PREFERRED STOCK PURCHASE AGREEMENT BETWEEN CORDIA CORPORATION AND BARRON PARTNERS LP DATED MARCH 3, 2005 PREFERRED STOCK PURCHASE AGREEMENT

PREFERRED STOCK PURCHASE AGREEMENT

BETWEEN

CORDIA CORPORATION

AND

BARRON PARTNERS LP

DATED

MARCH  3, 2005

PREFERRED STOCK PURCHASE AGREEMENT

This PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into as of the 3rd day of March, 2005 by and among CORDIA CORPORATION, a corporation organized and existing under the laws of the State of Nevada (“Cordia” or the “Company”), and Barron Partners L.P., a Delaware limited partnership (hereinafter referred to collectively as “Investor”).

PRELIMINARY STATEMENT:

WHEREAS, the Investor wishes to purchase from the Company, upon the terms and subject to the conditions of this Agreement, One Million Five Hundred Thousand Dollars ($1,500,000.00) worth of preferred stock of the Company, with such preferred stock being as described in the Certificate of Designations, Rights and Preferences attached hereto as Exhibit A (the “Preferred Stock”).  The Preferred Stock shall be convertible into shares of common stock of the Company at any time after the payment by the Investor to the Company of a conversion price of one-dollar ($1.00) per share (the “Conversion Price”). In addition, the Company will issue to the Investor Common Stock Purchase Warrants (the “Warrants”) to purchase up to an additional 750,000 shares of common stock of the Company at an exercise price of two dollars ($2.00) per common share (“Warrant A”) and an additional 750,000 shares of common stock of the Company at an exercise price of four dollars ($4.00) per common share (“Warrant B”); and

WHEREAS, the parties intend to memorialize the purchase and sale of such Preferred Stock and the Warrants.

NOW, THEREFORE, in consideration of the mutual covenants and premises contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby conclusively acknowledged, the parties hereto, intending to be legally bound, agree as follows:

ARTICLE I

INCORPORATION BY REFERENCE, SUPERSEDER AND DEFINITIONS

1.1

Incorporation by Reference.  The foregoing recitals and the Exhibits attached hereto and referred to herein, are hereby acknowledged to be true and accurate, and are incorporated herein by this reference.

1.2

Superseder.  This Agreement, to the extent that it is inconsistent with any other instrument or understanding among the parties governing the affairs of the Company, shall supersede such instrument or understanding to the fullest extent permitted by law.  A copy of this Agreement shall be filed at the Company’s principal office.

1.3

Certain Definitions.  For purposes of this Agreement, the following capitalized terms shall have the following meanings (all capitalized terms used in this Agreement that are not defined in this Article 1 shall have the meanings set forth elsewhere in this Agreement):

1.3.1

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

1.3.2

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

1.3.3

 “Affiliate” means a Person or Persons directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with the Person(s) in question.  The term “control,” as used in the immediately preceding sentence, means, with respect to a Person that is a corporation, the right to the exercise, directly or indirectly, of more than 50 percent of the voting rights attributable to the shares of such controlled corporation and, with respect to a Person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such controlled Person.

1.3.4

“Articles”  The Certificate of Incorporation of the Company, as the same may be amended from time to time.

1.3.5

“Closing Date” means the payment of One Million Five Hundred Thousand Dollars ($1,500,000.00) by the Investor to the Company pursuant to this Agreement to purchase the Preferred Stock, which shall occur on or before March 4, 2005.

1.3.6

“Common Stock” means shares of common stock of the Company, par value $0.001 per share

         1.3.7

"Effective Date" shall mean the date the Registration Statement of the Company covering the Shares being subscribed for hereby is declared effective.

         1.3.8

"Escrow Agreement" shall mean the escrow agreement between the Company and the Investor attached hereto as Exhibit D.

          1.3.9

"Material Adverse Effect" shall mean any adverse effect on the business, operations, properties or financial condition of the Company that is material and adverse to the Company and its subsidiaries and affiliates, taken as a whole and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the Company to perform any of its material obligations under this Agreement or the Registration Rights Agreement or to perform its obligations under any other material agreement.

1.3.10

“New York Act” means the New York General Corporation Law, as amended.

1.3.11

“Person” means an individual, partnership, firm, limited liability company, trust, joint venture, association, corporation, or any other legal entity.

1.3.12

“Purchase Price” means $1.00 per share of Preferred Stock issued for a total aggregate purchase price a $1,500,000.00 paid by the Investor to the Company for the Preferred Stock and the Warrants.

