
          than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii)
          the filing with the Commission of the Prospectus Supplement, (iii)
          application(s) to each applicable Trading Market for the listing of the
          Securities for trading thereon in the time and manner required thereby and (iv)
          such filings as are required to be made under applicable state securities laws
          and Nasdaq regulations (collectively, the &#147;<U>Required           Approvals</U>&#148;).  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Issuance
of the Securities; Registration</U>. The Securities are duly           authorized and,
when issued and paid for in accordance with the applicable           Transaction
Documents, will be duly and validly issued, fully paid and           nonassessable, free
and clear of all Liens imposed by the Company. The Warrant           Shares, when issued
in accordance with the terms of the Warrants, will be           validly issued, fully
paid and nonassessable, free and clear of all Liens           imposed by the Company. The
Company has reserved from its duly authorized           capital stock the maximum number
of shares of Common Stock issuable pursuant to           this Agreement and the Warrants.
The Company has prepared and filed the           Registration Statement in conformity
with the requirements of the Securities           Act, which Registration Statement was
declared effective on July 1, 2008 (the           &#147;<U>Effective Date</U>&#148;),
 including the Prospectus, and such           amendments and supplements thereto as
may have been required to the date of this           Agreement. The Registration
Statement is effective under the Securities Act and           no stop order preventing or
suspending the effectiveness of the Registration           Statement or suspending or
preventing the use of the Prospectus has been issued           by the Commission and no
proceedings for that purpose have been instituted or,           to the knowledge of the
Company, are threatened by the Commission. The Company,           if required by the
rules and regulations of the Commission, proposes to file the           Prospectus
Supplement with the SEC pursuant to Rule 424(b). At the time the           Registration
Statement and any amendments thereto became effective, at the date           of this
Agreement and at the Closing Date, the Registration Statement and any
          amendments thereto conformed and will conform in all material respects to the
          requirements of the Securities Act and did not and will not contain any untrue
          statement of a material fact or omit to state any material fact required to be
          stated therein or necessary to make the statements therein not misleading; and
          the Prospectus and any amendments or supplements thereto, at the time the
          Prospectus or any amendment or supplement thereto was issued and at the Closing
          Date, conformed and will conform in all material respects to the requirements
of           the Securities Act and did not and will not contain an untrue statement of a
          material fact or omit to state a material fact necessary in order to make the
          statements therein, in light of the circumstances under which they were made,
          not misleading.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Capitalization</U>.
The capitalization of the Company is as set forth on <U>Schedule 3.1(g</U>). 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&#146;s stock option           plans, the issuance of shares of
Common Stock to employees pursuant to the           Company&#146;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&#146;s capital stock to which the Company is a party or, to the
          knowledge of the Company, between or among any of the Company&#146;s
          stockholders.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>SEC
Reports; Financial Statements</U>. The Company has filed all reports,
          schedules, forms, statements and other documents required to be filed by the
          Company under the Securities Act and the Exchange Act, including pursuant to
          Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or
          such shorter period as the Company was required by law or regulation to file
          such material) (the foregoing materials, including the exhibits thereto and
          documents incorporated by reference therein, together with the Prospectus and
          the Prospectus Supplement, being collectively referred to herein as the
          &#147;<U>SEC Reports</U>&#148;) on a timely basis or has received a valid
          extension of such time of filing and has filed any such SEC Reports prior to
the           expiration of any such extension. As of their respective dates, the SEC
Reports           complied in all material respects with the requirements of the
Securities Act           and the Exchange Act, as applicable, and none of the SEC
Reports, when filed,           contained any untrue statement of a material fact or
omitted to state a material           fact required to be stated therein or necessary in
order to make the statements           therein, in light of the circumstances under which
they were made, not           misleading. The Company has never been an issuer subject to
Rule 144(i) under           the Securities Act. The financial statements of the Company
included in the SEC           Reports comply in all material respects with applicable
accounting requirements           and the rules and regulations of the Commission with
respect thereto as in           effect at the time of filing. Such financial statements
have been prepared in           accordance with United States generally accepted
accounting principles           (&#147;<U>GAAP</U>&#148;) applied on a consistent basis
during the periods           involved, 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.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Material
Changes; Undisclosed Events, Liabilities or Developments</U>. 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&#146;s financial statements pursuant           to GAAP or
disclosed in filings made with the Commission, (iii) the Company has           not
altered its method of accounting, (iv) the Company has not declared or made           any
dividend or distribution of cash or other property to its stockholders or
          purchased, redeemed or made any agreements to purchase or redeem any shares of
          its capital stock and (v) the Company has not issued any equity securities to
          any officer, director or Affiliate, except pursuant to existing Company stock
          option plans. The Company does not have pending before the Commission any
          request for confidential treatment of information. Except for the issuance of
          the Securities contemplated by this Agreement or as set forth on <U>Schedule
          3.1(i)</U>, no event, liability or development has occurred or exists with
          respect to the Company or its Subsidiaries or their respective business,
          properties, operations or financial condition, that would be required to be
          disclosed by the Company under applicable securities laws at the time this
          representation is made or deemed made that has not been publicly disclosed at
          least 1 Trading Day prior to the date that this representation is made.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Litigation</U>.
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 &#147;<U>Action</U>&#148;) 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.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Labor
Relations</U>. 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&#146;s or its Subsidiaries&#146; employees is a member of a union
