Unassociated Document


    


    COMMON
      STOCK AND WARRANT PURCHASE

    


    AGREEMENT

    


    


    


    


    Dated
      as of June 26, 2008

    


    


    


    


    by
      and among

    


    


    


    


    BOND
      LABORATORIES, INC.

    


    and

    


    


    


    


    THE
      PURCHASERS LISTED ON EXHIBIT A


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      TABLE
        OF CONTENTS


      
        
          	 	 	
                  Page

                
	 	 	 
	
                  ARTICLE
                    I    Purchase
                    and Sale of Common Stock and Warrants

                	
                  1

                
	
                  Section
                    1.1

                	
                  Purchase
                    and Sale of Common Stock and Warrants.

                	
                  1

                
	
                  Section
                    1.2

                	
                  Purchase
                    Price and Closings

                	
                  2

                
	
                  Section
                    1.3

                	
                  Promissory
                    Bridge Notes

                	
                  2

                
	
                  Section
                    1.4

                	
                  Purchase
                    Price Adjustment

                	
                  2

                
	 	 	 
	
                  ARTICLE
                    II    Representations
                    and Warranties

                	
                  3

                
	
                  Section
                    2.1

                	
                  Representations
                    and Warranties of the Company

                	
                  3

                
	
                  Section
                    2.2

                	
                  Representations
                    and Warranties of the Purchasers

                	
                  15

                
	 	 	 
	
                  ARTICLE
                    III    Covenants

                	
                  18

                
	
                  Section
                    3.1

                	
                  Securities
                    Compliance

                	
                  18

                
	
                  Section
                    3.2

                	
                  Registration
                    and Listing

                	
                  19

                
	
                  Section
                    3.3

                	
                  Inspection
                    Rights

                	
                  19

                
	
                  Section
                    3.4

                	
                  Compliance
                    with Laws

                	
                  19

                
	
                  Section
                    3.5

                	
                  Keeping
                    of Records and Books of Account

                	
                  19

                
	
                  Section
                    3.6

                	
                  Reporting
                    Requirements

                	
                  19

                
	
                  Section
                    3.7

                	
                  Other
                    Agreements

                	
                  20

                
	
                  Section
                    3.8

                	
                  Use
                    of Proceeds

                	
                  20

                
	
                  Section
                    3.9

                	
                  Reporting
                    Status

                	
                  20

                
	
                  Section
                    3.10

                	
                  Disclosure
                    of Transaction

                	
                  20

                
	
                  Section
                    3.11

                	
                  Disclosure
                    of Material Information

                	
                  20

                
	
                  Section
                    3.12

                	
                  Form
                    D

                	
                  21

                
	
                  Section
                    3.13

                	
                  No
                    Integrated Offerings

                	
                  21

                
	
                  Section
                    3.14

                	
                  Pledge
                    of Securities

                	
                  21

                
	
                  Section
                    3.15

                	
                  Sarbanes-Oxley
                    Act

                	
                  21

                
	
                  Section
                    3.16

                	
                  Directors
                    and Officers Insurance

                	
                  21

                
	
                  Section
                    3.17

                	
                  Board
                    of Directors

                	
                  21

                
	
                  Section
                    3.18

                	
                  Restrictions
                    on Issuance of Securities

                	
                  21

                
	
                  Section
                    3.19

                	
                  Subsequent
                    Financings

                	
                  22

                
	 	 	 
	
                  ARTICLE
                    IV    Conditions

                	
                  23

                
	
                  Section
                    4.1

                	
                  Conditions
                    Precedent to the Obligation of the Company to Close and to Sell
                    the
                    Securities

                	
                  23

                
	
                  Section
                    4.2

                	
                  Conditions
                    Precedent to the Obligation of the Purchasers to Close and to
                    Purchase the
                    Securities

                	
                  24

                
	 	 	 
	
                  ARTICLE
                    V    Certificate
                    Legend

                	
                  26

                
	
                  Section
                    5.1

                	
                  Legend

                	
                  26

                
	 	 	 
	
                  ARTICLE
                    VI    Indemnification

                	
                  27

                
	
                  Section
                    6.1

                	
                  Company
                    Indemnity.

                	
                  27

                
	
                  Section
                    6.2

                	
                  Indemnification
                    Procedure

                	
                  27

                
	
                   

                	 	 


        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        
          	
                  ARTICLE
                    VII    Miscellaneous

                	
                  28

                
	
                  Section
                    7.1

                	
                  Fees
                    and Expenses

                	
                  28

                
	
                  Section
                    7.2

                	
                  Specific
                    Performance; Consent to Jurisdiction; Venue.

                	
                  27

                
	
                  Section
                    7.3

                	
                  Entire
                    Agreement; Amendment

                	
                  29

                
	
                  Section
                    7.4

                	
                  Notices

                	
                  29

                
	
                  Section
                    7.5

                	
                  Waivers

                	
                  30

                
	
                  Section
                    7.6

                	
                  Headings

                	
                  30

                
	
                  Section
                    7.7

                	
                  Successors
                    and Assigns

                	
                  30

                
	
                  Section
                    7.8

                	
                  Right
                    of First Offer

                	
                  31

                
	
                  Section
                    7.9

                	
                  No
                    Third Party Beneficiaries

                	
                  31

                
	
                  Section
                    7.10

                	
                  Governing
                    Law

                	
                  31

                
	
                  Section
                    7.11

                	
                  Survival

                	
                  32

                
	
                  Section
                    7.12

                	
                  Counterparts

                	
                  32

                
	
                  Section
                    7.13

                	
                  Publicity

                	
                  32

                
	
                  Section
                    7.14

                	
                  Severability

                	
                  32

                
	
                  Section
                    7.15

                	
                  Further
                    Assurances

                	
                  32

                


        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    COMMON
      STOCK AND WARRANT PURCHASE AGREEMENT

    


    This
      COMMON STOCK AND WARRANT PURCHASE AGREEMENT (this “Agreement”),
      dated
      as of June 26, 2008 by and among Bond Laboratories, Inc., a Nevada corporation
      (the “Company”),
      and
      the purchasers listed on Exhibit
      A
      hereto
      (each a “Purchaser”
and
      collectively, the “Purchasers”),
      for
      the purchase and sale of shares of the Company’s common stock, par value $0.001
      per share (the “Common
      Stock”)
      by the
      Purchasers. 

    


    The
      parties hereto agree as follows:

     

    ARTICLE
      I

     

    PURCHASE
      AND SALE OF COMMON STOCK AND WARRANTS

     

    Section
      1.1 Purchase
      and Sale of Common Stock and Warrants. 

     

    (a) Upon
      the
      following terms and conditions, the Company shall issue and sell to the
      Purchasers, and the Purchasers shall purchase from the Company, shares of Common
      Stock (the “Shares”)
      at a
      price per share of $1.00 (the “Per
      Share Purchase Price”)
      for an
      aggregate purchase price of Four Million Dollars ($4,000,000) (the “Purchase
      Price”).
      Each
      Purchaser shall pay the portion of the Purchase Price set forth opposite its
      name on Exhibit
      A
      hereto.
      The Company and the Purchasers are executing and delivering this Agreement
      in
      accordance with and in reliance upon the exemption from securities registration
      afforded by Section 4(2) of the U.S. Securities Act of 1933, as amended, and
      the
      rules and regulations promulgated thereunder (the “Securities
      Act”),
      including Regulation D (“Regulation
      D”),
      and/or upon such other exemption from the registration requirements of the
      Securities Act as may be available with respect to any or all of the investments
      to be made hereunder.

     

    (b) In
      the
      event that a Purchaser would own in excess of 9.99% of the Common Stock
      outstanding on a Closing Date (as
      defined in Section 1.2 below),
      in lieu
      of purchasing shares of Common Stock that
      would cause a Purchaser to exceed the 9.99% threshold set forth
      above,
      such
      Purchaser shall purchase shares of the Company’s Series A Convertible Preferred
      Stock (the “Series
      A Preferred Stock”)
      set
      forth opposite its name on Exhibit
      A
      hereto.
      This Agreement, including, without limitation, the representations and
      warranties contained herein, shall apply to the purchase of the Series A
      Preferred Stock and, accordingly, any reference in this Agreement to
“Shares”
shall
      also be deemed to include such shares of the Series A Preferred Stock and any
      shares of Common Stock issuable upon conversion of such Series A Preferred
      Stock. 

     

    (c) Upon
      the
      following terms and conditions and for no additional consideration, each of
      the
      Purchasers shall be issued Warrants, in substantially the form attached hereto
      as Exhibit
      B
      (the
“Warrants”),
      to
      purchase the number of shares of Common Stock equal to sixty percent (60%)
      of
      the number of Shares purchased by each Purchaser pursuant to the terms of this
      Agreement, as set forth opposite such Purchaser’s name on Exhibit
      A
      hereto.
      The Warrants shall expire seven (7) years following the Closing Date and shall
      have an initial exercise price per share equal to $1.25. Any shares of Common
      Stock issuable upon exercise of the Warrants (and such shares when issued)
      are
      herein referred to as the “Warrant
      Shares.”
The
      Shares, the Warrants and the Warrant Shares are sometimes collectively referred
      to herein as the “Securities.”
      


    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    Section
      1.2 Purchase
      Price and Closings.
      In
      consideration of and in express reliance upon the representations, warranties,
      covenants, terms and conditions of this Agreement, the Company agrees to issue
      and sell to the Purchasers and, in consideration of and in express reliance
      upon
      the representations, warranties, covenants, terms and conditions of this
      Agreement, the Purchasers, severally but not jointly, agree to purchase the
      number of Shares and Warrants set forth opposite their respective names on
      Exhibit
      A.
      The
      Shares and Warrants shall be sold and funded in two separate closings (each,
      a
“Closing”).
      The
      initial Closing under this Agreement (the “Initial
      Closing”)
      shall
      take place on or about June 26, 2008 (the “Initial
      Closing Date”)
      and
      shall be funded in the amount of Three Million Dollars ($3,000,000). The second
      Closing under this Agreement (the “Second
      Closing”)
      shall
      take place upon the mutual agreement of the Company and any subsequent
      Purchaser, but in no event later than July 26, 2008 (the “Second
      Closing Date”),
      and
      shall be funded in the amount of One Million Dollars ($1,000,000). Each
      subsequent Purchaser shall execute this Agreement and the other applicable
      Transaction Documents (as hereafter defined) in the capacity of a Purchaser
      and
Exhibit
      A
      shall be
      supplemented to reflect the sale of such additional Shares and Warrants. The
      Initial Closing Date and the Second Closing Date are sometimes referred to
      in
      this Agreement as the “Closing
      Date”.
      Each
      Closing under this Agreement shall take place at the offices of Kramer Levin
      Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York, New York
      10036, provided,
      that
      all of the conditions set forth in Article IV hereof and applicable to such
      Closing shall have been fulfilled or waived in accordance herewith. At
      each
      Closing and
      upon
      receipt by the Company of the appropriate purchase price from each Purchaser
      (i.e., a purchase price equal to the number of Shares to be purchased by such
      Purchaser multiplied by the Per Share Purchase Price),
      the
      Company shall deliver or cause to be delivered to each
      such
      Purchaser (x) a certificate for the number of Shares set forth opposite the
      name
      of such Purchaser on Exhibit
      A
      hereto,
      (y) a Warrant to purchase such number of shares of Common Stock as is set forth
      opposite the name of such Purchaser on Exhibit
      A
      attached
      hereto and (z) any other documents required to be delivered pursuant to Article
      IV hereof. Each
      Purchaser shall deliver
      each of
      the documents required to be delivered by it pursuant to Article IV hereof
      as
      well as its
      portion of the Purchase Price by wire transfer to an
      escrow
      account designated by the escrow agent
      prior to
      each Closing.

     

    Section
      1.3 Exchange
      of Promissory Bridge Notes.
      The
      parties hereto acknowledge and agree that, at the Initial Closing, (i) the
      holders of certain promissory bridge notes (the “Bridge
      Notes”),
      as
      set forth on Exhibit
      A
      hereto,
      previously issued by the Company, having an aggregate principal amount not
      to
      exceed $400,000, will, pursuant to the terms of such Bridge Notes, become
      Purchasers under this Agreement and parties to the other Transaction Documents,
      and will receive Warrants based on the formula set forth in Section 1.1(c)
      hereof, and (ii) such Bridge Notes (plus accrued and unpaid interest) shall
      convert into a number of Shares equal to 120% of the principal amount of such
      Bridge Notes (plus accrued and unpaid interest) divided by the Per Share
      Purchase Price. The principal amount of such Bridge Notes shall be considered
      part of the Purchase Price for purposes of this Agreement

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    Section
      1.4 Purchase
      Price Adjustment.
      In the
      event the Company fails to achieve (i) aggregate revenue determined in
      accordance with generally accepted accounting principles in the United States
      (“GAAP”)
      of at
      least $3,800,000 for the calendar year ending December 31, 2008 and (ii)
      positive adjusted EBITDA (as defined below) for the fourth quarter ending
      December 31, 2008 (which shall not include specific marketing expenses allocated
      to sponsorships or any fees paid to athletes, athletes’ agents and sports teams,
      leagues or sanctioning bodies to endorse the Company and/or its products but
      shall include any travel and entertainment expenses incurred by the Company
      in
      connection with such sponsorships), each as determined by the Company’s audited
      financial statements for the year ending December 31, 2008, then the Company
      shall promptly issue to each Purchaser a number of additional shares of Common
      Stock equal to (A) the product of (1) the number of Shares purchased by such
      Purchaser pursuant to this Agreement and (2) the quotient obtained by dividing
      the Per Share Purchase Price by $0.70, minus (B) the number of Shares purchased
      by such Purchaser pursuant to this Agreement. The number of additional shares
      of
      Common Stock which may be issued pursuant to this Section 1.4 will be rounded
      down to the nearest whole share and no fractional shares shall be issued.
 For
      purposes hereof, “EBITDA”
shall
      mean, for any period, the sum, determined on a consolidated basis, of (a) net
      income (or net loss), (b) interest expense (including the interest component
      on
      obligations under capitalized leases but excluding interest income), whether
      paid or accrued, on all indebtedness, (c) income tax expense, (d) depreciation
      expense and (e) amortization expense, excluding other non-cash income included
      in determining net income and extraordinary or unusual gains included in
      determining net income.

     

     

    ARTICLE
      II

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Section
      2.1 Representations
      and Warranties of the Company.
      The
      Company hereby represents and warrants to the Purchasers as follows, as of
      the
      date hereof (or other applicable date as stated in this Section 2.1) and each
      Closing Date, except as set forth on the Schedule of Exceptions attached hereto
      with each numbered Schedule corresponding to the section number
      herein:

     

    (a) Organization,
      Good Standing and Power.
      The
      Company is a corporation duly incorporated, validly existing and in good
      standing under the laws of the State of Nevada and has the requisite corporate
      power to own, lease and operate its properties and assets and to conduct its
      business as it is now being conducted. The Company does not have any
      Subsidiaries (as defined in Section 2.1(g)) or own securities of any kind in
      any
      other entity except as set forth on Schedule
      2.1(g)
      hereto.
      The Company and each such Subsidiary (as defined in Section 2.1(g)) is duly
      qualified to do business as a foreign corporation and is in good standing in
      every jurisdiction in which the nature of the business conducted or property
      owned by it makes such qualification necessary except for any jurisdiction(s)
      (alone or in the aggregate) in which the failure to be so qualified will not
      have a Material Adverse Effect. For the purposes of this Agreement,
“Material
      Adverse Effect”
means
      any effect on the business, results of operations, assets or condition
      (financial or otherwise) of the Company that is material and adverse to the
      Company and its Subsidiaries (as hereafter defined) taken as a whole, and/or
      any
      condition, circumstance, or situation that would prohibit or otherwise
      materially interfere with the ability of the Company from entering into and
      performing any of its obligations under the Transaction Documents (as defined
      below) in any material respect;
      provided,
      however,
      that
      Material Adverse Effect shall not be deemed to include: (i) changes in
      applicable law or (ii) any effect resulting from the public announcement of
      the
      transactions contemplated by this Agreement or
      the
      consummation of the transactions
      contemplated by this Agreement.


    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (b) Authorization;
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and
      perform this Agreement, the Warrants, the Escrow Agreement by and among the
      Company, the Purchasers and the escrow agent, substantially in the form of
      Exhibit
      C
      attached
      hereto (the “Escrow
      Agreement”),
      and
      the Registration Rights Agreement by and among the Company and the Purchasers,
      dated as of the date hereof, substantially in the form of Exhibit
      D
      attached
      hereto (the “Registration
      Rights Agreement”
and,
      together with this Agreement, the Escrow Agreement and the Warrants, the
“Transaction
      Documents”),
      and
      to issue and sell the Securities in accordance with the terms hereof and to
      complete the transactions contemplated by the Transaction Documents. The
      execution, delivery and performance of the Transaction Documents by the Company
      and the consummation by it of the transactions contemplated thereby have been
      duly and validly authorized by all necessary corporate action, and, except
      as
      set forth on Schedule
      2.1(b),
      no
      further consent or authorization of the Company, its Board of Directors or
      stockholders is required. When executed and delivered by the Company, each
      of
      the Transaction Documents shall constitute a valid and binding obligation of
      the
      Company enforceable against the Company in accordance with its terms, except
      as
      rights to indemnity and contribution may be limited by federal or state
      securities laws and except as such enforceability may be limited by applicable
      bankruptcy, reorganization, moratorium, liquidation, conservatorship,
      receivership or similar laws relating to, or affecting generally the enforcement
      of, creditors’ rights and remedies or by other equitable principles of general
      application.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (c) Capitalization.
      The
      authorized capital stock of the Company as of the date hereof is set forth
      on
Schedule
      2.1(c)
      hereto.
      All of the outstanding shares of the Common Stock and any other outstanding
      security of the Company have been duly and validly authorized and validly
      issued, fully paid and nonassessable and were issued in accordance with the
      registration or qualification provisions of the Securities Act, or pursuant
      to
      valid exemptions therefrom. Except as provided in this Agreement or as set
      forth
      on Schedule
      2.1(c)
      hereto,
      including the rights, preferences and privileges of the Company’s Series A
      Convertible Preferred Stock, no shares of Common Stock or any other security
      of
      the Company are entitled to preemptive rights, registration rights, rights
      of
      first refusal or similar rights and there are no outstanding options, warrants,
      scrip, rights to subscribe to, call or commitments of any character whatsoever
      relating to, or securities or rights convertible into, any shares of capital
      stock of the Company. Furthermore, except (i) as set forth in this Agreement,
      (ii) for stock options and restricted stock issued by the Company to its
      employees, directors and consultants, (iii) as set forth in the Commission
      Documents (as defined in Section 2.1(f)), and (iv) as set forth on Schedule
      2.1(c)
      hereto,
      there are no contracts, commitments, understandings, or arrangements by which
      the Company is or may become bound to issue additional shares of the capital
      stock of the Company or options, securities or rights convertible into shares
      of
      capital stock of the Company. Except for customary transfer restrictions
      contained in agreements entered into by the Company in order to sell restricted
      securities or as provided in the Registration Rights Agreement or except as
      set
      forth in the Commission Documents or on Schedule
      2.1(c)
      hereto,
      the Company is not a party to or bound by any agreement or understanding
      granting registration or anti-dilution rights to any person with respect to
      any
      of its equity or debt securities. Except as set forth in the Commission
      Documents and on Schedule
      2.1(c),
      the
      Company is not a party to, and it has no Knowledge of, any agreement or
      understanding restricting the voting or transfer of any shares of the capital
      stock of the Company. Except as disclosed in the Commission Documents or on
      Schedule
      2.1(c),
      (i)
      there are no outstanding debt securities, or other form of material debt of
      the
      Company or any of its Subsidiaries, (ii) there are no contracts, commitments,
      understandings, agreements or arrangements under which the Company or any of
      its
      Subsidiaries is required to register the sale of any of their securities under
      the Securities Act, (iii) there are no outstanding securities of the Company
      or
      any of its Subsidiaries which contain any redemption or similar provisions,
      and
      there are no contracts, commitments, understandings, agreements or arrangements
      by which the Company or any of its Subsidiaries is or may become bound to redeem
      a security of the Company or any of its Subsidiaries, (iv) there are no
      securities or instruments containing anti-dilution or similar provisions that
      will be triggered by the issuance of the Securities, (v) the Company does not
      have any stock appreciation rights or “phantom stock” plans or agreements, or
      any similar plan or agreement and (vi) as of the date of this Agreement, to
      the
      Company’s and each of its Subsidiaries’ Knowledge, no Person (as defined below)
      or group of related Persons beneficially owns (as determined pursuant to Rule
      13d-3 promulgated under the Securities Exchange Act of 1934, as amended, and
      the
      rules and regulations promulgated thereunder (the “Exchange
      Act”))
      or
      has the right to acquire by agreement with or by obligation binding upon the
      Company, beneficial ownership of in excess of 5% of the Common Stock.
Any
      Person with any right to purchase securities of the Company that would be
      triggered as a result of the transactions contemplated hereby or by any of
      the
      other Transaction Documents has waived such rights or the time for the exercise
      of such rights has passed, except where failure of the Company to receive such
      waiver would not have a Material Adverse Effect. Except as set forth in the
      Commission Documents, on Schedule
      2.1(c)
      or the
      rights, preferences and privileges of the Company’s Series A Convertible
      Preferred Stock, there
      are no
      options, warrants or other outstanding securities of the Company (including,
      without limitation, any equity securities issued pursuant to any Company Plan)
      the vesting of which will be accelerated by the transactions contemplated hereby
      or by any of the other Transaction Documents. Except as set forth in
Schedule
      2.1(c),
      none of
      the transactions contemplated by this Agreement or by any of the other
      Transaction Documents shall cause, directly or indirectly, the acceleration
      of
      vesting of any options issued pursuant the Company’s stock option
      plans.
      For
      purposes of this Agreement, “Knowledge”
means
      (i) the actual knowledge of those officers of the Company required to file
      statements relating to their ownership of the Company’s securities pursuant to
      Section 16 of the Exchange Act, and (ii) with respect to each Subsidiary, the
      executive officers of such Subsidiary.

     

    (d) Issuance
      of Securities.
      The
      Shares and the Warrants to be issued at the Closing have been duly authorized
      by
      all necessary corporate action and, when paid for and issued in accordance
      with
      the terms hereof and the Warrants, respectively, and subject to and in reliance
      on the representations, warranties and covenants of the Purchasers made herein
      and in the Warrants, the Shares and the Warrant Shares will be validly issued,
      fully paid and nonassessable and free and clear of all liens, encumbrances
      and
      rights of refusal of any kind and the holders shall be entitled to all rights
      accorded to a holder of Common Stock. 

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (e) No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by the Company
      and the consummation by the Company of the transactions contemplated hereby
      and
      thereby do not and will not (i) violate any provision of the Company's Articles
      of Incorporation (the “Articles”)
      or
      Bylaws (the “Bylaws”),
      each
      as amended to date, or any Subsidiary's comparable charter documents, (ii)
      conflict with, or constitute a default (or an event which with notice or lapse
      of time or both would become a default) under, or give to others any rights
      of
      termination, amendment, acceleration or cancellation of, any agreement,
      mortgage, deed of trust, indenture, note, bond, license, lease agreement,
      instrument or obligation to which the Company or any of its Subsidiaries is
      a
      party or by which the Company or any of its Subsidiaries' respective properties
      or assets are bound, or (iii) result in a violation of any federal, state or
      local statute, rule, regulation, order, judgment or decree (including federal
      and state securities laws and regulations) applicable to the Company or any
      of
      its Subsidiaries or by which any property or asset of the Company or any of
      its
      Subsidiaries is bound or affected, except, in all cases, other than violations
      pursuant to clauses (i) or (iii) (with respect to federal and state securities
      laws) above, for such conflicts, defaults, terminations, amendments,
      acceleration, cancellations and violations as would not, individually or in
      the
      aggregate, have a Material Adverse Effect. Neither
      the Company nor any of its Subsidiaries is required under federal, state,
      foreign or local law, rule or regulation to obtain any consent, authorization
      or
      order of, or make any filing or registration with, any court or governmental
      agency in order for it to execute, deliver or perform any of its obligations
      under the Transaction Documents or issue and sell the Securities in accordance
      with the terms hereof (other than any filings, consents and approvals which
      may
      be required to be made by the Company under applicable state and federal
      securities laws, rules or as may be required for the Company to carry out its
      obligations under the Registration Rights Agreement). 

     

    (f) Commission
      Documents, Financial Statements.
      The
Common
      Stock of the Company is registered pursuant to Section 12(b) or 12(g) of the
      Exchange Act, and, except as disclosed on Schedule
      2.1(f)
      hereto,
      the Company
      has timely filed all reports, schedules, forms, statements and other documents
      required to be filed by it with the Securities and Exchange Commission (the
      “Commission”)
      pursuant to the reporting requirements of the Exchange Act, including pursuant
      to Sections 13, 14 or 15(d) thereof (all of the foregoing and all exhibits
      included therein and financial statement and schedules thereto, including
      filings incorporated by reference therein being referred to herein as the
“Commission
      Documents”).
      At
      the times of their respective filings, the Form 10-Q for the fiscal quarter
      ended March 31, 2008 and the Form 10-QSB for the fiscal quarters ended September
      30, 2007 and June 30, 2007 (collectively, the “Form
      10-Q”)
      and
      the Form 10-KSB for the fiscal year ended December 31, 2007 (the “Form
      10-K”)
      complied in all material respects with the requirements of the Exchange Act
      and
      the rules and regulations of the Commission promulgated thereunder, and, to
      the
      Knowledge of the Company, the Form 10-Q and Form 10-K at the time of their
      respective filings did not contain any untrue statement of a material fact
      or
      omit to state a material fact required to be stated therein or necessary in
      order to make the statements therein, in light of the circumstances under which
      they were made, not misleading. As of their respective dates, the financial
      statements of the Company included in the Commission Documents complied as
      to
      form and substance in all material respects with applicable accounting
      requirements and the published rules and regulations of the Commission or other
      applicable rules and regulations with respect thereto. Such financial
      statements, together with the related notes and schedules thereto, have been
      prepared in accordance with GAAP applied on a consistent basis during the
      periods involved (except (i) as may be otherwise indicated in such financial
      statements or the Notes thereto or (ii) in the case of unaudited interim
      statements, to the extent they may not include footnotes or may be condensed
      or
      summary statements), and fairly present in all material respects the financial
      position of the Company and its Subsidiaries as of the dates thereof and the
      results of operations and cash flows for the periods then ended (subject, in
      the
      case of unaudited statements, to normal year-end audit
      adjustments).

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    


                (g) Subsidiaries.
      The
      Commission Documents or Schedule
      2.1(g)
      hereto
      sets forth each Subsidiary of the Company, showing the jurisdiction of its
      incorporation or organization and showing the percentage of each person's
      ownership of the outstanding stock or other interests of such Subsidiary. For
      the purposes of this Agreement, “Subsidiary”
shall
      mean any corporation or other entity of which at least a majority of the
      securities or other ownership interest having ordinary voting power (absolutely
      or contingently) for the election of directors or other persons performing
      similar functions are at the time owned directly or indirectly by the Company
      and/or any of its other Subsidiaries.
      All of
      the outstanding shares of capital stock of each Subsidiary have been duly
      authorized and validly issued, and are fully paid and nonassessable.
Except
      as
      set forth in the Commission Documents, there is
      no
      outstanding preemptive, conversion or other rights, options, warrants or
      agreements granted or issued by or binding upon any Subsidiary for the purchase
      or acquisition of any shares of capital stock of any Subsidiary or any other
      securities convertible into, exchangeable for or evidencing the rights to
      subscribe for any shares of such capital stock. Neither the Company nor any
      Subsidiary is subject to any obligation (contingent or otherwise) to repurchase
      or otherwise acquire or retire any shares of the capital stock of any Subsidiary
      or any convertible securities, rights, warrants or options of the type described
      in the preceding sentence except as set forth on Schedule
      2.1(g)
      hereto
      or in
      the
      Commission Documents.
      Except
      as
      set forth in the Commission Documents, neither
      the Company nor any Subsidiary is party to, nor has any Knowledge of,
      any
      agreement restricting the voting or transfer of any shares of the capital stock
      of any Subsidiary.

     

    (h) No
      Material Adverse Change.
      Since
      December 31, 2007, the Company has not experienced or suffered any Material
      Adverse Effect, except as disclosed in the Commission Documents or on
Schedule
      2.1(h)
      hereto.

     

    (i) No
      Undisclosed Liabilities.
      Except
      as
      disclosed in the Commission Documents or on Schedule
      2.1(i)
      hereto,
      since December 31, 2007, neither the Company nor any of its Subsidiaries has
      incurred any liabilities, obligations, claims or losses (whether liquidated
      or
      unliquidated, secured or unsecured, absolute, accrued, contingent or otherwise)
      that
      would be required to be disclosed on a balance sheet of the Company or any
      Subsidiary (including the notes thereto) in conformity with GAAP and are not
      disclosed in the Commission Documents, other
      than those incurred in the ordinary course of the Company's or its Subsidiaries
      respective businesses or which, individually or in the aggregate, are not
      reasonably likely to have a Material Adverse Effect. Since
      December 31, 2007, except as disclosed in Commission Documents or
      on
Schedule
      2.1(i)
      hereto,
      none of
      the Company or any of its Subsidiaries has participated in any transaction
      material to the condition of the Company which is outside of the ordinary course
      of its business.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    (j) No
      Undisclosed Events or Circumstances.
      Since
      December 31, 2007, except as disclosed in the Commission Documents or on
Schedule
      2.1(j)
      hereto,
      no event or circumstance has occurred or exists with respect to the Company
      or
      its Subsidiaries or their respective businesses, properties, operations or
      financial condition, which, under applicable law, rule or regulation, requires
      public disclosure or announcement by the Company but which has not been so
      publicly announced or disclosed and which, individually or in the aggregate,
      would have a Material Adverse Effect.