1.3.13

Registration Rights Agreement" shall mean the registration rights agreement between the Investor and the Company attached hereto as Exhibit B.

1.3.14

"Registration Statement" shall mean the registration statement under the 1933 Act to be filed with the Securities and Exchange Commission for the registration of the Shares pursuant to the Registration Rights Agreement attached hereto as Exhibit B.

1.3.15  “SEC”  means the Securities and Exchange Commission.

1.3.16  "SEC Documents" shall mean the Company's latest Form 10-K or 10-KSB as of the time in question, all Forms 10-Q or 10-QSB and 8-K filed thereafter, and the Proxy Statement for its latest fiscal year as of the time in question until such time as the Company no longer has an obligation to maintain the effectiveness of a Registration Statement as set forth in the Registration Rights Agreement.

1.3.17  "Shares" shall mean, collectively, the shares of Common Stock of the Company issued upon conversion of the Preferred Stock subscribed for hereunder and those shares of Common Stock issuable to the Investor upon exercise of the Warrants.

1.3.18  “Warrants” shall mean Common Stock Purchase Warrants A and Common Stock Purchase Warrants B in the form attached hereto Exhibit C.

ARTICLE II

SALE AND PURCHASE OF CORDIA PREFERRED STOCK AND WARRANTS PURCHASE PRICE

PREFERRED STOCK PURCHASE AGREEMENT BETWEEN

CORDIA CORPORATION AND BARRON PARTNERS LP

PAGE # OF 24

1.1

Sale of Preferred Stock and Issuance of Warrants.  

(a)

Upon the terms and subject to the conditions set forth herein, and in accordance with applicable law, the Company agrees to sell to the Investor, and the Investor agrees to purchase from the Company, on the Closing Date 1,500,000 shares of Preferred Stock and the Warrants for the purchase price (the “Purchase Price”) of One Million Five Hundred Thousand Dollars ($1,500,000.00).  The Purchase Price shall be paid by the Investor to the Company on the Closing Date by a wire transfer of the Purchase Price into escrow to be held by the escrow agent pursuant to the terms of the Escrow Agreement.  The Company shall cause the Preferred Stock and the Warrants to be issued to the Investor upon the release of the Purchase Price to the Company by the escrow agent pursuant to the terms of the Escrow Agreement.  The Company shall register the shares of Common Stock into which the Preferred Stock is convertible pursuant to the terms and conditions of a Registration Rights Agreement attached hereto as Exhibit B.

(b)

The Preferred Stock shall be convertible by the Investor into an aggregate total of 1,500,000 shares of Common Stock (the “Conversion Shares”); provided, however, that the Investor shall not be entitled to convert the Preferred Stock into shares of Common Stock that would result in beneficial ownership by the Investor and its affiliates of more than 4.99% of the then outstanding number of shares of Common Stock on such date; provided, however, that the Investor may revoke the restriction described in this paragraph upon sixty-one (61) days prior written notice from the Investor to the Company.  For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder.

(c)

Upon execution and delivery of this Agreement and the Company’s receipt of the Purchase Price from the escrow agent pursuant to the terms of the Escrow Agreement, the Company shall issue to the Investor the Warrants to purchase an aggregate of 1,500,000 shares of Common Stock with 750,000 shares at an exercise price of $2.00 per share and the remaining 750,000 shares at an exercise price of $4.00 per share, all pursuant to the terms and conditions of the form of Warrants attached hereto as Exhibit C; provided, however, that the Investor shall not be entitled to exercise the Warrants and receive shares of Common Stock that would result in beneficial ownership by the Investor and its affiliates of more than 4.99% of the then outstanding number of shares of Common Stock on such date; provided, however, that the Investor may revoke the restriction described in this paragraph upon si xty-one (61) days prior written notice from the Investor to the Company.  For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder.

2.2

Purchase Price.  The Purchase Price shall be delivered by the Investor in the form of a check or wire transfer made payable to the Company in United States Dollars from the Investor to the escrow agent pursuant to the Escrow Agreement on the Closing Date.

ARTICLE III

CLOSING DATE AND DELIVERIES AT CLOSING

3.1  

Closing Date

The closing of the transactions contemplated by this Agreement (the “Closing”), unless expressly determined herein, shall be held at the offices of the Company, at 5:00 P.M. local time, on the Closing Date or on such other date and at such other place as may be mutually agreed by the parties, including closing by facsimile with originals to follow.  

