AdvisorShares Investments, LLC Purchase and Contribution Agreement

Section 1.   Purchase and Sale of Units .

1.1   Sale and Issuance of Units .

(a)   On or prior to the Closing (as defined below), the Company shall have authorized the sale and issuance to Fund.com of Units of the Company (the “ Units ”).  The Units shall have the rights, preferences, privileges and restrictions set forth in the Amended and Restated Limited Liability Company Agreement of the Company, in the form attached as Exhibit A (the “ LLC Agreement ”).

(b)   Subject to the terms and conditions of this Agreement, Fund.com agrees to purchase at the Closing, and the Company agrees to sell and issue to Fund.com at the Closing, 6,000,000 Units (the “ Purchased Units ”) (representing 60% of the outstanding Units of the Company) for the purchase price of $0.0458333 per Unit (the total aggregate amount, the “ Purchase Price ”).

1.2   Closing .  (a) The purchase and sale of the Units to be purchased by Fund.com pursuant to Section 1.1(b) hereof shall take place at the offices of Pillsbury Winthrop Shaw Pittman LLP, 1540 Broadway, New York, New York, at 10:00 A.M., on October 31, 2008, or at such other time and place as the Company and Fund.com mutually agree upon orally or in writing (which time and place are designated as the “ Closing ”).

(b)   At the Closing, the Company shall deliver to Fund.com an executed copy of the LLC Agreement indicating Fund.com’s ownership of the Purchased Units against payment of $275,000 (the “ Initial Payment ”) by check or wire transfer or any combination thereof.  At the Closing, the Company shall become a party to (i) this Agreement, (ii) the LLC Agreement and (iii) that certain Employment Agreement, dated the date hereof, between the Company and the Founder, the form of which is attached hereto as Exhibit B (the “ Employment Agreement ” and, collectively with the LLC Agreement,  the “ Ancillary Agreements ”).

(c)   Upon the Closing and receipt by Fund.com of the Purchased Units, Fund.com shall pledge, and grant a security interest in, the Purchased Units to the Company to secure Fund.com’s capital contribution obligations under subsections (d) – (g) of this Section 1.2 (the “ Contribution Obligations ”).  Upon a default of Fund.com’s Contribution Obligations, the Company shall exercise its rights in its security interest in the Purchased Units, as provided in Section 5.07 of the LLC Agreement.

(d)   Upon the issuance by the Securities and Exchange Commission (the “ SEC ”) of its notice (the “ SEC Exemptive Order ”) regarding the approval of the application of the Company and AdvisorShares Trust for exemptive relief (“ Milestone A ”), within 30 days following written notice by the Company to Fund.com of the achievement of Milestone A, Fund.com shall effect payment to the Company of $1,000,000 by check or wire transfer or any combination thereof.

(e)   Upon the Company’s total assets under management reaching US$150,000,000 (“ Milestone B ”), within 30 days following delivery by the Company to Fund.com of a statement from the Company’s independent auditor verifying the achievement of Milestone B, Fund.com shall effect payment to the Company of $725,000 by check or wire transfer or any combination thereof.

(f)   Upon the Company’s total assets under management reaching US$250,000,000 (“ Milestone C ”), within 30 days following delivery by the Company to Fund.com of a statement from the Company’s independent auditor verifying the achievement of Milestone C, Fund.com shall effect payment to the Company of $1,000,000 by check or wire transfer or any combination thereof.

(g)   Upon the Company’s total assets under management reaching US$450,000,000 (“ Milestone D ” and, collectively with Milestone A, Milestone B and Milestone C, the “ Milestones ”), within 30 days following delivery by the Company to Fund.com of a statement from the Company’s independent auditor verifying the achievement of Milestone D, Fund.com shall effect payment to the Company of $1,000,000 by check or wire transfer or any combination thereof.

(h)   Notwithstanding Sections 1.2(c)-(f) hereof, upon the earlier to occur of (i) any merger, consolidation or reorganization of the Company with or into any other entity, or disposition of all or substantially all of the Company’s Units or assets, in a transaction that results in a change of control of the Company, (ii) (unless the Milestones have been achieved) the third anniversary of the launch date of the first product issued under the SEC Exemptive Order and (iii) a forfeiture of Units held by Fund.com pursuant to Section 5.07(a) of the LLC Agreement, Fund.com shall be released from any of the Contribution Obligations, and shall not be in default, under subsections (d) - (g) of this Section 1.2, and Fund.com shall not be required to contribute any additional capital to the Company under this Agreement.

