Exhibit 10.2

                          IR BIOSCIENCES HOLDINGS, INC.

                             SUBSCRIPTION AGREEMENT

The  undersigned  (hereinafter  "SUBSCRIBER"  or  "PURCHASER")  hereby  confirms
his/her/its  subscription  for the purchase of units ("UNITS") of IR BioSciences
Holdings,  Inc., a Delaware corporation (the "COMPANY"),  on the terms described
below, with each Unit consisting of:

         (a) a number of shares (the  "SHARES")  of common stock of the Company,
par value $0.001 per share (the "COMMON STOCK"), determined by dividing: (i) the
Unit  Price (as  defined  below) by (ii) a price  (the  "COMMON  STOCK  PURCHASE
PRICE") equal to  seventy-five  percent (75%) of the five (5) day average of the
closing bid price of the shares of Common Stock on the NASD OTC  Bulletin  Board
for the  trading  day  ending  one day prior to the  initial  closing  ("INITIAL
CLOSING")  of the  Offering  or any  subsequent  closing  (each,  a  "SUBSEQUENT
CLOSING"  and  together  with  the  Initial  Closing,   each,  a  "CLOSING"  and
collectively,  the "CLOSINGS"),  with a floor on the Common Stock Purchase Price
equal to sixteen cents ($0.16) and a ceiling on the Common Stock  Purchase Price
equal to thirty cents ($0.30),  as adjusted to reflect forward and reverse stock
splits.  If one or more Subsequent  Closings  occurs,  the Common Stock Purchase
Price,  for purposes of all the  Closings,  shall equal the lowest  Common Stock
Purchase Price  determined at any Closing.  If one or more  Subsequent  Closings
occurs,  the Common  Stock  Purchase  Price,  for  purposes  of such  Subsequent
Closing,  shall be no  greater  than the lesser  of:  (i)  lowest  Common  Stock
Purchase Price determined at any prior Closing or (ii) the Common Stock Purchase
Price determined for such Subsequent Closing; and,

         (b) a warrant  (collectively,  the  "WARRANTS") to purchase at any time
prior to the fifth (5th) anniversary  following the date of the final Closing of
the Offering and at the holder's  sole and absolute  discretion,  fifty  percent
(50%) of the shares of Common Stock included within the Unit at a price equal to
fifty cents  ($0.50) per share of Common Stock (the "WARRANT  EXERCISE  PRICE").
All warrants shall be exercised on a cash basis provided that the Company is not
in default of its  registration  obligations as described in the Memorandum,  as
defined below The shares of Common Stock underlying each Warrant are referred to
herein as the "WARRANT SHARES."

         Capitalized  terms used and not otherwise defined herein shall have the
meanings  set  forth  for  such  terms  in the  Company's  Confidential  Private
Placement Memorandum,  dated September 7, 2006 (as amended or supplemented,  and
together  with  all  exhibits,  documents  and  filings  attached  thereto,  the
"MEMORANDUM").  The Units,  the Shares,  the Warrants and the Warrant Shares are
sometimes referred to collectively herein as the "SECURITIES."

         In connection with this subscription,  Subscriber and the Company agree
as follows:


<PAGE>



1. PURCHASE AND SALE OF THE UNITS.

         (a) The Company hereby agrees to issue and to sell to  Subscriber,  and
Subscriber  hereby agrees to purchase  from the Company,  a number of Units at a
price  equal to  $25,000  per Unit  (the  "UNIT  PRICE")  and for the  aggregate
subscription  amount set forth on the signature page hereto.  Upon acceptance of
this Subscription  Agreement by the Company and promptly after the final Closing
of the  Offering,  the Company  shall issue and  deliver to  Subscriber  a share
certificate and a warrant certificate evidencing the applicable number of Shares
and  Warrants  subscribed  for against  payment in U.S.  Dollars of the Purchase
Price (as defined below).

         (b) Subscriber has hereby delivered and paid concurrently  herewith the
aggregate  purchase price (the "PURCHASE PRICE") set forth on the signature page
hereof required to purchase the Units  subscribed for hereunder which amount has
been  paid in  U.S.  Dollars  by  cash,  wire  transfer  or  check,  subject  to
collection,  to the  order of  "American  Stock  Transfer & Trust  Ccompany - IR
BioSciences Holdings, Inc. Escrow Account."

         (c) Subscriber  understands and acknowledges  that this subscription is
part of a proposed  placement by the Company of up to $6,500,000 of Units, which
offering is being made on a "best efforts all or none" basis for a minimum of 80
Units  ($2,000,000  Gross  Proceeds)  (the  "MINIMUM  OFFERING")  and on a "best
efforts"  basis as to an  additional  180 Units  (additional  gross  proceeds of
$4,500,000) (the "MAXIMUM  OFFERING").  The Maximum Offering may be increased at
the  discretion  of  the  company  and  the  Placement  agent  by an  additional
$1,000,000  of gross  proceeds and in the event of any such  increase,  the term
"Maximum Offering" shall include any such increase.  Subscriber understands that
subscriptions for the Units will be held in an escrow account established by the
Company and the Placement Agent with American Stock Transfer & Trust Company. No
proceeds shall be released to the company until and unless the Minimum  Offering
is reached  within the Offering  Period (as described in the  Memorandum) or any
extended  period.  If the Minimum  Offering is not obtained  within the Offering
Period or any  extended  period,  the funds held therein will be returned to the
investors without interest or deduction.

2.  REPRESENTATIONS  AND  WARRANTIES OF  SUBSCRIBER.  Subscriber  represents and
warrants to the Company and Placement Agent as follows:

         (a) Subscriber is an "accredited investor" as defined by Rule 501 under
the Securities Act of 1933, as amended (the "ACT"), and Subscriber is capable of
evaluating  the merits and risks of  Subscriber's  investment in the Company and
has the capacity to protect Subscriber's own interests.

         (b)  Subscriber  understands  that  the  Securities  are not  presently
registered,  but  Subscriber  is entitled to certain  rights with respect to the
registration of the Shares and Warrant Shares (see Section 5 below).

         (c) Subscriber  acknowledges  and  understands  that the Securities are
being  purchased for investment  purposes and not with a view to distribution or
resale, nor with the intention of selling,  transferring or otherwise  disposing
of all or any part thereof for any particular  price, or at any particular time,
or upon the happening of any particular event or circumstances,  except selling,
transferring,  or disposing  the  Securities  made in full  compliance  with all
applicable  provisions of the Act, the rules and regulations  promulgated by the
Securities and Exchange  Commission  ("SEC")  thereunder,  and applicable  state
securities  laws;  and  that an  investment  in the  Securities  is not a liquid
investment.

         (d)  Subscriber   acknowledges   that  the  Securities   must  be  held
indefinitely unless subsequently registered under the Act or unless an exemption
from such  registration  is available.  Subscriber is aware of the provisions of
Rule 144  promulgated  under the Act which permit limited resale of common stock
purchased  in a  private  placement  subject  to  the  satisfaction  of  certain
conditions,  including, among other things, the existence of a public market for
the common stock, the availability of certain current public  information  about
the  Company,  the  resale  occurring  not less than one year  after a party has
purchased and paid for the security to be sold, the sale being effected  through
a "broker's  transaction" or in transactions  directly with a "market maker" and
the number of shares of common  stock being sold during any  three-month  period
not exceeding specified limitations.