     

    (k) Indebtedness.
      The
      Commission Documents or Schedule
      2.1(k)
      hereto
      sets forth as of the date hereof all outstanding secured and unsecured
      Indebtedness of the Company or any Subsidiary, or for which the Company or
      any
      Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness”
shall
      mean (a) any liabilities for borrowed money or amounts owed in excess of
      $100,000 (other than trade accounts payable incurred in the ordinary course
      of
      business), (b) all guaranties, endorsements and other contingent obligations
      in
      respect of liabilities for borrowed money of others in excess of $100,000,
      whether or not the same are or should be reflected in the Company’s balance
      sheet (or the notes thereto), except guaranties by endorsement of negotiable
      instruments for deposit or collection or similar transactions in the ordinary
      course of business; and (c) the present value of any lease payments in excess
      of
      $25,000 due under leases required to be capitalized in accordance with GAAP.
      Neither the Company nor any Subsidiary is in default with respect to any
      Indebtedness.

     

    (l) Title
      to Assets.
      Each
      of
      the Company and the Subsidiaries has good and marketable title
      to
      all of its real and personal property reflected in the Commission
      Documents that
      is
      material to the business of the Company,
      free and
      clear of any mortgages, pledges, charges, liens, security interests or other
      encumbrances, except for those indicated in the Commission Documents or on
      Schedule
      2.1(l)
      hereto
      or such that, individually or in the aggregate, do not cause a Material Adverse
      Effect,
      and
      except for Permitted Liens.
      All
      such leases of the Company and each of its Subsidiaries are valid and subsisting
      and in full force and effect
      in all
      material respects. “Permitted
      Liens”
means
      (i) statutory liens for taxes, assessments and other governmental charges which
      are not yet due and payable or are due but not delinquent or are being contested
      in good faith by appropriate proceedings, (ii) statutory or common law liens
      to
      secure landlords, sublandlords, licensors or sublicensors under leases or rental
      agreements, (iii) deposits or pledges made in connection with, or to secure
      payment of, workers’ compensation, unemployment insurance, old age pension or
      other social security programs mandated under applicable laws, (iv) statutory
      or
      common law liens in favor of carriers, warehousemen, mechanics, workmen,
      repairmen and materialmen to secure claims for labor, materials or supplies
      and
      other like liens, (v) restrictions on transfer of securities imposed by
      applicable state and federal securities laws, (vi) any other encumbrance
      affecting any asset which does not materially impede or otherwise affect the
      ownership or operation of such asset, (vii) liens resulting from a filing by
      a
      lessor as a precautionary filing for a true lease, (viii) deposits to secure
      the
      performance of bids, trade contracts, leases, statutory obligations, surety
      and
      appeal bonds, performance bonds an other obligations of a like nature incurred
      in the ordinary course of business, (ix) vendor’s liens to secure payment, or
      (x) rights or claims of customers or tenants under licenses or
      leases.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (m) Actions
      Pending.
      Except
      as
      set forth in the Commission Documents or on Schedule
      2.1(m)
      hereto,
      there
      is no
      action, suit, claim, investigation, arbitration, alternate dispute resolution
      proceeding or other proceeding pending or, to the Knowledge
      of the
      Company, threatened against the Company or any Subsidiary which questions the
      validity of this Agreement or any of the other Transaction Documents or any
      of
      the transactions contemplated hereby or thereby or any action taken or to be
      taken pursuant hereto or thereto. Except as set forth in the Commission
      Documents or on Schedule
      2.1(m)
      hereto,
      there is no action, suit, claim, investigation, arbitration, alternate dispute
      resolution proceeding or other proceeding pending or, to the Knowledge
      of the
      Company, threatened against or involving the Company, any Subsidiary or any
      of
      their respective properties or assets, which individually or in the aggregate,
      could reasonably be expected to have a Material Adverse Effect. Except
      as
      set forth in the Commission Documents, there
      are no
      outstanding orders, judgments, injunctions, awards or decrees of any court,
      arbitrator or governmental or regulatory body against the Company or any
      Subsidiary or any officers or directors of the Company or any Subsidiary in
      their capacities as such, which individually or in the aggregate, could
      reasonably be expected to have a Material Adverse Effect.

     

    (n) Compliance
      with Law.
      The
      business of the Company and the Subsidiaries has been and is presently being
      conducted in accordance with all applicable federal, state and local
      governmental laws, rules, regulations and ordinances, except as set forth in
      the
      Commission Documents or on Schedule
      2.1(n)
      hereto
      or such that, individually or in the aggregate, the noncompliance therewith
      would not reasonably be expected to have a Material Adverse Effect. The Company
      and each of its Subsidiaries have all franchises, permits, licenses, consents
      and other governmental or regulatory authorizations and approvals necessary
      for
      the conduct of its business as now being conducted by it unless the failure
      to
      possess such franchises, permits, licenses, consents and other governmental
      or
      regulatory authorizations and approvals, individually or in the aggregate,
      could
      not reasonably be expected to have a Material Adverse Effect.

     

    (o) Taxes.
      Except
      as set forth in the Commission Documents or on Schedule
      2.1(o)
      hereto,
and
      except for matters that would not, individually or in the aggregate, have or
      reasonably be expected to have a Material Adverse Effect, the
      Company and each of the Subsidiaries has accurately prepared and filed all
      federal, state and other tax returns required by law to be filed by it, has
      paid
      all taxes shown to be due and all additional assessments, and adequate
      provisions have been and are reflected in the financial statements of the
      Company and the Subsidiaries for all current taxes and other charges to which
      the Company or any Subsidiary is subject and which are not currently due and
      payable.
      Except
      as disclosed on Schedule
      2.1(o)
      hereto,
      none of the federal income tax returns of the Company or any Subsidiary has
      been
      audited by the Internal Revenue Service. The Company has no Knowledge of any
      additional assessments, adjustments or contingent tax liability (whether federal
      or state) of any nature whatsoever, whether pending or threatened against the
      Company or any Subsidiary for any period, nor of any basis for any such
      assessment, adjustment or contingency.

     

    (p) Certain
      Fees.
      Except
      as set forth on Schedule
      2.1(p)
      hereto,
      the Company has not employed any broker or finder or incurred any liability
      for
      any brokerage or investment banking fees, commissions, finders' structuring
      fees, financial advisory fees or other similar fees in connection with the
      Transaction Documents.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (q) Disclosure.
      Neither
      this Agreement or the Schedules hereto nor any other documents, certificates
      or
      instruments furnished to the Purchasers by or on behalf of the Company or any
      Subsidiary in connection with the transactions contemplated by this Agreement
      contains any untrue statement of a material fact or omits to state a material
      fact necessary in order to make the statements made herein or therein, in the
      light of the circumstances under which they were made herein or therein, not
      misleading.

     

    (r) Operation
      of Business.
      The
      Company and each of the Subsidiaries owns or possesses the rights to use all
      patents, trademarks, domain names (whether or not registered) and any patentable
      improvements or copyrightable derivative works thereof, websites and
      intellectual property rights relating thereto, service marks, trade names,
      copyrights, licenses and authorizations which are necessary for the conduct
      of
      its business as now conducted, which the failure to so have would reasonably
      be
      expected to have a Material Adverse Effect. Except as set forth in the
      Commission Documents, neither the Company nor any Subsidiary has received
      written notice that the intellectual property rights used by the Company or
      any
      Subsidiary, and necessary for their respective business, violates or infringes
      upon the rights of any third party.

     

    (s) Environmental
      Compliance.
      Except
      as
      disclosed in the Commission Documents or on Schedule
      2.1(s)
      hereto,
      the Company and each of its Subsidiaries have obtained all material approvals,
      authorization, certificates, consents, licenses, orders and permits or other
      similar authorizations of all governmental authorities, or from any other
      person, that are required under any Environmental
      Laws,
      except
      where failure to obtain such material approvals, authorization, certificates,
      consents, licenses, orders and permits or other similar authorizations would
      not
      individually or in the aggregate have a Material Adverse Effect.
      “Environmental
      Laws”
shall
      mean all applicable laws relating to the protection of the environment
      including, without limitation, all requirements pertaining to reporting,
      licensing, permitting, controlling, investigating or remediating emissions,
      discharges, releases or threatened releases of hazardous substances, chemical
      substances, pollutants, contaminants or toxic substances, materials or wastes,
      whether solid, liquid or gaseous in nature, into the air, surface water,
      groundwater or land, or relating to the manufacture, processing, distribution,
      use, treatment, storage, disposal, transport or handling of hazardous
      substances, chemical substances, pollutants, contaminants or toxic substances,
      material or wastes, whether solid, liquid or gaseous in nature. Except as set
      forth in
      the
      Commission Documents or on
      Schedule
      2.1(s)
      hereto,
      the Company has all necessary governmental approvals required under all
      Environmental Laws and used in its business or in the business of any of its
      Subsidiaries, except for such instances as would not individually or in the
      aggregate have a Material Adverse Effect. Except
      as
      disclosed in the Commission Documents,
      the Company
      and each of its Subsidiaries are also in compliance with all other limitations,
      restrictions, conditions, standards, requirements, schedules and timetables
      required or imposed under all Environmental Laws,
      except
      where failure to be in compliance would
      not
      individually or in the aggregate have a Material Adverse Effect.
      Except
      as
      disclosed in the Commission Documents or for such instances as would not
      individually or in the aggregate have a Material Adverse Effect, there are
      no
      past or present events, conditions, circumstances, incidents, actions or
      omissions relating to or in any way affecting the Company or its Subsidiaries
      that violate or would be reasonably likely to violate any Environmental Law
      after the Closing or that would be reasonably likely to give rise to any
      environmental liability, or otherwise form the basis of any claim, action,
      demand, suit, proceeding, hearing, study or investigation (i) under any
      Environmental Law or (ii) based on or related to the manufacture, processing,
      distribution, use, treatment, storage (including, without limitation,
      underground storage tanks), disposal, transport or handling, or the emission,
      discharge, release or threatened release of any hazardous substance.


     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (t) Books
      and Records; Internal Accounting Controls.
      The
      records and documents of the Company and its Subsidiaries accurately reflect
      in
      all material respects the information relating to the business of the Company
      and its Subsidiaries, the location and collection of their assets, and the
      nature of all transactions giving rise to the obligations or accounts receivable
      of the Company or any Subsidiary. The Company and each of its Subsidiaries
      maintain a system of internal accounting controls sufficient to provide
      reasonable assurance that (i) transactions are executed in accordance with
      management's general or specific authorizations, (ii) transactions are recorded
      as necessary to permit preparation of financial statements in conformity with
      GAAP and to maintain asset accountability, (iii) access to assets is permitted
      only in accordance with management's general or specific authorization, (iv)
      the
      recorded accountability for assets is compared with the existing assets at
      reasonable intervals and appropriate actions are taken with respect to any
      differences and (v) accounts, notes and other receivables and inventory are
      recorded accurately, and proper and adequate procedures are implemented to
      effect the collection thereof on a current and timely basis. Except as set
      forth
      on Schedule
      2.1(t)
      hereto
      or in the Commission Documents, there are no significant deficiencies or
      material weaknesses in the design or operation of internal controls over
      financial reporting that would reasonably be expected to materially and
      adversely affect the Company’s ability to record, process, summarize and report
      financial information, and there is no fraud, whether or not material, that
      involves management or, to the Knowledge of the Company, other employees who
      have a significant role in the Company’s internal controls and the Company has
      provided to the Purchaser copies of any written materials relating to the
      foregoing.

     

    (u) Material
      Agreements.
      Except
      for the Transaction Documents (with respect to clause (i) of this Section 2.1(u)
      only) or as set forth in the Commission Documents or on Schedule
      2.1(u)
      hereto,
      or as would not be reasonably likely to have a Material Adverse Effect, (i)
      the
      Company and each of its Subsidiaries have performed all obligations required
      to
      be performed by them to date under any written or oral contract, instrument,
      agreement, commitment, obligation, plan or arrangement, filed or required to
      be
      filed with the Commission (the “Material
      Agreements”),
      (ii)
      neither the Company nor any of its Subsidiaries has received any notice of
      default under any Material Agreement and, (iii) to the Company's Knowledge,
      neither the Company nor any of its Subsidiaries is in default under any material
      provision of any Material Agreement. 

     

    (v) Transactions
      with Affiliates.
      Except
      as set forth in the Commission Documents or on Schedule
      2.1(v)
      hereto,
      there are no loans, leases, agreements, contracts, royalty agreements,
      management contracts or arrangements or other continuing transactions exceeding
      $50,000 in value between (a) the Company, any Subsidiary or any of their
      respective customers or suppliers on the one hand, and (b) on the other hand,
      any officer, employee, consultant or director of the Company, or any of its
      Subsidiaries (except for reimbursements to such persons for reasonable expenses
      incurred on behalf of the Company or any Subsidiary, or arrangements entered
      into by and between any such person and the Company or any Subsidiary as part
      of
      the normal and customary terms of such person’s employment or services as a
      director or consultant with the Company or any of its Subsidiaries), or any
      person owning any capital stock of the Company or any Subsidiary or any member
      of the immediate family of such officer, employee, consultant, director or
      stockholder or any corporation or other entity controlled by such officer,
      employee, consultant, director or stockholder, or a member of the immediate
      family of such officer, employee, consultant, director or stockholder which,
      in
      each case, is required to be disclosed in the Commission Documents or in the
      Company’s most recently filed definitive proxy statement on Schedule 14A, that
      is not so disclosed in the Commission Documents or in such proxy
      statement.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (w) Securities
      Act of 1933.
      Subject
      to the accuracy and completeness of the representations and warranties of the
      Purchasers contained in the Transaction Documents, the Company has complied
      and
      will comply with all applicable federal and state securities laws in connection
      with the offer, issuance and sale of the Securities hereunder. Neither the
      Company nor anyone acting on its behalf, directly or indirectly, has or will
      sell, offer to sell or solicit offers to buy any of the Securities or similar
      securities to, or solicit offers with respect thereto from, or enter into any
      negotiations relating thereto with, any person, or has taken or will take any
      action so as to bring the issuance and sale of any of the Securities under
      the
      registration provisions of the Securities Act and applicable state securities
      laws, and neither the Company nor any of its affiliates, nor any person acting
      on its or their behalf, has engaged in any form of general solicitation or
      general advertising (within the meaning of Regulation D under the Securities
      Act) in connection with the offer or sale of any of the Securities.

     

    (x) Governmental
      Approvals.
      Except
      as set forth on Schedule
      2.1(x)
      hereto
      or disclosed in the Commission Documents, and except for the filing of any
      notice prior or subsequent to the Closing that may be required under applicable
      state and/or federal securities laws (which if required, shall be filed on
      a
      timely basis), no authorization, consent, approval, license, exemption of,
      filing or registration with any court or governmental department, commission,
      board, bureau, agency or instrumentality, domestic or foreign, is or will be
      necessary for, or in connection with, the execution or delivery of the
      Securities, or for the performance by the Company of its obligations under
      the
      Transaction Documents except for such authorizations, consents, approvals,
      licenses, exemptions, filings or registrations the Company’s failure of which to
      obtain would not, individually or in the aggregate, constitute a Material
      Adverse Effect.

     

    (y) Employees.
      Neither
      the Company nor any Subsidiary has any collective bargaining arrangements or
      agreements covering any of its employees, except as set forth on Schedule
      2.1(y)
      hereto
      or disclosed in the Commission Documents. Except as set forth on Schedule
      2.1(y)
      hereto
      or disclosed in the Commission Documents, neither the Company nor any Subsidiary
      has any employment contract, agreement regarding proprietary information,
      non-competition agreement, non-solicitation agreement, confidentiality
      agreement, or any other similar contract or restrictive covenant, relating
      to
      the right of any officer, employee or consultant to be employed or engaged
      by
      the Company or such Subsidiary required to be disclosed in the Commission
      Documents that is not so disclosed. Since December 31, 2007, no officer,
      consultant or key employee of the Company or any Subsidiary whose termination,
      either individually or in the aggregate, would be reasonably likely to have
      a
      Material Adverse Effect, has terminated, or indicated to the Company his or
      her
      intent to terminate, his or her employment or engagement with the Company or
      any
      Subsidiary.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    (z) Labor
      Relations.
      Except
      as
      set forth in the Commission Documents or as
      could
      not reasonably be expected to have a Material Adverse Effect, (i) neither the
      Company nor any of its Subsidiaries is engaged in any unfair labor practice,
      (ii) there is no strike, labor dispute, slowdown or stoppage pending or, to
      the
      knowledge of the Company, threatened against the Company or any of its
      Subsidiaries, and (iii) neither the Company nor any of its Subsidiaries is
      a
      party to any collective bargaining agreement or contract.

     

    (aa) Absence
      of Certain Developments.
      Except
      as disclosed in the Commission Documents or on Schedule
      2.1(aa)
      hereto,
      since December 31, 2007, neither the Company nor any Subsidiary
      has:

    


    (i) issued
      any stock, bonds or other corporate securities or any right, options or warrants
      with respect thereto other than under the Company’s stock option plan(s) and
      otherwise in the ordinary course of business;

     

    (ii) borrowed
      any amount or incurred or become subject to any liabilities (absolute or
      contingent) except current liabilities incurred in the ordinary course of
      business which are comparable in nature and amount to the current liabilities
      incurred in the ordinary course of business during the comparable portion of
      its
      prior fiscal year, as adjusted to reflect the current nature and volume of
      the
      Company’s or such Subsidiary’s business;

     

     

    (iii) discharged
      or satisfied any lien or encumbrance or paid any obligation or liability
      (absolute or contingent), other than Permitted Liens and current liabilities
      paid in the ordinary course of business;

     

     

    (iv) declared
      or made any payment or distribution of cash or other property to stockholders
      with respect to its stock, or purchased or redeemed, or made any agreements
      so
      to purchase or redeem, any shares of its capital stock other than under any
      equity incentive plans of the Company;

     

     

    (v) sold,
      assigned or transferred any other tangible assets, or canceled any debts or
      claims, except in the ordinary course of business;

     

     

    (vi) sold,
      assigned or transferred any patent rights, trademarks, trade names, copyrights,
      trade secrets or other intangible assets or intellectual property rights
      necessary for the conduct of its business as presently conducted;

     

     

    (vii) suffered
      any material losses or waived any rights of material value, whether or not
      in
      the ordinary course of business;

     

     

    (viii) made
      any
      changes in employee compensation except in the ordinary course of business
      and
      consistent with past practices;

     

     

    (ix) made
      capital expenditures or commitments therefor that aggregate in excess of
      $100,000;

     

     

    (x) made
      charitable contributions or pledges in excess of $10,000;

     

     

    (xi) experienced
      any material problems with labor or management in connection with the terms
      and
      conditions of their employment; or 

     

     

    (xii) entered
      into an agreement, written or otherwise, to take any of the foregoing
      actions.

     

    
      
         

      

      
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    (bb) Public
      Utility Holding Company Act and Investment Company Act Status.
      The
      Company is not a “holding company” or a “public utility company” as such terms
      are defined in the Public Utility Holding Company Act of 1935, as amended.
      The
      Company is not, and as a result of and immediately upon the Closing will not
      be,
      an “investment company” or a company “controlled” by an “investment company,”
within the meaning of the Investment Company Act of 1940, as
      amended.

     

    (cc) ERISA.
      Except
      as set forth in the Commission Documents, no liability to the Pension Benefit
      Guaranty Corporation has been incurred with respect to any Plan by the Company
      or any of its Subsidiaries which is or would be materially adverse to the
      Company and its Subsidiaries. The execution and delivery of this Agreement
      and
      the issuance and sale of the Securities will not involve any transaction which
      is subject to the prohibitions of Section 406 of the Employee Retirement Income
      Security Act of 1974, as amended (“ERISA”)
      or in
      connection with which a tax could be imposed pursuant to Section 4975 of the
      Internal Revenue Code of 1986, as amended, provided that, if any of the
      Purchasers, or any person or entity that owns a beneficial interest in any
      of
      the Purchasers, is an “employee pension benefit plan” (within the meaning of
      Section 3(2) of ERISA) with respect to which the Company is a “party in
      interest” (within the meaning of Section 3(14) of ERISA), the requirements of
      Sections 407(d)(5) and 408(e) of ERISA, if applicable, are met. As used in
      this
      Section 2.1(cc), the term “Plan” shall mean an “employee pension benefit plan”
(as defined in Section 3 of ERISA) which is or has been established or
      maintained, or to which contributions are or have been made, by the Company
      or
      any Subsidiary or by any trade or business, whether or not incorporated, which,
      together with the Company or any Subsidiary, is under common control, as
      described in Section 414(b) or (c) of the Code.

     

    (dd) Independent
      Nature of Purchasers.
      The
      Company acknowledges that the obligations of each Purchaser under the
      Transaction Documents are several and not joint with the obligations of any
      other Purchaser, and no Purchaser shall be responsible in any way for the
      performance of the obligations of any other Purchaser under the Transaction
      Documents and the Company shall not be excused from performance of its
      obligations to any Purchaser under the Transaction Documents as a result of
      nonperformance or breach by any other Purchaser. The Company acknowledges that
      the decision of each Purchaser to purchase Securities pursuant to this Agreement
      has been made by such Purchaser independently of any other purchaser and
      independently of any information, materials, statements or opinions as to the
      business, affairs, operations, assets, properties, liabilities, results of
      operations, condition (financial or otherwise) or prospects of the Company
      or of
      its Subsidiaries which may have made or given by any other Purchaser or by
      any
      agent or employee of any other Purchaser. The Company acknowledges that nothing
      contained herein, or in any Transaction Document, and no action taken by any
      Purchaser pursuant hereto or thereto, shall be deemed to constitute the
      Purchasers as a partnership, an association, a joint venture or any other kind
      of entity, or create a presumption that the Purchasers are in any way acting
      in
      concert or as a group with respect to such obligations or the transactions
      contemplated by the Transaction Documents. The Company acknowledges that each
      Purchaser shall be entitled to independently protect and enforce its rights,
      including without limitation, the rights arising out of this Agreement or out
      of
      the other Transaction Documents, and it shall not be necessary for any other
      Purchaser to be joined as an additional party in any proceeding for such
      purpose. 

     

    
      
         

      

      
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    (ee) Anti-takeover
      Device.
      Neither
      the Company nor any of its Subsidiaries has any outstanding shareholder rights
      plan or “poison pill” or any similar arrangement. There
      are
      no provisions of any anti-takeover or
      business combination statute applicable to the Company, the Articles and the
      Bylaws which would
      preclude the issuance and sale of the Securities, the reservation for issuance
      of the Warrant Shares and the consummation of the other transactions
      contemplated by this Agreement or any of the other Transaction
      Documents. 

     

    (ff) No
      Integrated Offering.
      Assuming
      the accuracy of the Purchasers’ representations and warranties herein, neither
      the Company, nor any of its affiliates, nor any person acting on its or their
      behalf, has directly or indirectly made any offers or sales of any security
      or
      solicited any offers to buy any security under circumstances that would cause
      the offering of the Securities pursuant to this Agreement to be integrated
      with
      prior offerings by the Company for purposes of the Securities Act which would
      prevent the Company from selling the Securities pursuant to Regulation D and
      Rule 506 thereof under the Securities Act, or any applicable exchange-related
      stockholder approval provisions, nor will the Company or any of its affiliates
      or Subsidiaries take any action or steps that would cause the offering of the
      Securities to be integrated with other offerings if such other offering, if
      integrated, would cause the offer and sale of the Securities not to be exempt
      from registration pursuant to Regulation D and Rule 506 thereof under the
      Securities Act. Except as set forth on Schedule
      2.1(ff)
      hereto,
      the Company does not have any registration statement pending before the
      Commission or currently under the Commission’s review and since December 1,
      2007, the Company has not offered or sold any of its equity securities or debt
      securities convertible into shares of Common Stock.

     

    (gg) Sarbanes-Oxley
      Act. 
      The Company is in compliance with the applicable provisions of the
      Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
      Act”),
      and
      the rules and regulations promulgated thereunder, that are effective and for
      which compliance by the Company is required as of the date hereof. 

     

    (hh) DTC
      Status.
      The
      Company’s current transfer agent is a participant in and the Common Stock is
      eligible for transfer pursuant to the Depository Trust Company Automated
      Securities Transfer Program. The name, address, telephone number, fax number,
      contact person and email address of the Company’s transfer agent is set forth on
Schedule
      2.1(hh)
      hereto.

     

    (ii) Insurance.
      The
      Company and its Subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are prudent
      and customary in the businesses in which the Company and the Subsidiaries are
      engaged (not including directors and officers insurance coverage). Such
      insurance contracts and policies are accurate and complete in all material
      respects. Neither the Company nor any Subsidiary has any reason to believe
      that
      it will not be able to renew its existing insurance coverage as and when such
      coverage expires or to obtain similar coverage from similar insurers as may
      be
      necessary to continue its business without a significant increase in
      cost.

     

    
      
         

      

      
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    Section
      2.2 Representations
      and Warranties of the Purchasers.
      Each of
      the Purchasers hereby represents and warrants to the Company with respect solely
      to itself and not with respect to any other Purchaser as follows as of the
      date
      hereof and as of each Closing Date, except as set forth on the Schedule of
      Exceptions attached hereto with each numbered schedule corresponding to the
      section number herein:

     

    (a) Organization
      and Standing of the Purchasers.
      If the
      Purchaser is an entity, such Purchaser is a corporation, limited liability
      company or partnership duly incorporated or organized, validly existing and
      in
      good standing under the laws of the jurisdiction of its incorporation or
      organization.

     

    (b) Authorization
      and Power.
      Such
      Purchaser has the requisite power and authority to enter into and perform its
      obligations under the Transaction Documents and to purchase the Securities
      being
      sold to it hereunder. The execution, delivery and performance of the Transaction
      Documents by such Purchaser and the consummation by it of the transactions
      contemplated hereby have been duly authorized by all necessary corporate,
      partnership or other action, and no further consent or authorization of such
      Purchaser or its Board of Directors, stockholders, partners or members, as
      the
      case may be, is required. When executed and delivered by the Purchasers, the
      Transaction Documents shall constitute valid and binding obligations of such
      Purchaser enforceable against such Purchaser in accordance with their terms,
      except as such enforceability may be limited by applicable bankruptcy,
      insolvency, reorganization, moratorium, liquidation, conservatorship,
      receivership or similar laws relating to, or affecting generally the enforcement
      of, creditor's rights and remedies or by other equitable principles of general
      application.

     

    (c) No
      Conflict.
      The
      execution, delivery and performance of the Transaction Documents by such
      Purchaser and the consummation by such Purchaser of the transactions
      contemplated thereby and hereby do not and will not (i) violate any provision
      of
      such Purchaser’s charter or organizational documents, (ii) conflict with, or
      constitute a default (or an event which with notice or lapse of time or both
      would become a default) under, or give to others any rights of termination,
      amendment, acceleration or cancellation of, any agreement, mortgage, deed of
      trust, indenture, note, bond, license, lease agreement, instrument or obligation
      to which such Purchaser is a party or by which such Purchaser’s respective
      properties or assets are bound, or (iii) result in a violation of any federal,
      state, local or foreign statute, rule, regulation, order, judgment or decree
      (including federal and state securities laws and regulations) applicable to
      such
      Purchaser or by which any property or asset of such Purchaser are bound or
      affected, except, in all cases, other than violations pursuant to clauses (i)
      or
      (iii) (with respect to federal and state securities laws) above, for such
      conflicts, defaults, terminations, amendments, accelerations, cancellations
      and
      violations as would not, individually or in the aggregate, materially and
      adversely affect such Purchaser’s ability to perform its obligations under the
      Transaction Documents. 

     

    
      
         

      

      
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    (d) Acquisition
      for Investment.
      Such Purchaser
      is purchasing the Securities solely
      for its own account for the purpose of investment and not with a view to or
      for
      sale in connection with distribution. Such Purchaser
      does not have a present intention to sell any of the Securities,
      nor a
      present arrangement (whether or not legally binding) or intention to effect
      any
      distribution of any of the Securities to
      or
      through any person or entity; provided,
      however,
      that by
      making the representations herein, such Purchaser does not agree to hold
any
      of
      the Securities for
      any
      minimum or other specific term and reserves the right to dispose of the
Securities at
      any
      time in accordance with the
      terms
      and provisions of the Transaction Documents and Federal
      and state securities laws applicable to such disposition. Such Purchaser
      acknowledges that (i)
      it
      has
      such
      knowledge and experience in financial and business matters such that Purchaser
      is capable of evaluating the merits and risks of Purchaser's investment in
      the
      Company, (ii) it
      is
      able
      to bear the financial risks associated with an investment in the Securities,
      (iii)
      it
      has
      been
      given full access to such records of the Company and the Subsidiaries and to
      the
      officers of the Company and the Subsidiaries as it has deemed necessary or
      appropriate to conduct its due diligence investigation,
      (iv) it
      has reviewed or received copies of the Commission Documents, (v) it and has
      sought such accounting, legal and tax advice as it has considered necessary
      to
      make an informed investment decision with respect to its acquisition of the
      Securities, (vi) except for this Agreement and the transactions contemplated
      hereby, neither the Company nor its employees have disclosed to such Purchaser
      any material non-public information that, according to applicable law, rule
      or
      regulation, should have been disclosed publicly by the Company prior to the
      date
      hereof but which has not been so disclosed, and (vii) it (and not the Company)
      shall be responsible for its own tax liabilities that may arise as a result
      of
      this investment or the transactions contemplated by this Agreement. Purchaser
      has the financial capability to perform all of its obligations under this
      Agreement, including the financial capability to purchase the
      Securities.