3.2

Deliveries by the Company.  In addition to and without limiting any other provision of this Agreement, the Company agrees to deliver, or cause to be delivered, to the escrow agent under the Escrow Agreement, the following:

(a)

At or prior to Closing, an executed Agreement;

(b)

At or prior to Closing, executed Warrants in the name of the Investor in the form attached hereto as Exhibit C;

(c)

At or prior to Closing, an executed Registration Rights Agreement between the Investor and the Company in the form attached hereto as Exhibit B;

(d)

At or prior to Closing, confirmation that the provisions of Paragraphs 6.6 and 6.7 herein have been satisfied or commenced, as appropriate;

(e)

At or prior to the Closing, an executed Escrow Agreement;

(f)

At or prior to the Closing an opinion of the Issuers counsel in form and substance reasonable acceptable to the Purchaser;

(g)

At or prior to the Closing, Certified Articles and Preferred Stock Designations issued by the Secretary of State of Nevada;

(h)

At or prior to the Closing, a good standing Certificate issued by the Nevada Secretary of State

(i)

Such other documents or certificates as shall be reasonably requested by the each Investor or its counsel.

3.3

Deliveries by Investor.  In addition to and without limiting any other provision of this Agreement, the Investor agrees to deliver, or cause to be delivered, to the escrow agent under the Escrow Agreement, the following:

(a)

At or prior to Closing, the aggregate amount of One Million Five Hundred Thousand Dollars ($1,500,000.00);

(b)

At or prior to Closing, an executed Agreement;

(c)

At or prior to Closing, an executed Registration Rights Agreement between the Investor and the Company in the form attached hereto as Exhibit B; and

(d)

Such other documents or certificates as shall be reasonably requested by the Company or its counsel.

In the event any document provided to the other party in Paragraphs 3.2 and 3.3 herein are provided by facsimile, the party shall forward an original document to the other party within seven (7) business days.

a.1

Further Assurances.  The Company and the Investor shall, upon request, on or after the Closing Date, cooperate with each other (specifically, the Company shall cooperate with the Investor, and the Investor shall cooperate with the Company) by furnishing any additional information, executing and delivering any additional documents and/or other instruments and doing any and all such things as may be reasonably required by the parties or their counsel to consummate or otherwise implement the transactions contemplated by this Agreement.

a.2

Waiver.  The Investor may waive any of the requirements of Section 3.2 of this Agreement, and the Company at its discretion may waive any of the provisions of Section 3.3 of this Agreement.  The Investor may also waive any of the requirements of the Company under the Escrow Agreement.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF

CORDIA  

Cordia represents and warrants to the Investor (which warranties and representations shall survive from the date of the Closing for a period of twenty four (24) months regardless of what examinations, inspections, audits and other investigations the Investor has heretofore made or may hereinafter make with respect to such warranties and representations) as follows:

4.1

Organization and Qualification.  Cordia is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, and has the requisite corporate power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted and is duly qualified to do business in any other jurisdiction by virtue of the nature of the businesses conducted by it or the ownership or leasing of its properties, except where the failure to be so qualified will not, when taken together with all other such failures, have a Material Adverse Effect on the business, operations, properties, assets, financial condition or results of operation of Cordia and its subsidiaries taken as a whole.

4.2

Articles of Incorporation and By-Laws.  The complete and correct copies of Cordia’s Articles of Incorporation and By-Laws, as amended or restated to date, which have been filed with the Securities and Exchange Commission, are a complete and correct copy of such document as in effect on the date hereof and as of the Closing Date.

4.3

Capitalization.

4.3.1  The authorized and outstanding capital stock of Cordia as of March 1, 2005, is a total 25,000,000 authorized shares.  Of the total amount of authorized shares 20,000,000 shares are common stock and 5,000,000 shares are preferred stock.  Cordia has 4,541,210 shares of issued and outstanding common stock and no reserved shares of common stock.  There are no issued and outstanding shares of preferred stock.  This information is set forth in Cordia’s Articles of Incorporation on file with the Secretary of State which will be provided pursuant to Section 3.2(g) of this Agreement and Cordia’s Quarterly Report on Form 10-QSB, for the period ended September 30, 2004 filed on November 12, 2004 with the Securities and Exchange Commission and updated on all subsequent SEC Documents less subsequent acquisitions and agreements to acquire shares of Compa ny’s common stock.  All shares of capital stock have been duly authorized and are validly issued, and are fully paid and not assessable, and free of preemptive rights.  