         (e) Subscriber  acknowledges that Subscriber has had the opportunity to
ask questions  of, and receive  answers from the Company or any person acting on
its behalf  concerning the Company and its business and to obtain any additional
information,  to the extent  possessed by the Company (or to the extent it could
have been  acquired  by the  Company  without  unreasonable  effort or  expense)
necessary to verify the accuracy of the information  received by Subscriber.  In
connection  therewith,  Subscriber  acknowledges  that  Subscriber  has  had the
opportunity to discuss the Company's business,  management and financial affairs
with the Company's management or any person acting on its behalf. Subscriber has
received and reviewed the Memorandum, and all the information,  both written and
oral,  that it  desires.  Without  limiting  the  generality  of the  foregoing,
Subscriber has been furnished with or has had the opportunity to acquire, and to
review:  (i)  copies  of all  of the  Company's  publicly  available  documents,
including  but not limited to, those  attached to the  Memorandum,  and (ii) all
information,  both  written  and  oral,  that it  desires  with  respect  to the
Company's business, management,  financial affairs and prospects. In determining
whether to make this  investment,  Subscriber has relied solely on  Subscriber's
own  knowledge  and  understanding  of the Company and its  business  based upon
Subscriber's  own due diligence  investigations  and the  information  furnished
pursuant  to this  paragraph.  Subscriber  understands  that no person  has been
authorized to give any information or to make any representations which were not
furnished  pursuant to this paragraph and Subscriber has not relied on any other
representations or information.

         (f) Subscriber has all requisite legal and other power and authority to
execute and deliver  this  Subscription  Agreement  and to carry out and perform
Subscriber's  obligations under the terms of this Subscription  Agreement.  This
Subscription  Agreement  constitutes a valid and legally  binding  obligation of
Subscriber,  enforceable  in accordance  with its terms,  and subject to laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and rules of law  governing  specific  performance,  injunctive  relief or other
general  principals  of equity,  whether such  enforcement  is  considered  in a
proceeding in equity or law.

         (g)  Subscriber  has carefully  considered  and has discussed  with the
Subscriber's  professional legal, tax, accounting and financial advisors, to the
extent the Subscriber has deemed  necessary,  the suitability of this investment
and  the  transactions  contemplated  by  this  Subscription  Agreement  for the
Subscriber's  particular  federal,  state,  local and foreign tax and  financial
situation  and  has  determined  that  this  investment  and  the   transactions
contemplated by this  Subscription  Agreement are a suitable  investment for the
Subscriber.  Subscriber relies solely on such advisors and not on any statements
or representations of the Company or any of its agents.  Subscriber  understands
that Subscriber (and not the Company) shall be responsible for  Subscriber's own
tax liability that may arise as a result of this investment or the  transactions
contemplated by this Subscription Agreement.

         (h)  This   Subscription   Agreement  and  the  Confidential   Purchase
Questionnaire  accompanying  this  Subscription  Agreement  does not contain any
untrue  statement  of a  material  fact or omit  any  material  fact  concerning
Subscriber.

         (i) There are no actions, suits,  proceedings or investigations pending
against  Subscriber or Subscriber's  properties before any court or governmental
agency (nor, to Subscriber's knowledge, is there any threat thereof) which would
impair  in any  way  Subscriber's  ability  to  enter  into  and  fully  perform
Subscriber's  commitments and obligations under this  Subscription  Agreement or
the transactions contemplated hereby.

         (j) The execution, delivery and performance of and compliance with this
Subscription Agreement and the issuance of the Securities will not result in any
material violation of, or conflict with, or constitute a material default under,
any of Subscriber's  articles of incorporation or bylaws, if applicable,  or any
of Subscriber's  material agreements nor result in the creation of any mortgage,
pledge,  lien,  encumbrance or charge against any of the assets or properties of
Subscriber or the Securities.

         (k) Subscriber  acknowledges  that the Securities are  speculative  and
involve a high degree of risk and that  Subscriber can bear the economic risk of
the  purchase  of  the  Securities,   including  a  total  loss  of  his/her/its
investment.

         (l) Subscriber  acknowledges that he/she/it has carefully  reviewed and
considered  the risk  factors  discussed  in the "Risk  Factors"  section of the
Memorandum.

         (m) Subscriber recognizes that no federal,  state or foreign agency has
recommended or endorsed the purchase of the Securities.

         (n)  Subscriber  is aware  that the  Securities  are and will be,  when
issued,  "restricted  securities"  as that  term is  defined  in Rule 144 of the
general rules and regulations under the Act.

         (o) Subscriber  understands that any and all certificates  representing
the Securities and any and all  securities  issued in replacement  thereof or in
exchange therefor shall bear the following legend or one  substantially  similar
thereto, which Subscriber has read and understands:

               "THE SECURITIES  REPRESENTED  HEREBY HAVE NOT
               BEEN  REGISTERED  UNDER THE SECURITIES ACT OF
               1933,  AS  AMENDED,  OR ANY STATE  SECURITIES
               LAWS  AND  NEITHER  THE  SECURITIES  NOR  ANY
               INTEREST   THEREIN  MAY  BE  OFFERED,   SOLD,
               TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF
               EXCEPT PURSUANT TO AN EFFECTIVE  REGISTRATION
               STATEMENT  UNDER  SUCH ACT OR SUCH LAWS OR AN
               EXEMPTION  FROM  REGISTRATION  UNDER SUCH ACT
               AND  SUCH  LAWS  WHICH,  IN  THE  OPINION  OF
               COUNSEL FOR THIS CORPORATION, IS AVAILABLE."

         (p) In addition, the certificates representing the Securities,  and any
and all securities issued in replacement thereof or in exchange therefor,  shall
bear such legend as may be required by the securities  laws of the  jurisdiction
in which Subscriber resides.

         (q)  Because  of  the  restrictions   imposed  on  resale,   Subscriber
understands  that  the  Company  shall  have  the  right  to note  stop-transfer
instructions in its stock transfer records,  and Subscriber has been informed of
the  Company's  intention  to  do  so.  Any  sales,   transfers,  or  any  other
dispositions of the Securities by Subscriber, if any, will be in compliance with
the Act.

         (r)  Subscriber  acknowledges  that  Subscriber  has such knowledge and
experience  in financial  and business  matters that he is capable of evaluating
the  merits  and  risks of an  investment  in the  Securities  and of  making an
informed  investment  decision.  Subscriber  is  not  being  represented  in the
Offering  or in his  purchase  of the  Securities  by counsel to the  Company or
counsel to the Placement Agent and has consulted with his own personal advisors.

         (s)  Subscriber  represents  that:  (i)  Subscriber is able to bear the
economic  risks of an  investment in the  Securities  and to afford the complete
loss of the investment,  and (ii) (A) Subscriber could be reasonably  assumed to
have the capacity to protect  his/her/its  own interests in connection with this
subscription;  or  (B)  Subscriber  has  a  pre-existing  personal  or  business
relationship  with either the Company or any affiliate  thereof or the Placement
Agent of such duration and nature as would enable a reasonably prudent purchaser
to be aware of the character, business acumen and general business and financial
circumstances  of the  Company or such  affiliate  and is  otherwise  personally
qualified  to evaluate  and assess the risks,  nature and other  aspects of this
subscription.