     

    (e) Rule
      144.
      Such
      Purchaser understands that the Securities must be held indefinitely unless
      such
      Securities are registered under the Securities Act or an exemption from
      registration is available. Such Purchaser acknowledges that such person is
      familiar with Rule 144 of the rules and regulations of the Commission, as
      amended, promulgated pursuant to the Securities Act (“Rule
      144”),
      and
      that such Purchaser has been advised that Rule 144 permits resales only under
      certain circumstances. Such Purchaser understands that to the extent that Rule
      144 is not available, such Purchaser will be unable to sell any Securities
      without either registration under the Securities Act or the existence of another
      exemption from such registration requirement.

     

    (f) General.
      Such
      Purchaser understands that the Securities are being offered and sold in reliance
      on a transactional exemption from the registration requirements of federal
      and
      state securities laws and the Company is relying upon the truth and accuracy
      of
      the representations, warranties, agreements, acknowledgments and understandings
      of such Purchaser set forth herein in order to determine the applicability
      of
      such exemptions and the suitability of such Purchaser to acquire the Securities.
      Such Purchaser understands that no United States federal or state agency or
      any
      government or governmental agency has passed upon or made any recommendation
      or
      endorsement of the Securities.

     

    (g) No
      General Solicitation.
      Such
      Purchaser acknowledges that the Securities were not offered to such Purchaser
      by
      means of any form of general or public solicitation or general advertising,
      or
      publicly disseminated advertisements or sales literature, including (i) any
      advertisement, article, notice or other communication published in any
      newspaper, magazine, or similar media, or broadcast over television or radio,
      or
      (ii) any seminar or meeting to which such Purchaser was invited by any of the
      foregoing means of communications. Such Purchaser, in making the decision to
      purchase the Securities, has relied upon independent investigation made by
      it
      and the representations, warranties, agreements, acknowledgments and
      understandings set forth in the Transaction Documents and has not relied on
      any
      information or representations made by third parties.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    (h) Accredited
      Investor.
      Such
      Purchaser is an “accredited investor” (as defined in Rule 501 of Regulation D),
      and such Purchaser has such experience in business and financial matters that
      it
      is capable of evaluating the merits and risks of an investment in the
      Securities. Such Purchaser is not required to be registered as a broker-dealer
      under Section 15 of the Exchange Act and such Purchaser is not a broker-dealer.
      Such Purchaser acknowledges that an investment in the Securities is speculative
      and involves a high degree of risk. 

     

    (i) Certain
      Fees.
      The
      Purchasers have not employed any broker or finder or incurred any liability
      for
      any brokerage or investment banking fees, commissions, finders' structuring
      fees, financial advisory fees or other similar fees in connection with the
      Transaction Documents.

     

    (j) Independent
      Investment.
      Except
      as may be disclosed in any filings with the Commission by the Purchasers under
      Section 13 and/or Section 16 of the Exchange Act, no Purchaser has agreed to
      act
      with any other Purchaser for the purpose of acquiring, holding, voting or
      disposing of the Shares purchased hereunder for purposes of Section 13(d) under
      the Exchange Act, and each Purchaser is acting independently with respect to
      its
      investment in the Securities.

     

    (k) No
      Shorting.
      No
      Purchaser has engaged in any short sales of any securities of the Company or
      instructed any third parties to engage in any short sales of securities of
      the
      Company on its behalf prior to the Closing Date. Each Purchaser covenants and
      agrees that it will not be in a net short position with respect to the shares
      of
      Common Stock issued or issuable to it.

     

    (l) Not
      an
      Affiliate.
      Such
      Purchaser is not an officer, director or “affiliate” (as defined in Rule 405 of
      the Securities Act) of the Company.

     

    ARTICLE
      III

     

    COVENANTS

     

    The
      Company covenants with each Purchaser as follows, which covenants are for the
      benefit of each Purchaser and their respective permitted assignees.

     

    Section
      3.1 Securities
      Compliance.
      The
      Company shall notify the Commission in accordance with its rules and
      regulations, of the transactions contemplated by any of the Transaction
      Documents and shall take all other necessary action and proceedings as may
      be
      required and permitted by applicable law, rule and regulation, for the legal
      and
      valid issuance of the Securities to the Purchasers, or their respective
      subsequent holders.

     

    
      
         

      

      
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    Section
      3.2 Registration
      and Listing.
      The
      Company shall use commercially reasonable efforts to (i) cause its Common Stock
      to continue to be registered under Sections 12(b) or 12(g) of the Exchange
      Act,
      (ii) to comply in all respects with its reporting and filing obligations under
      the Exchange Act, (iii) to comply with all requirements related to any
      registration statement filed pursuant to this Agreement, and (iv) to not take
      any action or file any document (whether or not permitted by the Securities
      Act
      or the rules promulgated thereunder) to terminate or suspend such registration
      or to terminate or suspend its reporting and filing obligations under the
      Exchange Act or Securities Act, except as permitted herein. The
      Company will use commercially reasonable efforts to continue the listing or
      trading of its Common Stock on the OTC Bulletin Board or any successor market.
      Subject to the terms of the Transaction Documents, the Company further covenants
      that it will take such further action as the Purchasers may reasonably request,
      all to the extent required from time to time to enable the Purchasers to sell
      the Securities without registration under the Securities Act within the
      limitation of the exemptions provided by Rule 144 promulgated under the
      Securities Act. Upon the request of the Purchasers, the Company shall deliver
      to
      the Purchasers a written certification of a duly authorized officer as to
      whether it has complied with such requirements.

     

    Section
      3.3 Inspection
      Rights.
      The
      Company shall permit, during normal business hours and upon reasonable request
      and reasonable notice, each Purchaser or any employees, agents or
      representatives thereof, so long as such Purchaser shall be obligated hereunder
      to purchase the Shares or shall beneficially own any Shares or Warrant Shares,
      for purposes reasonably related to such Purchaser's interests as a stockholder
      to examine and make reasonable copies of the records and books of account of,
      and visit and inspect the properties, assets, operations and business of the
      Company and any Subsidiary, and to discuss the affairs, finances and accounts
      of
      the Company and any Subsidiary with any of its officers, consultants, directors,
      and key employees.

     

    Section
      3.4 Compliance
      with Laws.
      The
      Company shall comply, and cause each Subsidiary to comply, with all applicable
      laws, rules, regulations and orders, noncompliance with which would be
      reasonably likely to have a Material Adverse Effect.

     

    Section
      3.5 Keeping
      of Records and Books of Account.
      The
      Company shall keep and cause each Subsidiary to keep adequate records and books
      of account, in which complete entries will be made in accordance with GAAP
      consistently applied, reflecting all financial transactions of the Company
      and
      its Subsidiaries.

     

    Section
      3.6 Reporting
      Requirements.
      If the
      Company ceases to file its periodic reports with the Commission, or if the
      Commission ceases making these periodic reports available via the Internet
      without charge, then the Company shall, promptly after filing with the
      Commission, furnish the following to each Purchaser so long as such Purchaser
      shall be obligated hereunder to purchase the Securities or shall beneficially
      own Shares or Warrant Shares:

     

    (a) Quarterly
      Reports filed with the Commission on Form 10-Q;

     

    (b) Annual
      Reports filed with the Commission on Form 10-K; and

     

    (c) Copies
      of
      all notices, information and proxy statements in connection with any meetings,
      that are, in each case, provided to holders of shares of Common Stock,
      contemporaneously with the delivery of such notices or information to such
      holders of Common Stock.

     

    
      
         

      

      
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    Section
      3.7 Other
      Agreements.
      The
      Company shall not enter into any agreement in which the terms of such agreement
      would restrict or impair the right or ability of the Company or any Subsidiary
      to perform its material obligations under the Transaction
      Documents.

     

    Section
      3.8 Use
      of
      Proceeds.
      The net
      proceeds from the sale of the Shares will be used by the Company for working
      capital and general corporate purposes and not to redeem any Common Stock or
      securities convertible, exercisable or exchangeable into Common Stock or to
      settle any outstanding litigation.

    


    Section
      3.9 Reporting
      Status. So
      long
      as a Purchaser beneficially owns any of the Securities, the Company shall timely
      file all reports required to be filed with the Commission pursuant to the
      Exchange Act, and the Company shall not terminate its status as an issuer
      required to file reports under the Exchange Act even if the Exchange Act or
      the
      rules and regulations thereunder would permit such termination. 

    


    Section
      3.10 Disclosure
      of Transaction.
      The
      Company shall issue a press release describing the material terms of the
      transactions contemplated hereby (the “Press
      Release”)
      as
      soon as practicable after each Closing Date but in no event later than one
      day
      after such Closing Date; provided,
      however,
      that if
      such Closing occurs after 4:00 P.M. Eastern Time on any Trading Day, the Company
      shall issue the Press Release no later than 9:00 A.M. Eastern Time on the first
      Trading Day following such Closing Date. The Company shall also file with the
      Commission a Current Report on Form 8-K (the “Form
      8-K”)
      describing the material terms of the transactions contemplated hereby (and
      attaching as exhibits thereto this Agreement, the Registration Rights Agreement,
      the form of Warrant and the Press Release) as soon as practicable following
      each
      Closing Date but in no event more than two (2) Trading Days following the
      applicable Closing Date, which Press Release and Form 8-K shall be subject
      to
      prior review and comment by the Purchasers. “Trading
      Day”
means
      any day during which the OTC Bulletin Board (or other principal exchange on
      which the Common Stock is traded) shall be open for trading. 

     

    Section
      3.11 Disclosure
      of Material Information.
      The
      Company covenants and agrees that neither it nor any other person acting on
      its
      behalf has provided or will provide any Purchaser or its agents or counsel
      with
      any information that the Company believes constitutes material non-public
      information, unless prior thereto such Purchaser shall have executed a written
      agreement regarding the confidentiality and use of such information.  The
      Company understands and confirms that each Purchaser shall be relying on the
      foregoing representations in effecting transactions in securities of the
      Company.

     

    
      
         

      

      
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    Section
      3.12 Form
      D.
      The
      Company agrees to file a Form D with respect to the Securities as required
      by
      Rule 506 under Regulation D and to provide a copy thereof to the Purchasers
      promptly after such filing.

     

    Section
      3.13 No
      Integrated Offerings.
      The
      Company shall not make any offers or sales of any security (other than the
      Securities being offered or sold hereunder) under circumstances that would
      require registration of the Securities being offered or sold hereunder under
      the
      Securities Act.

     

    Section
      3.14 Pledge
      of Securities.
      The
      Company acknowledges and agrees that the Securities may be pledged by a
      Purchaser in connection with a bona fide
      margin
      agreement or other loan or financing arrangement that is secured by the Common
      Stock. The pledge of Common Stock shall not be deemed to be a transfer, sale
      or
      assignment of the Common Stock hereunder, and no Purchaser effecting a pledge
      of
      Common Stock shall be required to provide the Company with any notice thereof
      or
      otherwise make any delivery to the Company pursuant to this Agreement or any
      other Transaction Document; provided that a Purchaser and its pledgee shall
      be
      required to comply with the provisions of Article V hereof in order to effect
      a
      sale, transfer or assignment of Common Stock to such pledgee. At the Purchasers'
      expense, the Company hereby agrees to execute and deliver such documentation
      as
      a pledgee of the Common Stock may reasonably request in connection with a pledge
      of the Common Stock to such pledgee by a Purchaser.

     

    Section
      3.15 Sarbanes-Oxley
      Act. 
      The Company shall comply with the applicable provisions of the Sarbanes-Oxley
      Act, and the rules and regulations promulgated thereunder, upon the
      effectiveness of such provisions or the date by which compliance therewith
      by
      the Company is required. 

     

    Section
      3.16 Directors
      and Officers Insurance.
      The
      Company shall use its commercially reasonable efforts to obtain directors and
      officers insurance coverage of at least $5.0 million within 60 days following
      the Initial Closing Date. 

     

    Section
      3.17 Board
      of Directors.
      The
      Company shall use commercially reasonable efforts to cause, by or before
      September 30, 2008, its Bylaws to be amended to provide that the number of
      authorized seats on its Board of Directors shall be five (5). The Company shall
      nominate two (2) individuals designated by the Purchasers representing a
      majority of the then outstanding Shares for election to the Company's Board
      of
      Directors. 

     

    Section
      3.18 Restrictions
      on Issuance of Securities.
      For a
      period of two (2) years following the earlier of the Second Closing Date or
      July
      26, 2008, the Company shall not issue to any of its officers, directors,
      employees or consultants any shares of its Common Stock or options to purchase
      shares of Common Stock in excess of a number of shares equal to ten percent
      (10%) of the number of issued and outstanding shares of Common Stock (as
      calculated on a fully diluted basis) as of the Initial Closing Date. In
      addition, the Company shall not issue any options with an exercise price per
      share less than $1.00.

     

    
      
         

      

      
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    Section
      3.19 Subsequent
      Financings.
      

     

    (a)
       For
      a
      period of two (2) years following
      the
      Initial Closing Date,
      the
      Company covenants and agrees to promptly notify in writing (a "Rights
      Notice")
      the
      Purchasers of the terms and conditions of any proposed offer or sale to, or
      exchange with (or other type of distribution to) any third party (a
“Subsequent
      Financing”),
      of
      Common Stock or any debt or equity securities convertible, exercisable or
      exchangeable into Common Stock; provided,
      however,
      prior
      to delivering to each Purchaser a Rights Notice, the Company shall first
deliver
      to each Purchaser a written notice of its intention to effect a Subsequent
      Financing (“Pre-Notice”)
      within
      three (3) Trading Days of receiving an applicable offer, which Pre-Notice shall
      ask such Purchaser if it wants to review the details of such financing. Upon
      the
      request of a Purchaser, and only upon a request by such Purchaser within three
      (3) Trading Days of receipt of a Pre-Notice, the Company shall promptly, but
      no
      later than three (3) Trading Days after such request, deliver a Rights Notice
      to
      such Purchaser. The
      Rights Notice shall describe, in reasonable detail, the proposed Subsequent
      Financing, the names and investment amounts of all investors participating
      in
      the Subsequent Financing (if known), the proposed closing date of the Subsequent
      Financing, which shall be within twenty (20) calendar days from the date of
      the
      Rights Notice, and all of the terms and conditions thereof
      and
      proposed definitive documentation to be entered into in connection
      therewith.
      The
      Rights Notice shall provide each Purchaser an option (the “Rights
      Option”)
      during
      the ten (10) Trading Days following delivery of the Rights Notice (the
“Option
      Period”)
      to
      inform the Company whether such Purchaser will purchase up
      to one
      hundred percent (100%) of its pro rata portion of all or a portion of the
      securities being
      offered in such Subsequent Financing on the same, material terms and conditions
      as contemplated by such Subsequent Financing. If
      any
      Purchaser elects not to participate in such Subsequent Financing, the other
      Purchasers may participate on a pro-rata basis so long as such participation
      in
      the aggregate does not exceed one hundred percent (100%) of the total Purchase
      Price hereunder. For
      purposes of this Section, all references to “pro
      rata”
means,
      for any Purchaser electing to participate in such Subsequent Financing, the
      percentage obtained by dividing (x) the total number of Shares purchased by
      such
      Purchaser at the Closing by (y) the total number of Shares purchased by all
      of
      the participating Purchasers at the Closing. Delivery
      of any Rights Notice constitutes a representation and warranty by the Company
      that there are no other material terms and conditions, arrangements, agreements
      or otherwise except for those disclosed in the Rights Notice, to provide
      additional compensation to any party participating in any proposed Subsequent
      Financing, including, but not limited to, additional compensation based on
      changes in the Purchase Price or any type of reset or adjustment of a purchase
      or conversion price or to issue additional securities at any time after the
      closing date of a Subsequent Financing. If the Company does not receive notice
      of exercise of the Rights Option from the Purchasers within the Option Period,
      the Company shall have the right to close the Subsequent Financing on the
      scheduled closing date with a third party; provided
      that all
      of the material terms and conditions of the closing are substantially similar
      to
      those provided to the Purchasers in the Rights Notice. If the closing of the
      proposed Subsequent Financing does not occur within thirty (30) days following
      the proposed date disclosed in the Rights Notice, any closing of the
      contemplated Subsequent Financing or any other Subsequent Financing shall be
      subject to all of the provisions of this Section 3.19(a), including, without
      limitation, the delivery of a new Rights Notice. The provisions of this Section
      3.19(a) shall not apply to issuances of securities in a Permitted
      Financing. 


    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    (b)
      For
      purposes of this Agreement, a Permitted Financing (as defined hereinafter)
      shall
      not be considered a Subsequent Financing. A "Permitted
      Financing"
      shall
      mean (i) securities issued (other than for cash) in connection with a merger,
      acquisition, or consolidation, (ii) securities issued pursuant to the
      conversion or exercise
      of convertible or exercisable securities issued or outstanding on or prior
      to
      the date hereof or issued pursuant to this Agreement (so long as the conversion
      or exercise price in such securities are not amended to lower such price and/or
      adversely affect the Purchasers), (iii) the Warrant Shares, (iv) the
      issuance of securities
      in
      connection with acquisitions,
      leasing arrangements, collaborations, licensing arrangements, strategic
      investments or
      other
      partnering arrangements,
      the
      primary purpose
      of which
      is
      not to raise capital,
      (v) Common Stock issued or the issuance or grants of options to purchase Common
      Stock pursuant to the Company’s stock option plans and employee stock purchase
      plans as approved by the Company’s Board of Directors, and (vi) any warrants or
      other securities issued to the placement agent and its designees for the
      transactions contemplated by this Agreement.

     

    ARTICLE
      IV

     

    CONDITIONS

     

    Section
      4.1 Conditions
      Precedent to the Obligation of the Company to Close and to Sell the
      Securities.
      The
      obligation hereunder of the Company to close and issue and sell the Securities
      to the Purchasers at each Closing Date is subject to the satisfaction or waiver,
      at or before such Closing, of the conditions set forth below. These conditions
      are for the Company's sole benefit and may be waived by the Company at any
      time
      in its sole discretion.

     

    (a) Accuracy
      of the Purchasers’ Representations and Warranties.
      The
      representations and warranties of each Purchaser shall be true and correct
      in
      all material respects (except for those representations and warranties that
      are
      qualified by materiality or Material Adverse Effect, which shall be true and
      correct in all respects) as of the date when made and as of the Closing Date,
      as
      though made at that time, except for representations and warranties that are
      expressly made as of a particular date, which shall be true and correct in
      all
      material respects (except for those representations and warranties that are
      qualified by materiality or Material Adverse Effect, which shall be true and
      correct in all respects) as of such date.

     

    (b) Performance
      by the Purchasers.
      Each
      Purchaser shall have performed, satisfied and complied in all material respects
      with all covenants, agreements and conditions required by this Agreement to
      be
      performed, satisfied or complied with by such Purchaser at or prior to the
      Closing Date.

     

    (c) No
      Injunction.
      No
      statute, rule, regulation, executive order, decree, ruling or injunction shall
      have been enacted, entered, promulgated or endorsed by any court or governmental
      authority of competent jurisdiction which prohibits the consummation of any
      of
      the transactions contemplated by this Agreement.

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    (d) Delivery
      of Purchase Price.
      The
      Purchasers shall have delivered to the Company the applicable purchase price
      for
      the Shares to be purchased by each Purchaser.

     

    (e) Delivery
      of Transaction Documents.
      The
      Transaction Documents shall have been duly executed and delivered by the
      Purchasers and, with respect to the Escrow Agreement, the escrow agent, to
      the
      Company. 

     

    (f) Series
      A Preferred Stock Purchase Agreement.
      Prior
      to or at the Initial Closing, the transactions contemplated by that certain
      Series A Convertible Preferred Stock Purchase Agreement dated on or about the
      date hereof shall have been consummated.

     

    Section
      4.2 Conditions
      Precedent to the Obligation of the Purchasers to Close and to Purchase the
      Securities.
      The
      obligation hereunder of each Purchaser to purchase the Securities and consummate
      the transactions contemplated by this Agreement is subject to the satisfaction
      or waiver, at or before each Closing Date, of each of the conditions set forth
      below. These conditions are for the Purchaser’s sole benefit and may be waived
      by the Purchaser at any time in its sole discretion.

     

    (a) Accuracy
      of the Company's Representations and Warranties.
      Each of
      the representations and warranties of the Company in this Agreement and the
      other Transaction Documents shall be true and correct in all material respects
      (except for those representations and warranties that are qualified by
      materiality or Material Adverse Effect, which shall be true and correct in
      all
      respects) as of the date when made and as of the Closing Date as though made
      at
      that time, except for representations and warranties that are expressly made
      as
      of a particular date, which shall be true and correct in all material respects
      (except for those representations and warranties that are qualified by
      materiality or Material Adverse Effect, which shall be true and correct in
      all
      respects) as of such date.

     

    (b) Performance
      by the Company.
      The
      Company shall have performed, satisfied and complied in all material respects
      with all covenants, agreements and conditions required by this Agreement to
      be
      performed, satisfied or complied with by the Company at or prior to the Closing
      Date.

     

    (c) No
      Suspension, Etc.
      Trading
      in the Common Stock shall not have been suspended by the Commission or the
      OTC
      Bulletin Board (except for any suspension of trading of limited duration agreed
      to by the Company, which suspension shall be terminated prior to the Closing),
      and, at any time prior to the Closing Date, trading in securities generally
      as
      reported by Bloomberg Financial Markets (“Bloomberg”)
      shall
      not have been suspended or limited, or minimum prices shall not have been
      established on securities whose trades are reported by Bloomberg, or on the
      New
      York Stock Exchange, nor shall a banking moratorium have been declared either
      by
      the United States or New York State authorities.

     

    (d) No
      Injunction.
      No
      statute, rule, regulation, executive order, decree, ruling or injunction shall
      have been enacted, entered, promulgated or endorsed by any court or governmental
      authority of competent jurisdiction which prohibits the consummation of any
      of
      the transactions contemplated by this Agreement.

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    (e) No
      Proceedings or Litigation.
      No
      action, suit or proceeding before any arbitrator or any governmental authority
      shall have been commenced, and no investigation by any governmental authority
      shall have been threatened, against the Company or any Subsidiary, or any of
      the
      officers, directors or affiliates of the Company or any Subsidiary seeking
      to
      restrain, prevent or change the transactions contemplated by this Agreement,
      or
      seeking damages in connection with such transactions.

     

    (f) Opinion
      of Counsel.
      The
      Purchasers shall have received an opinion of counsel to the Company, dated
      the
      date of such Closing, substantially in the form of Exhibit
      E
      hereto,
      with such exceptions and limitations as shall be reasonably acceptable to
      counsel to the Purchasers.

     

    (g) Shares
      and Warrants.
      At or
      prior to the Closing, the Company shall have delivered to the Purchasers
      certificates representing the Shares (in such denominations as each Purchaser
      may request) and the Warrants (in such denominations as each Purchaser may
      request) duly executed by the Company, in each case, being acquired by the
      Purchasers at such Closing. 

     

    (h) Secretary's
      Certificate.
      The
      Company shall have delivered to the Purchasers a secretary's certificate, dated
      as of the Closing Date, as to (i) the resolutions adopted by the Board of
      Directors approving the transactions contemplated hereby, (ii) the Articles,
      (iii) the Bylaws, each as in effect at such Closing, and (iv) the authority
      and
      incumbency of the officers of the Company executing the Transaction Documents
      and any other documents required to be executed or delivered in connection
      therewith.

     

    (i) Officer's
      Certificate.
      On the
      Closing Date, the Company shall have delivered to the Purchasers a certificate
      signed by an executive officer on behalf of the Company, dated as of the Closing
      Date, confirming the accuracy of the Company's representations, warranties
      and
      its compliance with covenants as of the Closing Date and confirming the
      compliance by the Company with the conditions precedent set forth in paragraphs
      (b)-(e) of this Section 4.2 as of the Closing Date (provided that, with respect
      to the matters in paragraphs (d) and (e) of this Section 4.2, such confirmation
      shall be based on the Knowledge of the Company).

     

    (j) Escrow
      Agreement.
      At each
      Closing, the Company and the escrow agent shall have executed and delivered
      the
      Escrow Agreement, in the form attached hereto as Exhibit
      C,
      to each
      Purchaser.

     

    (k) Registration
      Rights Agreement.
      As of
      the Closing Date, the Company shall have duly executed and delivered the
      Registration Rights Agreement in the form of Exhibit
      D
      attached
      hereto.

     

    (l) Material
      Adverse Effect.
      No
      Material Adverse Effect shall have occurred at or before the Closing
      Date.

     

    (m) Series
      A Preferred Stock Purchase Agreement.
      Prior
      to or at the Initial Closing, the transactions contemplated by that certain
      Series A Convertible Preferred Stock Purchase Agreement dated on or about the
      date hereof shall have been consummated.

     

    
      
         

      

      
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    ARTICLE
      V

     

    CERTIFICATE
      LEGEND 

     

    Section
      5.1 Legend.
      Each
      certificate representing the Securities shall be stamped or otherwise imprinted
      with a legend substantially in the following form (in addition to any legend
      required by applicable state securities or “blue sky” laws):

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
      OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
      STATE SECURITIES LAWS OR BOND LABORATORIES, INC. SHALL HAVE RECEIVED AN OPINION
      OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
      UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
      REQUIRED.

     

    The
      Company agrees to reissue certificates representing any of the Shares and the
      Warrant Shares, without the legend set forth above if at such time, prior to
      making any transfer of any such Shares or Warrant Shares, such holder thereof
      shall give written notice to the Company describing the manner and terms of
      such
      transfer and removal as the Company may reasonably request. Such proposed
      transfer and removal will not be effected until: (a) either (i) the Company
      has
      received an opinion of counsel reasonably satisfactory to the Company, to the
      effect that the registration of the Shares or Warrant Shares under the
      Securities Act is not required in connection with such proposed transfer, (ii)
      a
      registration statement under the Securities Act covering such proposed
      disposition has been filed by the Company with the Commission and has become
      and
      remains effective under the Securities Act, (iii) the Company has received
      other
      evidence reasonably satisfactory to the Company that such registration and
      qualification under the Securities Act and state securities laws are not
      required, or (iv) the holder provides the Company with reasonable assurances
      that such security can be sold pursuant to Rule 144 under the Securities Act;
      and (b) either (i) the Company has received an opinion of counsel reasonably
      satisfactory to the Company, to the effect that registration or qualification
      under the securities or “blue sky” laws of any state is not required in
      connection with such proposed disposition, or (ii) compliance with applicable
      state securities or “blue sky” laws has been effected or a valid exemption
      exists with respect thereto. The Company will respond to any such notice from
      a
      holder within five (5) business days. In the case of any proposed transfer
      under
      this Section 5.1, the Company will use reasonable efforts to comply with any
      such applicable state securities or “blue sky” laws, but shall in no event be
      required, (x) to qualify to do business in any state where it is not then
      qualified, or (y) to take any action that would subject it to tax or to the
      general service of process in any state where it is not then subject. The
      restrictions on transfer contained in this Section 5.1 shall be in addition
      to,
      and not by way of limitation of, any other restrictions on transfer contained
      in
      any other section of this Agreement. Whenever
      a
      certificate representing the Shares or Warrant Shares is required to be issued
      to a Purchaser without a legend, in lieu of delivering physical certificates
      representing the Shares or Warrant Shares, provided the Company's transfer
      agent
      is participating in the Depository Trust Company (“DTC”)
      Fast
      Automated Securities Transfer program, the Company shall use its commercially
      reasonable efforts to cause its transfer agent to electronically transmit the
      Shares or Warrant Shares to a Purchaser by crediting the account of such
      Purchaser's Prime Broker with DTC through its Deposit Withdrawal Agent
      Commission (“DWAC”)
      system
      (to the extent not inconsistent with any provisions of this
      Agreement).

     

    
      
         

      

      
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    ARTICLE
      VI

     

    INDEMNIFICATION

     

    Section
      6.1 Company
      Indemnity. The
      Company agrees to indemnify and hold harmless the Purchasers (and their
      respective directors, officers, affiliates, agents, successors and
      assigns) (each,
      a
“Purchaser
      Indemnified Party”
and
      collectively, the “Purchaser
      Indemnified Parties”)
      from
      and against any and all losses, liabilities, deficiencies, costs, damages and
      expenses (including, without limitation, reasonable attorneys’ fees, charges and
      disbursements) (“Damages”) incurred
      by the Purchaser
      Indemnified Parties as
      a
      result of any inaccuracy in or breach of the representations, warranties or
      covenants made by the Company herein;
      provided,
      however,
      that
      the Company shall not be liable under this Section 6.1 to a Purchaser
      Indemnified Party to the extent that such Damages resulted or arose from the
      breach by a Purchaser Indemnified Party of any representation, warranty,
      covenant or agreement of a Purchaser Indemnified Party contained in the
      Transaction Documents or the gross negligence, recklessness, willful misconduct
      or bad faith of a Purchaser Indemnified Party. 