4.3.2  Except pursuant to this Agreement and as set forth in Schedule 4.3(a) hereto, and as set forth in Cordia’s SEC Documents, filed with the SEC, as of the date hereof and as of the Closing Date, there are not now outstanding options, warrants, rights to subscribe for, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, shares of any class of capital stock of Cordia, or agreements, understandings or arrangements to which Cordia is a party, or by which Cordia is or may be bound, to issue additional shares of its capital stock or options, warrants, scrip or rights to subscribe for, calls or commitment of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, any shares of any class of its capital stock.  This section does not effect Company’s ability to rep urchase shares of its own common stock from the public or as contemplated with the parties and transactions described in Schedule 4.3(b) hereto.  The Company agrees to inform the Investors in writing of any additional warrants granted prior to the Closing Date.  

4.3.3   The Company on the Closing Date (i) will have full right, power, and authority to sell, assign, transfer, and deliver, to the Investor, Cordia Preferred Shares hereunder, free and clear of all liens, charges, claims, options, pledges, restrictions, and encumbrances whatsoever; and (ii) upon conversion of the Preferred Stock or exercise of the Warrants, the Investor will acquire good and marketable title to such Shares, free and clear of all liens, charges, claims, options, pledges, restrictions, and encumbrances whatsoever, except as otherwise provided in this Agreement as to the limitation on the voting rights of such Shares in certain circumstances.

4.4

Authority.  Cordia has all requisite corporate power and authority to execute and deliver this Agreement, the Preferred Stock, the Warants, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement by Cordia and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action and no other corporate proceedings on the part of Cordia is necessary to authorize this Agreement or to consummate the transactions contemplated hereby except as disclosed in this Agreement.   This Agreement has been duly executed and delivered by Cordia and constitutes the legal, valid and binding obligation of Cordia, enforceable against Cordia in accordance with its terms.

4.5

No Conflict; Required Filings and Consents.

The execution and delivery of this Agreement by Cordia does not, and the performance by Cordia of their respective obligations hereunder will not:  (i) conflict with or violate the Articles or By-Laws of Cordia; (ii) conflict with, breach or violate any federal, state, foreign or local law, statute, ordinance, rule, regulation, order, judgment or decree (collectively, "Laws") in effect as of the date of this Agreement and applicable to Cordia; or (iii) result in any breach of, constitute a default (or an event that with notice or lapse of time or both would become a default) under, give to any other entity any right of termination, amendment, acceleration or cancellation of, require payment under, or result  in the creation of a lien or encumbrance on any of the properties or assets of Cordia pursuant to, any note, bond, mortgage, indenture, contract, agreeme nt, lease, license, permit, franchise or other instrument or obligation to which Cordia is a party or by Cordia or any of its properties or assets is bound.  Excluding from the foregoing are such violations, conflicts, breaches, defaults, terminations, accelerations, creations of liens, or incumbency that would not, in the aggregate, have a Material Adverse Effect.

4.6

Report and Financial Statements.  Cordia’s Annual Report on Form 10-K, filed on April 15, 2004 with the Securities and Exchange Commission contains the audited financial statements of Cordia as of December 31, 2003 and Quarterly Report on Form 10-QSB, filed on November 12, 2004 for period ended September 30, 2004  (the “Financial Statements”). Each of the balance sheets contained in or incorporated by reference into any such Financial Statements (including the related notes and schedules thereto) fairly presented the financial position of Cordia as of its date, and each of the statements of income and changes in stockholders’ equity and cash flows or equivalent statements in such Financial Statements (including any related notes and schedules thereto) fairly presents, changes in stockholders’ equity and chan ges in cash flows, as the case may be, of Cordia for the periods to which they relate, in each case in accordance with United States generally accepted accounting principles (“U.S. GAAP”) consistently applied during the periods involved, except in each case as may be noted therein, subject to normal year-end audit adjustments in the case of unaudited statements.  The books and records of Cordia have been, and are being, maintained in all material respects in accordance with U.S. GAAP and any other applicable legal and accounting requirements and reflect only actual transaction.  

4.7

Compliance with Applicable Laws.  Cordia is not in violation of, or, to the knowledge of Cordia is under investigation with respect to or has been given notice or has been charged with the violation of any Law of a governmental agency, except for violations, which individually or in the aggregate do not have a Material Adverse Effect.  

4.8

Brokers.