         (t) Subscriber  further  represents that the address set forth below is
his/her  principal  residence  (or, if Subscriber is a company,  partnership  or
other entity,  the address of its principal place of business);  that Subscriber
is purchasing the Securities for  Subscriber's  own account and not, in whole or
in part,  for the account of any other  person;  Subscriber  is  purchasing  the
Securities  for investment  and not with a view to resale or  distribution;  and
that  Subscriber  has not formed any entity for the  purpose of  purchasing  the
Securities.

         (u)  Subscriber  understands  that the Company and the Placement  Agent
shall have the  unconditional  right to accept or reject this  subscription,  in
whole or in part, for any reason or without a specific  reason,  in the sole and
absolute  discretion  of the  Company  (even  after  receipt  and  clearance  of
Subscriber's funds). This Subscription Agreement is not binding upon the Company
until  accepted by an authorized  officer of the Company.  In the event that the
subscription is rejected, then Subscriber's  subscription funds will be returned
without interest thereon or deduction therefrom.

         (v) Subscriber has not been furnished with any oral  representation  or
oral  information in connection  with the offering of the Securities that is not
contained in the Memorandum and this Subscription Agreement.

         (w)  Subscriber  represents  that  Subscriber  is not  subscribing  for
Securities as a result of or subsequent to any advertisement, article, notice or
other  communication  published in any  newspaper,  magazine or similar media or
broadcast over the Internet,  television or radio or presented at any seminar or
meeting.

         (x) Subscriber has carefully read this  Subscription  Agreement and the
Memorandum,  and Subscriber has accurately completed the Confidential  Purchaser
Questionnaire which accompanies this Subscription Agreement.

         (y) No  representations  or warranties  have been made to Subscriber by
the Company,  or any officer,  employee,  agent,  affiliate or subsidiary of the
Company,  other than the representations of the Company contained herein, and in
subscribing   for  the  Securities  the  Subscriber  is  not  relying  upon  any
representations  other  than  those  contained  in  the  Memorandum  or in  this
Subscription Agreement.

         (z) Subscriber  represents and warrants,  to the best of its knowledge,
that other than the Placement Agent, no finder, broker, agent, financial advisor
or other  intermediary,  nor any purchaser  representative  or any broker-dealer
acting as a broker,  is  entitled to any  compensation  in  connection  with the
transactions contemplated by this Subscription Agreement.

         (aa)  Subscriber  represents and warrants that  Subscriber has: (i) not
distributed  or  reproduced  the  Memorandum,  in whole or in part, at any time,
without the prior written consent of the Company and the Placement  Agent,  (ii)
kept confidential the existence of the Memorandum and the information  contained
therein or made available in connection  with any further  investigation  of the
Company  and  (iii)   refrained   and  shall   refrain   from   trading  in  the
publicly-traded  securities of the Company  (including any short sales, or other
hedging  structures) or any other relevant company for so long as such recipient
has been in possession of the material non-public  information  contained in the
Memorandum.

3.  REPRESENTATIONS  AND WARRANTIES OF THE COMPANY.  The Company  represents and
warrants to Subscriber as follows:

         (a) The Company is duly  organized and validly  exists as a corporation
in good standing under the laws of the State of Delaware.

         (b) The Company has all such  corporate  power and  authority  to enter
into, deliver and perform this Subscription Agreement.

         (c) All necessary  corporate  action has been duly and validly taken by
the  Company to  authorize  the  execution,  delivery  and  performance  of this
Subscription  Agreement  by the  Company,  and  the  issuance  and  sale  of the
Securities to be sold by the Company  pursuant to this  Subscription  Agreement.
This Subscription  Agreement has been duly and validly authorized,  executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company  enforceable  against the Company in  accordance  with its terms,
except as the enforceability  thereof may be limited by bankruptcy,  insolvency,
reorganization,  moratorium or other similar laws  affecting the  enforcement of
creditors' rights generally and by general equitable principles.

         (d) In addition to the foregoing,  Subscriber shall be entitled to rely
on all  of the  representations  and  warranties  made  by  the  Company  to the
Placement Agent in that certain Placement Agency  Agreement,  as the same may be
amended,  entered into between the Placement Agent and the Company in connection
with the Offering as if such  representations  and warranties were made directly
to the Subscriber.

4.  INDEMNIFICATION.  Subscriber  agrees  to  indemnify  and hold  harmless  the
Company,  the  Placement  Agent,  and  their  respective  officers,   directors,
employees,  shareholders,  agents representatives and affiliates, and any person
acting on behalf of the Company or Placement Agent, from and against any and all
damage, loss, liability, cost and expense (including reasonable attorneys' fees)
which any of them may incur by reason of the  failure by  Subscriber  to fulfill
any of the terms and conditions of this Subscription  Agreement, or by reason of
any breach of the  representations  and warranties made by Subscriber herein, or
in  any  other   document   provided  by   Subscriber   to  the   Company.   All
representations,  warranties and covenants of each of Subscriber and the Company
contained herein shall survive the acceptance of this subscription.

5.  REGISTRATION  RIGHTS.  In  consideration  of the  investment  in the Company
described in this Agreement and the Memorandum, the Company hereby grants to the
Subscriber the registration rights set forth on Annex A, attached hereto.

6. MISCELLANEOUS.

         (a)  Subscriber  agrees not to  transfer  or assign  this  Subscription
Agreement or any of  Subscriber's  interest  herein and further  agrees that the
transfer or assignment of the Securities  acquired pursuant hereto shall be made
only in accordance with all applicable laws.

         (b) Subscriber  agrees that  Subscriber  cannot cancel,  terminate,  or
revoke  this  Subscription   Agreement  or  any  agreement  of  Subscriber  made
hereunder,  and this  Subscription  Agreement  shall  survive the death or legal
disability  of  Subscriber  and  shall  be  binding  upon  Subscriber's   heirs,
executors, administrators, successors, and permitted assigns.

         (c)  Subscriber  has  read and has  accurately  completed  this  entire
Subscription Agreement.

         (d) This Subscription  Agreement constitutes the entire agreement among
the parties  hereto with respect to the subject matter hereof and may be amended
only by a written execution by all parties.

         (f)  Subscriber  acknowledges  that it has been advised to consult with
his/her/its own attorney  regarding this subscription and Subscriber has done so
to the extent that Subscriber deems appropriate.

         (g) Any notice or other  document  required or permitted to be given or
delivered  to the  Subscriber  shall be in writing  and sent:  (i) by fax if the
sender on the same day sends a  confirming  copy of such notice by a  recognized
overnight delivery service (charges prepaid),  or (b) by registered or certified
mail with return  receipt  requested  (postage  prepaid) or (c) by a  recognized
overnight delivery service (with charges prepaid).

                  If to the Company, at:

                  IR BioSciences Holdings, Inc.
                  4021 N. 75th Street, Suite 201
                  Scottsdale, Arizona 85251
                  Attn: John Fermanis
                  Tel: (480) 922-3926; Fax: (480) 922-4781

                  If to  the  Subscriber,  at  its  address  set  forth  on  the
signature page to this Subscription Agreement, or such other address as it shall
have  specified  to  the  Company  in  writing,  with a copy  (which  shall  not
constitute notice) to each of the following:

                  Joseph Stevens & Company, Inc.
                  59 Maiden Lane, 32nd Floor
                  New York, NY 10038
                  Attn:  Joseph Sorbara
                  Tel: (212) 361-3020, Fax: (212) 361-3333

         (h) Failure of the Company to exercise  any right or remedy  under this
Subscription  Agreement  or any other  agreement  between  the  Company  and the
Subscriber,  or otherwise,  or delay by the Company in exercising  such right or
remedy,  will not operate as a waiver thereof.  No waiver by the Company will be
effective unless and until it is in writing and signed by the Company.