(i)   Notwithstanding any other provision of this Agreement and the LLC Agreement, (i) the parties agree to treat the Contribution Obligations as property contributed to the Company by Fund.com with a fair market value of $3,750,0000, and the capital account of Fund.com shall be credited with such amount and the amount of the Initial Payment (total of $4,000,000) upon Fund.com being admitted as a member of the Company, and (ii) any actual payments pursuant to any of the Contribution Obligations shall not be treated as additional capital contributions under the LLC Agreement.

(j)   Notwithstanding any provision of the LLC Agreement, any payments pursuant to any of the Contribution Obligations shall not trigger or be subject to the provisions of Section 4.04(e) of the LLC Agreement.

Section 2.   Representations and Warranties of the Company .   The Company hereby represents and warrants to Fund.com that, except as set forth on the Disclosure Schedule attached as Exhibit C to this Agreement, which exceptions shall be deemed to be part of the representations and warranties made hereunder, the following representations are true and complete as of the date of the Closing, except as otherwise indicated.  The Disclosure Schedule shall be arranged in sections corresponding to the numbered and lettered sections and subsections contained in this Section 2, and the disclosures in any section or subsection of the Disclosure Schedule shall qualify other sections and subsections in this Section 2 only to the extent it is readily apparent from a reading of the disclosure that such disclosure is applicable to such other sections and subsections.

2.1   Organization, Good Standing and Qualification .  The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite limited liability company power and authority to carry on its business as now conducted and as proposed to be conducted.  The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on the business (as such business is currently conducted and as it is currently proposed to be conducted), assets, liabilities, prospects, financial condition or results of operations of the Company (a “ Material Adverse Effect ”).

2.2   Capitalization and Voting Rights .

(a)   Founder LLC is the sole member of the Company and owns all of the issued and outstanding limited liability company interests of the Company.

(b)   The outstanding limited liability company interests of the Company are all duly and validly authorized and issued, fully paid and nonassessable , except as such non-assessability may be affected by Section 18-607 of the Delaware Limited Liability Company Act , and were issued in accordance with the registration or qualification provisions of the Securities Act of 1933, as amended (the “ Act ”) and any relevant state securities laws, or pursuant to valid exemptions therefrom.

(c)   There are no outstanding options, warrants, rights (including conversion or preemptive rights) or agreements for the purchase or acquisition from the Company of any of its Units.  Notwithstanding the foregoing, the Company intends to reserve Units equal to ten percent (10%) of the authorized capital of the Company for purchase upon exercise of options or warrants to be granted in the future under incentive compensation plans.

2.3   Subsidiaries .  The Company does not presently own or control, directly or indirectly, any interest in any other corporation, association or other business entity.  The Company is not a participant in any joint venture, partnership or similar arrangement.

2.4   Authorization .  All limited liability company action on the part of the Company, its officers, managers and members necessary for the authorization, execution and delivery of this Agreement and the Ancillary Agreements, the performance of all obligations of the Company hereunder and thereunder, and the authorization, issuance, sale and delivery of the  Units being sold hereunder  has been taken or will be taken prior to the Closing, and each of this Agreement and the Ancillary Agreements constitutes valid and legally binding obligations of the Company, enforceable in accordance with their respective terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

2.5   Valid Issuance of Units .  The Units that are being purchased by Fund.com hereunder, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid and nonassessable ( except as such non-assessability may be affected by Section 18-607 of the Delaware Limited Liability Company Act) , and will be free of restrictions on transfer other than restrictions on transfer under this Agreement, the LLC Agreement, the Unit Restriction Agreement, and under applicable state and federal securities laws.

2.6   Governmental Consents .  No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of the Company is required in connection with the consummation of the transactions contemplated by this Agreement, except for customary “blue sky” and Regulation D filings under state and federal securities laws.

2.7   Offering .  Subject in part to the truth and accuracy of Fund.com’s representations set forth in Section 4 hereof, the offer, sale and issuance of the Units as contemplated by this Agreement are exempt from the registration requirements of any applicable state and federal securities laws, and neither the Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemption.

2.8   Litigation .  There is no action, suit, proceeding or investigation pending or, to the Company’s knowledge, currently threatened against the Company that questions the validity of this Agreement or any Ancillary Agreements, or the right of the Company to enter into such agreements, or to consummate the transactions contemplated hereby or thereby, or that might result, either individually or in the aggregate, in any Material Adverse Effect, or any change in the current equity ownership of the Company.  The foregoing includes, without limitation, actions, suits, proceedings or investigations pending or involving the prior employment of any of the Company’s employees, their use in connection with the Company’s business of any information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with prior employers.  The Company is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality.  There is no action, suit, proceeding or investigation by the Company currently pending or that the Company intends to initiate.