Except as set forth on Schedule 4.8, no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or Commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Cordia

4.9

SEC Documents.  Cordia acknowledges that Cordia is a publicly held company and has made available to the Investor after demand true and complete copies of any requested SEC Documents. The Common Stock is quoted and traded on the OTC Bulletin Board of the National Association of Securities Dealers, Inc.  The Company has received no notice, either oral or written, with respect to the continued quotation or trading of the Common Stock on the OTC Bulletin Board. The Company has not provided to the Investor any information that, according to applicable law, rule or regulation, should have been disclosed publicly prior to the date hereof by the Company, but which has not been so disclosed. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act, and rules and regulations of the SEC promulg ated thereunder and the SEC Documents did 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, not misleading.

4.10

Litigation.  To the knowledge of Cordia, no litigation, claim, or other proceeding before any court or governmental agency is pending or threatened against Cordia that materially effects this Agreement or will have a material adverse affect on the Company or its operations.

4.11

Exemption from Registration.    When validly converted in accordance with the terms of the Preferred Stock, and upon exercise of the Warrants in accordance with their terms, the Shares underlying the Preferred Stock and the Warrants will be duly and validly issued, fully paid, and non-assessable.  The Company is issuing the Preferred Stock and the Warrants in accordance with and in reliance upon the exemption from securities registration afforded, inter alia, by Rule 506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or Section 4(2) of the 1933 Act; provided, however, that certain filings and registrations may be required under state securities “blue sky” laws depending upon the residency of the Investor.

4.12

No General Solicitation or Advertising in Regard to this Transaction. Neither the Company nor any of its Affiliates nor, to the knowledge of the Company, any Person acting on its or their behalf (i) has conducted or will conduct any general solicitation (as that term is used in Rule 502(c) of Regulation D as promulgated by the SEC under the 1933 Act) or general advertising with respect to the sale of the Preferred Stock, or (ii) made any offers or sales of any security or solicited any offers to buy any security under any circumstances that would require registration of the Preferred Stock, under the 1933 Act, except as required herein.

4.13

No Material Adverse Change. Since December 31, 2004, no Material Adverse Effect has occurred or exists with respect to the Company that has not been disclosed in the SEC Documents. No material supplier has given notice, oral or written, that it intends to cease or reduce the volume of its business with the Company from historical levels. Since December 31, 2004, no event or circumstance has occurred or exists with respect to the Company or its businesses, properties, prospects, operations or financial condition, that, under any applicable law, rule or regulation, requires public disclosure or announcement prior to the date hereof by the Company but which has not been so publicly announced or disclosed in writing to the Investor.

4.14

Material Non-Public Information. The Company has not disclosed to the Investors any material non-public information that (i) if disclosed, would reasonably be expected to have a material effect on the price of the Common Stock or (ii) according to applicable law, rule or regulation, should have been disclosed publicly by the Company prior to the date hereof but which has not been so disclosed.

4.15      Internal Controls And Procedures. The Company maintains books and records and internal accounting controls which provide reasonable assurance that (i) all transactions to which the Company or any subsidiary is a party or by which its properties are bound are executed with management's authorization; (ii) the recorded accounting of the Company's consolidated assets is compared with existing assets at regular intervals; (iii) access to the Company's consolidated assets is permitted only in accordance with management's authorization; and (iv) all transactions to which the Company or any subsidiary is a party or by which its properties are bound are recorded as necessary to permit preparation of the financial statements of the Company in accordance with U.S. generally accepted accounting principles.

4.16

Full Disclosure.  No representation or warranty made by Cordia in this Agreement and no certificate or document furnished or to be furnished to the Investor pursuant to this Agreement contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

The Investor represents and warrants to the Company that:

5.1

Organization and Standing of the Investor. The Investor is a limited partnership duly formed, validly existing and in good standing under the laws of the State of Delaware. The state in which any offer to purchase shares hereunder was made or accepted by such Investor is the state shown as such Investor’s address. The Investor was not formed for the purpose of investing solely in the Preferred Stock, the Warrants or the shares of Common Stock, which are the subject of this Agreement.

5.2

Authorization and Power. The Investor has the requisite power and authority to enter into and perform this Agreement and to purchase the securities being sold to it hereunder. The execution, delivery and performance of this Agreement by the Investor and the consummation by the Investor of the transactions contemplated hereby have been duly authorized by all necessary partnership action where appropriate. This Agreement and the Registration Rights Agreement have been duly executed and delivered by the Investor and at the Closing shall constitute valid and binding obligations of the Investor enforceable against the Investor in accordance with their terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, cr editors' rights and remedies or by other equitable principles of general application.