         (i)  This  Subscription  Agreement  shall  be  enforced,  governed  and
construed in all respects in accordance  with the laws of the State of New York,
as such laws are  applied  by the New York  courts  except  with  respect to the
conflicts of law provisions  thereof,  and shall be binding upon the Subscriber,
the Subscriber's heirs,  estate, legal  representatives,  successors and assigns
and shall inure to the benefit of the Company, its successors and assigns.

         (j) Any legal suit, action or proceeding  arising out of or relating to
this  Subscription  Agreement or the transactions  contemplated  hereby shall be
instituted  exclusively in New York Supreme Court, County of New York, or in the
United States District Court for the Southern  District of New York. The parties
hereto  hereby:  (i) waives any  objection  which they may now have or hereafter
have to the venue of any such suit,  action or proceeding,  and (ii) irrevocably
consents to the jurisdiction of the New York Supreme Court,  County of New York,
and the United States  District  Court for the Southern  District of New York in
any such suit,  action or  proceeding.  The parties  further agree to accept and
acknowledge service of any and all process which may be served in any such suit,
action or  proceeding in the New York Supreme  Court,  County of New York, or in
the United States District Court for the Southern District of New York and agree
that service of process  upon a party  mailed by certified  mail to such party's
address shall be deemed in every respect  effective service of process upon such
party in any such suit, action or proceeding.

         (k) If any  provision  of  this  Subscription  Agreement  is held to be
invalid or unenforceable  under any applicable statute or rule of law, then such
provision  shall be deemed modified to conform with such statute or rule of law.
Any provision hereof that may prove invalid or unenforceable under any law shall
not affect the validity or enforceability of any other provisions hereof.

         (l) The parties  understand and agree that money damages would not be a
sufficient remedy for any breach of the Subscription Agreement by the Company or
the Subscriber  and that the party against which such breach is committed  shall
be entitled to equitable relief,  including injunction and specific performance,
as a remedy for any such  breach.  Such  remedies  shall not be deemed to be the
exclusive  remedies for a breach by either party of the  Subscription  Agreement
but shall be in addition to all other remedies available at law or equity to the
party against which such breach is committed.

         (m) All pronouns and any variations thereof used herein shall be deemed
to refer to the  masculine,  feminine,  singular  or plural,  as identity of the
person or persons may require.

         (n) This Subscription  Agreement may be executed in counterparts and by
facsimile,  each of which  shall be deemed an  original,  but all of which shall
constitute one and the same instrument.

The  undersigned  understands  that the  information  provided herein and in the
Questionnaire  may be forwarded to the NASD and may be used in  connection  with
the  Registration  Statement to be filed by the Company with the  Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended, covering
the proposed  resale  offerings of securities by the  Subscriber.  Further,  the
undersigned  will promptly notify you of any changes in such  information  which
may occur subsequent  hereto and prior to the effective date of the Registration
Statement.   The  undersigned  understands  and  agrees  that  the  Subscription
Agreement  and  Questionnaire,  as  completed  by the  undersigned,  and further
communications regarding the matters contemplated herein, will be relied upon by
the Company,  the Placement Agent and its respective  counsel in connection with
obtaining clearance for any offering from the NASD.


                            [Signature Pages Follow]




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Signature Page for Individuals:

         IN WITNESS WHEREOF,  Subscriber has caused this Subscription  Agreement
to be executed as of the date indicated below.


$-----------------------------------        ------------------------------------
Purchase Price                              Number of Units ($25,000 per Unit)


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Print or Type Name                          Print or Type Name (Joint-owner)


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Signature                                   Signature (Joint-owner)


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Date                                        Date (Joint-owner)


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Social Security Number                      Social Security Number (Joint-owner)

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Address                                     Address (Joint-owner)


Please check if applicable:

      _______  Joint Tenancy                      ______  Tenants in Common


Wiring Instructions:

                      Bank Name:       J.P. Morgan Chase
                      ABA #:           021 000 021
                      Acct. #:         323 890121
                      Acct.            Name:  American  Stock  Transfer  & Trust
                                       Company   as   Escrow    Agent   for   IR
                                       BioSciences Holdings, Inc.


<PAGE>


Partnerships, Corporations or Other Entities:

         IN WITNESS WHEREOF,  Subscriber has caused this Subscription  Agreement
to be executed as of the date indicated below.


$ --------------------------                -----------------------------
   Total Purchase Price                     Number of Units ($25,000 per Unit)


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Print or Type Name of Entity

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Address


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Taxpayer I.D. No. (if applicable)                             Date



By:
    --------------------------------        ------------------------------------
    Signature                               Print or Type Name and Indicate
                                            Title or Position with Entity


By:
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    Signature                               Print or Type Name and Indicate
                                            Title or Position with Entity


Wiring Instructions:

                      Bank Name:       J.P. Morgan Chase
                      ABA #:           021 000 021
                      Acct. #:         323 890121
                      Acct.            Name:  American  Stock  Transfer  & Trust
                                       Company   as   Escrow    Agent   for   IR
                                       BioSciences Holdings, Inc.

         IN WITNESS WHEREOF, the Company has caused this Subscription  Agreement
to be  executed,  and  the  foregoing  subscription  accepted,  as of  the  date
indicated below.


                                                   IR BIOSCIENCES HOLDINGS, INC.



                                            By:
                                                 -------------------------------
                                                   Name:  Michael K. Wilhelm
                                                   Title:  President and CEO



Date: ___________________, 2006

<PAGE>


                                     Annex A

                               Registration Rights

         IR  BioSciences  Holdings,  Inc.  hereby grants to the  Subscriber  the
following registration rights.

         1. DEFINITIONS.

         Capitalized  terms  used  herein  without  definition  shall  have  the
respective meanings given such terms as set forth in the Subscription  Agreement
between IR BioSciences Holdings,  Inc. and the subscriber signatory thereto (the
"SUBSCRIPTION  AGREEMENT") or in the Company's  Confidential  Private  Placement
Memorandum,  dated as of  September  7, 2006 (as  amended or  supplemented,  and
together  with  all  exhibits,  documents  and  filings  attached  thereto,  the
"MEMORANDUM").  As used herein,  the  following  terms shall have the  following
meanings:

                   BUSINESS  DAY:  Any day other  than a day on which  banks are
                   authorized or required to be closed in the State of New York.

                   COMMISSION:   The  United  States   Securities  and  Exchange
                   Commission.

                   COMMON STOCK: The common stock, par value $.001 per share, of
                   the Company.

                   EXCHANGE  ACT:  The  Securities  Exchange  Act  of  1934,  as
                   amended,  and the rules  and  regulations  of the  Commission
                   promulgated thereunder.

                   HOLDER OR HOLDERS:  Any holder of the Registrable Securities.

                   PERSON:  Any  individual,  corporation,   partnership,  joint
                   venture,    association,    joint   stock   company,   trust,
                   unincorporated  organization or government or other agency or
                   political subdivision thereof.