     

    Section
      6.2 Indemnification
      Procedure.
      Any
      party
      entitled to indemnification under this Article VI (an “indemnified
      party”)
      will
      give written notice to the indemnifying party of any matters giving rise to
      a
      claim for indemnification; provided, that the failure of any indemnified party
      to give notice as provided herein shall not relieve the indemnifying party
      of
      its obligations under this Article VI except to the extent that the indemnifying
      party is actually prejudiced by such failure to give notice. In case any such
      action, proceeding or claim is brought against an indemnified party in respect
      of which indemnification is sought hereunder, the indemnifying party shall
      be
      entitled to participate in and, unless in the reasonable judgment of the
      indemnifying party a conflict of interest between it and the indemnified party
      exists with respect to such action, proceeding or claim (in which case the
      indemnifying party shall be responsible for the reasonable fees and expenses
      of
      one separate counsel for the indemnified parties), to assume the defense thereof
      with counsel reasonably satisfactory to the indemnified party. In the event
      that
      the indemnifying party advises an indemnified party that it will not contest
      such a claim for indemnification hereunder, or fails, within thirty (30) days
      of
      receipt of any indemnification notice to notify, in writing, such person of
      its
      election to defend, settle or compromise, at its sole cost and expense, any
      action, proceeding or claim (or discontinues its defense at any time after
      it
      commences such defense), then the indemnified party may, at its option, defend,
      settle or otherwise compromise or pay such action or claim. In any event, unless
      and until the indemnifying party elects in writing to assume and does so assume
      the defense of any such claim, proceeding or action, the indemnified party's
      costs and expenses arising out of the defense, settlement or compromise of
      any
      such action, claim or proceeding shall be losses subject to indemnification
      hereunder. The indemnified party shall cooperate fully with the indemnifying
      party in connection with any negotiation or defense of any such action or claim
      by the indemnifying party and shall furnish to the indemnifying party all
      information reasonably available to the indemnified party which relates to
      such
      action or claim. The indemnifying party shall keep the indemnified party fully
      apprised at all times as to the status of the defense or any settlement
      negotiations with respect thereto. If the indemnifying party elects to defend
      any such action or claim, then the indemnified party shall be entitled to
      participate in such defense with counsel of its choice at its sole cost and
      expense. The indemnifying party shall not be liable for any settlement of any
      action, claim or proceeding effected without its prior written consent which
      shall not be unreasonably withheld. Notwithstanding anything in this Article
      VI
      to the contrary, the indemnifying party shall not, without the indemnified
      party's prior written consent, settle or compromise any claim or consent to
      entry of any judgment in respect thereof which imposes any future obligation
      on
      the indemnified party or which does not include, as an unconditional term
      thereof, the giving by the claimant or the plaintiff to the indemnified party
      of
      a release from all liability in respect of such claim. The indemnification
      required by this Article VI shall be made by periodic payments of the amount
      thereof during the course of investigation or defense, as and when bills are
      received or expense, loss, damage or liability is incurred, so long as the
      indemnified party irrevocably agrees to refund such moneys if it is ultimately
      determined by a court of competent jurisdiction that such party was not entitled
      to indemnification. The indemnity agreements contained herein shall be in
      addition to (a) any cause of action or similar rights of the indemnified party
      against the indemnifying party or others, and (b) any liabilities the
      indemnifying party may be subject to pursuant to the law.


    
      
         

      

      
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    ARTICLE
      VII

     

    MISCELLANEOUS

     

    Section
      7.1 Fees
      and Expenses.
      Each
      party shall pay the fees and expenses of its advisors, counsel, accountants
      and
      other experts, if any, and all other expenses, incurred by such party incident
      to the negotiation, preparation, execution, delivery and performance of this
      Agreement, provided
      that the
      Company shall pay all actual attorneys' fees and expenses (including
      disbursements and out-of-pocket expenses) incurred by the Purchasers in
      connection with (i) the preparation, negotiation, execution and delivery of
      this
      Agreement, the Registration Rights Agreement, the Warrants and the transactions
      contemplated thereunder, which payment shall be made at the Initial Closing
      and
      shall not exceed $45,000, (ii) up to $5,000 in connection the filing and
      declaration of effectiveness by the Commission of the Registration Statement
      (as
      defined in the Registration Rights Agreement) in accordance with Section 4(iv)
      of the Registration Rights Agreement and (iii) any amendments, modifications
      or
      waivers of this Agreement or any of the other Transaction Documents. The Company
      and the Purchasers hereby agree that the prevailing party in any suit, action
      or
      proceeding arising out of or relating to the Securities, this Agreement or
      the
      Registration Rights Agreement, shall be entitled to reimbursement for reasonable
      legal fees from the non-prevailing party. 

     

    Section
      7.2 Specific
      Performance; Consent to Jurisdiction; Venue. 

     

    (a) The
      Company and the Purchasers acknowledge and agree that irreparable damage would
      occur in the event that any of the provisions of this Agreement or the other
      Transaction Documents are not performed in accordance with their specific terms
      or are otherwise breached. It is accordingly agreed that the parties shall
      be
      entitled to an injunction or injunctions to prevent or cure breaches of the
      provisions of this Agreement or the other Transaction Documents and to enforce
      specifically the terms and provisions hereof or thereof, this being in addition
      to any other remedy to which any of them may be entitled by law or
      equity.

     

    (b) The
      parties agree that venue for any dispute arising under this Agreement will
      lie
      exclusively in the state or federal courts located in New York County, New
      York,
      and the parties irrevocably waive any right to raise forum
      non conveniens
      or any
      other argument that New York is not the proper venue. The parties irrevocably
      consent to personal jurisdiction in the state and federal courts of the state
      of
      New York. The Company and each Purchaser consent to process being served in
      any
      such suit, action or proceeding by mailing a copy thereof to such party at
      the
      address in effect for notices to it under this Agreement and agrees that such
      service shall constitute good and sufficient service of process and notice
      thereof. Nothing in this Section 7.2 shall affect or limit any right to serve
      process in any other manner permitted by law. The Company and the Purchasers
      hereby agree that the prevailing party in any suit, action or proceeding arising
      out of or relating to the Securities, this Agreement or the Registration Rights
      Agreement, shall be entitled to reimbursement for reasonable legal fees from
      the
      non-prevailing party.


    
      
         

      

      
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    Section
      7.3 Entire
      Agreement; Amendment.
      This
      Agreement and the Transaction Documents contain the entire understanding and
      agreement of the parties with respect to the matters covered hereby and, except
      as specifically set forth herein or in the other Transaction Documents, neither
      the Company nor any Purchaser make any representation, warranty, covenant or
      undertaking with respect to such matters, and they supersede all prior
      understandings and agreements with respect to said subject matter, all of which
      are merged herein. Following the Closing, no provision of this Agreement may
      be
      waived or amended other than by a written instrument signed by the Company
      and
      the Purchasers holding at least a majority of all Shares then held by the
      Purchasers. Any amendment or waiver effected in accordance with this Section
      7.3
      shall be binding upon each Purchaser (and their permitted assigns) and the
      Company. 

     

    Section
      7.4 Notices.
      Any
      notice, demand, request, waiver or other communication required or permitted
      to
      be given hereunder shall be in writing and shall be effective (a) upon hand
      delivery, by telecopy or facsimile (or other electronic transmission) at the
      address or number designated below (if delivered on a business day during normal
      business hours where such notice is to be received), or the first business
      day
      following such delivery (if delivered other than on a business day during normal
      business hours where such notice is to be received) or (b) on the second
      business day following the date of mailing by express courier service, fully
      prepaid, addressed to such address, or upon actual receipt of such mailing,
      whichever shall first occur. The addresses for such communications shall
      be:

     

    

      
        	
                If
                  to the Company:

              	
                Bond
                  Laboratories, Inc. 

              
	 	
                777
                  South Highway 101, Suite 215 

              
	 	
                Solana
                  Beach, California 92975

              
	 	
                Attention:
                  Chief Executive Officer

              
	 	
                Tel.
                  No.: (858) 847-9000

              
	 	
                Fax
                  No.: (760) 990-5637 

              
	
                with copies (which copies 

                shall not constitute notice 

                to the Company) to:

              	Mintz
                Levin Cohn
                Ferris Glovsky & Popeo, P.C.
	 	
                3580 Carmel Mountain Road, Suite 300 

                San
                  Diego, California
                  92130
                  

                Attention:
                  Eddie Rodriguez, Esq. 

                Tel.
                  No.: (858) 314-1524 

                Fax
                  No.: (858) 314-1501

              
	 	 
	
                If to any Purchaser: 

              	
                At
                  the address of such Purchaser set forth on
                  Exhibit
                  A
                  to
                  this Agreement, with copies to Purchaser’s counsel as set forth on
                  Exhibit
                  A
                  or
                  as specified in writing by such Purchaser with copies
                  to:

              
	 	 
	 	
                Kramer
                  Levin Naftalis & Frankel LLP

                1177
                  Avenue of the Americas

                New
                  York, New York 10036

                Attention:
                  Christopher S. Auguste, Esq.

                Tel.
                  No.: (212) 715-9100

                Fax
                  No.: (212) 715-8000

              


      

    

     

    
      
         

      

      
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    Any
      party
      hereto may from time to time change its address for notices by giving written
      notice of such changed address to the other parties hereto.

     

    Section
      7.5 Waivers.
      No
      waiver by any party of any default with respect to any provision, condition
      or
      requirement of this Agreement shall be deemed to be a continuing waiver in
      the
      future or a waiver of any other provision, condition or requirement hereof,
      nor
      shall any delay or omission of any party to exercise any right hereunder in
      any
      manner impair the exercise of any such right accruing to it
      thereafter.

     

    Section
      7.6 Headings.
      The
      article, section and subsection headings in this Agreement are for convenience
      only and shall not constitute a part of this Agreement for any other purpose
      and
      shall not be deemed to limit or affect any of the provisions
      hereof.

     

    Section
      7.7 Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and assigns. After the Closing, the assignment by a party
      to
      this Agreement of any rights hereunder shall not affect the obligations of
      such
      party under this Agreement. Subject to Section 5.1 hereof, the Purchasers may
      assign the Securities and its rights under this Agreement and the other
      Transaction Documents and any other rights hereto and thereto without the
      consent of the Company; provided,
      however,
      that
      such Purchaser shall not assign such Securities and such rights under this
      Agreement and the other Transaction Documents to
      any
      known competitor of the Company. Notwithstanding the foregoing to the contrary,
      a Purchaser may assign its rights as provided herein so long as (i) such
      Purchaser agrees in writing with the transferee or assignee to assign such
      rights, and a copy of such agreement is furnished to the Company within a
      reasonable time after such assignment, (ii) the Company is, within a reasonable
      time after such transfer or assignment, furnished with written notice of (a)
      the
      name and address of such transferee or assignee, and (b) the rights and/or
      securities with respect to which such rights are being transferred or assigned,
      (iii) following such transfer or assignment the further disposition of such
      securities by the transferee or assignees is restricted under the Securities
      Act
      and applicable state securities laws, (iv) at or before the time the Company
      receives the written notice contemplated by clause (ii) of this Section 7.7,
      the
      transferee or assignee agrees in writing with the Company to be bound by all
      of
      the provisions of this Agreement and the other Transaction Documents, and (v)
      such transfer shall have been made in accordance with the applicable
      requirements of this Agreement.

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

     

    Section
      7.8 Right
      of First Offer.
      Each
      Purchaser covenants and agrees to promptly notify (in no event later than ten
      (10) Trading Days after making or receiving an applicable offer) in writing
      (a
      "Rights
      Notice")
      the
      Company of the terms and conditions of any private sale or transfer with any
      third party (except to affiliates of such Purchaser, which affiliates will
      be
      similarly bound by the Company’s right of first offer) of a number of Shares
      and/or Warrant Shares equal to at least twenty-five percent (25%) of the
      aggregate number of Shares and Warrant Shares such Purchaser initially acquired
      pursuant to the terms of this Agreement (as adjusted for any stock splits,
      stock
      dividends, reclassifications, recapitalizations and the like) (a “Subsequent
      Transfer”).
      The
      Rights Notice shall describe the proposed Subsequent Transfer, the proposed
      closing date of the Subsequent Transfer, and all of the material terms and
      conditions thereof (including the identity of the proposed transferee). The
      Rights Notice shall provide the Company an option (the “Rights
      Option”)
      during
      the five (5) Trading Days following delivery of the Rights Notice (the
“Option
      Period”)
      to
      inform such Purchaser whether the Company will purchase all of
      the
      Shares and/or Warrants being offered in such Subsequent Transfer on the same
      material terms and conditions as contemplated by such Subsequent Transfer;
      provided,
      however,
      that to
      the extent that the offered consideration described in the Rights Notice is
      other than all cash, the Company shall have the option to pay the aggregate
      purchase price in cash; provided,
      further,
      that to
      the extent that the offered consideration described in the Rights Notice
      consists of securities of another entity, the Company shall have the option
      to
      substitute securities of the Company with a fair market value equal to the
      fair
      market value of the securities offered in the Rights Notice (provided, that
      if
      the securities offered pursuant to the Rights Notice are registered, the
      Company’s securities must be registered as well). If such Purchaser does not
      receive notice of exercise of the Rights Option from the Company within the
      Option Period, such Purchaser shall have the right to close the Subsequent
      Transfer with a third party; provided
      that all
      of the material terms and conditions of the closing are the same as those
      provided to the Company in the Rights Notice. To the extent that the material
      terms and conditions of the closing are materially more favorable to the third
      party than the terms and conditions provided to the Company pursuant to the
      Rights Notice, the Purchaser shall be required once again to first offer such
      the securities to the Company before consummating such sale with the third
      party. If the Company exercises its right of first refusal hereunder, the
      Company and the Purchaser shall use commercially reasonable efforts to document
      and close the sale and purchase of the Shares and/or Warrants to the Company
      as
      promptly as practicable. 

     

    Section
      7.9 No
      Third Party Beneficiaries.
      Subject
      to the provisions of Article VI hereof, this Agreement is intended for the
      benefit of the parties hereto and their respective permitted successors and
      assigns and is not for the benefit of, nor may any provision hereof be enforced
      by, any other person.

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

     

    Section
      7.10 Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the internal
      laws of the State of New York, without giving effect to any of the conflicts
      of
      law principles which would result in the application of the substantive law
      of
      another jurisdiction. This Agreement shall not be interpreted or construed
      with
      any presumption against the party causing this Agreement to be
      drafted.

     

    Section
      7.11 Survival.
      The
      representations and warranties of the Company and the Purchasers shall survive
      the execution and delivery hereof and the Closing until the third anniversary
      of
      the Closing Date.

     

    Section
      7.12 Counterparts.
      This
      Agreement may be executed in any number of counterparts, all of which taken
      together shall constitute one and the same instrument and shall become effective
      when counterparts have been signed by each party and delivered to the other
      parties hereto, it being understood that all parties need not sign the same
      counterpart. 

     

    Section
      7.13 Publicity.
      The
      Company agrees that it will not disclose, and will not include in any public
      announcement, the names of the Purchasers without the consent of the Purchasers,
      which consent shall not be unreasonably withheld or delayed, or unless and
      until
      such disclosure is required by law, rule or applicable regulation, and then
      only
      to the extent of such requirement. 

     

    Section
      7.14 Severability.
      The
      provisions of this Agreement are severable and, in the event that any court
      of
      competent jurisdiction shall determine that any one or more of the provisions
      or
      part of the provisions contained in this Agreement shall, for any reason, be
      held to be invalid, illegal or unenforceable in any respect, such invalidity,
      illegality or unenforceability shall not affect any other provision or part
      of a
      provision of this Agreement and this Agreement shall be reformed and construed
      as if such invalid or illegal or unenforceable provision, or part of such
      provision, had never been contained herein, so that such provisions would be
      valid, legal and enforceable to the maximum extent possible.

     

    Section
      7.15 Further
      Assurances.
      From
      and after the date of this Agreement, upon the request of the Purchasers or
      the
      Company, the Company and each Purchaser shall execute and deliver such
      instruments, documents and other writings as may be reasonably necessary or
      desirable to confirm and carry out and to effectuate fully the intent and
      purposes of this Agreement, the Warrants and the Registration Rights
      Agreement.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]


    
      
         

      

      
        32

        
          

        

      

      
         

      

    


    


    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed by their respective authorized officers as of the date first above
      written.

     

    
      	 	 	 
	 	BOND
              LABORATORIES, INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:

	 	Title:


    

     

    
      	 	 	 
	 	PURCHASER:
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:

	 	Title:


    


    
      
         

      

      
        33

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A 

    LIST
      OF PURCHASERS

    

      
        	
                Names
                  and Addresses

              	
                Number
                  of Shares

              	
                Dollar
                  Amount of

              
	
                of
                  Purchasers

              	
                & Warrants
                  Purchased

              	
                Investment

              


      

    

     

    INITIAL
      CLOSING:

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    


    EXHIBIT
      B

    FORM
      OF WARRANT

    


    


    THIS
      WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
      STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL
      REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES
      UNDER
      THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES
      LAWS
      IS NOT REQUIRED.

    


    WARRANT
      TO PURCHASE

    


    SHARES
      OF
      COMMON STOCK

    


    OF

    


    BOND
      LABORATORIES, INC.

    


    Expires
      June 26, 2015

    


    No.:
      W-08- __Number
      of
      Shares: ___________

    Date
      of
      Issuance: June 26, 2008

    


    


    FOR
      VALUE
      RECEIVED, the undersigned, Bond Laboratories, Inc., a Nevada corporation
      (together with its successors and assigns, the “Issuer”),
      hereby certifies that _______________________________ or its registered assigns
      is entitled to subscribe for and purchase, during the Term (as hereinafter
      defined), up to ____________________________________ (_____________) shares
      (subject to adjustment as hereinafter provided) of the duly authorized, validly
      issued, fully paid and non-assessable Common Stock of the Issuer, at an exercise
      price per share equal to the Warrant Price then in effect, subject, however,
      to
      the provisions and upon the terms and conditions hereinafter set forth.
      Capitalized terms used in this Warrant and not otherwise defined herein shall
      have the respective meanings specified in Section 9 hereof.

    


    1. Term.
      The
      term of this Warrant shall commence on June 26, 2008 and shall expire at 6:00
      p.m., eastern time, on June 26, 2015 (such period being the “Term”).

     

    2.
      Method
      of Exercise; Payment; Issuance of New Warrant; Transfer and
      Exchange.

    


    (a) Time
      of Exercise.
      The
      purchase rights represented by this Warrant may be exercised in whole or in
      part
      during the Term.


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    


    (b) Method
      of Exercise.
      The
      Holder hereof may exercise this Warrant, in whole or in part, by the surrender
      of this Warrant (with the exercise form attached hereto duly executed) at the
      principal office of the Issuer, and by the payment to the Issuer of an amount
      of
      consideration therefor equal to the Warrant Price in effect on the date of
      such
      exercise multiplied by the number of shares of Warrant Stock with respect to
      which this Warrant is then being exercised, payable at such Holder’s election
      (i) by certified or official bank check or by
      wire
      transfer to an account designated by the Issuer,
      (ii) by
“cashless exercise” in accordance with the provisions of subsection (c) of this
      Section 2, but only when a registration statement under the Securities Act
      providing for the resale of the Warrant Stock is not then in effect, or (iii)
      by
      a combination of the foregoing methods of payment selected by the Holder of
      this
      Warrant.

    


    (c) Cashless
      Exercise.
      Notwithstanding any provisions herein to the contrary and commencing nine (9)
      months following the Original Issue Date if (i) the Per Share Market Value
      of
      one share of Common Stock is greater than the Warrant Price (at the date of
      calculation as set forth below) and (ii) a registration statement under the
      Securities Act providing for the resale of the Warrant Stock is not then in
      effect, unless the registration statement is not effective as a result of the
      Issuer exercising its rights under Section 3(n) of the Registration Rights
      Agreement (as defined in the Purchase Agreement), in lieu of exercising this
      Warrant by payment of cash, the Holder may exercise this Warrant by a cashless
      exercise and shall receive the number of shares of Common Stock equal to an
      amount (as determined below) by surrender of this Warrant at the principal
      office of the Issuer together with the properly endorsed Notice of Exercise
      in
      which event the Issuer shall issue to the Holder a number of shares of Common
      Stock computed using the following formula:

    


    
      	
              X
                = Y - 

            	 (A)(Y)	
               

            	 
	 	    B	
                

            	 


    

    


    
      	
              Where

            	
              X
                =

            	
              the
                number of shares of Common Stock to be issued to the
                Holder.

            


    

    


    
      	 	
              Y
                =

            	
              the
                number of shares of Common Stock purchasable upon exercise of all
                of the
                Warrant or, if only a portion of the Warrant is being exercised,
                the
                portion of the Warrant being exercised.


            


    

    


    
      	 	
              A
                =

            	
              the
                Warrant Price. 

            


    

    


    B
      = the
      Per
      Share Market Value of one share of Common Stock.

    


    (d) Issuance
      of Stock Certificates.
      In the
      event of any exercise of this Warrant in accordance with and subject to the
      terms and conditions hereof, certificates for the shares of Warrant Stock so
      purchased shall be dated the date of such exercise and delivered to the Holder
      hereof within a reasonable time, not exceeding three (3) Trading Days after
      such
      exercise (the “Delivery
      Date”)
      or, at
      the request of the Holder (provided that a registration statement under the
      Securities Act providing for the resale of the Warrant Stock is then in effect),
      issued and delivered to the Depository Trust Company (“DTC”)
      account on the Holder’s behalf via the Deposit Withdrawal Agent Commission
      System (“DWAC”)
      within
      a reasonable time, not exceeding three (3) Trading Days after such exercise,
      and
      the Holder hereof shall be deemed for all purposes to be the holder of the
      shares of Warrant Stock so purchased as of the date of such exercise.
      Notwithstanding the foregoing to the contrary, the Issuer or its transfer agent
      shall only be obligated to issue and deliver the shares to the DTC on a holder’s
      behalf via DWAC if such exercise is in connection with a sale and the
      Issuer and its transfer agent are participating in DTC through the DWAC
      system.
      The
      Holder shall deliver this original Warrant, or an indemnification undertaking
      with respect to such Warrant in the case of its loss, theft or destruction,
      at
      such time that this Warrant is fully exercised. With respect to partial
      exercises of this Warrant, the Issuer shall keep written records of the number
      of shares of Warrant Stock exercised as of each date of
      exercise.


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (e) Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon
      Exercise.
      In
      addition to any other rights available to the Holder, if the Issuer fails to
      cause its transfer agent to transmit to the Holder a certificate or certificates
      representing the Warrant Stock pursuant to an exercise on or before the date
      that is two (2) Trading Days following the Delivery Date, and if after such
      date
      the Holder is required by its broker to purchase (in an open market transaction
      or otherwise) shares of Common Stock to deliver in satisfaction of a sale by
      the
      Holder of the Warrant Stock which the Holder anticipated receiving upon such
      exercise (a “Buy-In”),
      then
      the Issuer shall (1) pay in cash to the Holder the amount by which (x) the
      Holder’s total purchase price (including brokerage commissions, if any) for the
      shares of Common Stock so purchased exceeds (y) the amount obtained by
      multiplying (A) the number of shares of Warrant Stock that the Issuer was
      required to deliver to the Holder in connection with the exercise at issue
      times
      (B) the price at which the sell order giving rise to such purchase obligation
      was executed, and (2) at the option of the Holder, either reinstate the portion
      of the Warrant and equivalent number of shares of Warrant Stock for which such
      exercise was not honored or deliver to the Holder the number of shares of Common
      Stock that would have been issued had the Issuer timely complied with its
      exercise and delivery obligations hereunder. For example, if the Holder
      purchases Common Stock having a total purchase price of $11,000 to cover a
      Buy-In with respect to an attempted exercise of shares of Common Stock with
      an
      aggregate sale price giving rise to such purchase obligation of $10,000, under
      clause (1) of the immediately preceding sentence the Issuer shall be required
      to
      pay the Holder $1,000. The Holder shall provide the Issuer written notice
      indicating the amounts payable to the Holder in respect of the Buy-In, together
      with applicable confirmations and other evidence reasonably requested by the
      Issuer. Nothing herein shall limit a Holder’s right to pursue any other remedies
      available to it hereunder, at law or in equity including, without limitation,
      a
      decree of specific performance and/or injunctive relief with respect to the
      Issuer’s failure to timely deliver certificates representing shares of Common
      Stock upon exercise of this Warrant as required pursuant to the terms
      hereof.

     

    (f) Transferability
      of Warrant.
      Subject
      to the terms and provisions of this Warrant (Section 2(h) hereof), this Warrant
      may be transferred by a Holder, in whole or in part, without the consent of
      the
      Issuer; provided,
      however,
      that
      the Holder shall not transfer this Warrant to any known competitor of the
      Issuer. If transferred pursuant to this paragraph, this Warrant may be
      transferred on the books of the Issuer by the Holder hereof in person or by
      duly
      authorized attorney, upon surrender of this Warrant at the principal office
      of
      the Issuer, properly endorsed (by the Holder executing an assignment in the
      form
      attached hereto) and upon payment of any necessary transfer tax or other
      governmental charge imposed upon such transfer. This Warrant is exchangeable
      at
      the principal office of the Issuer for Warrants to purchase the same aggregate
      number of shares of Warrant Stock, each new Warrant to represent the right
      to
      purchase such number of shares of Warrant Stock as the Holder hereof shall
      designate at the time of such exchange. All Warrants issued on transfers or
      exchanges shall be dated the Original Issue Date and shall be identical with
      this Warrant except as to the number of shares of Warrant Stock issuable
      pursuant thereto. If, at the time of the surrender of this Warrant in connection
      with any transfer of this Warrant, the transfer of this Warrant shall not be
      registered pursuant to an effective registration statement under the Securities
      Act and under applicable state securities or blue sky laws, the Issuer may
      require, as a condition of allowing such transfer (i) that the holder or
      transferee execute and deliver to the Issuer an investment letter in form and
      substance acceptable to the Issuer and (ii) that the transferee be an
“accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or
      (a)(8) promulgated under the Securities Act or a qualified institutional buyer
      as defined in Rule 144A(a) under the Securities Act. Notwithstanding
      the foregoing to the contrary, the shares of Warrant Stock issuable upon the
      exercise of this Warrant are subject to a right of first offer in favor of
      the
      Issuer as set forth in Section 7.8 of the Purchase Agreement.


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (g) Continuing
      Rights of Holder.
      The
      Issuer will, at the time of or at any time after each exercise of this Warrant,
      upon the request of the Holder hereof, acknowledge in writing the extent, if
      any, of its continuing obligation to afford to such Holder all rights to which
      such Holder shall continue to be entitled after such exercise in accordance
      with
      the terms of this Warrant, provided
      that if
      any such Holder shall fail to make any such request, the failure shall not
      affect the continuing obligation of the Issuer to afford such rights to such
      Holder.

    


    (h) Compliance
      with Securities Laws.

    


    (i) The
      Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant
      and
      the shares of Warrant Stock to be issued upon exercise hereof are being acquired
      solely for the Holder’s own account and not as a nominee for any other party,
      and for investment, and that the Holder will not offer, sell or otherwise
      dispose of this Warrant or any shares of Warrant Stock to be issued upon
      exercise hereof except pursuant to an effective registration statement, or
      an
      exemption from registration, under the Securities Act and any applicable state
      securities laws.

    


    (ii) Except
      as
      provided in paragraph (iii) below, this Warrant and all certificates
      representing shares of Warrant Stock issued upon exercise hereof shall be
      stamped or imprinted with a legend in substantially the following
      form:

    


    THIS
      WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
      STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL
      REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES
      UNDER
      THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES
      LAWS
      IS NOT REQUIRED.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (iii) The
      Issuer agrees to reissue this Warrant or certificates representing any of the
      Warrant Stock, without the legend set forth above if at such time, prior to
      making any transfer of any such securities, the Holder shall give written notice
      to the Issuer describing the manner and terms of such transfer. Such proposed
      transfer will not be effected until: (a) (i) the Issuer has received an opinion
      of counsel reasonably satisfactory to the Issuer, to the effect that the
      registration of such securities under the Securities Act is not required in
      connection with such proposed transfer, (ii) a registration statement under
      the
      Securities Act covering such proposed disposition has been filed by the Issuer
      with the Securities and Exchange Commission and has become effective under
      the
      Securities Act and the Holder has represented that the Warrant Stock has been
      or
      will be sold, (iii) the Issuer has received other evidence reasonably
      satisfactory to the Issuer that such registration and qualification under the
      Securities Act and state securities laws are not required, or (iv) the Holder
      provides the Issuer with reasonable assurances that such security can be sold
      pursuant to Rule 144 under the Securities Act; and (b) either (i) the Issuer
      has
      received an opinion of counsel reasonably satisfactory to the Issuer, to the
      effect that registration or qualification under the securities or “blue sky”
laws of any state is not required in connection with such proposed disposition,
      or (ii) compliance with applicable state securities or “blue sky” laws has been
      effected or a valid exemption exists with respect thereto. The Issuer will
      respond to any such notice from a holder within five (5) Trading Days. In the
      case of any proposed transfer under this Section 2(h), the Issuer will use
      reasonable efforts to comply with any such applicable state securities or “blue
      sky” laws, but shall in no event be required, (x) to qualify to do business in
      any state where it is not then qualified, (y) to take any action that would
      subject it to taxation or to the general or unlimited service of process in
      any
      state where it is not then subject, or (z) to comply with state securities
      or
“blue sky” laws of any state for which registration by coordination is
      unavailable to the Issuer. The restrictions on transfer contained in this
      Section 2(h) shall be in addition to, and not by way of limitation of, any
      other
      restrictions on transfer contained in any other section of this Warrant.
      Whenever
      a
      certificate representing the Warrant Stock is required to be issued to a the
      Holder without a legend, in lieu of delivering physical certificates
      representing the Warrant Stock, the Issuer shall use its commercially reasonable
      efforts to cause its transfer agent to electronically transmit the Warrant
      Stock
      to the Holder by crediting the account of the Holder’s Prime Broker with DTC
      through its DWAC system (to the extent not inconsistent with any provisions
      of
      this Warrant or the Purchase Agreement).
      Notwithstanding the foregoing to the contrary, the Issuer or its transfer agent
      shall only be obligated to issue and deliver the shares to the DTC on a holder’s
      behalf via DWAC if such exercise is in connection with a sale and the
      Issuer and its transfer agent are participating in DTC through the DWAC
      system.
      