5.3   No Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Investor of the transactions contemplated hereby or relating hereto do not and will not (i) result in a violation of such Investor's charter documents or bylaws where appropriate or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of any agreement, indenture or instrument to which the Investor is a party, or result in a violation of any law, rule, or regulation, or any order, judgment or decree of any court or governmental agency applicable to the Investor or its properties (except for such conflicts, defaults and violations as would not, individually or in the aggregate, have a Material Adverse Effect on such Investor) . The Investor is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of such Investor’s obligations under this Agreement or to purchase the securities from the Company in accordance with the terms hereof, provided that for purposes of the representation made in this sentence, the Investor is assuming and relying upon the accuracy of the relevant representations and agreements of the Company herein.

5.4

Financial Risks. The Investor acknowledges that such Investor is able to bear the financial risks associated with an investment in the securities being purchased by the Investor from the Company and that it has been given full access to such records of the Company and the subsidiaries and to the officers of the Company and the subsidiaries as it has deemed necessary or appropriate to conduct its due diligence investigation. The Investor is capable of evaluating the risks and merits of an investment in the securities being purchased by the Investor from the Company by virtue of its experience as an investor and its knowledge, experience, and sophistication in financial and business matters and the Investor is capable of bearing the entire loss of its investment in the securities being purchased by the Investor from the Company.

5.5

Accredited Investor. The Investor is (i) an “accredited investor” as that term is defined in Rule 501 of Regulation D promulgated under the 1933 Act by reason of Rule 501(a)(3) and (6), (ii) experienced in making investments of the kind described in this Agreement and the related documents, (iii) able, by reason of the business and financial experience of its officers (if an entity) to protect its own interests in connection with the transactions described in this Agreement, and the related documents, and (iv) able to afford the entire loss of its investment in the securities being purchased by the Investor from the Company.

5.6

Brokers.  Except as set forth in Schedule 4.8, no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or Commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Investor.

5.7

Knowledge of Company.  The Investor has been, upon request, furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the securities being purchased by the Investor from the Company.  The Investor has been afforded the opportunity to ask questions of the Company and have received complete and satisfactory answers to any such inquiries.

5.8

Risk Factors   The Investor understands that such Investor’s investment in the securities being purchased by the Investor from the Company involves a high degree of risk.  The Investor understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the securities being purchased by the Investor from the Company. The Investor warrants that such Investor is able to bear the complete loss of such Investor’s investment in the securities being purchased by the Investor from the Company.

a.1

Full Disclosure.  No representation or warranty made by the Investor in this Agreement and no certificate or document furnished or to be furnished to Cordia pursuant to this Agreement contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading. Except as set forth or referred to in this Agreement, Investor does not have any agreement or understanding with any person relating to acquiring, holding, voting or disposing of any equity securities of the Company.

a.2

Reimbursement of Due Diligence Expenses. Upon closing, the Company shall pay Investor $35,000 for due diligence and legal expenses.  If the transaction is not closed due solely to the fault of the Investor, there shall be no payment for any expenses.

ARTICLE VI

COVENANTS OF THE COMPANY

6.1. Registration Rights. The Company shall cause the Registration Rights Agreement to remain in full force and effect according to the provisions of the Registration Rights Agreement and the Company shall comply in all material respects with the terms thereof.

6.2. Reservation Of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, shares of Common Stock for the purpose of enabling the Company to issue the shares of Common Stock underlying the Preferred Stock and Warrants.

6.3. Compliance with Laws. The Company hereby agrees to comply in all respects with the Company's reporting, filing and other obligations under the Laws.

6.4. Exchange Act Registration. The Company will use its best efforts to comply in all respects with its reporting and filing obligations under the 1934 Act, and will not take any action or file any document (whether or not permitted by the 1934 Act or the rules thereunder) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under the 1934 until the Investors have disposed of all of their Shares.  

6.5. Corporate Existence; Conflicting Agreements. The Company will take all steps necessary to preserve and continue the corporate existence of the Company. The Company shall not enter into any agreement, the terms of which agreement would restrict or impair the right or ability of the Company to perform any of its obligations under this Agreement or any of the other agreements attached as exhibits hereto.

a.1

Preferred Stock.   From and after the Closing Date and continuing for the lesser of three (3) years or when the aggregate common shares underlying outstanding Preferred Stock and Warrants equal three hundred thousand (300,000), the Company will not issue any shares of Preferred Stock of the Company which are convertible into shares of Common Stock of the Company other than on a conversion ratio which is fixed, except in the case of normal adjustments which may include anti-dilution provisions, among other things, but which shall not include in any case the conversion ratio of such shares of Preferred Stock based on the market price of the Common Stock after the date of closing of the issuance of such shares of Preferred Stock.