                   PROSPECTUS:  The  prospectus  included  in  any  Registration
                   Statement (including,  without limitation,  a prospectus that
                   discloses  information  previously  omitted from a prospectus
                   filed  as  part of an  effective  registration  statement  in
                   reliance  upon Rule  430A  promulgated  under the  Securities
                   Act),   as  amended  or   supplemented   by  any   prospectus
                   supplement,  with respect to the terms of the offering of any
                   portion  of  the  Registrable   Securities  covered  by  such
                   Registration   Statement,   and  all  other   amendments  and
                   supplements  to  the  prospectus,   including  post-effective
                   amendments,  and all  material  incorporated  by reference or
                   deemed to be incorporated by reference in such prospectus.

                   REGISTRABLE  SECURITIES:  The Shares and the Warrant  Shares,
                   until such time as (1) a Registration Statement covering such
                   Registrable  Securities  has been  declared  effective by the
                   Commission and such Registrable Securities have been disposed
                   of pursuant to such effective  Registration  Statement or (2)
                   such Registrable Securities are saleable pursuant to Rule 144
                   (or any similar provision then in force) under the Securities
                   Act, without any restriction,  whichever is earlier. The term
                   Registrable  Securities  shall also include any shares issued
                   as a result of any stock split or  dividend or shares  issued
                   in  payment  of the  penalties  as  referred  to in Section 2
                   below.

                   REGISTRATION  STATEMENT:  Any  registration  statement of the
                   Company  that  covers  any  of  the  Registrable   Securities
                   pursuant to the provisions of this  Agreement,  including the
                   Prospectus,  amendments and supplements to such  registration
                   statements,   including   post  effective   amendments,   all
                   exhibits,  and all  material  incorporated  by  reference  or
                   deemed to be incorporated  by reference in such  registration
                   statement.

                   SECURITIES  ACT: The Securities Act of 1933, as amended,  and
                   the  rules  and  regulations  of the  Commission  promulgated
                   thereunder.

                   UNITS:  The  units  of  the  Company  sold  pursuant  to  the
                   Subscription   Agreement   consisting  of  Common  Stock  and
                   Warrants.

                   WARRANTS:  The Warrant included in the Units  exercisable for
                   shares of Common Stock.

                   WARRANT  SHARES:  The shares of Common  Stock  issuable  upon
                   exercise of the Warrants

         2. REGISTRATION RIGHTS.

                  (a) REQUIRED  REGISTRATION.  Not before 180 days following the
         final  Closing date but prior to 190 days  following  the final Closing
         date (the "Filing Period") the Company shall file with the Commission a
         Registration   Statement  on  appropriate   form  for  the  purpose  of
         registering  for public resale the  Registrable  Securities sold to the
         Subscriber pursuant to the Subscription  Agreement or held by a Holder.
         The  Company  shall use its good faith best  efforts to ensure that the
         Registration  Statement  is declared  effective  within 120 days of the
         filing date. In the event that the registration  statement covering all
         of the  Registrable  Securities  is not filed within the Filing  Period
         then Subscriber shall be entitled to liquidated  damages equal to 1% of
         the Subscriber's  original subscription amount in the Offering for each
         30 day period (or pro rata amount of each 30 day period). The amount of
         damages may be paid by the Company in cash or in  additional  shares of
         Common  Stock  (the  number  of  shares  to be  based  upon  the  final
         subscription  price of the Common Stock in the  Offering).  The Company
         will  agree  to  take  all  actions  as  are   necessary  to  keep  the
         Registration  Statement  effective  until the  later of:  (i) the third
         anniversary  of the first date that no Warrants  remain  unexercised or
         unexpired  or  (ii)  the  date  on  which  all  Registrable  Securities
         purchased by the Subscriber or held by a Holder may be sold without any
         restriction,  under Rule 144(k)  during any 90-day period in accordance
         with all rules and regulations  regarding sales of securities  pursuant
         to Rule 144 (such  period,  the  "Effectiveness  Period").  The Company
         shall bear all expenses of the Registration  Statement,  including fees
         and  expenses of its counsel  and  accountants  and any blue sky filing
         fees.  Further,  the Company shall pay the firm of Ellenoff  Grossman &
         Schole,  as counsel to the Placement Agent, up to $15,000 for review of
         the Registration Statement.  The Company shall also pay all expenses of
         its counsel and transfer agent for any "144 opinions" or other opinions
         which are required in connection  with any transfers of Securities made
         by such parties under Rule 144 or any other applicable sale or transfer
         (including,  without  limitation,  sales made  pursuant  to  prospectus
         delivery).

                  (b) EXCEPTIONS. Notwithstanding the foregoing, the Company may
         delay the  registration of Registrable  Securities  pursuant to Section
         2(a) hereof for the time periods  described in Section 2(e) hereof upon
         the occurrence of any of the following:

                           (i) The Company shall have previously entered into an
                  agreement or letter of intent  contemplating  an  underwritten
                  public offering on a firm commitment  basis of Common Stock or
                  securities  convertible  into or exchangeable for Common Stock
                  and the managing  underwriter of such proposed public offering
                  advises  the  Company  in  writing  that in its  opinion  such
                  proposed   underwritten   offering  would  be  materially  and
                  adversely  affected  by a  concurrent  registered  offering of
                  Registrable  Securities  (such  opinion  to state the  reasons
                  thereof);

                           (ii)  During  the two (2)  month  period  immediately
                  preceding such request, the Company shall have entered into an
                  agreement  or  letter of  intent,  which  has not  expired  or
                  otherwise   terminated,   contemplating  a  material  business
                  acquisition by the Company or its subsidiaries  whether by way
                  of merger,  consolidation,  acquisition of assets, acquisition
                  of securities or otherwise;

                           (iii)  The  Company  is  in  possession  of  material
                  nonpublic  information  that the Company  would be required to
                  disclose in the  Registration  Statement  and that is not, but
                  for the  registration,  otherwise  required to be disclosed at
                  the time of such registration, the disclosure of which, in its
                  good faith judgment,  would have a material  adverse effect on
                  the business, operations, prospects or competitive position of
                  the Company;

                           (iv) The Company shall receive the written opinion of
                  the managing  underwriter of the underwritten  public offering
                  pursuant to which Common Stock has been registered  within the
                  three (3) month period prior to the receipt of a  registration
                  request that the registration of additional  Common Stock will
                  materially  and  adversely  affect  the  market for the Common
                  Stock (such opinion to state the reasons thereof); or

                           (v) At the time of receipt of a registration request,
                  the Company is engaged,  or its board of directors has adopted
                  by  resolution  a plan  to  engage,  in any  program  for  the
                  purchase of Common  Stock or  securities  convertible  into or
                  exchangeable  for Common Stock and, in the opinion of counsel,
                  reasonably   satisfactory  to  the  requesting  Holders,   the
                  distribution of the Common Stock to be registered  would cause
                  such  purchase to be in violation of  Regulation M promulgated
                  under the Exchange Act.

                  (e) PERIOD OF DELAY.  If an event  described  in  clauses  (i)
         through (iv) of Section  2(b) shall occur,  the Company may, by written
         notice to the  Holders,  delay the filing of a  Registration  Statement
         with respect to the Registrable  Securities to be covered thereby for a
         period of time not exceeding 60 days.  If an event  described in clause
         (v) of Section 2(b) shall occur, the filing of a Registration Statement
         with respect to the Registrable  Securities to be covered thereby shall
         be delayed until the first date that the  Registrable  Securities to be
         covered  thereby can be sold without  violation of  Regulation M of the
         Exchange Act.