    


    (i) Accredited
      Investor Status.
      In no
      event may the Holder exercise this Warrant in whole or in part unless the Holder
      is an “accredited investor” as defined in Regulation D under the Securities Act.



    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    


    3. Stock
      Fully Paid; Reservation and Listing of Shares; Covenants.

    


    (a) Stock
      Fully Paid.
      Assuming
      the accuracy and completeness of the representations and warranties of the
      Holder contained herein and in the Purchase Agreement, the Issuer
      represents, warrants, covenants and agrees that all shares of Warrant Stock
      which may be issued upon the exercise of this Warrant or otherwise hereunder
      will, when issued in accordance with the terms of this Warrant, be duly
      authorized, validly issued, fully paid and nonassessable and free from all
      taxes, liens and charges created by or through the Issuer. The Issuer further
      covenants and agrees that during the period within which this Warrant may be
      exercised, the Issuer will at all times have authorized and reserved for the
      purpose of issuance upon exercise of this Warrant a sufficient
      number
      of
      shares of Common Stock to
      allow
      for full
      exercise
      of this Warrant.

    


    (b) Reservation.
      If any
      shares of Common Stock required to be reserved for issuance upon exercise of
      this Warrant or as otherwise provided hereunder require registration or
      qualification with any governmental authority under any federal or state law
      before such shares may be so issued, the Issuer will in good faith use its
      commercially reasonable efforts at its expense to cause such shares to be duly
      registered or qualified. If the Issuer shall list any shares of Common Stock
      on
      any securities exchange or market it will, at its expense, list thereon,
      maintain and increase when necessary such listing, of, all shares of Warrant
      Stock from time to time issued upon exercise of this Warrant or as otherwise
      provided hereunder (provided that such Warrant Stock has been registered
      pursuant to a registration statement under the Securities Act then in effect),
      and, to the extent permissible under the applicable securities exchange rules,
      all unissued shares of Warrant Stock which are at any time issuable hereunder,
      so long as any shares of Common Stock shall be so listed. The Issuer will also
      so list on each securities exchange or market, and will maintain such listing
      of, any other securities which the Holder of this Warrant shall be entitled
      to
      receive upon the exercise of this Warrant if at the time any securities of
      the
      same class shall be listed on such securities exchange or market by the
      Issuer.

    


    (c) Covenants.
      The
      Issuer shall not by any action including, without limitation, amending the
      Articles of Incorporation or the by-laws of the Issuer, or through any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue
      or
      sale of securities or any other action, avoid or seek to avoid the observance
      or
      performance of any of the terms of this Warrant, but will at all times in good
      faith assist in the carrying out of all such terms and in the taking of all
      such
      actions as may be necessary or appropriate to protect the rights of the Holder
      hereof against impairment. Without limiting the generality of the foregoing,
      the
      Issuer will (i) not permit the par value, if any, of its Common Stock to exceed
      the then effective Warrant Price, (ii) not amend or modify any provision of
      the
      Articles of Incorporation or by-laws of the Issuer in any manner that would
      materially and adversely affect the rights of the Holders of the Warrants,
      (iii)
      take all such action as may be reasonably necessary in order that the Issuer
      may
      validly and legally issue fully paid and nonassessable shares of Common Stock,
      free and clear of any liens, claims, encumbrances and restrictions (other than
      as provided herein) upon the exercise of this Warrant, and (iv) use its
      commercially reasonable efforts to obtain all such authorizations, exemptions
      or
      consents from any public regulatory body having jurisdiction thereof as may
      be
      reasonably necessary to enable the Issuer to perform its obligations under
      this
      Warrant.


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    


    (d) Loss,
      Theft, Destruction of Warrants.
      Upon
      receipt of evidence satisfactory to the Issuer of the ownership of and the
      loss,
      theft, destruction or mutilation of any Warrant and, in the case of any such
      loss, theft or destruction, upon receipt of indemnity or security satisfactory
      to the Issuer or, in the case of any such mutilation, upon surrender and
      cancellation of such Warrant, the Issuer will make and deliver, in lieu of
      such
      lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and
      representing the right to purchase the same number of shares of Common
      Stock.

    


    4. Adjustment
      of Warrant Price and Number of Shares Issuable Upon Exercise.
      The
      Warrant Price and the Warrant Share Number shall be subject to adjustment from
      time to time as set forth in this Section 4. The Issuer shall give the Holder
      notice of any event described below which requires an adjustment pursuant to
      this Section 4 in accordance with the notice provisions set forth in Section
      5.

    


    (a) Recapitalization,
      Reorganization, Reclassification, Consolidation, Merger or Sale.
      In case
      the Issuer after the Original Issue Date shall do any of the following (each,
      a
“Triggering
      Event”):
      (a)
      consolidate or merge with or into any other Person and the Issuer shall not
      be
      the continuing or surviving corporation of such consolidation or merger, or
      (b)
      permit any other Person to consolidate with or merge into the Issuer and the
      Issuer shall be the continuing or surviving Person but, in connection with
      such
      consolidation or merger, any Capital Stock of the Issuer shall be changed into
      or exchanged for Securities of any other Person or cash or any other property,
      or (c) transfer all or substantially all of its properties or assets to any
      other Person, or (d) effect a capital reorganization or reclassification of
      its
      Capital Stock, then, and as a condition to each such Triggering Event, proper
      and adequate provision shall be made so that, upon the basis and the terms
      and
      in the manner provided in this Warrant, the Holder of this Warrant shall be
      entitled upon the exercise hereof at any time after the consummation of such
      Triggering Event, to the extent this Warrant is not exercised prior to such
      Triggering Event, to receive at the Warrant Price in effect at the time
      immediately prior to the consummation of such Triggering Event in lieu of the
      Common Stock issuable upon such exercise of this Warrant prior to such
      Triggering Event, the Securities, cash and property to which such Holder would
      have been entitled upon the consummation of such Triggering Event if such Holder
      had exercised the rights represented by this Warrant immediately prior thereto
      (including the right of a shareholder to elect the type of consideration it
      will
      receive upon a Triggering Event), subject to adjustments (subsequent to such
      corporate action) as nearly equivalent as possible to the adjustments provided
      for elsewhere in this Section 4; provided,
      however,
      the
      Holder shall have the option to receive, in lieu of the foregoing right to
      receive such securities, cash and property, an amount in cash equal to the
      value
      of this Warrant calculated in accordance with the Black-Scholes formula.
      Notwithstanding the foregoing to the contrary, in the event of a Triggering
      Event, at the request of the Holder delivered before the thirtieth (30th)
      day
      after such Triggering Event, the Issuer shall pay to the Holder an amount in
      cash equal to the value of the unexercised portion of this Warrant as of the
      date of such Triggering Event calculated in accordance with the Black-Scholes
      formula within five (5) days of such request.


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (b) Stock
      Dividends, Subdivisions and Combinations.
      If at
      any time the Issuer shall:

    


       (i) make
      or
      issue or set a record date for the holders of the Common Stock for the purpose
      of entitling them to receive a dividend payable in, or other distribution of,
      shares of Common Stock, 

    


       (ii)
       subdivide
      its outstanding shares of Common Stock into a larger number of shares of Common
      Stock, or

    


       (iii)
       combine
      its outstanding shares of Common Stock into a smaller number of shares of Common
      Stock,

    


    then
      (1)
      the number of shares of Common Stock for which this Warrant is exercisable
      immediately after the occurrence of any such event shall be adjusted to equal
      the number of shares of Common Stock which a record holder of the same number
      of
      shares of Common Stock for which this Warrant is exercisable immediately prior
      to the occurrence of such event would own or be entitled to receive after the
      happening of such event, and (2) the Warrant Price then in effect shall be
      adjusted to equal (A) the Warrant Price then in effect multiplied by the number
      of shares of Common Stock for which this Warrant is exercisable immediately
      prior to the adjustment divided by (B) the number of shares of Common Stock
      for
      which this Warrant is exercisable immediately after such
      adjustment.

    


    (c) Certain
      Other Distributions.
      If at
      any time the Issuer shall make or issue or set a record date for the holders
      of
      the Common Stock for the purpose of entitling them to receive any divi-dend
      or
      other distribution of:

    


    (i) cash,

    


    (ii) any
      evidences of its indebtedness, any shares of stock of any class or any other
      securities or property of any nature whatsoever (other than cash, Common Stock
      Equivalents or Additional Shares of Common Stock), or

    


    (iii) any
      warrants or other rights to subscribe for or purchase any evidences of its
      indebtedness, any shares of stock of any class or any other securities or
      property of any nature whatsoever (other than cash, Common Stock Equivalents
      or
      Additional Shares of Common Stock), 

    


    then
      (1)
      the number of shares of Common Stock for which this Warrant is exercisable
      shall
      be adjusted to equal the product of the number of shares of Common Stock for
      which this Warrant is exercisable immediately prior to such adjustment
      multiplied by a fraction (A) the numerator of which shall be the Per Share
      Market Value of Common Stock at the date of taking such record and (B) the
      denominator of which shall be such Per Share Market Value minus the amount
      allocable to one share of Common Stock of any such cash so distributable and
      of
      the fair value (as determined in good faith by the Board and, if required by
      the
      Majority Holders, supported by an opinion from an investment banking firm
      mutually agreed upon by the Issuer and the Holder) of any and all such evidences
      of indebtedness, shares of stock, other securities or property or warrants
      or
      other subscription or purchase rights so distributable, and (2) the Warrant
      Price then in effect shall be adjusted to equal (A) the Warrant Price then
      in
      effect multiplied by the number of shares of Common Stock for which this Warrant
      is exercisable immediately prior to the adjustment divided by (B) the number
      of
      shares of Common Stock for which this Warrant is exercisable immediately after
      such adjustment. A reclassification of the Common Stock (other than a change
      in
      par value, or from par value to no par value or from no par value to par value)
      into shares of Common Stock and shares of any other class of stock shall be
      deemed a distribution by the Issuer to the holders of its Common Stock of such
      shares of such other class of stock within the meaning of this Section 4(c)
      and,
      if the outstanding shares of Common Stock shall be changed into a larger or
      smaller number of shares of Common Stock as a part of such reclassification,
      such change shall be deemed a subdivision or combination, as the case may be,
      of
      the outstanding shares of Common Stock within the meaning of Section
      4(b). 


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (d) Issuance
      of Additional Shares of Common Stock.
      

    


    (i) In
      the
      event the Issuer shall at any time following the Original Issue Date issue
      any
      Additional Shares of Common Stock (otherwise than as provided in the foregoing
      subsections (a) through (c) of this Section 4), at a price per share less than
      the Warrant Price then in effect or without consideration, then the Warrant
      Price upon each such issuance shall be adjusted to that price determined by
      multiplying the Warrant Price then in effect by a fraction:

     

    (A) the
      numerator of which shall be equal to the sum of (x) the number of shares of
      Outstanding Common Stock immediately prior to the issuance of such Additional
      Shares of Common Stock plus
      (y) the
      number of shares of Common Stock (rounded to the nearest whole share) which
      the
      aggregate consideration for the total number of such Additional Shares of Common
      Stock so issued would purchase at a price per share equal to the Warrant Price
      then in effect, and

     

    (B) the
      denominator of which shall be equal to the number of shares of Outstanding
      Common Stock immediately after the issuance of such Additional Shares of Common
      Stock.

     

    


    (ii) No
      adjustment of the number of shares of Common Stock for which this Warrant shall
      be exercisable shall be made under paragraph (i) of Section 4(d) upon the
      issuance of any Additional Shares of Common Stock which are issued pursuant
      to
      the exercise of any Common Stock Equivalents, if any such adjustment shall
      previously have been made upon the issuance of such Common Stock Equivalents
      (or
      upon the issuance of any warrant or other rights therefor) pursuant to Section
      4(e).

    


    (e)  Issuance
      of Common Stock Equivalents.
      If at
      any time the Issuer shall take a record of the holders of its Common Stock
      for
      the purpose of entitling them to receive a distribution of, or shall in any
      manner (whether directly or by assumption in a merger in which the Issuer is
      the
      surviving corporation) issue or sell, any Common Stock Equivalents, whether
      or
      not the rights to exchange or convert thereunder are immediately exercisable,
      and the price per share for which Common Stock is issuable upon such conversion
      or exchange shall be less than the Warrant Price in effect immediately prior
      to
      the time of such issue or sale, or if, after any such issuance of Common Stock
      Equivalents, the price per share for which Additional Shares of Common Stock
      may
      be issuable thereafter is amended or adjusted, and such price as so amended
      shall be less than the Warrant Price in effect at the time of such amendment
      or
      adjustment, then the Warrant Price then in effect shall be adjusted as provided
      in Section 4(d). No further adjustments of the number of shares of Common Stock
      for which this Warrant is exercisable and the Warrant Price then in effect
      shall
      be made upon the actual issue of such Common Stock upon conversion or exchange
      of such Common Stock Equivalents.


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (f) Other
      Provisions applicable to Adjustments under this Section.
      The
      following provisions shall be ap-plicable to the making of adjustments of the
      number of shares of Common Stock for which this Warrant is exercisable and
      the
      Warrant Price then in effect provided for in this Section 4:

    


    (i) Computation
      of Consideration.
      To the
      extent that any Additional Shares of Common Stock or any Common Stock
      Equivalents (or any warrants or other rights therefor) shall be issued for
      cash
      consideration, the consideration received by the Issuer therefor shall be the
      amount of the cash received by the Issuer therefor, or, if such Additional
      Shares of Common Stock or Common Stock Equivalents are offered by the Issuer
      for
      subscription, the subscription price, or, if such Additional Shares of Common
      Stock or Common Stock Equivalents are sold to underwriters or dealers for public
      offering without a subscription offering, the initial public offering price
      (in
      any such case subtracting any amounts paid or receivable for accrued interest
      or
      accrued dividends and without taking into account any compensation, discounts
      or
      expenses paid or incurred by the Issuer for and in the underwriting of, or
      otherwise in connection with, the issuance thereof). In connection with any
      merger or consolidation in which the Issuer is the surviving corporation (other
      than any consolidation or merger in which the previously outstanding shares
      of
      Common Stock of the Issuer shall be changed to or exchanged for the stock or
      other securities of another corporation), the amount of consideration therefore
      shall be, deemed to be the fair value, as determined reasonably and in good
      faith by the Board, of such portion of the assets and business of the
      nonsurviving corporation as the Board may determine to be attributable to such
      shares of Common Stock or Common Stock Equivalents, as the case may be. The
      consideration for any Additional Shares of Common Stock issuable pursuant to
      any
      warrants or other rights to subscribe for or purchase the same shall be the
      consideration received by the Issuer for issuing such warrants or other rights
      plus the additional con-sideration payable to the Issuer upon exercise of such
      warrants or other rights. The consideration for any Additional Shares of Common
      Stock issuable pursuant to the terms of any Common Stock Equivalents shall
      be
      the consideration received by the Issuer for issuing war-rants or other rights
      to subscribe for or purchase such Common Stock Equivalents, plus the
      consideration paid or payable to the Issuer in respect of the subscription
      for
      or purchase of such Common Stock Equivalents, plus the additional consideration,
      if any, payable to the Issuer upon the exercise of the right of conversion
      or
      exchange in such Common Stock Equivalents. In the event of any consolidation
      or
      merger of the Issuer in which the Issuer is not the surviving corporation or
      in
      which the previously outstanding shares of Common Stock of the Issuer shall
      be
      changed into or exchanged for the stock or other securities of another
      corporation, or in the event of any sale of all or substantially all of the
      assets of the Issuer for stock or other securities of any corporation, the
      Issuer shall be deemed to have issued a number of shares of its Common Stock
      for
      stock or securities or other property of the other corporation computed on
      the
      basis of the actual exchange ratio on which the transaction was predicated,
      and
      for a consideration equal to the fair market value on the date of such
      transaction of all such stock or securities or other property of the other
      corporation. In the event any consideration received by the Issuer for any
      securities consists of property other than cash, the fair market value thereof
      at the time of issuance or as otherwise applicable shall be as determined in
      good faith by the Board. In the event Common Stock is issued with other shares
      or securities or other assets of the Issuer for consideration which covers
      both,
      the consideration computed as provided in this Section 4(f)(i) shall be
      allocated among such securities and assets as determined in good faith by the
      Board.


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (ii) When
      Adjustments to Be Made.
      The
      adjustments required by this Section 4 shall be made whenever and as often
      as
      any specified event requiring an adjustment shall occur, except that any
      adjustment of the number of shares of Common Stock for which this Warrant is
      exercisable that would otherwise be required may be postponed (except in the
      case of a subdivision or combination of shares of the Common Stock, as provided
      for in Section 4(b)) up to, but not beyond the date of exercise if such
      adjustment either by itself or with other adjustments not previously made adds
      or subtracts less than one percent (1%) of the shares of Common Stock for which
      this Warrant is exercisable immediately prior to the making of such adjustment.
      Any adjustment representing a change of less than such minimum amount (except
      as
      aforesaid) which is postponed shall be carried forward and made as soon as
      such
      adjustment, together with other adjustments required by this Section 4 and
      not
      previously made, would result in a minimum adjustment or on the date of
      exercise. For the purpose of any adjustment, any specified event shall be deemed
      to have occurred at the close of business on the date of its
      occurrence.

    


    (iii) Fractional
      Interests.
      In
      computing ad-justments under this Section 4, fractional interests in Common
      Stock shall be taken into account to the near-est one one-hundredth
      (1/100th)
      of a
      share.

    


    (iv) When
      Adjustment Not Required.
      If the
      Issuer shall take a record of the holders of its Common Stock for the purpose
      of
      entitling them to receive a dividend or distribution or subscription or purchase
      rights and shall, thereafter and before the distribution to stockholders
      thereof, legally abandon its plan to pay or deliver such dividend, distribution,
      subscription or purchase rights, then thereafter no adjustment shall be required
      by reason of the taking of such record and any such adjustment previously made
      in respect thereof shall be rescinded and annulled.

     

    (g) Form
      of Warrant after Adjustments.
      The
      form of this Warrant need not be changed because of any adjustments in the
      Warrant Price or the number and kind of Securities purchasable upon the exercise
      of this Warrant.

    


    (h) Escrow
      of Warrant Stock.
      If
      after any property becomes distributable pursuant to this Section 4 by reason
      of
      the taking of any record of the holders of Common Stock, but prior to the
      occurrence of the event for which such record is taken, and the Holder
      exer-cises this Warrant, any shares of Common Stock issuable upon exercise
      by
      reason of such adjustment shall be deemed the last shares of Common Stock for
      which this Warrant is exercised (notwithstanding any other provision to the
      contrary herein) and such shares or other property shall be held in escrow
      for
      the Holder by the Issuer to be issued to the Holder upon and to the extent
      that
      the event actually takes place, upon payment of the current Warrant Price.
      Notwithstanding any other provision to the contrary herein, if the event for
      which such record was taken fails to occur or is rescinded, then such escrowed
      shares shall be cancelled by the Issuer and escrowed property
      returned.


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    5. Notice
      of Adjustments.
      Whenever
      the Warrant Price or Warrant Share Number shall be adjusted pursuant to Section
      4 hereof (for purposes of this Section 5, each an “adjustment”),
      the
      Issuer shall cause its Chief Financial Officer to prepare and execute a
      certificate setting forth, in reasonable detail, the event requiring the
      adjustment, the amount of the adjustment, the method by which such adjustment
      was calculated (including a description of the basis on which the Board made
      any
      determination hereunder), and the Warrant Price and Warrant Share Number after
      giving effect to such adjustment, and shall cause copies of such certificate
      to
      be delivered to the Holder of this Warrant promptly after each adjustment.
      Any
      dispute between the Issuer and the Holder of this Warrant with respect to the
      matters set forth in such certificate may at the option of the Holder of this
      Warrant be submitted to a national or regional accounting firm reasonably
      acceptable to the Issuer and the Holder, provided
      that the
      Issuer shall have ten (10) days after receipt of notice from such Holder of
      its
      selection of such firm to object thereto, in which case such Holder shall select
      another such firm and the Issuer shall have no such right of objection. The
      firm
      selected by the Holder of this Warrant as provided in the preceding sentence
      shall be instructed to deliver a written opinion as to such matters to the
      Issuer and such Holder within thirty (30) days after submission to it of such
      dispute. Such opinion shall be final and binding on the parties hereto. The
      costs and expenses of the initial accounting firm shall be paid equally by
      the
      Issuer and the Holder and, in the case of an objection by the Issuer, the costs
      and expenses of the subsequent accounting firm shall be paid in full by the
      Issuer.

    


    6. Fractional
      Shares.
      No
      fractional shares of Warrant Stock will be issued in connection with any
      exercise hereof, but in lieu of such fractional shares, the Issuer shall round
      the number of shares to be issued upon exercise up to the nearest whole number
      of shares.

    


    7. Ownership
      Cap and Exercise Restriction.
      Notwithstanding anything to the contrary set forth in this Warrant, at no time
      may a Holder of this Warrant exercise this Warrant if the number of shares
      of
      Common Stock to be issued pursuant to such exercise would exceed, when
      aggregated with all other shares of Common Stock beneficially owned by such
      Holder and its affiliates at such time, the number of shares of Common Stock
      which would result in such Holder and its affiliates beneficially owning (as
      determined in accordance with Section 13(d) of the Exchange Act and the rules
      thereunder) in excess of 4.99% of the then issued and outstanding shares of
      Common Stock; provided,
      however,
      that
      upon a holder of this Warrant providing the Issuer with sixty-one (61) days
      notice (pursuant to Section 13 hereof) (the “Waiver
      Notice”)
      that
      such Holder would like to waive this Section 7 with regard to any or all shares
      of Common Stock issuable upon exercise of this Warrant, this Section 7 will
      be
      of no force or effect with regard to all or a portion of the Warrant referenced
      in the Waiver Notice; provided,
      further,
      that
      this provision shall be of no further force or effect during the sixty-one
      (61)
      days immediately preceding the expiration of the term of this
      Warrant.

    


    8.  Registration
      Rights.
      The
      Holder of this Warrant is entitled to the benefit of certain registration rights
      with respect to the shares of Warrant Stock issuable upon the exercise of this
      Warrant pursuant to that certain Registration Rights Agreement, of even date
      herewith, by and among the Issuer and Persons listed on Schedule I thereto
      (the
“Registration
      Rights Agreement”)
      and
      the registration rights with respect to the shares of Warrant Stock issuable
      upon the exercise of this Warrant by any subsequent Holder may only be assigned
      in accordance with the terms and provisions of the Registrations Rights
      Agreement.


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    


    9. Definitions.
      For the
      purposes of this Warrant, the following terms have the following
      meanings:

    


    “Additional
      Shares of Common Stock”
      means
      all
      shares of Common Stock issued by the Issuer after the Original Issue Date,
      and
      all shares of Other Common, if any, issued by the Issuer after the Original
      Issue Date, except: (i) securities issued (other than for cash) in connection
      with a merger, acquisition, or consolidation, (ii) securities issued pursuant
      to
      the conversion or exercise of convertible or exercisable securities issued
      or
      outstanding on or prior to the Original Issue Date or issued pursuant to the
      Purchase Agreement (so long as the
      conversion or exercise price in such securities are not amended to lower such
      price and/or adversely affect the Holders), (iii) the Warrant Stock, (iv)
the
      issuance of securities
      in connection with acquisitions,
      leasing arrangements, collaborations, licensing arrangements, strategic
      investments or
      other
      partnering arrangements,
      the
      primary purpose
      of which
      is
      not to raise
      capital,
      (v) Common Stock issued or the issuance or grants of options to purchase
      Common
      Stock
      pursuant to the Issuer’s stock option plans and employee stock purchase plans as
      approved by the Board, and (vi) any warrants or other securities issued to
      the
      placement agent and its designees for the transactions contemplated by the
      Purchase Agreement.

    


    “Articles
      of Incorporation”
means
      the Articles of Incorporation of the Issuer as in effect on the Original Issue
      Date, and as hereafter from time to time amended, modified, supplemented or
      restated in accordance with the terms hereof and thereof and pursuant to
      applicable law. 

    


    “Board”
shall
      mean the Board of Directors of the Issuer.

    


    “Capital
      Stock”
means
      and includes (i) any and all shares, interests, participations or other
      equivalents of or interests in (however designated) corporate stock, including,
      without limitation, shares of preferred or preference stock, (ii) all
      partnership interests (whether general or limited) in any Person which is a
      partnership, (iii) all membership interests or limited liability company
      interests in any limited liability company, and (iv) all equity or ownership
      interests in any Person of any other type.

    


    “Common
      Stock”
means
      the Common Stock, $0.001 par value per share, of the Issuer and any other
      Capital Stock into which such stock may hereafter be changed.

    


    “Common
      Stock Equivalent”
means
      any Convertible Security or warrant, option or other right to subscribe for
      or
      purchase any Additional Shares of Common Stock or any Convertible
      Security.

    


    “Convertible
      Securities”
means
      evidences of Indebtedness, shares of Capital Stock or other Securities which
      are
      or may be at any time convertible into or exchangeable for Additional Shares
      of
      Common Stock. The term “Convertible Security” means one of the Convertible
      Securities.

    


    “Governmental
      Authority”
means
      any governmental, regulatory or self-regulatory entity, department, body,
      official, authority, commission, board, agency or instrumentality, whether
      federal, state or local, and whether domestic or foreign.


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    


    


    “Holders”
mean
      the Persons who shall from time to time own any Warrant. The term “Holder” means
      one of the Holders.

    


    “Independent
      Appraiser”
means
      a
      nationally recognized or major regional investment banking firm or firm of
      independent certified public accountants of recognized standing (which may
      be
      the firm that regularly examines the financial statements of the Issuer) that
      is
      regularly engaged in the business of appraising the Capital Stock or assets
      of
      corporations or other entities as going concerns, and which is not affiliated
      with either the Issuer or the Holder of any Warrant.

    


    “Issuer”
means
      Bond Laboratories, Inc., a Nevada corporation, and its successors. 

    


    “Majority
      Holders”
means
      at any time the Holders of Warrants exercisable for a majority of the shares
      of
      Warrant Stock issuable under the Warrants at the time outstanding.

    


    “Nasdaq”
means
      the Nasdaq Global Market or the Nasdaq Capital Market.

    


    “Original
      Issue Date”
means
      June 26, 2008.

    


    “OTC
      Bulletin Board”
means
      the over-the-counter electronic bulletin board.

    


    “Other
      Common”
means
      any other Capital Stock of the Issuer of any class which shall be authorized
      at
      any time after the date of this Warrant (other than Common Stock) and which
      shall have the right to participate in the distribution of earnings and assets
      of the Issuer without limitation as to amount.

    


    “Outstanding
      Common Stock”
means,
      at any given time, the aggregate amount of outstanding shares of Common Stock,
      assuming full exercise, conversion or exchange (as applicable) of all options,
      warrants and other Securities which are convertible into or exercisable or
      exchangeable for, and any right to subscribe for, shares of Common Stock that
      are outstanding at such time.

    


    “Person”
means
      an individual, corporation, limited liability company, partnership, joint stock
      company, trust, unincorporated organization, joint venture, Governmental
      Authority or other entity of whatever nature.

    


    “Per
      Share Market Value”
means
      on any particular date (a) the last closing bid price per share of the Common
      Stock on such date on Nasdaq or
      another registered national stock exchange on which the Common Stock is then
      listed, or if there is no such price on such date, then the closing bid price
      on
      such exchange or quotation system on the date nearest preceding such date,
      or
      (b) if the Common Stock is not listed then on Nasdaq or any registered national
      stock exchange, the last closing bid price for a share of Common Stock in the
      over-the-counter market, as reported by the OTC Bulletin Board or in the
      National Quotation Bureau Incorporated or similar organization or agency
      succeeding to its functions of reporting prices) at the close of business on
      such date, or (c) if the Common Stock is not then reported by the OTC Bulletin
      Board or the National Quotation Bureau Incorporated (or similar organization
      or
      agency succeeding to its functions of reporting prices), then the average of
      the
“Pink Sheet” quotes for the five (5) Trading Days preceding such date of
      determination, or (d) if the Common Stock is not then publicly traded the fair
      market value of a share of Common Stock as determined in good faith by the
      Board
      or, if required by the Majority Holders, by an Independent Appraiser selected
      in
      good faith by the Majority Holders; provided,
      however,
      that
      the Issuer, after receipt of the determination by such Independent Appraiser,
      shall have the right to select an additional Independent Appraiser, in which
      case, the fair market value shall be equal to the average of the determinations
      by each such Independent Appraiser; and provided,
      further
      that all
      determinations of the Per Share Market Value shall be appropriately adjusted
      for
      any stock dividends, stock splits or other similar transactions during such
      period. The determination of fair market value by an Independent Appraiser
      shall
      be based upon the fair market value of the Issuer determined on a going concern
      basis as between a willing buyer and a willing seller and taking into account
      all relevant factors determinative of value, and shall be final and binding
      on
      all parties. In determining the fair market value of any shares of Common Stock,
      no consideration shall be given to any restrictions on transfer of the Common
      Stock imposed by agreement or by federal or state securities laws, or to the
      existence or absence of, or any limitations on, voting rights. 