          that relates to such employee&#146;s relationship with the Company or such
          Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a
          collective bargaining agreement, and the Company and its Subsidiaries believe
          that their relationships with their employees are good. No executive officer,
to           the knowledge of the Company, is, or is now expected to be, in violation of
any           material term of any employment contract, confidentiality, disclosure or
          proprietary information agreement or non-competition agreement, or any other
          contract or agreement or any restrictive covenant in favor of any third party,
          and the continued employment of each such executive officer does not subject
the           Company or any of its Subsidiaries to any liability with respect to any of
the           foregoing matters. The Company and its Subsidiaries are in compliance with
all           U.S. federal, state, local and foreign laws and regulations relating to
          employment and employment practices, terms and conditions of employment and
          wages and hours, except where the failure to be in compliance could not,
          individually or in the aggregate, reasonably be expected to have a Material
          Adverse Effect.  </FONT></P></TD>
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<p align=center>
<font size=2>- 11 -</font></p>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Compliance</U>.
Neither the Company nor any Subsidiary: (i) is in default           under or in violation
of (and no event has occurred that has not been waived           that, with notice or
lapse of time or both, would result in a default by the           Company or any
Subsidiary under), nor has the Company or any Subsidiary received           notice of a
claim that it is in default under or that it is in violation of, any           indenture,
loan or credit agreement or any other agreement or instrument to           which it is a
party or by which it or any of its properties is bound (whether or           not such
default or violation has been waived), (ii) is in violation of any           order of any
court, arbitrator or governmental body or (iii) is or has been in           violation of
any statute, rule or regulation of any governmental authority,           including
without limitation all foreign, federal, state and local laws           applicable to its
business and all such laws that affect the environment, except           in each case as
could not have or reasonably be expected to result in a Material           Adverse
Effect.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Regulatory
Permits</U>. 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
(&#147;<U>Material Permits</U>&#148;), and neither the Company           nor any
Subsidiary has received any notice of proceedings relating to the           revocation or
modification of any Material Permit.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Title
to Assets</U>. 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.  </FONT></P></TD>
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<p align=center>
<font size=2>- 12 -</font></p>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Patents
and Trademarks</U>. To the knowledge of the Company, the Company and           the
Subsidiaries have, or have rights to use, all patents, patent applications,
          trademarks, trademark applications, service marks, trade names, trade secrets,
          inventions, copyrights, licenses and other intellectual property rights and
          similar rights necessary or material for use in connection with their
respective           businesses as described in the SEC Reports and which the failure to
so have           could have a Material Adverse Effect (collectively, the &#147;<U>Intellectual
          Property Rights</U>&#148;). Neither the Company nor any Subsidiary has received
          a notice (written or otherwise) that any of the Intellectual Property Rights
          used by the Company or any Subsidiary violates or infringes upon the rights of
          any Person. To the knowledge of the Company, all such Intellectual Property
          Rights are enforceable and there is no existing infringement by another Person
          of any of the Intellectual Property Rights. The Company and its Subsidiaries
          have taken reasonable security measures to protect the secrecy, confidentiality
          and value of all of their intellectual properties, except where failure to do
so           could not, individually or in the aggregate, reasonably be expected to have
a           Material Adverse Effect.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Insurance</U>.
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.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Transactions
With Affiliates and Employees</U>. Except as set forth in the           SEC Reports, none
of the officers or directors of the Company and, to the           knowledge of the
Company, none of the employees of the Company is presently a           party to any
transaction with the Company or any Subsidiary (other than for           services as
employees, officers and directors), including any contract,           agreement or other
arrangement providing for the furnishing of services to or           by, providing for
rental of real or personal property to or from, or otherwise           requiring payments
to or from any officer, director or such employee or, to the           knowledge of the
Company, any entity in which any officer, director, or any such           employee has a
substantial interest or is an officer, director, trustee or           partner, in each
case in excess of $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.  </FONT></P></TD>
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<font size=2>- 13 -</font></p>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Sarbanes-Oxley;
Internal Accounting Controls</U>. The Company is in material           compliance with
all provisions of the Sarbanes-Oxley Act of 2002 which are           applicable to it as
of the Closing Date. The Company and the Subsidiaries           maintain a system of
internal accounting controls sufficient to provide           reasonable assurance that:
(i) transactions are executed in accordance with           management&#146;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&#146;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-1 5(e) and 1 5d-1           5(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&#146;s rules           and forms. The Company&#146;s
certifying officers have evaluated the           effectiveness of the Company&#146;s
disclosure controls and procedures as of the           end of the period covered by the
Company&#146;s most recently filed periodic           report under the Exchange Act (such
date, the &#147;<U>Evaluation           Date</U>&#148;). 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&#146;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&#146;s internal control           over financial reporting.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Certain
Fees</U>. Except as set forth in the Prospectus Supplement, no           brokerage or
finder&#146;s fees or commissions are or will be payable by the           Company to any
broker, financial advisor or consultant, finder, placement agent,           investment
banker, bank or other Person with respect to the transactions           contemplated by
the Transaction Documents. The 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.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(t)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Investment
Company</U>. 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 &#147;investment company&#148; within the meaning of the           Investment Company