         3. REGISTRATION PROCEDURES.

                   In  connection  with  the  registration  obligations  of  the
Company  pursuant to the terms and  conditions  of this  Agreement,  the Company
shall:

                  (a) prior to filing a Registration  Statement or Prospectus or
         any amendments or supplements thereto, including documents incorporated
         by reference  after the initial filing of the  Registration  Statement,
         the Company  will furnish to the Holders  covered by such  Registration
         Statement (the "Selling  Holders"),  Ellenoff Grossman and Schole,  LLP
         ("EGS"), the Placement Agent and the underwriters, if any, draft copies
         of all such documents  proposed to be filed at least three (3) Business
         Days prior  thereto,  which  documents will be subject to the review of
         EGS and the  Placement  Agent.  The  Company  shall use its good  faith
         efforts  to make such  changes  to the  Registration  Statement  as are
         reasonably  requested by EGS and/or the Placement  Agent  including any
         changes requested by any regulatory agency.

                  (b) as  promptly  as  practicable  prepare  and file  with the
         Commission  such  amendments  and  post-effective   amendments  to  the
         Registration  Statement as may be  necessary to keep such  Registration
         Statement  effective  for the period  required  pursuant  to Section 2;
         cause the  Prospectus  to be  supplemented  by any required  Prospectus
         supplement,  and, as so supplemented,  to be filed pursuant to Rule 424
         under  the  Securities  Act;  and  comply  with the  provisions  of the
         Securities Act applicable to it with respect to the  disposition of all
         Registrable  Securities  covered by such Registration  Statement during
         the  applicable  period in  accordance  with the  intended  methods  of
         disposition  by the  Selling  Holders  set  forth in such  Registration
         Statement or supplement to the Prospectus;

                  (c) as promptly as  practicable  furnish to any Selling Holder
         and the  Placement  Agent,  if any,  without  charge,  such  number  or
         conformed copies of such Registration  Statement and any post-effective
         amendment   thereto  and  such  number  of  copies  of  the  Prospectus
         (including   each   preliminary   Prospectus)  and  any  amendments  or
         supplements  thereto,  and  any  documents  incorporated  by  reference
         therein,  as such Selling Holder or underwriter may reasonably  request
         in order to facilitate the  disposition of the  Registrable  Securities
         being sold by such Selling Holder (it being understood that the Company
         consents to the use of the  Prospectus  and any amendment or supplement
         thereto  by each  Selling  Holder  and  the  underwriters,  if any,  in
         connection  with the  offering and sale of the  Registrable  Securities
         covered by the  Prospectus  or any  amendment or  supplement  thereto);
         provided,  that before  filing a  Registration  Statement or Prospectus
         relating to the Registrable Securities or any amendments or supplements
         thereto,  the Company  will furnish to Holders'  Counsel  copies of all
         documents  proposed to be filed at least three (3) Business  Days prior
         to the filing thereof, which documents will be subject to the review of
         such counsel;

                  (d)  on or  prior  to  the  date  on  which  the  Registration
         Statement is declared  effective,  register or qualify such Registrable
         Securities  under  such  other  securities  or "blue  sky" laws of such
         jurisdictions  as any Selling Holder,  Holders'  Counsel or underwriter
         reasonably  requests and do any and all other acts and things which may
         be necessary or advisable to enable such Selling  Holder to  consummate
         the disposition in such  jurisdictions of such  Registrable  Securities
         owned  by  such  Selling  Holder;   keep  each  such   registration  or
         qualification  (or  exemption  therefrom)  effective  during the period
         which the Registration Statement is required to be kept effective;  and
         do any and all other acts or things  reasonably  necessary or advisable
         to enable the  disposition  in such  jurisdictions  of the  Registrable
         Securities covered by the applicable Registration  Statement;  provided
         that the Company shall not be required to (i) qualify to do business as
         a foreign  corporation or as a broker-dealer in any jurisdiction  where
         it is not then so qualified or (ii) take any action which would subject
         it to general  service of process or to  taxation  in any  jurisdiction
         where it is not then so subject;

                  (e)  cause  the   Registrable   Securities   covered  by  such
         Registration  Statement to be registered with or approved by such other
         governmental  agencies or  authorities as may be necessary by virtue of
         the  business  and  operations  of the  Company to enable  the  Selling
         Holders to consummate the disposition of such Registrable Securities;

                  (f) as promptly as practicable notify each Selling Holder, EGS
         and  the  Placement  Agent  (i)  when a  Prospectus  or any  Prospectus
         supplement or post-effective amendment has been filed and, with respect
         to a Registration Statement or any post-effective  amendment,  when the
         same has become effective, (ii) of any request by the Commission or any
         other  federal  or  state  governmental  authority  for  amendments  or
         supplements  to a Registration  Statement or related  Prospectus or for
         additional  information to be included in any Registration Statement or
         Prospectus or otherwise, (iii) of the issuance by the Commission of any
         stop order suspending the effectiveness of a Registration  Statement or
         the initiation or threatening of any proceedings for that purpose, (iv)
         of the issuance by any state securities  commission or other regulatory
         authority of any order  suspending the  qualification or exemption from
         qualification  of  any  of  the  Registrable   Securities  under  state
         securities or "blue sky" laws or the initiation of any  proceedings for
         that  purpose  and (v) of the  happening  of any event  which makes any
         statement made in a Registration Statement or related Prospectus or any
         document incorporated or deemed to be incorporated by reference therein
         untrue or which requires the making of any changes in such Registration
         Statement,  Prospectus  or  documents so that they 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, as promptly as  practicable  thereafter,
         prepare  and file  with the  Commission  and  furnish a  supplement  or
         amendment to such Prospectus so that, as thereafter  deliverable to the
         purchasers of such  Registrable  Securities,  such  Prospectus will not
         contain  any untrue  statement  of a  material  fact or omit to state a
         material fact necessary to make the statements therein, in light of the
         circumstances under which they were made, not misleading;

                  (g) make  available to the Holders and the  Placement  Agent a
         final prospectus (or file same under Commission Rule 424(b) within five
         (5) days after the date that the  Registration  Statement  is  declared
         effective.

                  (h) use its reasonable  efforts to prevent the issuance of any
         order suspending the effectiveness of a Registration Statement, and, if
         one is issued,  to obtain the  withdrawal of any order  suspending  the
         effectiveness  of a  Registration  Statement at the  earliest  possible
         moment.



         Each Selling Holder, upon receipt of any notice from the Company of the
happening of any event of the kind  described in subsection  (f) of this Section
3, shall forthwith discontinue  disposition of the Registrable  Securities until
such  Selling  Holder's  receipt  of the copies of the  supplemented  or amended
Prospectus  contemplated  by  subsection  (f) of this  Section  3 or until it is
advised in writing (the  "Advice") by the Company that the use of the Prospectus
may be  resumed,  and has  received  copies of any  additional  or  supplemental
filings  which are  incorporated  by  reference  in the  Prospectus,  and, if so
directed by the Company,  such Selling Holder will, or will request the managing
underwriter  or  underwriters,  if  any,  to,  deliver  to the  Company  (at the
Company's  expense) all copies,  other than  permanent  file copies then in such
Selling  Holder's  possession,  of  the  Prospectus  covering  such  Registrable
Securities  current at the time of receipt of such notice. In the event that the
Company  shall give any such notice,  the time periods for which a  Registration
Statement is required to be kept effective pursuant to Section 2 hereof shall be
extended by the number of days during the period from and  including the date of
the giving of such notice to and  including  the date when each  Selling  Holder
shall have  received (i) the copies of the  supplemented  or amended  Prospectus
contemplated by Section 2(f) or (ii) the Advice.