a.2

Convertible Debt.   On or prior to the Closing Date, the Company will cause to be cancelled all convertible debt in the Company. For the lesser of three (3) years from the closing or when the aggregate common shares underlying outstanding Preferred Stock and Warrants equal three hundred thousand (300,000) the Company will not issue any convertible debt with a conversion price lower than four dollars ($4.00).

a.3

Reset Equity Deals.   On or prior to the Closing Date, the Company will cause to be cancelled any and all reset features related to any shares outstanding that could result in additional shares being issued. For the lesser of three (3) years from the closing or when the aggregate common shares underlying outstanding Preferred Stock and Warrants equal three hundred thousand (300,000) the Company will not enter into financing transactions that have any reset features that could result in additional shares being issued.  For purposes of this provision reset features shall be those that reduce the conversion and or exercise price below that which was granted in original issuance or grant of stock options.

a.4

 Independent Directors.  The Company will use its best efforts to cause the appointment of an independent director within ninety (90) days so that total number of independent directors is at least two (2) independent directors.  If no such Director is appointed, the Company shall pay to the Investors, pro rata, as liquidated damages and not as a penalty, an amount equal to twelve percent (12%) of the Purchase Price per annum, payable monthly.  The parties agree that the only damages payable for a violation of the terms of this Agreement with respect to which liquidated damages are expressly provided shall be such liquidated damages.  Nothing shall preclude the Investor from pursuing or obtaining specific performance or other equitable relief with respect to this Agreement.  The parties hereto agree that the liquidated damages provided for in this Section 6.9 constitute a reasonable estimate of the damages that may be incurred by the Investor by reason of the failure of the Company to appoint at least two independent directors in accordance with the provision hereof.

a.5

 Independent Directors Become Majority of Audit and Compensation Committees.  Upon appointment of the additional independent director(s) the Company will cause the appointment of a majority of outside directors to the audit and compensation committees of the board of directors within (90) days.  If no such Director is appointed, the Company shall pay to the Investors, pro rata, as liquidated damages and not as a penalty, an amount equal to twelve percent (12%) of the Purchase Price per annum, payable monthly.  The parties agree that the only damages payable for a violation of the terms of this Agreement with respect to which liquidated damages are expressly provided shall be such liquidated damages.  Nothing shall preclude the Investor from pursuing or obtaining specific performance or other equitable relief with respect to this Agreement.  The p arties hereto agree that the liquidated damages provided for in this Section 6.10 constitute a reasonable estimate of the damages that may be incurred by the Investor by reason of the failure of the Company to appoint at least two independent directors in accordance with the provision hereof.

6.11 Use of Proceeds.   The Company will use the proceeds from the sale of the Preferred Stock and the Warrants (excluding amounts paid by the Company for legal and administrative fees in connection with the sale of such securities) for working capital, vendor deposits, letters of credit, and acquisitions.  

6.12 Right of First Refusal.   For the lesser of three (3) years from the closing or when the aggregate common shares underlying outstanding Preferred Stock and Warrants equal three hundred thousand (300,000)each Investor shall have the right to participate in any financing by the company at one hundred percent (100%) of the offering price. Cordia shall send Investor, where practicable written notice describing the terms of the offer and price range and Investor shall have ten (10) business days from receipt to agree to the terms of the offer.  Investor’s failure to accept said offer or attempts to modify said offer will be treated as a rejection of the offer and forfeiture of the right of first refusal for that financing transaction. Other parties to the proposed financing shall be disclosed to the Investor. If the Investor decides not to participate, the Issuer shall have 30 days to close the financing transaction with a third party and if not so closed, the Issuer must reoffer the opportunity to Investor.

6.13  Price Adjustment.    If, within the 24 months following the Closing Date, the Company closes on the sale of a note or notes, shares of Common Stock, or shares of any class of Preferred Stock at a price per share of Common Stock, or with a conversion right to acquire Common Stock at a price per share of Common Stock, that is less than the Conversion Price (as adjusted to the capitalization per share as of the Closing Date, following any stock splits, stock dividends, or the like) (collectively, the “Subsequent Conversion Price”), the Company shall make a post-Closing adjustment in the Conversion Price so that the effective price per share paid by the Investor is reduced to being equivalent to such lower conversion price after taking into account any prior conversions of the Preferred Stock and/or exercises of the Warrants.