Act of 1940, as amended. The Company shall conduct its           business in a manner so
that it will not become subject to the Investment           Company Act of 1940, as
amended.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(u)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Registration
Rights</U>. No Person has any right to cause the Company to           effect the
registration under the Securities Act of any securities of the           Company.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Listing
and Maintenance Requirements</U>. 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.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(w)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Application
of Takeover Protections</U>. 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&#146;s certificate of incorporation           (or similar charter documents) or
the laws of its state of incorporation that is           or could become applicable to
the Purchasers as a result of the Purchasers and           the Company fulfilling their
obligations or exercising their rights under the           Transaction Documents,
including without limitation as a result of the           Company&#146;s issuance of the
Securities and the Purchasers&#146; ownership of           the Securities.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Disclosure</U>.
Except with respect to the material terms and conditions of           the transactions
contemplated by the Transaction Documents, the Company confirms           that neither it
nor any other Person acting on its behalf has provided any of           the Purchasers or
their agents or counsel with any information that it believes           constitutes or
might constitute material, non-public information which is not           otherwise
disclosed in the Prospectus Supplement. The Company understands and           confirms
that the Purchasers will rely on the foregoing representation in           effecting
transactions in securities of the Company. All 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.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(y)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Integrated Offering</U>. Assuming the accuracy of the Purchasers&#146;          representations
and warranties set forth in Section 3.2, neither the Company,           nor any of its
Affiliates, nor any Person acting on its or their behalf has,           directly or
indirectly, made any offers or sales of any security or solicited           any offers to
buy any security, under circumstances that would cause this           offering of the
Securities to be integrated with prior offerings by the Company           for purposes of
any applicable shareholder approval provisions of any Trading           Market on which
any of the securities of the Company are listed or designated.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(z)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Solvency</U>.
Based on the consolidated financial condition of the Company as           of the Closing
Date, after giving effect to the receipt by the Company of the           proceeds from
the sale of the Securities hereunder, (i) the fair saleable value           of the Company&#146;s
assets exceeds the amount that will be required to be paid           on or in respect of
the Company&#146;s existing debts and other liabilities           (including known
contingent liabilities) as they mature, (ii) the Company&#146;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. <U>Schedule           3.1(z</U>)
sets forth as of the date thereof all outstanding secured and           unsecured
Indebtedness of the Company or any Subsidiary, or for which the           Company or any
Subsidiary has commitments. For the purposes of this Agreement, &#147;<U>Indebtedness</U>&#148; 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&#146;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.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(aa)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Tax
Status</U>. Except for matters that would not, individually or in the
          aggregate, have or reasonably be expected to result in a Material Adverse
          Effect, the Company and each Subsidiary has filed all necessary federal, state
          and foreign income and franchise tax returns and has paid or accrued all taxes
          shown as due thereon, and the Company has no knowledge of a tax deficiency
which           has been asserted or threatened against the Company or any Subsidiary.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(bb)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Foreign
Corrupt Practices</U>. 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.  </FONT></P></TD>
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<p align=center>
<font size=2>- 16 -</font></p>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(cc)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Accountants</U>.
The Company&#146;s accounting firm is set forth on <U>Schedule 3.1(cc</U>) 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) has expressed its opinion with respect           to the financial
statements to be included in the Company&#146;s Annual Report           for the year
ending June 30, 2009.  </FONT></P></TD>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(dd)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Acknowledgment
Regarding Purchasers&#146; Purchase of Securities</U>. The           Company acknowledges
and agrees that each of the Purchasers is acting solely in           the capacity of an
arm&#146;s length purchaser with respect to the Transaction           Documents and the
transactions contemplated thereby. The Company further           acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of           the Company (or in
any similar capacity) with respect to the Transaction           Documents and the
transactions contemplated thereby and any advice given by any           Purchaser or any
of their respective representatives or agents in connection           with the
Transaction Documents and the transactions contemplated thereby is           merely
incidental to the Purchasers&#146; purchase of the Securities. The           Company
further represents to each Purchaser that the Company&#146;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.  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ee)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Acknowledgement
Regarding Purchaser&#146;s Trading Activity</U>. Anything in           this Agreement or
elsewhere herein to the contrary notwithstanding (except for           Sections 3.2(e)
and 4.14 hereof), it is understood and acknowledged by the           Company that: (i)
none of the Purchasers 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 &#147;derivative&#148; securities           based on
securities issued by the Company or to hold the Securities for any           specified
term; (ii) that past or future open market or other transactions by           any
Purchaser, specifically including, without limitation, Short Sales or           &#147;derivative&#148; transactions,
before or after the closing of this           transaction, may negatively impact the
market price of the Company&#146;s           publicly-traded securities; (iii) that any
Purchaser, and counter-parties in           &#147;derivative&#148; transactions to which
any such Purchaser is a party,           directly or indirectly, presently may have a
&#147;short&#148; position in the           Common Stock, and (iv) that each Purchaser
shall not be deemed to have any           affiliation with or control over any arm&#146;s
length counter-party in any           &#147;derivative&#148; 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&#146; 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.  </FONT></P></TD>
</TR>
</TABLE>
<BR>