2.9   Compliance with Other Instruments .  The Company is not in violation or default of any provision of its Certificate of Formation or Limited Liability Company Agreement, or in any material respect of any instrument, judgment, order, writ, decree or contract to which it is a party or by which it is bound, or, to its knowledge, of any provision of any federal or state statute, rule or regulation applicable to the Company.  

The execution, delivery and performance of this Agreement and the Ancillary Agreements, and the consummation of the transactions contemplated hereby and thereby will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument, judgment, order, writ, decree or material contract or an event that results in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its business or operations or any of its assets or properties.

2.10   Agreements; Actions.

(a)   Except for the Ancillary Agreements, there are no agreements, understandings, instruments, contracts or proposed transactions to which the Company is a party or by which it is bound that involve (i) obligations (contingent or otherwise) of, or payments to, the Company in excess of $25,000, (ii) the license of any patent, copyright, trademark, trade secret or other proprietary right to or from the Company, (iii) the grant of rights to manufacture, produce, assemble, license, market, or sell its products to any other Person that limit the Company’s exclusive right to develop, manufacture, assemble, distribute, market or sell its products, or (iv) indemnification by the Company with respect to infringements of proprietary rights.

(b)   The Company has not (i) authorized or made any distribution upon or with respect to any Units, (ii) incurred any indebtedness for money borrowed or incurred any other liabilities individually in excess of $25,000 or in excess of $50,000 in the aggregate, (iii) made any loans or advances to any Person, other than for ordinary expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights.

(c)   The Company is not a guarantor or indemnitor of any indebtedness of any other Person.

(d)   For the purposes of subsections (b) and (c) of this Section 2.10, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons the Company has reason to believe are affiliated with each other) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsection.

2.11   Title to Properties and Assets, Liens, etc .  The Company has good and marketable title to its properties and assets, and has good title to all its leasehold interests, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than (i) the lien of current taxes not yet due and payable, and (ii) possible minor liens and encumbrances which do not in any case materially detract from the value of the property subject thereto or materially impair the operations of the Company, and which have not arisen otherwise than in the ordinary course of business.  With respect to the property and assets it leases, the Company is in compliance with such leases and, to the best of its knowledge, holds a valid leasehold interest free of any liens, claims or encumbrances.

2.12   Intellectual Property Rights .  To the knowledge of the Company,  the operation by the Company of its business as now conducted and as proposed to be conducted does not infringe the patents, copyrights, trademarks, service marks, patent and trademark applications, trade names, licenses, information, trade secrets and other proprietary rights, data, processes and know-how (collectively, “ Proprietary Rights ”) of others, and the Company owns, has the right to use or can acquire in the ordinary course of business, all Proprietary Rights necessary to conduct it business as now conducted and proposed to be conducted.  Except for software and other similar items used in the ordinary course of its business, there are no outstanding options, licenses or agreements of any kind relating to the foregoing, nor is the Company bound by or a party to any options, licenses or agreements of any kind with respect to the Proprietary Rights of any other person or entity.  Except for (1) off-the-shelf software and other similar items used in the ordinary course of its business and (2) advertising spending with various medium, including internet search engines, the Company is not obligated to pay any royalties or other payments to third parties with respect to the marketing, sale or distribution of any Company services or products or the license or use of any of its Proprietary Rights.  The Company is not aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with his or her ability to promote the interests of the Company or that would conflict with the business of the Company as currently proposed to be conducted.  Neither the execution nor delivery of this Agreement or the other Transaction Documents, nor the carrying on of the business of the Company by the employees of the Company, nor the conduct of the business of the Company as proposed to be conducted, will, to the Company’s knowledge, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any of such employees is now obligated.  The Company is not aware of any infringement or violation by a third party of any of the Company’s Proprietary Rights.

2.13   Certain Transactions .  The Company is not indebted, directly or indirectly, to any of its directors, officers or employees or to their respective spouses or children or to any Affiliate of any of the foregoing, other than in connection with expenses or advances of expenses incurred in the ordinary course of business.  None of the Company’s directors, officers or employees, or any members of their immediate families, or any Affiliate of the foregoing are, directly or indirectly, indebted to the Company or, to the Company’s knowledge, have any (i) material commercial, industrial, banking, consulting, legal, accounting, charitable or familial relationship with any of the Company’s customers, suppliers, service providers, joint venture partners, licensees and competitors, (ii) direct or indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation which competes with the Company except that directors, officers or employees or stockholders of the Company may own stock in (but not exceeding two