6.14 Insider Selling.  The earliest any of the “Insiders” listed in Schedule 6.14 can start selling their shares on the public market shall be the lesser of two years from Closing or when the aggregate common shares underlying outstanding Preferred Stock and Warrants equal three hundred thousand (300,000).  This restriction on sale shall be limited to the restricted stock and stock options as set forth in Schedule 6.14. Officers and/or directors who conclude their service to the Company shall no longer be subject to the aforementioned restriction on sales period, however they shall be subject to a ninety (90) day waiting period commencing on their last day of service to the Company. Andrew Barron Worden and the Investor shall not be considered “Insiders”.

6.15

Employment and Consulting Contracts.  Employment and consulting contracts with officers and directors shall be unanimously approved by the Board of Directors, which shall contain at least two (2) independent directors.  At the time of Closing and for two years thereafter employment contracts and consulting contracts shall not contain any anti-dilution for reverse split protection provisions for shares, options or warrants or any deferred compensation.

6.16

Notice of Intent to Sell or Merge Company.  The Company will give Investor 62 days notice before the event of a sale of all or substantially all of the assets of the Company or the merger or consolidation of the Company in a transaction in which the Company is not the surviving entity. The Investor shall have the right to waive such notice requirement Investor must agree to sign a confidentiality agreement and not to sell any shares until such time as public information is available regarding the proposed transaction.

6.17

Sale or Merger of Company. In the event of a sale or merger of substantially all of the Company or an underwritten public offering of the Common Stock of the Company, then the 4.99% restriction in the Preferred Stock and in the Warrants will immediately be terminated and the Investors will have the right to convert the Preferred Stock and exercise the Warrants concurrent with the sale, subject to the conversion by the Investor of the Preferred Stock and the payment by the Investor to the Company of the aggregate exercise price of the Warrants.

6.18 Subsequent Equity Sales.  For the lesser of three (3) years from the closing or when the aggregate common shares underlying outstanding Preferred Stock and Warrants equal three hundred thousand (300,000), the Company shall be prohibited from effecting or entering into an agreement to effect any Subsequent Financing involving a “Variable Rate Transaction” or an “MFN Transaction” (each as defined below).  The term “Variable Rate Transaction” shall mean a transaction in which the Company issues or sells (i) any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at a ny time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock.  The term “MFN Transaction” shall mean a transaction in which the Company issues or sells any securities in a capital raising transaction or series of related transactions which grants to an investor the right to receive additional shares based upon future transactions of the Company on terms more favorable than those granted to such investor in such offering.  Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. Notwithstanding the foregoing, this Section 4.14 shall not apply i n respect of an Exempt Issuance, except that no Variable Rate Transaction or MFN Transaction shall be an Exempt Issuance.

ARTICLE VII

COVENANTS OF THE INVESTOR

7.1   Compliance with Law. The Investor's trading activities with respect to shares of the Company's Common Stock will be in compliance with all applicable state and federal securities laws, rules and regulations and rules and regulations of any public market on which the Company's Common Stock is listed.  

7.2   Transfer Restrictions.  The Investor’s acknowledge that (1) the Preferred Stock, Warrants and shares underlying the Preferred Stock and Warrants have not been registered under the provisions of the 1933 Act, and may not be transferred unless (A) subsequently registered thereunder or (B) the Investor shall have delivered to the Company an opinion of counsel, reasonably satisfactory in form, scope and substance to the Company, to the effect that the Preferred Stock, Warrants and shares underlying the Notes and Warrants to be sold or transferred may be sold or transferred in a transaction that does not require the shares to be registered under the Securities Act; and (2) any sale of the Preferred Stock, Warrants and shares underlying the Preferred Stock and Warrants made in reliance on Rule 144 promulgated under the 1933 Act may be made only in accordance with the terms of s aid Rule and further, if said Rule is not applicable, any resale of such securities under circumstances in which the seller, or the person through whom the sale is made, may be deemed to be an underwriter, as that term is used in the 1933 Act, may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder.

7.3   Restrictive Legend.  The Investor acknowledges and agrees that the Preferred Stock, the Warrants and the Shares underlying the Preferred Stock and Warrants, and, until such time as the Shares underlying the Preferred Stock and Warrants have been registered under the 1933 Act and sold in accordance with an effective Registration Statement, certificates and other instruments representing any of the Shares, shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of any such securities):

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SHARES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, OR (3) in a transaction that does not require the shares to be registered under the Securities Act."