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    “Purchase
      Agreement”
means
      the Common Stock and Warrant Purchase Agreement dated as of June 26, 2008,
      among
      the Issuer and the Purchasers.

    


    “Purchasers”
means
      the purchasers of the Common Stock and the Warrants issued by the Issuer
      pursuant to the Purchase Agreement.

    


    “Securities”
means
      any debt or equity securities of the Issuer, whether now or hereafter
      authorized, any instrument convertible into or exchangeable for Securities
      or a
      Security, and any option, warrant or other right to purchase or acquire any
      Security. “Security” means one of the Securities.

    


    “Securities
      Act”
means
      the Securities Act of 1933, as amended, or any similar federal statute then
      in
      effect.

    


    “Subsidiary”
means
      any corporation at least 50% of whose outstanding Voting Stock shall at the
      time
      be owned directly or indirectly by the Issuer or by one or more of its
      Subsidiaries, or by the Issuer and one or more of its Subsidiaries.

    


    “Term”
has
      the
      meaning specified in Section 1 hereof.

    


    “Trading
      Day”
means
      (a) a day on which the Common Stock is traded on Nasdaq, or (b) if the Common
      Stock is not traded on Nasdaq, a day on which the Common Stock is quoted in
      the
      over-the-counter market as reported by the OTC Bulletin Board or in the National
      Quotation Bureau Incorporated (or any similar organization or agency succeeding
      its functions of reporting prices); provided,
      however,
      that in
      the event that the Common Stock is not listed or quoted as set forth in (a)
      or
      (b) hereof, then Trading Day shall mean any day except Saturday, Sunday and
      any
      day which shall be a legal holiday or a day on which banking institutions in
      the
      State of New York are authorized or required by law or other government action
      to close.


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    “Voting
      Stock”
means,
      as applied to the Capital Stock of any corporation, Capital Stock of any class
      or classes (however designated) having ordinary voting power for the election
      of
      a majority of the members of the Board (or other governing body) of such
      corporation, other than Capital Stock having such power only by reason of the
      happening of a contingency.

    


    “Warrants”
means
      the Warrants issued in connection with the transactions contemplated by the
      Purchase Agreement, including, without limitation, this Warrant, and any other
      warrants of like tenor issued in substitution or exchange for any thereof
      pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any of
      such other Warrants. 

    


    “Warrant
      Price”
      initially means $1.25, as such price may be adjusted from time to time as shall
      result from the adjustments specified in this Warrant, including Section 4
      hereto.

    


    “Warrant
      Share Number”
means
      at any time the aggregate number of shares of Warrant Stock which may at such
      time be purchased upon exercise of this Warrant, after giving effect to all
      prior adjustments and increases to such number made or required to be made
      under
      the terms hereof.

    


    “Warrant
      Stock”
means
      Common Stock issuable upon exercise of any Warrant or Warrants or otherwise
      issuable pursuant to any Warrant or Warrants.

    


    10. Other
      Notices.
      In case
      at any time:

    


    
      	 	
              (A)

            	
              the
                Issuer shall make any distributions to the holders of Common Stock;
                or

            


    

    


    
      	 	
              (B)

            	
              the
                Issuer shall authorize the granting to all holders of its Common
                Stock of
                rights to subscribe for or purchase any shares of Capital Stock of
                any
                class or other rights; or

            


    

    


    
      	 	
              (C)

            	
              there
                shall be any reclassification of the Capital Stock of the Issuer;
                or

            


    

    


    
      	 	
              (D)

            	
              there
                shall be any capital reorganization by the Issuer;
                or

            


    

    


    
      	 	
              (E)

            	
              there
                shall be any (i) consolidation or merger involving the Issuer or
                (ii)
                sale, transfer or other disposition of all or substantially all of
                the
                Issuer’s property, assets or business (except a merger or other
                reorganization in which the Issuer shall be the surviving corporation
                and
                its shares of Capital Stock shall continue to be outstanding and
                unchanged
                and except a consolidation, merger, sale, transfer or other disposition
                involving a wholly-owned Subsidiary);
                or

            


    

    


    
      	 	
              (F)

            	
              there
                shall be a voluntary or involuntary dissolution, liquidation or winding-up
                of the Issuer or any partial liquidation of the Issuer or distribution
                to
                holders of Common Stock;

            


    


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    then,
      in
      each of such cases, the Issuer shall give written notice to the Holder of the
      date on which (i) the books of the Issuer shall close or a record shall be
      taken
      for such dividend, distribution or subscription rights or (ii) such
      reorganization, reclassification, consolidation, merger, disposition,
      dissolution, liquidation or winding-up, as the case may be, shall take place.
      Such notice also shall specify the date as of which the holders of Common Stock
      of record shall participate in such dividend, distribution or subscription
      rights, or shall be entitled to exchange their certificates for Common Stock
      for
      securities or other property deliverable upon such reorganization,
      reclassification, consolidation, merger, disposition, dissolution, liquidation
      or winding-up, as the case may be. Such notice shall be given at least twenty
      (20) days prior to the action in question and not less than ten (10) days prior
      to the record date or the date on which the Issuer’s transfer books are closed
      in respect thereto. This Warrant entitles the Holder to receive copies of all
      financial and other information distributed or required to be distributed to
      the
      holders of the Common Stock.

    


    11. Amendment
      and Waiver.
      Any
      term, covenant, agreement or condition in this Warrant may be amended, or
      compliance therewith may be waived (either generally or in a particular instance
      and either retroactively or prospectively), by a written instrument or written
      instruments executed by the Issuer and the Majority Holders; provided,
      however,
      that no
      such amendment or waiver shall reduce the Warrant Share Number, increase the
      Warrant Price, shorten the period during which this Warrant may be exercised
      or
      modify any provision of this Section 11 without the consent of the Holder of
      this Warrant. No consideration shall be offered or paid to any person to amend
      or consent to a waiver or modification of any provision of this Warrant unless
      the same consideration is also offered to all holders of the
      Warrants.

    


    12. Governing
      Law; Jurisdiction.
      This
      Warrant shall be governed by and construed in accordance with the internal
      laws
      of the State of New York, without giving effect to any of the conflicts of
      law
      principles which would result in the application of the substantive law of
      another jurisdiction. This Warrant shall not be interpreted or construed with
      any presumption against the party causing this Warrant to be drafted. The Issuer
      and the Holder agree that venue for any dispute arising under this Warrant
      will
      lie exclusively in the state or federal courts located in New York County,
      New
      York, and the parties irrevocably waive any right to raise forum
      non conveniens
      or any
      other argument that New York is not the proper venue. The Issuer and the Holder
      irrevocably consent to personal jurisdiction in the state and federal courts
      of
      the state of New York. The Issuer and the Holder consent to process being served
      in any such suit, action or proceeding by mailing a copy thereof to such party
      at the address in effect for notices to it under this Warrant and agrees that
      such service shall constitute good and sufficient service of process and notice
      thereof. Nothing in this Section 12 shall affect or limit any right to serve
      process in any other manner permitted by law. The Issuer and the Holder hereby
      agree that the prevailing party in any suit, action or proceeding arising out
      of
      or relating to this Warrant or the Purchase Agreement, shall be entitled to
      reimbursement for reasonable legal fees from the non-prevailing party. The
      parties hereby waive all rights to a trial by jury.


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    13. Notices.
      Any
      notice, demand, request, waiver or other communication required or permitted
      to
      be given hereunder shall be in writing and shall be effective (a) upon hand
      delivery, by telecopy or facsimile (or other electronic transmission) at the
      address or number designated below (if delivered on a business day during normal
      business hours where such notice is to be received), or the first business
      day
      following such delivery (if delivered other than on a business day during normal
      business hours where such notice is to be received) or (b) on the second
      business day following the date of mailing by express courier service, fully
      prepaid, addressed to such address, or upon actual receipt of such mailing,
      whichever shall first occur. The addresses for such communications shall
      be:

    

      
        	
                If
                  to the Issuer:

              	
                Bond
                  Laboratories, Inc. 

              
	 	
                777
                  South Highway 101, Suite 215 

              
	 	
                Solana
                  Beach, California 92975

              
	 	
                Attention:
                  Chief Executive Officer

              
	 	
                Tel.
                  No.: (858) 847-9000

              
	 	
                Fax
                  No.: (760) 990-5637 

              
	
              	 
	
                with
                  copies (which copies 

                shall
                  not constitute notice) 

                 

              	 
	to: 	Mintz
                Levin Cohn Ferris Glovsky & Popeo, P.C.
                3580
                  Carmel Mountain Road, Suite 600

                San
                  Diego, California 92130 

                Attention:
                  Eddie
                  Rodriguez, Esq.

                Tel.
                  No.: (858)
                  314-1527

                Fax
                  No.: (858)
                  314-1501

              
	 	 
	If to any
                Holder:	
                At
                  the address of such Holder set forth on Exhibit
                  A
                  to
                  this Agreement, with copies to Holder’s counsel as set forth on
                  Exhibit
                  A
                  or
                  as specified in writing by such Holder with copies to:

              
	 	 
	with
                copies (which copies 
                shall
                  not constitute notice)  

              	 
	to:	Kramer Levin
                Naftalis
                & Frankel LLP
                1177
                  Avenue of the Americas

                New
                  York, New York 10036

                Attention:
                  Christopher S. Auguste, Esq.

                Tel.
                  No.: (212) 715-9100

                Fax
                  No.: (212) 715-8000

              


      

    

     

    Any
      party
      hereto may from time to time change its address for notices by giving written
      notice of such changed address to the other party hereto.

     

    14. Warrant
      Agent.
      The
      Issuer may, by written notice to each Holder of this Warrant, appoint an agent
      having an office in New York, New York for the purpose of issuing shares of
      Warrant Stock on the exercise of this Warrant pursuant to subsection (b) of
      Section 2 hereof, exchanging this Warrant pursuant to subsection (d) of Section
      2 hereof or replacing this Warrant pursuant to subsection (d) of Section 3
      hereof, or any of the foregoing, and thereafter any such issuance, exchange
      or
      replacement, as the case may be, shall be made at such office by such
      agent.


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    


    15. Remedies.
      The
      Issuer stipulates that the remedies at law of the Holder of this Warrant in
      the
      event of any default or threatened default by the Issuer in the performance
      of
      or compliance with any of the terms of this Warrant are not and will not be
      adequate and that, to the fullest extent permitted by law, such terms may be
      specifically enforced by a decree for the specific performance of any agreement
      contained herein or by an injunction against a violation of any of the terms
      hereof or otherwise.

    


    16. Successors
      and Assigns.
      This
      Warrant and the rights evidenced hereby shall inure to the benefit of and be
      binding upon the successors and assigns of the Issuer, the Holder hereof and
      (to
      the extent provided herein) the Holders of Warrant Stock issued pursuant hereto,
      and shall be enforceable by any such Holder or Holder of Warrant
      Stock.

    


    17. Modification
      and Severability.
      If, in
      any action before any court or agency legally empowered to enforce any provision
      contained herein, any provision hereof is found to be unenforceable, then such
      provision shall be deemed modified to the extent necessary to make it
      enforceable by such court or agency. If any such provision is not enforceable
      as
      set forth in the preceding sentence, the unenforceability of such provision
      shall not affect the other provisions of this Warrant, but this Warrant shall
      be
      construed as if such unenforceable provision had never been contained
      herein.

    


    18. Headings.
      The
      headings of the Sections of this Warrant are for convenience of reference only
      and shall not, for any purpose, be deemed a part of this Warrant.

    


    


    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    


    IN
      WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year
      first above written.

     

    
      	 	 	 
	 	
              BOND
                LABORATORIES, INC.

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:

	 	
              Title:
                

            



      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    


    EXERCISE
      FORM

    WARRANT

    


    BOND
      LABORATORIES, INC.

    


    The
      undersigned _______________, pursuant to the provisions of the within Warrant,
      hereby elects to purchase _____ shares of Common Stock of Bond Laboratories,
      Inc. covered by the within Warrant.

    

      
        	
                Dated:
                  _________________

              	 	
                Signature

              	
                ___________________________

              
	 	 	 	 
	 	 	
                Address

              	
                _____________________

              
	
                 

              	 	 	
                _____________________

              


      

    

    


    Number
      of
      shares of Common Stock beneficially owned or deemed beneficially owned by the
      Holder on the date of Exercise: _________________________

    


    The
      undersigned is an “accredited investor” as defined in Regulation D under the
      Securities Act of 1933, as amended.

     

    The
      undersigned intends that payment of the Warrant Price shall be made as (check
      one): 

     

    Cash
      Exercise_______ 

     

    Cashless
      Exercise_______

     

    If
      the
      Holder has elected a Cash Exercise, the Holder shall pay the sum of $________
      by
      certified or official bank check (or via wire transfer) to the Issuer in
      accordance with the terms of the Warrant. 

     

    If
      the
      Holder has elected a Cashless Exercise, a certificate shall be issued to the
      Holder for the number of shares equal to the whole number portion of the product
      of the calculation set forth below, which is ___________. The Issuer shall
      pay a
      cash adjustment in respect of the fractional portion of the product of the
      calculation set forth below in an amount equal to the product of the fractional
      portion of such product and the Per Share Market Value on the date of exercise,
      which product is ____________.

     

    X
      = Y -
(A)(Y)

    B

    


    Where: 

    


    The
      number of shares of Common Stock to be issued to the Holder
      __________________(“X”).

    


    The
      number of shares of Common Stock purchasable upon exercise of all of the Warrant
      or, if only a portion of the Warrant is being exercised, the portion of the
      Warrant being exercised ___________________________ (“Y”). 


    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

    


    The
      Warrant Price ______________ (“A”). 

    


    The
      Per
      Share Market Value of one share of Common Stock _______________________
      (“B”).

    


    


    ASSIGNMENT

    


    FOR
      VALUE
      RECEIVED, _________________ hereby sells, assigns and transfers unto
      __________________ the within Warrant and all rights evidenced thereby and
      does
      irrevocably constitute and appoint _____________, attorney, to transfer the
      said
      Warrant on the books of the within named corporation.

     

    
      
        	
                Dated:
                  _________________

              	 	
                Signature

              	
                ___________________________

              
	 	 	 	 
	 	 	
                Address

              	
                _____________________

              
	
                 

              	 	 	_____________________


      

    

    


    PARTIAL
      ASSIGNMENT

    


    FOR
      VALUE
      RECEIVED, _________________ hereby sells, assigns and transfers unto
      __________________ the right to purchase _________ shares of Warrant Stock
      evidenced by the within Warrant together with all rights therein, and does
      irrevocably constitute and appoint ___________________, attorney, to transfer
      that part of the said Warrant on the books of the within named
      corporation.

    


    
       

      
        
          	
                  Dated:
                    _________________

                	 	
                  Signature

                	
                  ___________________________

                
	 	 	 	 
	 	 	
                  Address

                	
                  _____________________

                
	
                   

                	 	 	_____________________


        




    

    FOR
      USE
      BY THE ISSUER ONLY:

    


    This
      Warrant No. W-___ canceled (or transferred or exchanged) this _____ day of
      ___________, _____, shares of Common Stock issued therefor in the name of
      _______________, Warrant No. W-_____ issued for ____ shares of Common Stock
      in
      the name of _______________.


    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    


    EXHIBIT
      C

    FORM
      OF ESCROW AGREEMENT

    ESCROW
      AGREEMENT

     

    THIS
      ESCROW AGREEMENT (this “Agreement”)
      is
      made as of June 26, 2008, by and among Bond Laboratories, Inc., a Nevada
      corporation (the “Company”),
      the
      purchasers signatory hereto (each a “Purchaser”
and
      together the “Purchasers”),
      Burnham Hill Partners, a division of Pali Capital, Inc. (“BHP”),
      Chardan Capital Markets, LLC (“Chardan”
and,
      together with BHP, the “Placement
      Agents”),
      and
      Kramer Levin Naftalis & Frankel LLP, with an address at 1177 Avenue of the
      Americas, New York, New York 10036 (the “Escrow
      Agent”).
      Capitalized terms used but not defined herein shall have the meanings set forth
      in the Purchase Agreement (as defined below).

     

    W
      I T N E
      S S E T H:

     

    WHEREAS,
      the Purchasers will be purchasing from the Company shares of Common Stock (the
      “Common
      Stock”),
      par
      value $.001 per share (the “Shares”),
      pursuant to a Common Stock and Warrant Purchase Agreement dated as of the date
      hereof by and among the Company and the Purchasers (the “Purchase
      Agreement”);
      

     

    WHEREAS,
      the Company and the Purchasers have requested that the Escrow Agent hold the
      subscription amounts with respect to the purchase of the Shares in escrow until
      the Escrow Agent has received all closing documents and deliveries required
      under Article IV of the Purchase Agreement with respect to each Closing;
      and

     

    NOW,
      THEREFORE, in consideration of the covenants and mutual promises contained
      herein and other good and valuable consideration, the receipt and legal
      sufficiency of which are hereby acknowledged and intending to be legally bound
      hereby, the parties agree as follows:

     

     

    ARTICLE
      VIII

     

    TERMS
      OF THE ESCROW

     

    Section
      8.1 The
      parties hereby agree to establish an escrow account with the Escrow Agent
      whereby the Escrow Agent shall hold the funds for the purchase of the Shares
      as
      contemplated by the Purchase Agreement.

     

    Section
      8.2 Upon
      the
      Escrow Agent’s receipt of the aggregate subscription amounts into its master
      escrow account, together with copies of counterpart signature pages of the
      Transaction Documents from each Purchaser and the Company and all other closing
      documents and deliveries required under Article IV of the Purchase Agreement,
      it
      shall advise the Company and the Placement Agents, or their designated attorneys
      or agents, of the amount of funds it has received into its master escrow
      account.

     

    Section
      8.3 Wire
      transfers to the Escrow Agent shall be made as follows:



    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    


    Section
      8.4 The
      Company and the Placement Agents, promptly after being advised by the Escrow
      Agent that it has received the subscription amounts for the applicable Closing,
      copies of counterpart signature pages of the Transaction Documents from each
      Purchaser and the Company and all other closing documents and deliveries
      required under Article IV of the Purchase Agreement, shall deliver to the Escrow
      Agent a Release Notice, in the form attached hereto as Exhibit
      A
      (the
“Release
      Notice”).

     

    Section
      8.5 Once
      the
      Escrow Agent receives the Release Notice executed by the Company and the
      Placement Agents, the Escrow Agent shall wire the subscription proceeds per
      the
      written instructions of the Company and the Placement Agents, net of fees,
      expenses and any other disbursements as set forth in the Release
      Notice.

     

    Section
      8.6 Wire
      transfers to the Company shall be made pursuant to written instructions from
      the
      Company provided to the Escrow Agent.

     

    Section
      8.7 Upon
      the
      written request from a Purchaser to the Escrow Agent, the Escrow Agent shall
      promptly return the subscription proceeds to each Purchaser pursuant to written
      wire instructions to be delivered by such Purchaser to the Escrow
      Agent.

     

     

    ARTICLE
      IX

     

    MISCELLANEOUS

     

    Section
      9.1 
      No
      waiver or any breach of any covenant or provision herein contained shall be
      deemed a waiver of any preceding or succeeding breach thereof, or of any other
      covenant or provision herein contained. No extension of time for performance
      of
      any obligation or act shall be deemed an extension of the time for performance
      of any other obligation or act.

     

    Section
      9.2 All
      notices or other communications required or permitted hereunder shall be in
      writing, and shall be sent as set forth in the Purchase Agreement.

     

    Section
      9.3 This
      Escrow Agreement shall be binding upon and shall inure to the benefit of the
      permitted successors and permitted assigns of the parties hereto.

     

    Section
      9.4 This
      Escrow Agreement is the final expression of, and contains the entire agreement
      between, the parties with respect to the subject matter hereof and supersedes
      all prior understandings with respect thereto. This Escrow Agreement may not
      be
      modified, changed, supplemented or terminated, nor may any obligations hereunder
      be waived, except by written instrument signed by the parties to be charged
      or
      by its agent duly authorized in writing or as otherwise expressly permitted
      herein.

     

    Section
      9.5 Whenever
      required by the context of this Escrow Agreement, the singular shall include
      the
      plural and masculine shall include the feminine. This Escrow Agreement shall
      not
      be construed as if it had been prepared by one of the parties, but rather as
      if
      both parties had prepared the same. Unless otherwise indicated, all references
      to Articles are to this Escrow Agreement.


    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    Section
      9.6 The
      parties hereto expressly agree that this Escrow Agreement shall be governed
      by,
      interpreted under and construed and enforced in accordance with the laws of
      the
      State of New York, without regard to conflicts of law principles that would
      result in the application of the substantive laws of another jurisdiction.
      Any
      action to enforce, arising out of, or relating in any way to, any provisions
      of
      this Escrow Agreement shall only be brought in a state or Federal court sitting
      in New York City, Borough of Manhattan.

     

    Section
      9.7 The
      Escrow Agent’s duties hereunder may be altered, amended, modified or revoked
      only by a writing signed by the Company, each Purchaser and the Escrow
      Agent.

     

    Section
      9.8 The
      Escrow Agent shall be obligated only for the performance of such duties as
      are
      specifically set forth herein and may rely and shall be protected in relying
      or
      refraining from acting on any instrument reasonably believed by the Escrow
      Agent
      to be genuine and to have been signed or presented by the proper party or
      parties. The Escrow Agent shall not be personally liable for any act the Escrow
      Agent may do or omit to do hereunder as the Escrow Agent while acting in good
      faith and in the absence of gross negligence, fraud and willful misconduct,
      and
      any act done or omitted by the Escrow Agent pursuant to the advice of the Escrow
      Agent’s attorneys-at-law shall be conclusive evidence of such good faith, in the
      absence of gross negligence, fraud and willful misconduct.

     

    Section
      9.9 The
      Escrow Agent is hereby expressly authorized to disregard any and all warnings
      given by any of the parties hereto or by any other person or corporation,
      excepting only orders or process of courts of law and is hereby expressly
      authorized to comply with and obey orders, judgments or decrees of any court.
      In
      case the Escrow Agent obeys or complies with any such order, judgment or decree,
      the Escrow Agent shall not be liable to any of the parties hereto or to any
      other person, firm or corporation by reason of such decree being subsequently
      reversed, modified, annulled, set aside, vacated or found to have been entered
      without jurisdiction.

     

    Section
      9.10 The
      Escrow Agent shall not be liable in any respect on account of the identity,
      authorization or rights of the parties executing or delivering or purporting
      to
      execute or deliver the Purchase Agreement or any documents or papers deposited
      or called for thereunder in the absence of gross negligence, fraud and willful
      misconduct.

     

    Section
      9.11 The
      Escrow Agent shall be entitled to employ such legal counsel and other experts
      as
      the Escrow Agent may deem necessary properly to advise the Escrow Agent in
      connection with the Escrow Agent’s duties hereunder, may rely upon the advice of
      such counsel, and may pay such counsel reasonable compensation therefor.
The
      Escrow Agent has acted as legal counsel for the Placement Agents and may
      continue to act as legal counsel for the Placement Agents from time to time,
      notwithstanding its duties as the Escrow Agent hereunder. The Company and the
      Placement Agents consent to the Escrow Agent in such capacity as legal counsel
      for the Placement Agents and waives any claim that such representation
      represents a conflict of interest on the part of the Escrow Agent. The Company
      and the Placement Agents understand that the Escrow Agent is relying explicitly
      on the foregoing provision in entering into this Escrow
      Agreement.

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    Section
      9.12 The
      Escrow Agent’s responsibilities as escrow agent hereunder shall terminate if the
      Escrow Agent shall resign by giving written notice to the Company and the
      Purchasers. In the event of any such resignation, the Purchasers and the Company
      shall appoint a successor Escrow Agent and the Escrow Agent shall deliver to
      such successor Escrow Agent any escrow funds and other documents held by the
      Escrow Agent.

     

    Section
      9.13 If
      the
      Escrow Agent reasonably requires other or further instruments in connection
      with
      this Escrow Agreement or obligations in respect hereto, the necessary parties
      hereto shall join in furnishing such instruments.

     

    Section
      9.14 It
      is
      understood and agreed that should any dispute arise with respect to the delivery
      and/or ownership or right of possession of the documents or the escrow funds
      held by the Escrow Agent hereunder, the Escrow Agent is authorized and directed
      in the Escrow Agent’s sole discretion (1) to retain in the Escrow Agent’s
      possession without liability to anyone all or any part of said documents or
      the
      escrow funds until such disputes shall have been settled either by mutual
      written agreement of the parties concerned by a final order, decree or judgment
      or a court of competent jurisdiction after the time for appeal has expired
      and
      no appeal has been perfected, but the Escrow Agent shall be under no duty
      whatsoever to institute or defend any such proceedings or (2) to deliver the
      escrow funds and any other property and documents held by the Escrow Agent
      hereunder to a state or Federal court having competent subject matter
      jurisdiction and located in the City of New York, Borough of Manhattan, in
      accordance with the applicable procedure therefor.

     

    Section
      9.15 The
      Company and each Purchaser agree jointly and severally to indemnify and hold
      harmless the Escrow Agent and its partners, employees, agents and
      representatives from any and all claims, liabilities, costs or expenses in
      any
      way arising from or relating to the duties or performance of the Escrow Agent
      hereunder or the transactions contemplated hereby or by the Purchase Agreement
      other than any such claim, liability, cost or expense to the extent the same
      shall have been determined by final, unappealable judgment of a court of
      competent jurisdiction to have resulted from the gross negligence, fraud or
      willful misconduct of the Escrow Agent.

     

    [SIGNATURE
      PAGE FOLLOWS]


    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    


    [SIGNATURE
      PAGE TO ESCROW AGREEMENT]

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of this
      25th
      day of
      June, 2008.

     

    
      	
               

              BOND
                LABORATORIES, INC.

               

               

              By:__________________________________________

              Name:

              Title:

            	
               

            
	 	 
	 	 
	
              ESCROW
                AGENT:

            	 
	
              Kramer
                Levin Naftalis & Frankel LLP

            	 
	
               

              By:__________________________________________

              Name:

              Title:

            	
               

            
	 	 
	 	 
	
              Burnham
                Hill Partners,

              a
                division of Pali Capital, Inc. 

               

               

              By:__________________________________________

              Name:

              Title:

            	
               

            
	 
	 
	
              Chardan
                Capital Markets, LLC 

               

               

            
	
              By:__________________________________________

              Name:

              Title:

            


    

    
 

    [PURCHASERS’
      SIGNATURE PAGE FOLLOWS]


    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    


    [PURCHASER’S
      SIGNATURE PAGE TO ESCROW AGREEMENT]

    


    Name
      of
      Investing Entity: __________________________

    Signature
      of Authorized Signatory of Investing Entity:
      __________________________

    Name
      of
      Authorized Signatory: _________________________

    Title
      of
      Authorized Signatory: __________________________

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    


    Exhibit
      A to

    Escrow
      Agreement

     

    RELEASE
      NOTICE

     

    The
      UNDERSIGNED, pursuant to the Escrow Agreement dated as of June 26, 2008 among
      Bond Laboratories, Inc. (the “Company”),
      the
      Purchasers signatory thereto and Kramer Levin Naftalis & Frankel LLP, as
      Escrow Agent (the “Escrow
      Agreement”),
      hereby notify the Escrow Agent that each of the conditions precedent to the
      purchase and sale of the Shares have been satisfied or waived in accordance
      with
      Article IV of the Purchase Agreement. The Company hereby confirms that all
      of
      its respective representations and warranties contained in the Purchase
      Agreement remain true and correct and authorize the release by the Escrow Agent
      of the funds to be released as described in the Escrow Agreement and as set
      forth below. This Release Notice shall not be effective until executed by the
      Company and the Placement Agents. 

     

    Capitalized
      terms used herein and not defined shall have the meaning ascribed to such terms
      in the Escrow Agreement.

     

    This
      Release Notice may be signed in one or more counterparts, each of which shall
      be
      deemed an original.

     

    Please
      release the $3,000,000 that has been deposited in the escrow account pursuant
      to
      the Escrow Agreement according to the following instructions:

     

     

    [to
      be completed]

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    


    IN
      WITNESS WHEREOF, the undersigned have caused this Release Notice to be duly
      executed and delivered as of this ___ day of June, 2008.

     

    
      	
               

              BOND
                LABORATORIES, INC.

               

               

              By:____________________________

              Name:

              Title:

            


    

    


    
      	
              PLACEMENT
                AGENTS:

            	 
	 	 
	
              Burnham
                Hill Partners,

              a
                division of Pali Capital, Inc. 