<p align=center>
<font size=2>- 17 -</font></p>
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<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(ff)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Regulation
M Compliance</U>. The Company has not, and to its knowledge no one           acting on
its behalf has, (i) taken, directly or indirectly, any action designed           to cause
or to result in the stabilization or manipulation of the price of any           security
of the Company to facilitate the sale or resale of any of the           Securities, (ii)
sold, bid for, purchased, or, paid any compensation for           soliciting purchases
of, any of the Securities, or (iii) paid or agreed to pay           to any Person any
compensation for soliciting another to purchase any other           securities of the
Company, other than, in the case of clauses (ii) and (iii),           compensation paid
to the Company&#146;s placement agent in connection with the           placement of the
Securities.  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Representations
and Warranties of the Purchasers</U>. 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:  </FONT></P>

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<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Organization;
Authority</U>. Such Purchaser is 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 this Agreement and           otherwise to
carry out its obligations hereunder and thereunder. The execution           and delivery
of this Agreement and performance by such Purchaser of the           transactions
contemplated by this Agreement have been duly authorized by all           necessary
corporate or similar action 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&#146; 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.  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Own
Account</U>. Such Purchaser is acquiring the Securities as principal for           its
own account and not with a view to or for distributing or reselling such
          Securities or any part thereof in violation of the Securities Act or any
          applicable state securities law, has no present intention of distributing any
of           such Securities in violation of the Securities Act or any applicable state
          securities law and has no direct or indirect arrangement or understandings with
          any other persons to distribute or regarding the distribution of such
Securities           (this representation and warranty not limiting such Purchaser&#146;s
right to           sell the Securities pursuant to the Registration Statement or
otherwise in           compliance with applicable federal and state securities laws) in
violation of           the Securities Act or any applicable state securities law. Such
Purchaser is           acquiring the Securities hereunder in the ordinary course of its
business.  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Purchaser
Status</U>. At the time such Purchaser was offered the Securities,           it was, and
as of the date hereof it is, and on each date on which it exercises           any
Warrants, it will be either: (i) an &#147;accredited investor&#148; as           defined
in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities           Act or
(ii) a &#147;qualified institutional buyer&#148; 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.  </FONT></P></TD>
</TR>
</TABLE>
<BR>