         4. REGISTRATION EXPENSES.

                  (a) All expenses incident to the Company's  performance of, or
         compliance with, the provisions hereof,  including without  limitation,
         all Commission and securities  exchange or NASD registration and filing
         fees,  fees and expenses of  compliance  with  securities or "blue sky"
         laws  (including fees and  disbursements  of counsel in connection with
         "blue sky"  qualifications  of the  Registrable  Securities),  printing
         expenses,   messenger   and  delivery   expenses,   internal   expenses
         (including,  without  limitation,  all  salaries  and  expenses  of the
         Company's  officers  and  employees   performing  legal  or  accounting
         duties),  fees and expenses  incurred in connection with the listing of
         the securities to be registered, if any, on each securities exchange on
         which similar  securities  issued by the Company are then listed,  fees
         and  disbursements  of  counsel  for the  Company  and its  independent
         certified  public  accountants  (including  the  expense of any special
         audit or "cold  comfort"  letters  required  by, or  incident  to, such
         performance), Securities Act liability insurance (if the Company elects
         to obtain such insurance),  reasonable fees and expenses of any special
         experts  retained by the Company in connection with such  registration,
         fees  and  expenses  of  other  persons  retained  by  the  Company  in
         connection with each registration  hereunder and including the fees and
         expense  of legal  counsel  retained  by a Holder  or  Holders  and the
         Placement  Agent  of  $20,000,  (but  not  or  any  underwriting  fees,
         discounts  or  commissions  attributable  to the  sale  of  Registrable
         Securities) are herein called "Registration Expenses."

                  (b)  The  Company  will  pay  all  Registration   Expenses  in
         connection with each Registration Statement filed pursuant to Section 2
         except as  otherwise  set forth  therein.  Other  than as  specifically
         provided for in Section  2(a)  hereto,  all expenses to be borne by the
         Holders in connection with any Registration Statement filed pursuant to
         Section  2  (including,  without  limitation,  all  underwriting  fees,
         discounts  or  commissions  attributable  to such  sale of  Registrable
         Securities)  shall be borne by the  participating  Holders  pro rata in
         relation  to the  number  of  Units  of  Registrable  Securities  to be
         registered by each Holder.

         5. INDEMNIFICATION; CONTRIBUTION.

                  (a)  INDEMNIFICATION  BY THE  COMPANY.  The Company  agrees to
         indemnity and hold harmless,  to the full extent permitted by law, each
         Holder,  its  officers,  directors  and each Person who  controls  such
         Holder  (within the meaning of the  Securities  Act),  and any agent or
         investment  adviser  thereof,  against  all  losses,  claims,  damages,
         liabilities  and expenses  (including  reasonable  attorneys'  fees and
         costs of  investigation)  arising  out of or based  upon any  untrue or
         alleged untrue statement of material fact contained in any Registration
         Statement,  any  amendment or  supplement  thereto,  any  Prospectus or
         preliminary  Prospectus  or any  omission or alleged  omission to state
         therein a material fact  required to be stated  therein or necessary to
         make the statements therein not misleading,  except insofar as the same
         arise out of or are based upon any such  untrue  statement  or omission
         based upon information with respect to such Holder furnished in writing
         to the  Company  by or on  behalf  of  such  Holder  expressly  for use
         therein;  provided  that, in the event that the  Prospectus  shall have
         been  amended  or  supplemented  and  copies  thereof  as so amended or
         supplemented,  shall  have  been  furnished  to a  Holder  prior to the
         confirmation  of any sales of  Registrable  Securities,  such indemnity
         with respect to the  Prospectus  shall not inure to the benefit of such
         Holder if the Person  asserting such loss,  claim,  damage or liability
         and who purchased the Registrable  Securities from such holder did not,
         at or  prior  to the  confirmation  of  the  sale  of  the  Registrable
         Securities  to such  Person,  receive  a copy of the  Prospectus  as so
         amended or  supplemented  and the untrue  statement  or  omission  of a
         material  fact  contained  in  the  Prospectus  was  corrected  in  the
         Prospectus as so amended or supplemented.

                  (b) INDEMNIFICATION BY HOLDERS OF REGISTRABLE  SECURITIES.  In
         connection  with  any  Registration  Statement  in  which a  Holder  is
         participating,  each such Holder will furnish to the Company in writing
         such  information  with  respect to the name and address of such Holder
         and such other  information  as may be  reasonably  required for use in
         connection  with any such  Registration  Statement  or  Prospectus  and
         agrees to indemnity,  to the full extent permitted by law, the Company,
         its  directors  and  officers  and each Person who controls the Company
         (within the meaning of the Securities Act) against any losses,  claims,
         damages,  liabilities and expenses  resulting from any untrue statement
         of a material fact in the  Registration  Statement or Prospectus or any
         amendment  thereof  or  supplement  thereto  or  necessary  to make the
         statements  therein  not  misleading,  to the  extent,  but only to the
         extent,  that such untrue or alleged  untrue  statement  relates to any
         information with respect to such Holder so furnished in writing by such
         Holder  specifically  for inclusion in any  Prospectus or  Registration
         Statement;  provided,  however, that such Holder shall not be liable in
         any  such  case to the  extent  that  prior to the  filing  of any such
         Registration Statement or Prospectus or amendment thereof or supplement
         thereto,   such  Holder  has   furnished  in  writing  to  the  Company
         information  expressly  for  use  in  such  Registration  Statement  or
         Prospectus  or  any  amendment  thereof  or  supplement  thereto  which
         corrected or made not misleading  information  previously  furnished to
         the  Company.  In no event shall the  liability  of any Selling  Holder
         hereunder  be greater in amount than the dollar  amount of the proceeds
         received  by such  Selling  Holder  upon  the  sale of the  Registrable
         Securities giving rise to such indemnification obligation.