               

               

            	 
	
              By:__________________________________________

              Name:

              Title:

            	 
	
               

               

              Chardan
                Capital Markets, LLC 

               

               

            
	
              By:__________________________________________

              Name:

              Title:

            


    

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    


    EXHIBIT
      D

    FORM
      OF REGISTRATION RIGHTS AGREEMENT

     

    This
      Registration Rights Agreement (this “Agreement”)
      is
      made and entered into as of June 26, 2008, by and among Bond Laboratories,
      Inc.,
      a Nevada corporation (the “Company”),
      and
      the purchasers listed on Schedule
      I
      hereto
      (the “Purchasers”).

    


    This
      Agreement is being entered into pursuant to the Common Stock and Warrant
      Purchase Agreement dated as of the date hereof among the Company and the
      Purchasers (the “Purchase
      Agreement”).

    


    The
      Company and the Purchasers hereby agree as follows:

    


    1. Definitions.

    


    Capitalized
      terms used and not otherwise defined herein shall have the meanings given such
      terms in the Purchase Agreement. As used in this Agreement, the following terms
      shall have the following meanings:

    


    “Advice”
shall
      have meaning set forth in Section 3(m).

    


    “Affiliate”
means,
      with respect to any Person, any other Person that directly or indirectly
      controls or is controlled by or under common control with such Person. For
      the
      purposes of this definition, “control,”
when
      used with respect to any Person, means the possession, direct or indirect,
      of
      the power to direct or cause the direction of the management and policies of
      such Person, whether through the ownership of voting securities, by contract
      or
      otherwise; and the terms of “affiliated,”
      “controlling”
and
      “controlled”
have
      meanings correlative to the foregoing.

    


    “Board”
shall
      have meaning set forth in Section 3(n).

    


    “Business
      Day”
means
      any day except Saturday, Sunday and any day which shall be a legal holiday
      or a
      day on which banking institutions in the state of New York generally are
      authorized or required by law or other government actions to close.

    


    “Closing
      Date”
means
      the date of the final closing of the purchase and sale of the Common Stock
      and
      the Warrants pursuant to the Purchase Agreement.

    


    “Commission”
means
      the Securities and Exchange Commission.

    


    “Common
      Stock”
means
      the Company’s common stock, par value $0.001 per share.

     

    
      “Effectiveness
        Date”
means,
        subject to Section 2(b) hereof, with respect to the Registration Statement,
        the
        earlier of (A) the one hundred twentieth (120th)
        day
        following the Closing Date or (B) the
        date
        which is within three (3) Business Days after the date on which the Commission
        informs the Company (i) that the Commission will not review the Registration
        Statement or (ii) that
        the
        Company may request the acceleration of the effectiveness of the Registration
        Statement and the Company makes such request; provided that,
        if the
        Effectiveness Date falls on a Saturday,
        Sunday or any other day which shall be a legal holiday or a day on which
        the
        Commission is authorized or required by law or other government actions to
        close, the Effectiveness Date shall be the following Business Day.

    


    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    


    “Effectiveness
      Period”
shall
      have the meaning set forth in Section 2.

    


    “Event”
shall
      have the meaning set forth in Section 7(e).

    


    “Event
      Date”
shall
      have the meaning set forth in Section 7(e).

    


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

    


    “Filing
      Date”
means,
      subject to Section 2(b) hereof, the sixtieth (60th)
      day
      following the Closing Date;
      provided that,
      if the
      Filing Date falls on a Saturday,
      Sunday or any other day which shall be a legal holiday or a day on which the
      Commission is authorized or required by law or other government actions to
      close, the Filing Date shall be the following Business Day. 

    


    “Holder”
or
      “Holders”
means
      the holder or holders, as the case may be, from time to time of Registrable
      Securities.

    


    “Indemnified
      Party”
shall
      have the meaning set forth in Section 5(c).

    


    “Indemnifying
      Party”
shall
      have the meaning set forth in Section 5(c).

    


    “Losses”
shall
      have the meaning set forth in Section 5(a).

    


    “Person”
means
      an individual or a corporation, partnership, trust, incorporated or
      unincorporated association, joint venture, limited liability company, joint
      stock company, government (or an agency or political subdivision thereof) or
      other entity of any kind.

    


    “Proceeding”
means
      an action, claim, suit, investigation or proceeding (including, without
      limitation, an investigation or partial proceeding, such as a deposition),
      whether commenced or threatened.

    


    “Prospectus”
means
      the prospectus included in the Registration Statement (including, without
      limitation, a prospectus that includes any 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 the Registration Statement,
      and
      all other amendments and supplements to the Prospectus, including post-effective
      amendments, and all material incorporated by reference in such
      Prospectus.


    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

     

    “Registrable
      Securities
      means
      (i) the shares of Common Stock issuable upon exercise of the Warrants and (ii)
      any warrants, shares of capital stock or other securities of the Company issued
      as a dividend or other distribution with respect to or in exchange for or in
      replacement of such shares of Common Stock.

    


    “Registration
      Statement”
means
      the registration statements and any additional registration statements
      contemplated by Section 2, including (in each case) the Prospectus, amendments
      and supplements to such registration statement or Prospectus, including pre-
      and
      post-effective amendments, all exhibits thereto, and all material incorporated
      by reference in such registration statement.

    


    “Requisite
      Holders”
shall
      mean, as of the date of determination, one or more Holders who in the aggregate
      hold not less than a majority of the shares of Common Stock included in the
      then
      outstanding Registrable Securities (including shares of Common Stock issuable
      upon exercise of the Warrants included in the then outstanding Registrable
      Securities); provided, that, if the matter in question relates to a particular
      registration, then the term “Requisite Holders” shall mean one or more Holders
      who in the aggregate hold not less than a majority of the shares of Common
      Stock
      included in the then outstanding Registrable Securities held by all Holders
      selling Registrable Securities pursuant to such registration (including shares
      of Common Stock issuable upon exercise of the Warrants included in the then
      outstanding Registrable Securities).

    


    “Rule
      144”
means
      Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.

    


    “Rule
      158”
means
      Rule 158 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.

    


    “Rule
      415”
means
      Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.

    


    “Rule
      424”
means
      Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.

    


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

    


    “Special
      Counsel”
means
      Kramer Levin Naftalis & Frankel LLP, for which the Holders will be
      reimbursed by the Company pursuant to Section 4.

    


    “Warrants”
means
      the warrants to purchase shares of Common Stock issued to the Purchasers
      pursuant to the Purchase Agreement.


    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

     

    2. Resale
      Registration.

    


    (a) Subject
      to Section 3(n) hereof, on or prior to the Filing Date, the Company shall
      prepare and file with the Commission a “resale” Registration Statement providing
      for the resale of all Registrable Securities for an offering to be made on
      a
      continuous basis pursuant to Rule 415. The Registration Statement shall be
      on
      Form S-1 (or on another form deemed appropriate by counsel to the Company in
      accordance herewith and with the Securities Act and the rules promulgated
      thereunder). Such Registration Statement shall cover to the extent allowable
      under the Securities Act and the rules promulgated thereunder (including Rule
      416), such indeterminate number of additional shares of Common Stock resulting
      from stock splits, stock dividends or similar transactions with respect to
      the
      Registrable Securities. The Company shall (i) not permit any securities other
      than the Registrable Securities and the securities listed on Schedule
      II
      hereto
      to be included in the Registration Statement except with the prior consent
      of
      the Requisite Holders, and (ii) use its commercially reasonable efforts to
      cause
      the Registration Statement to be declared effective under the Securities Act
      by
      the Effectiveness Date, and shall use commercially reasonable efforts to keep
      such Registration Statement continuously effective under the Securities Act
      until such date as is the earlier of (x) the date when all Registrable
      Securities covered by such Registration Statement have been sold or (y) the
      date
      on which the Registrable Securities may be sold without any restriction pursuant
      to Rule 144 as determined by the counsel to the Company pursuant to a written
      opinion letter, addressed to the Company’s transfer agent to such effect (the
“Effectiveness
      Period”).
      The
      Company shall request that the effective time of the Registration Statement
      is
      4:00 p.m. Eastern Time on the effective date. If at any time and for any reason,
      an additional Registration Statement is required to be filed because at such
      time the actual number of shares of Common Stock into which the Warrants are
      exercisable plus the number of shares of Common Stock exceeds the number of
      shares of Registrable Securities remaining under the Registration Statement,
      subject to Section 3(n) hereof, the Company shall have twenty (20) Business
      Days
      to file such additional Registration Statement, and the Company shall use its
      commercially reasonable efforts to cause such additional Registration Statement
      to be declared effective by the Commission as soon as practicable. 

     

    (b) Notwithstanding
      anything to the contrary set forth in this Section 2, in the event the
      Commission does not permit the Company to register all of the Registrable
      Securities in the Registration Statement because of the Commission’s application
      of Rule 415 or the Commission requires the Company to either exclude shares
      held
      by certain Holders or deem such Holders to be underwriters with respect to
      their
      Registrable Securities, the Company shall register in the Registration Statement
      such number of Registrable Securities as is permitted by the Commission without
      naming such Holder as an underwriter (unless such Holder agrees to be named
      as
      an underwriter), provided, however, that the number of Registrable Securities
      to
      be included in such Registration Statement or any subsequent registration
      statement shall be determined in the following order: (i) first, the shares
      of
      Common Stock issuable upon exercise of the Warrants shall be registered on
      a pro
      rata basis among the holders of the Warrants, and (ii) second, any shares listed
      on Schedule II hereto shall be registered on a pro rata basis among the holders
      of such shares. In the event the Commission does not permit the Company to
      register all of the Registrable Securities in the initial Registration
      Statement, then except as the Holders of such excluded Registrable Securities
      may otherwise agree, subject
      to
      Section 3(n) hereof, the
      Company shall use its commercially reasonable efforts to file subsequent
      Registration Statements to register the Registrable Securities that were not
      registered in the initial Registration Statement, as promptly as possible and
      in
      a manner permitted by the Commission. For purposes of this Section 2(b), “Filing
      Date” means
      with respect to each subsequent Registration Statement filed pursuant hereto,
      the
      later
      of (i) sixty (60) days following the sale of substantially all of the
      Registrable Securities included in the initial Registration Statement or any
      subsequent Registration Statement and (ii) six (6) months following the
      effective date of the initial Registration Statement or any subsequent
      Registration Statement, as applicable, or such earlier date as permitted by
      the
      Commission; provided that,
      if the
      Filing Date falls on a Saturday, Sunday or any other day which shall be a legal
      holiday or a day on which the Commission is authorized or required by law or
      other government actions to close, the Filing Date shall be the following
      Business Day.
      For
      purposes of this Section 2(b), “Effectiveness
      Date”
means
      with respect to each subsequent Registration Statement filed pursuant hereto,
      the earlier of (A)
      the
      nintieth (90th)
      day
      following the filing date of such Registration Statement (or in the event such
      Registration Statement receives a “full review” by the Commission, the one
      hundred twentieth (120th)
      day
      following such filing date) or (B) the date which is within three (3) Business
      Days after the date on which the Commission informs the Company (i) that the
      Commission will not review such Registration Statement (or has no comments
      or no
      further comments to the Registration Statement) or (ii) that
      the
      Company may request the acceleration of the effectiveness of such Registration
      Statement and the Company makes such request; provided that,
      if the
      Effectiveness Date falls on a Saturday, Sunday or any other day which shall
      be a
      legal holiday or a day on which the Commission is authorized or required by
      law
      or other government actions to close, the Effectiveness Date shall be the
      following Business Day. Unless otherwise agreed to in writing by the Requisite
      Holders, no Registration Statement shall include, by amendment or otherwise,
      securities other than Registrable Securities.

     

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

    


    3. Registration
      Procedures.

    


               In
      connection with the Company’s registration obligations hereunder, the Company
      shall:

     

            (a)
 Prepare
      and file with the Commission, on or prior to the Filing Date, a Registration
      Statement on Form S-1 (or on another appropriate form as determine by counsel
      to
      the Company in accordance herewith and with the Securities Act and the rules
      promulgated thereunder) in accordance with the plan of distribution as set
      forth
      on Exhibit
      A
      hereto
      and in accordance with applicable law, regulations and Commission policies,
      and
      cause the Registration Statement to become effective and remain effective as
      provided herein; provided,
      however,
      that
      not less than three (3) Business Days prior to the filing of the Registration
      Statement or any related Prospectus or any amendment or supplement thereto,
      the
      Company shall (i) furnish to the Holders and any Special Counsel, copies of
      all
      such documents proposed to be filed, which documents will be subject to the
      review of such Holders and such Special Counsel, and (ii) cause its officers
      and
      directors, counsel and independent certified public accountants to respond
      to
      such inquiries as shall be necessary, in the reasonable opinion of Special
      Counsel, to conduct a reasonable review of such documents. The Company shall
      not
      file the Registration Statement or any such Prospectus or any amendments or
      supplements thereto to which the Requisite Holders or any Special Counsel shall
      reasonably object in writing within three (3) Business Days of their receipt
      thereof.

    


    
      
         

      

      
        -15-

        
          

        

      

      
         

      

    

     

    (b) (i)
      Prepare and file with the Commission such amendments, including post-effective
      amendments, to the Registration Statement as may be necessary to keep the
      Registration Statement continuously effective as to the applicable Registrable
      Securities for the Effectiveness Period and prepare and file with the Commission
      such additional Registration Statements in order to register for resale under
      the Securities Act all of the Registrable Securities; (ii) cause the related
      Prospectus to be amended or supplemented by any required Prospectus supplement,
      and as so supplemented or amended to be filed pursuant to Rule 424 (or any
      similar provisions then in force) promulgated under the Securities Act; (iii)
      respond as promptly as practicable to any comments received from the Commission
      with respect to the Registration Statement or any amendment thereto and as
      promptly as practicable provide the Holders true and complete copies of all
      correspondence from and to the Commission relating to the Registration
      Statement; (iv) file the final prospectus pursuant to Rule 424 of the Securities
      Act no later than 9:00 a.m. Eastern Time on the Business Day following the
      date
      the Registration Statement is declared effective by the Commission; and (v)
      comply in all material respects with the provisions of the Securities Act and
      the Exchange Act with respect to the disposition of all Registrable Securities
      covered by the Registration Statement during the Effectiveness Period in
      accordance with the intended methods of disposition by the Holders thereof
      set
      forth in the Registration Statement as so amended or in such Prospectus as
      so
      supplemented.

    


    (c) Notify
      the Holders of Registrable Securities and any Special Counsel as promptly as
      possible (and, in the case of (i)(A) below, not less than three (3) days prior
      to such filing, and in the case of (iii) below, on the same day of receipt
      by
      the Company of such notice from the Commission) and (if requested by any such
      Person) confirm such notice in writing no later than two (2) Business Days
      following the day (i)(A) when a Prospectus or any Prospectus supplement or
      post-effective amendment to the Registration Statement is filed; (B) when the
      Commission notifies the Company whether there will be a “review” of such
      Registration Statement and whenever the Commission comments in writing on such
      Registration Statement and (C) with respect to the 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 the Registration Statement or Prospectus or
      for
      additional information; (iii) of the issuance by the Commission of any stop
      order suspending the effectiveness of the Registration Statement covering any
      or
      all of the Registrable Securities or the initiation or threatening of any
      Proceedings for that purpose; (iv) of the receipt by the Company of any
      notification with respect to the suspension of the qualification or exemption
      from qualification of any of the Registrable Securities for sale in any
      jurisdiction, or the initiation or threatening of any Proceeding for such
      purpose; and (v) of the occurrence of any event that makes any statement made
      in
      the Registration Statement or Prospectus or any document incorporated or deemed
      to be incorporated therein by reference untrue in any material respect or that
      requires any revisions to the Registration Statement, Prospectus or other
      documents so that, in the case of the Registration Statement or the Prospectus,
      as the case may be, it 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, in the light of the circumstances under which
      they
      were made, not misleading.


    
      
         

      

      
        -16-

        
          

        

      

      
         

      

    

     

               (d) Use
      its
      commercially reasonable efforts to avoid the issuance of, or, if issued, obtain
      the withdrawal of, as promptly as possible, (i) any order suspending the
      effectiveness of the Registration Statement or (ii) any suspension of the
      qualification (or exemption from qualification) of any of the
      Registrable Securities
      for sale in any jurisdiction.

    


    (e) If
      requested by the Requisite Holders, (i) promptly incorporate in a Prospectus
      supplement or post-effective amendment to the Registration Statement such
      information as the Company reasonably agrees should be included therein and
      (ii)
      make all required filings of such Prospectus supplement or such post-effective
      amendment as soon as practicable after the Company has received notification
      of
      the matters to be incorporated in such Prospectus supplement or post-effective
      amendment.

    


    (f) If
      requested by any Holder, furnish to such Holder and any Special Counsel, without
      charge, at least one conformed copy of each Registration Statement and each
      amendment thereto, including financial statements and schedules, all documents
      incorporated or deemed to be incorporated therein by reference, and all exhibits
      to the extent requested by such Person (including those previously furnished
      or
      incorporated by reference) promptly after the filing of such documents with
      the
      Commission.

    


    (g) Promptly
      deliver to each Holder and any Special Counsel, without charge, as many copies
      of the Prospectus or Prospectuses (including each form of prospectus) and each
      amendment or supplement thereto as such Persons may reasonably request; and
      subject to the provisions of Sections 3(m) and 3(n), the Company hereby consents
      to the use of such Prospectus and each amendment or supplement thereto by each
      of the selling Holders in connection with the offering and sale of the
      Registrable Securities covered by such Prospectus and any amendment or
      supplement thereto.

    


    (h) Prior
      to
      any public offering of Registrable Securities, use its commercially reasonable
      efforts to register or qualify or cooperate with the selling Holders and any
      Special Counsel in connection with the registration or qualification (or
      exemption from such registration or qualification) of such Registrable
      Securities for offer and sale under the securities or Blue Sky laws of such
      jurisdictions within the United States as any Holder requests in writing, to
      keep each such registration or qualification (or exemption therefrom) effective
      during the Effectiveness Period and to do any and all other acts or things
      necessary or advisable to enable the disposition in such jurisdictions of the
      Registrable Securities covered by a Registration Statement; provided,
      however,
      that
      the Company shall not be required to qualify generally to do business in any
      jurisdiction where it is not then so qualified or to take any action that would
      subject it to general service of process in any such jurisdiction where it
      is
      not then so subject or subject the Company to general or unlimited service
      of
      process or to any taxation in any such jurisdiction where it is not then so
      subject.

    


               (i) Unless
      any Registrable Securities shall be in book-entry only form, cooperate with
      the
      selling Holders to facilitate the timely preparation and delivery of
      certificates representing Registrable Securities to be sold pursuant to a
      Registration Statement, which certificates, to the extent permitted by the
      Purchase Agreement and applicable federal and state securities laws, shall
      be
      free of all restrictive legends, and to enable such Registrable Securities
      to be
      in such denominations and registered in such names as any selling Holder may
      request in connection with any sale of Registrable Securities.


    
      
         

      

      
        -17-

        
          

        

      

      
         

      

    

     

    (j) Upon
      the
      occurrence of any event contemplated by Section 3(c)(v) and subject to Section
      3(n) below, as promptly as practicable, prepare a supplement or amendment,
      including a post-effective amendment, to the Registration Statement or a
      supplement to the related Prospectus or any document incorporated or deemed
      to
      be incorporated therein by reference, and file any other required document
      so
      that, as thereafter delivered, neither the Registration Statement nor such
      Prospectus will contain an untrue statement of a material fact or omit to state
      a material fact required to be stated therein or necessary to make the
      statements therein, in the light of the circumstances under which they were
      made, not misleading. If the Company notifies in writing the selling Holders
      of
      the occurrence of any event or the existence of any fact contemplated by
      paragraph 3(c)(v) above, the selling Holders shall suspend the use of the
      Prospectus until the requisite supplement or amendment to the Prospectus has
      been made or a post-effective amendment to the applicable Registration Statement
      shall become effective. The Company shall provide prompt written notice to
      the
      Holders upon the requisite supplement or amendment to the Prospectus being
      made
      or a post-effective amendment to the applicable Registration Statement becoming
      effective.

    


    (k) Use
      its
      commercially reasonable efforts to cause all Registrable Securities relating
      to
      the Registration Statement to be listed or quoted on the OTC Bulletin Board
      or
      any other securities exchange, quotation system or market, if any, on which
      similar securities issued by the Company are then listed or traded as and when
      required pursuant to the Purchase Agreement.

    


    (l) Comply
      in
      all material respects with all applicable rules and regulations of the
      Commission and make generally available to its security holders all documents
      filed or required to be filed with the Commission, including, but not limited,
      to, earning statements satisfying the provisions of Section 11(a) of the
      Securities Act and Rule 158 not later than 90 days after the end of any 12-month
      period if such period is a fiscal year commencing on the first day of the first
      fiscal quarter of the Company after the effective date of the Registration
      Statement, which statement shall conform to the requirements of Rule 158.


    


    (m) The
      Company may require each selling Holder to furnish to the Company information
      regarding such Holder and the distribution of such Registrable Securities as
      is
      required by law to be disclosed in the Registration Statement, Prospectus,
      or
      any amendment or supplement thereto, and the Company may exclude from such
      registration the Registrable Securities of any such Holder who fails to furnish
      such information within ten (10) Business Days after receiving such written
      request, provided that the Company provides to each Holder a subsequent written
      request after the fifth (5th)
      Business Day of the initial request (and the Company shall not be responsible
      for, or incur any penalties under this Agreement with respect to, any delays
      in
      obtaining or maintaining the effectiveness of the Registration Statement caused
      by a selling Holder’s failure to timely provide the required information). Any
      sale of any Registrable Securities by any Holder pursuant to a Registration
      Statement shall constitute a representation and warranty by such Holder that
      the
      information relating to such Holder and its plan of distribution is as set
      forth
      in the Prospectus delivered by such Holder in connection with such disposition,
      that such Prospectus does not, as of the time of such sale, contain any untrue
      statement of a material fact relating to or provided by such Holder or its
      plan
      of distribution and that such Prospectus does not, as of the time of such sale,
      omit to state any material fact relating to or provided by such Holder or its
      plan of distribution necessary in order to make the statements in such
      Prospectus, in light of the circumstances under which they were made, not
      misleading.


    
      
         

      

      
        -18-

        
          

        

      

      
         

      

    

     

    If
      the
      Registration Statement refers to any Holder by name or otherwise as the holder
      of any securities of the Company, then such Holder shall have the right to
      require (subject to the exceptions set forth immediately below) the deletion
      of
      the reference to such Holder in any amendment or supplement to the Registration
      Statement filed or prepared subsequent to the time that such reference ceases
      to
      be required. The Company shall hold in confidence and not make any disclosure
      of
      non-public information concerning any selling Holder provided to, or at the
      request of, the Company by such selling Holder unless (i) disclosure of such
      information is reasonably necessary to comply with federal or state securities
      laws, rules, statutes or regulations, (ii) the disclosure of such information
      is
      reasonably necessary to avoid or correct a misstatement or omission in any
      Registration Statement or other public filing by the Company, (iii) the release
      of such information is ordered pursuant to a subpoena or other order from a
      court or governmental body of competent jurisdiction or is otherwise required
      by
      applicable law or legal process, (iv) such information has been made generally
      available to the public other than by disclosure in violation of this or any
      other agreement, or (v) such selling Holder consents to the form and content
      of
      any such disclosure. The Company agrees that it shall, upon learning that
      disclosure of such information concerning any selling Holder is sought in or
      by
      a court or governmental body of competent jurisdiction or through other means,
      give prompt notice to such selling Holder prior to making such disclosure,
      and
      allow such selling Holder, at its expense, to undertake appropriate action
      to
      prevent disclosure of, or to obtain a protective order for, such
      information.

    


    Each
      Holder covenants and agrees that it will not sell any Registrable Securities
      under the Registration Statement until the Company has electronically filed
      the
      Prospectus as then amended or supplemented as contemplated in Section 3(g)
      and
      notice from the Company that such Registration Statement and any post-effective
      amendments thereto have become effective as contemplated by Section
      3(c).

    


    Each
      Holder agrees by its acquisition of such Registrable Securities that, upon
      receipt of a notice from the Company of the occurrence of any event of the
      kind
      described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(n), such Holder
      will forthwith discontinue disposition of such Registrable Securities under
      the
      Registration Statement until such Holder’s receipt of the copies of the
      supplemented Prospectus and/or amended Registration Statement contemplated
      by
      Section 3(j), or until it is advised in writing (the “Advice”)
      by the
      Company that the use of the applicable Prospectus may be resumed, and, in either
      case, has received copies of any additional or supplemental filings that are
      incorporated or deemed to be incorporated by reference in such Prospectus or
      Registration Statement.

    


    (n) If
      (i)
      there is material non-public information regarding the Company which the
      Company’s Board of Directors (the “Board”)
      determines not to be in the Company’s best interest to disclose and which the
      Company is not otherwise required to disclose, (ii) there is a significant
      business opportunity (including, but not limited to, the acquisition or
      disposition of assets (other than in the ordinary course of business) or any
      merger, consolidation, tender offer or other similar transaction) available
      to
      the Company which the Board determines not to be in the Company’s best interest
      to disclose, or (iii) the Company is required to file a post-effective amendment
      to the Registration Statement to incorporate the Company’s quarterly and annual
      reports and audited financial statements on Forms 10-Q and 10-K, then the
      Company may (x) postpone or suspend filing of a registration statement for
      a
      period not to exceed thirty (30) consecutive days or (y) postpone or suspend
      effectiveness of a registration statement for a period not to exceed twenty
      (20)
      consecutive days; provided that the Company may not postpone or suspend
      effectiveness of a registration statement under this Section 3(n) for more
      than
      sixty (60) days in the aggregate during any three hundred sixty (360) day
      period; provided,
      however,
      that no
      such postponement or suspension shall be permitted for consecutive twenty (20)
      day periods arising out of the same set of facts, circumstances or
      transactions.


    
      
         

      

      
        -19-

        
          

        

      

      
         

      

    

    


            4. Registration
      Expenses.
      

    


    All
      fees
      and expenses incident to the performance of or compliance with this Agreement
      by
      the Company, except as and to the extent specified in this Section 4, shall
      be
      borne by the Company whether or not the Registration Statement is filed or
      becomes effective and whether or not any Registrable Securities are sold
      pursuant to the Registration Statement. The fees and expenses referred to in
      the
      foregoing sentence shall include, without limitation, (i) all registration
      and
      filing fees (including, without limitation, fees and expenses (A) with respect
      to filings required to be made with the OTC Bulletin Board and/or each other
      securities exchange or market on which Registrable Securities are required
      hereunder to be quoted or listed, if any (B) with respect to filing fees
      required to be paid to FINRA and (C) in compliance with state securities or
      Blue
      Sky laws (including, without limitation, fees and disbursements of counsel
      for
      the Holders in connection with Blue Sky qualifications of the Registrable
      Securities and determination of the eligibility of the Registrable Securities
      for investment under the laws of such jurisdictions as the Requisite Holders
      may
      designate)), (ii) printing expenses (including, without limitation, expenses
      of
      printing certificates for Registrable Securities and of printing prospectuses
      if
      the printing of prospectuses is requested by the Requisite Holders included
      in
      the Registration Statement), (iii) messenger, telephone and delivery expenses,
      (iv) fees and disbursements of counsel for the Company and Special Counsel
      for
      the Holders, in the case of the Special Counsel, up to a maximum amount of
      $5,000, (v) Securities Act liability insurance, if the Company so desires such
      insurance, and (vi) fees and expenses of all other Persons retained by the
      Company in connection with the consummation of the transactions contemplated
      by
      this Agreement, including, without limitation, the Company’s independent public
      accountants (including the expenses of any comfort letters or costs associated
      with the delivery by independent public accountants of a comfort letter or
      comfort letters). In addition, the Company shall be responsible for all of
      its
      internal expenses incurred in connection with the consummation of the
      transactions contemplated by this Agreement (including, without limitation,
      all
      salaries and expenses of its officers and employees performing legal or
      accounting duties), the expense of any annual audit, the fees and expenses
      incurred in connection with the listing of the Registrable Securities on any
      securities exchange as required hereunder. The Company shall not be responsible
      for any discounts, commissions, transfer taxes or other similar fees incurred
      by
      the Holders in connection with the sale of the Registrable
      Securities.


    
      
         

      

      
        -20-

        
          

        

      

      
         

      

    

     

            5. Indemnification.

    


    (a) Indemnification
      by the Company.
      The
      Company shall, notwithstanding any termination of this Agreement, indemnify
      and
      hold harmless each Holder, the officers, directors, managers, partners, members,
      shareholders, agents, brokers, investment advisors and employees of each of
      them, each Person who controls any such Holder (within the meaning of Section
      15
      of the Securities Act or Section 20 of the Exchange Act) and the officers,
      directors, agents and employees of each such controlling Person, to the fullest
      extent permitted by applicable law, from and against any and all losses, claims,
      damages, liabilities, costs (including, without limitation, costs of preparation
      and reasonable attorneys’ fees) and expenses (collectively, “Losses”)
      , as
      incurred, arising out of or relating to any violation of securities laws by
      the
      Company or untrue or alleged untrue statement of a material fact contained
      in
      the Registration Statement, any Prospectus or any form of prospectus or in
      any
      amendment or supplement thereto or in any preliminary prospectus, or arising
      out
      of or relating to any omission or alleged omission of a material fact required
      to be stated therein or necessary to make the statements therein (in the case
      of
      any Prospectus or form of prospectus or supplement thereto, in the light of
      the
      circumstances under which they were made) not misleading, except (i) to the
      extent, but only to the extent, that such untrue statements or omissions are
      based solely upon information furnished in writing to the Company by or on
      behalf of such indemnified party (or Holder with whom such indemnified party
      is
      affiliated) expressly for use therein, and (ii) that the Company shall not
      be
      liable to any such indemnified party in any such case to the extent that any
      of
      such Losses arises from an offer or sale by such indemnified party (or Holder
      with whom such indemnified party is affiliated) during a suspension period
      referenced in Section 3(n) above, if such indemnified party (or affiliated
      Holder) that received from the Company written notice of the commencement of
      such suspension prior to the making of such offer or sale. The Company shall
      notify the Holders promptly of the institution, threat or assertion of any
      Proceeding of which the Company is aware in connection with the transactions
      contemplated by this Agreement.