<p align=center>
<font size=2>- 18 -</font></p>
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<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Experience
of Such Purchaser</U>. 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.  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TD ALIGN=RIGHT WIDTH=5%></TD>
<TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Short
Sales and Confidentiality Prior To The Date Hereof</U>. Other than           consummating
the transactions contemplated hereunder, such Purchaser has not,           nor has any
Person acting on behalf of or pursuant to any understanding with           such
Purchaser, directly or indirectly executed any purchases or sales,           including
Short Sales, of the securities of the Company during the period           commencing from
the time that such Purchaser first received a term sheet           (written or oral) from
the Company or any other Person representing the Company           setting forth the
material terms of the transactions contemplated hereunder           (&#147;<U>Discussion
Time</U>&#148;). 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&#146;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&#146;s           assets, the
representation set forth above shall only apply with respect to the           portion of
assets managed by the portfolio manager that made the investment           decision to
purchase the Securities covered by this Agreement. Other than to           other Persons
party to this Agreement, such Purchaser has maintained the           confidentiality of
all disclosures made to it in connection with this           transaction (including the
existence and terms of this transaction).           Notwithstanding the foregoing, for
avoidance of doubt, nothing contained herein           shall constitute a representation
or warranty, or preclude any actions, with           respect to the identification of the
availability of, or securing of, available           shares to borrow in order to effect
short sales or similar transactions in the           future.  </FONT></P></TD>
</TR>
</TABLE>
<BR>