                  (c)  CONDUCT  OF  INDEMNIFICATION   PROCEEDINGS.   Any  Person
         entitled to  indemnification  hereunder  agrees to give prompt  written
         notice to the  indemnifying  party  after the receipt by such Person of
         any written notice of the commencement of any action, suit,  proceeding
         or  investigation  or threat  thereof  made in  writing  for which such
         Person  will claim  indemnification  or  contribution  pursuant  to the
         provisions  hereof  and,  unless in the  judgment  of  counsel  of such
         indemnified  party a  conflict  of  interest  may  exist  between  such
         indemnified  party and the  indemnifying  party  with  respect  to such
         claim,  permit the  indemnifying  party to assume  the  defense of such
         claim.  Whether or not such  defense  is  assumed  by the  indemnifying
         party, the indemnifying  party will not be subject to any liability for
         any  settlement  made without its consent (but such consent will not be
         unreasonably  withheld). No indemnifying party will consent to entry of
         any judgment or enter into any settlement  which does not include as an
         unconditional  term  thereof the giving by the claimant or plaintiff to
         such  indemnified  party of a release from all  liability in respect of
         such claim or litigation. If the indemnifying party is not entitled to,
         or  elects  not to,  assume  the  defense  of a  claim,  it will not be
         obligated to pay the fees and  expenses of more than one counsel  (plus
         such local  counsel,  if any,  as may be  reasonably  required in other
         jurisdictions)  with  respect to such claim,  unless in the judgment of
         any  indemnified  party a conflict of interest  may exist  between such
         indemnified  party  and any  other  of such  indemnified  parties  with
         respect to such claim, in which event the  indemnifying  party shall be
         obligated  to pay the fees and expenses of such  additional  counsel or
         counsels.  For the purposes of this Section 5(c), the term "conflict of
         interest"  shall  mean  that  there  are  one or  more  legal  defenses
         available  to  the  indemnified   party  that  are  different  from  or
         additional to those available to the  indemnifying  party or such other
         indemnified  parties,  as  applicable,  which  different or  additional
         defenses make joint representation inappropriate.

                  (d) CONTRIBUTION. If the indemnification from the indemnifying
         party  provided for in this Section 5 is  unavailable to an indemnified
         party hereunder in respect of any losses, claims, damages,  liabilities
         or expenses referred to therein,  then the indemnifying  party, in lieu
         of indemnifying such indemnified  party, shall contribute to the amount
         paid or payable by such  indemnified  party as a result of such losses,
         claims,  damages,  liabilities  or  expenses in such  proportion  as is
         appropriate to reflect the relative fault of the indemnifying party and
         indemnified  parties in connection  with the actions which  resulted in
         such losses, claims,  damages,  liabilities or expenses, as well as any
         other  relevant  equitable  considerations.  The relative fault of such
         indemnifying  party and  indemnified  parties  shall be  determined  by
         reference  to,  among other  things,  whether  any action in  question,
         including any untrue or alleged  untrue  statement of a material  fact,
         has  been  made  by,  or  relates  to  information  supplied  by,  such
         indemnifying  party or  indemnified  parties,  and the parties  intent,
         knowledge,  access to information and opportunity to correct or prevent
         such  action.  The amount paid or payable by a party as a result of the
         losses,  claims,  damages,  liabilities and expenses  referred to above
         shall be deemed to  include,  subject to the  limitations  set forth in
         Section 5(c), any reasonable legal or other fees or expenses reasonably
         incurred  by  such  party  in  connection  with  any  investigation  or
         proceeding.  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.

                  (e) If  indemnification is available under this Section 5, the
         indemnifying parties shall indemnity each indemnified party to the full
         extent provided in Sections 5(a) and (b) without regard to the relative
         fault of said  indemnifying  party or  indemnified  party or any  other
         equitable consideration provided for in this Section 5.

         6. TRANSFER OF RIGHTS.

                  The  rights  to cause  the  Company  to  register  Registrable
Securities  granted  pursuant to the  provisions  hereof may be  transferred  or
assigned by any Holder to a transferee or assignee;  provided; however, that the
transferee or assignee of such rights assumes the obligations of such transferor
or assignor, as the case may be, hereunder.

         7. AMENDMENT

                  Except as otherwise provided herein, the provisions hereof may
not be amended, modified or supplemented,  and waivers or consents to departures
from the provisions  hereof may not be given unless the Company has obtained the
written consent of Holders of at least a majority of the aggregate number of the
Registrable Securities then outstanding.

<PAGE>

                              SCHEDULE OF INVESTORS

Name of Investor                              Common Shares      Warrants
----------------                              -------------      --------
The Bahr Family L.P.                             156,250          78,125

The Henry H. Bahr QTIP Trust                     156,250          78,125
D/T/D 2/22/88

Paul J. Bargiel PC Employees                     331,250         165,625
Pension Plan & Trust
D/T/D 06/01/1986

Mohanlal Bhagwansingh &                           93,750          46,875
Leelautee Bhagwansingh JT WROS

David Briskie                                    156,250          78,125

Keith Buhrdorf                                   531,250         265,625

Roy M. Cappadona                                  62,500          31,250

George L. Cartagena &                            156,250          78,125
Martha Cartagena JT TEN

Robert Clauss                                    187,500          93,750

Buck Core                                         62,500          31,250

Brad Dehaan                                    1,562,500         781,250

Michael Doherty                                  153,125          76,562

Chidi Eze                                         75,000          37,500

Frank R. Fleming                                  31,250          15,625

Michael C. Geiger                                 62,500          31,250

Gerald E. Gillett Trust UA                        50,000          25,000
Dated 08/18/95
Gerald E. Gillett Trustee

Gordon & Price, Inc.                              93,750          46,875
Attention: John Gordon

Marshall I. Gurian                                37,500          18,750

Steven J. Hansel &                               187,500          93,750
Sharon M. Hansel JT TEN

<PAGE>

Name of Investor                              Common Shares      Warrants
----------------                              -------------      --------
Kenneth A. Hemstreet                             312,500         156,250

Arthur S. James Jr                                50,000          25,000

Ken Janckila                                     312,500         156,250

Christopher C. Jensen                            100,000          50,000

Brian G. Kiernan                                 312,500         156,250

Lester Krasno                                    156,250          78,125

Ken Lehman &                                     312,500         156,250
Karen Lehman JT WROS

George B. Lewis                                   68,750          34,375

Jim M. Macek                                     625,000         312,500

Anthony L. Markovic                            1,250,000         625,000

Anthony Wayne McCarthy                           312,500         156,250

Robert L. McEntire                               325,000         162,500

Jason M. McNamara                              1,281,250         640,625

Pershing LLC as Custodian FBO                    250,000         125,000
Jagadish Medarametla
IRA Rollover Account

Samuel Medina                                    160,000          80,000

Mike Milani &                                    312,500         156,250
Lorna Milani JT TEN

Enrico Monaco                                    125,000          62,500

Gregory Nagel &                                1,562,500         781,250
Mary Jo Nagel JT TEN

Jon D. Packer                                    625,000         312,500

Palisades Financial Ltd.                         156,250          78,125

William C. Pawson                              1,562,500         781,250

                                      A-2

<PAGE>

Name of Investor                              Common Shares      Warrants
----------------                              -------------      --------
Fred Pearl &                                      68,750          34,375
Marylou Pearl JT TEN

Sanford Porter                                    62,500          31,250

Randall L. Powell                                125,000          62,500

Vladimir Prerad                                  156,250          78,125

Peter Repole                                      62,500          31,250

Donald Ronning                                   406,250         203,125

David C. Rouse &                                  62,500          31,250
Marcy E, Rathjen Rouse JT TEN

Paul Sallwasser &                                437,500         218,750
Teri Sallwasser JT WROS

Richard S. Simms II &                             62,500          31,250
Cynthia Simms JT WROS

David Smith                                      150,000          75,000

Michael Sternberg                                100,000          50,000

The Philip A. & Pricilla S. Unverzagt            625,000         312,500
Living Trust U
A Dated 06/24/04
Philip A. Unverzagt &
Pricilla S. Unverzagt Trustees

Paul Vandyke                                     156,250          78,125

Thomas Wiles                                      62,500          31,250

                                      A-3