    


    (b) Indemnification
      by Holders.
      Each
      Holder shall, severally and not jointly, indemnify and hold harmless the Company
      and its Affiliates (including each Person who controls the Company within the
      meaning of Section 15 of the Securities Act and Section 20 of the Exchange
      Act)), and their respective directors, officers, representatives, agents and
      employees, to the fullest extent permitted by applicable law, from and against
      all Losses, as incurred, arising solely out of or based solely upon any untrue
      statement of a material fact contained in the Registration Statement, any
      Prospectus, or any form of prospectus, or in any amendment or supplement
      thereto, or arising solely out of or based solely upon any omission of a
      material fact required to be stated therein or necessary to make the statements
      therein (in the case of any Prospectus or form of prospectus or supplement
      thereto, in the light of the circumstances under which they were made) not
      misleading, to the extent, but only to the extent, that such untrue statement
      or
      omission is contained in any information so furnished in writing by or on behalf
      of such Holder or other Indemnifying Party to the Company specifically for
      inclusion in the Registration Statement or such Prospectus. Notwithstanding
      anything to the contrary contained herein, each Holder shall be liable under
      this Section 5(b) for only that amount as does not exceed the net proceeds
      to
      such Holder as a result of the sale of Registrable Securities pursuant to such
      Registration Statement.


    
      
         

      

      
        -21-

        
          

        

      

      
         

      

    

     

    (c) Conduct
      of Indemnification Proceedings.
      If any
      Proceeding shall be brought or asserted against any Person entitled to indemnity
      hereunder (an “Indemnified
      Party”),
      such
      Indemnified Party promptly shall notify the Person from whom indemnity is sought
      (the “Indemnifying
      Party)
      in
      writing, and the Indemnifying Party shall be entitled to assume the defense
      thereof, including the employment of counsel reasonably satisfactory to the
      Indemnified Party and the payment of all fees and expenses incurred in
      connection with defense thereof; provided, that the failure of any Indemnified
      Party to give such notice shall not relieve the Indemnifying Party of its
      obligations or liabilities pursuant to this Agreement, except (and only) to
      the
      extent that it shall be finally determined by a court of competent jurisdiction
      (which determination is not subject to appeal or further review) that such
      failure shall have proximately and materially adversely prejudiced the
      Indemnifying Party.

    


    An
      Indemnified Party shall have the right to employ separate counsel in any such
      Proceeding and to participate in the defense thereof, but the fees and expenses
      of such counsel shall be at the expense of such Indemnified Party or Parties
      unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
      expenses; or (2) the Indemnifying Party shall have failed promptly to assume
      the
      defense of such Proceeding and to employ counsel reasonably satisfactory to
      such
      Indemnified Party in any such Proceeding; or (3) the named parties to any such
      Proceeding (including any impleaded parties) include both such Indemnified
      Party
      and the Indemnifying Party, and such parties shall have been advised by counsel
      that a conflict of interest is likely to exist if the same counsel were to
      represent such Indemnified Party and the Indemnifying Party (in which case,
      if
      such Indemnified Party notifies the Indemnifying Party in writing that it elects
      to employ separate counsel at the expense of the Indemnifying Party, the
      Indemnifying Party shall not have the right to assume the defense thereof and
      such counsel shall be at the expense of the Indemnifying Party). The
      Indemnifying Party shall not be liable for any settlement of any such Proceeding
      effected without its written consent, which consent shall not be unreasonably
      withheld or delayed. No Indemnifying Party shall, without the prior written
      consent of the Indemnified Party, effect any settlement of any pending or
      threatened Proceeding in respect of which any Indemnified Party is a party
      and
      indemnity has been sought hereunder, unless such settlement includes an
      unconditional release of such Indemnified Party from all liability on claims
      that are the subject matter of such Proceeding.

    


    All
      fees
      and expenses of the Indemnified Party (including reasonable fees and expenses
      to
      the extent incurred in connection with investigating or preparing to defend
      such
      Proceeding in a manner not inconsistent with this Section) shall be paid to
      the
      Indemnified Party, as incurred, within ten (10) Business Days of written notice
      thereof to the Indemnifying Party (regardless of whether it is ultimately
      determined that an Indemnified Party is not entitled to indemnification
      hereunder; provided,
      that the Indemnified Party shall reimburse all such fees and expenses to the
      extent it is finally judicially determined that such Indemnified Party is not
      entitled to indemnification hereunder).

    


    (d) Contribution.
      If a
      claim for indemnification under Section 5(a) or 5(b) is due but unavailable
      to
      an Indemnified Party because of a failure or refusal of a governmental authority
      to enforce such indemnification in accordance with its terms (by reason of
      public policy or otherwise), then each 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, in such proportion
      as is appropriate to reflect the relative fault of the Indemnifying Party and
      Indemnified Party in connection with the actions, statements or omissions that
      resulted in such Losses as well as any other relevant equitable considerations.
      The relative fault of such Indemnifying Party and Indemnified Party 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 or omission
      or alleged omission of a material fact, has been taken or made by, or relates
      to
      information supplied by, such Indemnifying, Party or Indemnified Party, and
      the parties’
      relative intent, knowledge, access to information and opportunity to correct
      or
      prevent such action, statement or omission. The amount paid or payable by a
      party as a result of any Losses shall be deemed to include, subject to the
      limitations set forth in Section 5(c), any reasonable attorneys’ or other
      reasonable fees or expenses incurred by such party in connection with any
      Proceeding to the extent such party would have been indemnified for such fees
      or
      expenses if the indemnification provided for in this Section was available
      to
      such party in accordance with its terms. In no event shall any selling Holder
      be
      required to contribute an amount under this Section 5(d) in excess of the net
      proceeds received by such Holder upon sale of such Holder’s Registrable
      Securities pursuant to the Registration Statement giving rise to such
      contribution obligation.


    
      
         

      

      
        -22-

        
          

        

      

      
         

      

    

     

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 5(d) were determined by pro rata allocation or by
      any
      other method of allocation that does not take into account the equitable
      considerations referred to in the immediately preceding paragraph. 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. For purposes of this
      Section 5(d), each officer, director, partner, employee, representative or
      agent of an Indemnified Party, and each person, if any, who controls such
      Indemnified Party within the meaning of the Securities Act or the Exchange
      Act,
      shall have the same rights to contribution as such Indemnified Party and each
      officer, director, partner, employee, representative and agent of the Company,
      and each person, if any, who controls the Company within the meaning of the
      Securities Act or the Exchange Act, shall have the same rights to contribution
      as the Company.

    


    The
      indemnity and contribution agreements contained in this Section are in addition
      to any liability that the Indemnifying Parties may have to the Indemnified
      Parties pursuant to the law.

    


    6. Rule
      144.

    


    As
      long
      as any Holder owns Warrants or Registrable Securities, the Company covenants
      to
      use commercially reasonable efforts to timely file (or obtain extensions in
      respect thereof and file within the applicable grace period) all reports
      required to be filed by the Company after the date hereof pursuant to Section
      13(a) or 15(d) of the Exchange Act. The Company further covenants that it will
      take such further action as any Holder may reasonably request, all to the extent
      required from time to time to enable such Person to sell the Warrant Shares
      without registration under the Securities Act within the limitation of the
      exemptions provided by Rule 144 promulgated under the Securities Act, including
      providing any legal opinions relating to such sale pursuant to Rule 144. Upon
      the request of any Holder, the Company shall deliver to such Holder a written
      certification of a duly authorized officer as to whether it has complied with
      such requirements.


    
      
         

      

      
        -23-

        
          

        

      

      
         

      

    

     

    7. Miscellaneous.

    


    (a) Remedies.
      In the
      event of a breach by the Company or by a Holder, of any of their obligations
      under this Agreement, such Holder or the Company, as the case may be, in
      addition to being entitled to exercise all rights granted by law and under
      this
      Agreement, including recovery of damages, will be entitled to specific
      performance of their rights under this Agreement.
      The Company and each Holder agree that monetary damages would not
      provide adequate
      compensation for any losses incurred by reason of a breach by it of any of
      the
      provisions of this Agreement and hereby further agrees that, in the event of
      any
      action for specific performance in respect of such breach, it shall waive the
      defense that a remedy at law would be adequate.

    


    (b) No
      Inconsistent Agreements.
      Without
      the consent of the Requisite Holders, neither the Company nor any of its
      subsidiaries has, as of the date hereof entered into and currently in effect,
      nor shall the Company or any of its subsidiaries, on or after the date of this
      Agreement, enter into any agreement with respect to its securities that is
      inconsistent with the rights granted to the Holders in this Agreement or
      otherwise conflicts with the provisions hereof. Except as disclosed in
Schedule
      2.1(c)
      of the
      Purchase Agreement or Schedule
      II
      hereto,
      neither the Company nor any of its subsidiaries has previously entered into
      any
      agreement currently in effect granting any registration rights with respect
      to
      any of its securities to any Person. Without limiting the generality of the
      foregoing, without the written consent of the Requisite Holders, the Company
      shall not grant to any Person the right to request the Company to register
      any
      securities of the Company under the Securities Act unless the rights so granted
      are subject in all respects to the prior rights in full of the Holders set
      forth
      herein, and are not otherwise in conflict with the provisions of this
      Agreement.

    


    (c) No
      Piggyback on Registrations.
      Neither
      the Company nor any of its security holders (other than the Holders in such
      capacity pursuant hereto or as disclosed on Schedule
      II
      hereto)
      may include securities of the Company in the Registration Statement, and the
      Company shall not after the date hereof enter into any agreement providing
      such
      right to any of its securityholders, unless the right so granted is subject
      in
      all respects to the prior rights in full of the Holders set forth herein, and
      is
      not otherwise in conflict with the provisions of this Agreement.

    


    (d) [Intentionally
      Omitted]

    


    (e) Amendments
      and Waivers.
      The
      provisions of this Agreement, including the provisions of this sentence, may
      not
      be amended, modified or supplemented, and waivers or consents to departures
      from
      the provisions hereof may not be given, unless the same shall be in writing
      and
      signed by the Company and the Requisite Holders. Each Holder of Registrable
      Securities outstanding at the time of any such amendment, waiver or consent
      thereafter shall be bound by any amendment, waiver or consent effected pursuant
      to this Section 7(e) provided that a notice, writing or marking indicating
      such amendment, waiver or consent appears on the Registrable Securities or
      is
      delivered to such Holder.

    


    (f) Notices.
      Any
      notice, demand, request, waiver or other communication required or permitted
      to
      be given hereunder shall be in writing and shall be effective (a) upon hand
      delivery, telecopy, e-mail or facsimile at the address or number designated
      below (if delivered on a Business Day during normal business hours where such
      notice is to be received), or the first Business Day following such delivery
      (if
      delivered other than on a Business Day during normal business hours where such
      notice is to be received) or (b) on the second Business Day following the date
      of mailing by express courier service, fully prepaid, addressed to such address,
      or upon actual receipt of such mailing, whichever shall first occur. The
      addresses for such communications shall be:

     

    
      
         

      

      
        -24-

        
          

        

      

      
         

      

    

     

    
      	
              If
                to the Company:

            	
              Bond
                Laboratories, Inc

            
	 	
              777
                South Highway 101, Suite 215 

              Solana
                Beach, California 92975

              Attention:
                Chief Executive Officer

              Tel.
                No.: (858) 847-9000

              Fax
                No.: (760) 990-5637 

            
	
              with
                copies (which shall not constitute notice) to:

            	
              Mintz
                Levin Cohn Ferris Glovsky & Popeo, P.C.

              3580
                Carmel Mountain Road, Suite 600

              San
                Diego, California 92130

              Attention:
                Eddie Rodriguez, Esq.

              Tel.
                No.: (858) 314-1527

              Fax
                No.: (858) 314-1501 

            
	 	 
	
              If
                to any Purchaser:

            	
              At
                the address of such Purchaser set forth on Exhibit
                A
                to
                this Agreement, with copies to Purchaser’s counsel as set forth below or
                as specified in writing by such Purchaser:

            
	 	 
	
              with
                copies (which shall not constitute notice) to:

            	
              Kramer
                Levin Naftalis & Frankel LLP

              1177
                Avenue of the Americas

              New
                York, New York 10036

              Attention:
                Christopher S. Auguste, Esq.

              Tel
                No.: (212) 715-9100

              Fax
                No.: (212) 715-8000

            


    

     

    Any
      party
      hereto may from time to time change its address for notices by giving at least
      ten (10) days written notice of such changed address to the other party
      hereto.

    


    (g) Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and permitted assigns and shall inure to the benefit of each
      Holder and its successors and assigns. The Company may not assign this Agreement
      or any of its rights or obligations hereunder without the prior written consent
      of the Requisite Holders. Each Purchaser may assign its rights hereunder in
      the
      manner and to the Persons as permitted under the Purchase
      Agreement.

    


    (h) Assignment
      of Registration Rights.
      The
      rights of each Holder hereunder, including the right to have the Company
      register for resale Registrable Securities in accordance with the terms of
      this
      Agreement, shall be automatically assignable by each Holder to any Person (other
      than a known competitor of the Company) of all or a portion of
      the
      Registrable Securities if: (i) the Holder agrees in writing with the transferee
      or assignee to assign such rights, and a copy of such agreement is furnished
      to
      the Company within a reasonable time after such assignment, (ii) the Company
      is,
      within a reasonable time after such transfer or assignment, furnished with
      written notice of (a) the name and address of such transferee or assignee,
      and
      (b) the securities with respect to which such registration rights are being
      transferred or assigned, (iii) following such transfer or assignment the further
      disposition of such securities by the transferee or assignees is restricted
      under the Securities Act and applicable state securities laws, (iv) at or before
      the time the Company receives the written notice contemplated by clause (ii)
      of
      this Section, the transferee or assignee agrees in writing with the Company
      to
      be bound by all of the provisions of this Agreement, and (v) such transfer
      shall
      have been made in accordance with the applicable requirements of the Purchase
      Agreement. The rights to assignment shall apply to the Holders (and to
      subsequent) successors and assigns. 


    
      
         

      

      
        -25-

        
          

        

      

      
         

      

    

     

    (i) Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original and, all of which taken together
      shall constitute one and the same Agreement and shall become effective when
      counterparts have been signed by each party and delivered to the other parties
      hereto, it being understood that all parties need not sign the same counterpart.
      In the event that any signature is delivered by facsimile or other electronic
      transmission, such signature shall create a valid binding obligation of the
      party executing (or on whose behalf such signature is executed) the same with
      the same force and effect as if such facsimile signature were the original
      thereof.

    (a) (j) Governing
      Law; Jurisdiction.
      This
      Agreement shall be governed by and construed in accordance with the internal
      laws of the State of New York, without giving effect to any of the conflicts
      of
      law principles which would result in the application of the substantive law
      of
      another jurisdiction. This Agreement shall not be interpreted or construed
      with
      any presumption against the party causing this Agreement to be drafted. The
      Company and the Holders agree that venue for any dispute arising under this
      Agreement will lie exclusively in the state or federal courts located in New
      York County, New York, and the parties irrevocably waive any right to raise
      forum
      non conveniens
      or any
      other argument that New York is not the proper venue. The Company and the
      Holders irrevocably consent to personal jurisdiction in the state and federal
      courts of the state of New York. The Company and the Holders consent to process
      being served in any such suit, action or proceeding by delivering a copy thereof
      to such party at the address in effect for notices to it under this Agreement
      and agrees that such service shall constitute good and sufficient service of
      process and notice thereof. Nothing in this Section 7(k) shall affect or limit
      any right to serve process in any other manner permitted by law. The Company
      and
      the Holders hereby agree that the prevailing party in any suit, action or
      proceeding arising out of or relating to this Agreement or the Purchase
      Agreement, shall be entitled to reimbursement for reasonable legal fees from
      the
      non-prevailing party. The parties hereby waive all rights to a trial by
      jury.

     

    (k) Cumulative
      Remedies.
      The
      remedies provided herein are cumulative and not exclusive of any remedies
      provided by law.


    
      
         

      

      
        -26-

        
          

        

      

      
         

      

    

     

    (l) Severability.
      If any
      term, provision, covenant or restriction of this Agreement is held to be
      invalid, illegal, void or unenforceable in any respect, the remainder of the
      terms, provisions, covenants and restrictions set forth herein shall remain
      in
      full force and effect and shall in no way be affected, impaired or invalidated,
      and the parties hereto shall use their reasonable efforts to find and employ
      an
      alternative means to achieve the same or substantially the same result as that
      contemplated by such term, provision, covenant or restriction. It is hereby
      stipulated and declared to
      be the
      intention of the parties that they would have executed the remaining terms,
      provisions, covenants and restrictions without including any of such that may
      be
      hereafter declared invalid, illegal, void or unenforceable.

    


    (m) Headings.
      The
      headings herein are for convenience only, do not constitute a part of this
      Agreement and shall not be deemed to limit or affect any of the provisions
      hereof.

    


    (n) Shares
      Held by the Company and its Affiliates.
      Whenever the consent or approval of Holders of a specified percentage of
      Registrable Securities is required hereunder, Registrable Securities held by
      the
      Company or its Affiliates (other than any Holder or transferees or successors
      or
      assigns thereof if such Holder is deemed to be an Affiliate solely by reason
      of
      its holdings of such Registrable Securities) shall not be counted in determining
      whether such consent or approval was given by the Holders of such required
      percentage.

    


    (o) Independent
      Nature of Purchasers.
      The
      Company acknowledges that the obligations of each Purchaser under the
      Transaction Documents are several and not joint with the obligations of any
      other Purchaser, and no Purchaser shall be responsible in any way for the
      performance of the obligations of any other Purchaser under the Transaction
      Documents. The Company acknowledges that the decision of each Purchaser to
      purchase Securities pursuant to the Purchase Agreement has been made by such
      Purchaser independently of any other Purchaser and independently of any
      information, materials, statements or opinions as to the business, affairs,
      operations, assets, properties, liabilities, results of operations, condition
      (financial or otherwise) or prospects of the Company or of its Subsidiaries
      which may have been made or given by any other Purchaser or by any agent or
      employee of any other Purchaser. The Company acknowledges that nothing contained
      herein, or in any Transaction Document, and no action taken by any Purchaser
      pursuant hereto or thereto (including, but not limited to, the (i) inclusion
      of
      a Purchaser in the Registration Statement and (ii) review by, and consent to,
      such Registration Statement by a Purchaser) shall be deemed to constitute the
      Purchasers as a partnership, an association, a joint venture or any other kind
      of entity, or create a presumption that the Purchasers are in any way acting
      in
      concert or as a group with respect to such obligations or the transactions
      contemplated by the Transaction Documents. The Company acknowledges that each
      Purchaser shall be entitled to independently protect and enforce its rights,
      including without limitation, the rights arising out of this Agreement or out
      of
      the other Transaction Documents, and it shall not be necessary for any other
      Purchaser to be joined as an additional party in any proceeding for such
      purpose.

    (b) 

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]


    
      
         

      

      
        -27-

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Registration Rights
      Agreement to be duly executed by their respective authorized persons as of
      the
      date first indicated above.

     

    
      	 	 	 
	 	
              BOND
                LABORATORIES, INC.

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:

	 	Title



      	 	 	 
	 	PURCHASER:
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
	 	Title:


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    Schedule
      I

    Purchasers

    

      
        	
                Names
                  and Addresses

              	
                Number
                  of Warrants

              	
                Dollar
                  Amount of

              
	
                of
                  Purchasers

              	
                Purchased

              	
                Investment

              


      

    

    


    INITIAL
      CLOSING:

    



    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    


    Schedule
      II

    Other
      Securities to be Included on the Registration Statement

    


    
      	
              1.

            	
              Shares
                of Common Stock issuable upon the exercise of warrants issued or
                issuable
                to the placement agents and their designees in connection with the
                transactions contemplated by the Purchase
                Agreement.

            


    


    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    


    Exhibit
      A

    Plan
      of
      Distribution

    


     

    The
      selling security holders and any of their pledgees, donees, assignees and
      successors-in-interest may, from time to time, sell any or all of their shares
      of common stock being offered under this prospectus on any stock exchange,
      market or trading facility on which shares of our common stock are traded or
      in
      private transactions. These sales may be at fixed or negotiated prices. The
      selling security holders may use any one or more of the following methods when
      disposing of shares:

     

    
      	 	
              ·

            	
              ordinary
                brokerage transactions and transactions in which the broker-dealer
                solicits purchasers;

            


    

     

    
      	 	
              ·

            	
              block
                trades in which the broker-dealer will attempt to sell the shares
                as agent
                but may position and resell a portion of the block as principal to
                facilitate the transaction;

            


    

     

    
      	 	
              ·

            	
              purchases
                by a broker-dealer as principal and resales by the broker-dealer
                for its
                account;

            


    

     

    
      	 	
              ·

            	
              an
                exchange distribution in accordance with the rules of the applicable
                exchange;

            


    

     

    
      	 	
              ·

            	
              privately
                negotiated transactions;

            


    

     

    
      	 	
              ·

            	
              to
                cover short sales made after the date that the registration statement
                of
                which this prospectus is a part is declared effective by the
                Commission;

            


    

     

    
      	 	
              ·

            	
              broker-dealers
                may agree with the selling security holders to sell a specified number
                of
                such shares at a stipulated price per
                share;

            


    

     

    
      	 	
              ·

            	
              a
                combination of any of these methods of sale;
                and

            


    

     

    
      	 	
              ·

            	
              any
                other method permitted pursuant to applicable
                law.

            


    

     

    The
      shares may also be sold under Rule 144 under the Securities Act of 1933, as
      amended (“Securities Act”), if available, rather than under this prospectus. The
      selling security holders have the sole and absolute discretion not to accept
      any
      purchase offer or make any sale of shares if they deem the purchase price to
      be
      unsatisfactory at any particular time.

     

    The
      selling security holders may pledge their shares to their brokers under the
      margin provisions of customer agreements. If a selling security holder defaults
      on a margin loan, the broker may, from time to time, offer and sell the pledged
      shares.

     

    Broker-dealers
      engaged by the selling security holders may arrange for other broker-dealers
      to
      participate in sales. Broker-dealers may receive commissions or discounts from
      the selling security holders (or, if any broker-dealer acts as agent for the
      purchaser of shares, from the purchaser) in amounts to be negotiated, which
      commissions as to a particular broker or dealer may be in excess of customary
      commissions to the extent permitted by applicable law.


    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    If
      sales
      of shares offered under this prospectus are made to broker-dealers as
      principals, we would be required to file a post-effective amendment to the
      registration statement of which this prospectus is a part. In the post-effective
      amendment, we would be required to disclose the names of any participating
      broker-dealers and the compensation arrangements relating to such
      sales.

     

    The
      selling security holders and any broker-dealers or agents that are involved
      in
      selling the shares offered under this prospectus may be deemed to be
“underwriters” within the meaning of the Securities Act in connection with these
      sales. Commissions received by these broker-dealers or agents and any profit
      on
      the resale of the shares purchased by them may be deemed to be underwriting
      commissions or discounts under the Securities Act. Any broker-dealers or agents
      that are deemed to be underwriters may not sell shares offered under this
      prospectus unless and until we set forth the names of the underwriters and
      the
      material details of their underwriting arrangements in a supplement to this
      prospectus or, if required, in a replacement prospectus included in a
      post-effective amendment to the registration statement of which this prospectus
      is a part.

     

    The
      selling security holders and any other persons participating in the sale or
      distribution of the shares offered under this prospectus will be subject to
      applicable provisions of the Exchange Act, and the rules and regulations under
      that act, including Regulation M. These provisions may restrict activities
      of,
      and limit the timing of purchases and sales of any of the shares by, the selling
      security holders or any other person. Furthermore, under Regulation M, persons
      engaged in a distribution of securities are prohibited from simultaneously
      engaging in market making and other activities with respect to those securities
      for a specified period of time prior to the commencement of such distributions,
      subject to specified exceptions or exemptions. All of these limitations may
      affect the marketability of the shares.

     

    If
      any of
      the shares of common stock offered for sale pursuant to this prospectus are
      transferred other than pursuant to a sale under this prospectus, then subsequent
      holders could not use this prospectus until a post-effective amendment or
      prospectus supplement is filed, naming such holders. We offer no assurance
      as to
      whether any of the selling security holders will sell all or any portion of
      the
      shares offered under this prospectus.

     

    We
      have
      agreed to pay all fees and expenses we incur incident to the registration of
      the
      shares being offered under this prospectus. However, each selling security
      holder and purchaser is responsible for paying any discounts, commissions and
      similar selling expenses they incur. 

     

    We
      and
      the selling security holders have agreed to indemnify one another against
      certain losses, damages and liabilities arising in connection with this
      prospectus, including liabilities under the Securities Act.

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    


    EXHIBIT
      E

    FORM
      OF OPINION 

    


    1. The
      Company is a corporation existing and in good standing under the laws of the
      State of Nevada and has the requisite corporate power to own, lease and operate
      its properties and assets, and to carry on its business as presently conducted.
      The Company is duly qualified as a foreign corporation to do business and is
      in
      good standing in every state in which the failure to so qualify would have
      a
      Material Adverse Effect.

     

    2. The
      Company has the requisite corporate power and authority to enter into and
      perform its obligations under the Transaction Documents and to issue the Shares
      and the Warrants. The execution, delivery and performance of each of the
      Transaction Documents by the Company and the consummation by it of the
      transactions contemplated thereby have been duly and validly authorized by
      all
      necessary corporate action and no further consent or authorization of the
      Company, its Board of Directors or its stockholders is required. Each of the
      Transaction Documents has been duly executed and delivered and each of the
      Transaction Documents constitutes a legal, valid and binding obligation of
      the
      Company enforceable against the Company in accordance with its respective terms.
      The Shares are not subject to any preemptive rights under the Articles of
      Incorporation or the Bylaws.

     

    3. The
      Shares and the Warrants have been duly authorized by all corporate action on
      the
      part of the Company and, the Shares when delivered against payment in full
      as
      provided in the Purchase Agreement, will be validly issued, fully paid and
      nonassessable. The shares of Common Stock issuable upon exercise of the Warrants
      have been duly authorized by all corporate action on the part of the Company
      and
      reserved for issuance, and when delivered against payment in full as provided
      in
      the Warrants, will be validly issued, fully paid and nonassessable.

     

    4. The
      execution, delivery and performance of and compliance with the terms of the
      Transaction Documents and the issuance of the Shares and the Warrants do not
      (a)  violate any provision of the Articles of Incorporation or Bylaws, (b)
      conflict with, or constitute a default (or an event which with notice or lapse
      of time or both would become a default) under, or give to others any rights
      of
      termination, amendment, acceleration or cancellation of, any material agreement,
      mortgage, deed of trust, indenture, note, bond, license, lease agreement,
      instrument or obligation to which the Company is a party, (c) create or impose
      a
      lien, charge or encumbrance (other than a Permitted Lien) on any property of
      the
      Company under any agreement or any commitment known to us to which the Company
      is a party or by which the Company is bound or by which any of its respective
      properties or assets are bound, or (d) result in a violation of any federal
      or
      state statute, rule, regulation, order, judgment, injunction or decree known
      to
      us (including federal and state securities laws and regulations) applicable
      to
      the Company or by which any property or asset of the Company is bound or
      affected, except, in all cases other than violations pursuant to clauses (a)
      and
      (d) above, for such conflicts, default, terminations, amendments, acceleration,
      cancellations and violations as would not, individually or in the aggregate,
      have a Material Adverse Effect.

     

    5. No
      consent, approval or authorization of or designation, declaration or filing
      with
      any governmental authority on the part of the Company is required under federal
      or state law, rule or regulation in connection with the valid execution,
      delivery and performance of the Transaction Documents, or the offer, sale or
      issuance of the Shares and the Warrants other than filings as may be required
      by
      applicable federal and state securities laws.

     


    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    6. To
      our
      knowledge, there is no action, suit, claim, investigation or proceeding pending
      or threatened against the Company which questions the validity of the Agreement
      or the transactions contemplated thereby or any action taken or to be taken
      pursuant thereto. To our knowledge, there is no action, suit, claim,
      investigation or proceeding pending, or threatened, against or involving the
      Company or any of its properties or assets and which, if adversely determined,
      would result in a Material Adverse Effect. 

     

    7. The
      offer, issuance and sale of the Shares and the Warrants and the offer, issuance
      and sale of the shares of Common Stock issuable upon exercise of the Warrants
      are exempt from the registration requirements of the Securities
      Act.

     

    8. The
      Company is not, and as a result of and immediately upon Closing will not be,
      an
“investment company” or a company “controlled” by an “investment company,”
within the meaning of the Investment Company Act of 1940, as
      amended.

     

    
      
         

      

      
        -7-