<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ARTICLE IV.
</B><BR>OTHER AGREEMENTS OF THE PARTIES </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Warrant
Shares</U>. If all or any portion of a Warrant is exercised at a time when there is an
effective registration statement to cover the issuance or resale of the Warrant Shares or
if the Warrant is exercised via cashless exercise, the Warrant Shares issued pursuant to
any such exercise shall be issued free of all legends. If at any time following the date
hereof the Registration Statement (or any subsequent registration statement registering
the Warrant Shares) is not effective or is not otherwise available for the sale or resale
of the Warrant Shares, the Company shall immediately notify the holders of the Warrants
in writing that such registration statement is not then effective and thereafter shall
promptly notify such holders when the registration statement is effective again and
available for the sale or resale of the Warrant Shares. The Company shall use best
efforts to keep a registration statement (including the Registration Statement)
registering the issuance or resale of the Warrant Shares effective during the term of the
Warrants. Upon a cashless exercise of the Warrants, the holding period for purposes of
Rule 144 shall tack back to the original date of issuance of such Warrant.  </FONT></P>

<p align=center>
<font size=2>- 19 -</font></p>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Furnishing
of Information</U>. Until the earliest of the time that (i) no Purchaser owns Securities
or (ii) the Warrants have expired, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the Exchange Act
even if the Company is not then subject to the reporting requirements of the Exchange
Act. As long as any Purchaser owns Securities, 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, if any, as is
required for the Purchasers to sell the Securities under Rule 144. The Company further
covenants that it will take such further action as any holder of Securities may
reasonably request, to the extent required from time to time to enable such Person to
sell such Securities without registration under the Securities Act within the
requirements of the exemption provided by Rule 144.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.3 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Integration</U>.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities Act) that
would be integrated with the offer or sale of the Securities for purposes of the rules
and regulations of any Trading Market such that it would require shareholder approval
prior to the closing of such other transaction unless shareholder approval is obtained
before the closing of such subsequent transaction.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.4 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Securities
Laws Disclosure; Publicity</U>. 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, disclosing the material terms of the transactions contemplated hereby, and including
the Transaction Documents as exhibits thereto. The Company and each Purchaser shall
consult with each other in issuing any other press releases with respect to the
transactions contemplated hereby, and neither the Company nor any Purchaser shall issue
any such press release nor otherwise make any such public statement without the prior
consent of the Company, with respect to any press release of any Purchaser, or without
the prior consent of each Purchaser, with respect to any press release of the Company,
which consent shall not unreasonably be withheld or delayed, except if such disclosure is
required by law, in which case the disclosing party shall promptly provide the other
party with prior notice of such public statement or communication. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or include
the name of any Purchaser in any filing with the Commission or any regulatory agency or
Trading Market, without the prior written consent of such Purchaser, except (a) as
required by federal securities law in connection with the filing of final Transaction
Documents (including signature pages thereto) with the Commission and (b) to the extent
such disclosure is required by law or Trading Market regulations, in which case the
Company shall provide the Purchasers with prior notice of such disclosure permitted under
this clause (b).  </FONT></P>

<p align=center>
<font size=2>- 20 -</font></p>
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<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.5 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Shareholder
Rights Plan</U>. No claim will be made or enforced by the Company or, with the consent of
the Company, by any other Person, that any Purchaser is an &#147;Acquiring Person&#148; 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, in each case by virtue of
receiving Securities under the Transaction Documents or under any other agreement between
the Company and the Purchasers.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.6 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Non-Public
Information</U>. 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 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.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.7 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Use
of Proceeds</U>. The Company shall use the net proceeds from the sale of the Securities
hereunder to fund the preparation of the Company&#146;s Phase-II clinical trials in the
USA or Germany and for general working capital and administrative expenses. The Company
shall not use such proceeds for: (a) the satisfaction of any portion of the Company&#146;s
debt (other than payment of trade payables in the ordinary course of the Company&#146;s
business and prior practices), (b) the redemption of any Common Stock or Common Stock
Equivalents or (c) the settlement of any outstanding litigation.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.8 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Indemnification
of Purchasers</U>. 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 &#147;<U>Purchaser
Party</U>&#148;) 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&#146; 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&#146;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 the 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 such separate 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&#146;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&#146;s breach of
any of the representations, warranties, covenants or agreements made by such Purchaser
Party in this Agreement or in the other Transaction Documents.  </FONT></P>

<p align=center>
<font size=2>- 21 -</font></p>
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<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.9 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Reservation
of Common Stock</U>. 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.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.10 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Listing
of Common Stock</U>. The Company hereby agrees to use best efforts to maintain the
listing and quotation of the Common Stock on a Trading Market, and as soon as reasonably
practicable following the Closing (but not later than the Closing Date) to list or quote
all of the Shares and Warrant Shares on such Trading Market. The Company further agrees,
if the Company applies to have the Common Stock traded on any other Trading Market, it
will then include in such application all of the Shares and Warrant Shares, and will take
such other action as is necessary to cause all of the Shares and Warrant Shares to be
listed or quoted on such other Trading Market as promptly as possible. The Company will
then take all action reasonably necessary to continue the listing and trading of its
Common Stock on a Trading Market and will comply in all respects with the Company&#146;s
reporting, filing and other obligations under the bylaws or rules of the Trading Market.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.11 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Equal
Treatment of Purchasers</U>. No consideration 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.  </FONT></P>

<p align=center>
<font size=2>- 22 -</font></p>
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<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.12 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intentionally
Omitted.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;4.13 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Subsequent
Equity Sales</U>. </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From
the date hereof until 15 days after the Closing Date, neither the Company nor any
Subsidiary shall issue shares of Common Stock or Common Stock Equivalents other than
issuance of shares of Common Stock subsequent to exercise of outstanding warrants or
options. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.14 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Short
Sales and Confidentiality After The Date Hereof</U>. 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 Short Sales during
the period commencing with the Discussion Time and ending at such time the transactions
contemplated by this Agreement are first publicly announced 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 as described in Section 4.4, such Purchaser will maintain the confidentiality
of the existence and terms of this transaction and the information included in the
Disclosure Schedules. Notwithstanding the foregoing, no Purchaser makes any
representation, warranty or covenant hereby that it will not engage in Short Sales in the
securities of the Company after the time that the transactions contemplated by this
Agreement are first publicly announced as described in Section 4.4. 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&#146;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&#146;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.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.15 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Delivery
of Securities After Closing</U>. 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.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.16 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Capital
Changes</U>. Until the one year anniversary of the Closing Date, the Company shall not
undertake a reverse or forward stock split or reclassification of the Common Stock
without the prior written consent of the Purchasers holding a majority in interest of the
Shares.  </FONT></P>

<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ARTICLE V.
</B><BR>MISCELLANEOUS </FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Termination</U>.
This Agreement may be terminated by any Purchaser, as to such Purchaser&#146;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 October 12, 2009; <U>provided</U>, <U>however</U>,
that no such termination will affect the right of any party to sue for any breach by the
other party (or parties).  </FONT></P>

<p align=center>
<font size=2>- 23 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Fees
and Expenses</U>. 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.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.3 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Entire
Agreement</U>. The Transaction Documents, together with the exhibits and schedules
thereto, the Prospectus and the Prospectus Supplement, contain the entire understanding
of the parties with respect to the subject matter hereof and 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.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.4 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Notices</U>.
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 2<SUP>nd</SUP>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.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.5 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Amendments;
Waivers</U>. No provision of this Agreement may be waived or amended except in a written
instrument signed, in the case of an amendment, by the Company and the Purchasers holding
at least 67% of the Shares then held by the Purchasers in the aggregate 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.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.6 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Headings</U>.
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.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.7 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Successors
and Assigns</U>. 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 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
&#147;Purchasers.&#148; </FONT></P>

<p align=center>
<font size=2>- 24 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.8 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Third-Party Beneficiaries</U>. 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.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.9 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Governing
Law</U>. All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of the transactions contemplated
by this Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, employees or
agents) shall be commenced exclusively in the state and federal courts sitting in the
City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in the City of New York, borough of Manhattan for
the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to the
enforcement of any of the Transaction Documents), and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action or
proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby
irrevocably waives personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any other manner
permitted by law. If either party shall commence an action or proceeding to enforce any
provisions of the Transaction Documents, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its reasonable attorneys&#146; fees
and other costs and expenses incurred with the investigation, preparation and prosecution
of such action or proceeding.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.10 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Survival</U>.
The representations and warranties contained herein shall survive the Closing and the
delivery of the Securities for the applicable statute of limitations.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.11 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Execution</U>.
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 &#147;.pdf&#148; 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 &#147;.pdf&#148; signature page were an original thereof.  </FONT></P>

<p align=center>
<font size=2>- 25 -</font></p>
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<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.12 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Severability</U>.
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.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.13 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Rescission
and Withdrawal Right</U>. 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; <U>provided, however, </U>that in the case of a rescission of an exercise of a
Warrant, the Purchaser shall be required to return any shares of Common Stock subject to
any such rescinded exercise notice.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.14 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Replacement
of Securities</U>. 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.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.15 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Remedies</U>.
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 agrees to waive and not to
assert in any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.16 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Payment
Set Aside</U>. To the extent that the Company makes a payment or payments to any
Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its
rights thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are required to be refunded,
repaid or otherwise restored to the Company, a trustee, receiver or any other person
under any law (including, without limitation, any bankruptcy law, state or federal law,
common law or equitable cause of action), then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.  </FONT></P>

<p align=center>
<font size=2>- 26 -</font></p>
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<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.17 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Independent
Nature of Purchasers&#146; Obligations and Rights</U>. 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. 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 the Purchasers.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.18 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Liquidated
Damages</U>. The Company&#146;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.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.19 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Saturdays,
Sundays, Holidays, etc</U>. 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.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.20 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Construction</U>.
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.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.21 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>(Signature Pages
Follow) </I></FONT></P>

<p align=center>
<font size=2>- 27 -</font></p>
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<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. </FONT></P>


<!-- MARKER FORMAT-SHEET="Signature (Single)" FSL="Workstation" -->
<TABLE WIDTH=100% CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>PLURISTEM THERAPEUTICS, INC.</B> <BR><BR>
<BR>By: ________________________________<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With a copy to (which shall not constitute notice): </FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Address of Notice</U><BR><BR>
<BR>Fax:_______________<BR>
&nbsp;<BR>&nbsp; </FONT></TD>
</TR>
</TABLE>
<BR>


<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

<BR>SIGNATURE PAGE FOR PURCHASER FOLLOWS]</FONT></P>


<p align=center>
<font size=2>- 28 -</font></p>
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<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[PURCHASER SIGNATURE PAGES TO PSTI SECURITIES PURCHASE AGREEMENT]</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Name of Purchaser: &nbsp;_____________________________________________________________________________________________________  </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>Signature of Authorized
Signatory of Purchaser:</I> &nbsp;______________________________________________________________________________</FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Name of Authorized Signatory: &nbsp;____________________________________________________________________________________________ </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Title of Authorized Signatory:  &nbsp;_____________________________________________________________________________________________</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Email Address of Authorized
Signatory: &nbsp;______________________________________________________________________________________ </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Fax Number of Authorized Signatory: &nbsp;________________________________________________________________________________________
 </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Address for Notice of Purchaser: &nbsp;____________________________________________________________________________________________ </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Address for Delivery of Securities
for Purchaser (if not same as address for notice): </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Subscription Amount: &nbsp;$____________________  </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Shares: &nbsp;_______________________                             </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Warrant Shares:  &nbsp;__________________________</FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">EIN Number: <B>[PROVIDE
THIS UNDER SEPARATE COVER]</B> </FONT> </P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[SIGNATURE PAGES
CONTINUE] </FONT></P>


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<font size=2>- 29 -</font></p>
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