Exhibit
      10.1

     

    SUBSCRIPTION
      AGREEMENT

     

    
      	To:	 	
              Ionatron,
                Inc. 
                3716
                  East Columbia

                Tucson,
                  AZ 85714

              

            


    

    


    Ladies
      and Gentlemen:

    


    1.  Purchase
      and Sale of the Shares
      and
      Warrants.
      The
      undersigned hereby tenders this subscription and applies for the purchase of
      the
      number of shares (the “Shares”) of the common stock (the “Common Stock”), par
      value $0.001 per Share, of Ionatron, Inc. at a price of $5.75 per Share. The
      Company shall also issue to the undersigned warrants (the “Warrants”) to
      purchase a number of shares of Common Stock (the “Warrant Shares”) equal to 20%
      of the Shares (rounded to the next highest integer in the case of a fractional
      Warrant Shares) purchased by the undersigned. The Warrants shall be exercisable
      for a period of five (5) years commencing on the Closing Date (as defined below)
      at an exercise price of $9.15 per share. Together with this Subscription
      Agreement, the undersigned is delivering to the Company, a check payable to
      the
      Company or funds by wire transfer to an escrow account maintained at Continental
      Stock Transfer & Trust Company (the “Transfer Agent”), in accordance with
      the Escrow Agreement made as of August 1, 2006 by and among the Company, the
      Transfer Agent and J Giordano Securities Group (“J Giordano”), the placement
      agent for the Offering (defined below), in accordance with the instructions
      of J
      Giordano, in the full amount of the purchase price for the Shares and Warrants
      which the undersigned is subscribing for pursuant hereto. The form of the Escrow
      Agreement is attached as Exhibit A hereto. The Shares and Warrants are being
      offered, pursuant to this Subscription Agreement as part of an offering (the
      “Offering”) of approximately 4,616,305 Shares and Warrants to purchase up to
      923,260 Warrant Shares ($26,543,750), which maximum number of Shares and
      Warrants is subject to increase upon the mutual consent of the Company and
      J
      Giordano, on an “any or all basis.” The “Closing Date” means the date on which
      the purchase price for the Shares and Warrants is released from escrow to the
      Company and the Company accepts the undersigned’s subscription (the “Closing”).
      The Closing shall occur as soon as practicable, following the undersigned’s
      deposit of the purchase price into the escrow account and the Company’s
      acceptance of the undersigned’s subscription and satisfaction of the conditions
      to closing set forth in Section 5. Upon the Closing, the Company shall deliver
      to its Transfer Agent irrevocable instructions to issue the Shares to the
      undersigned and, promptly following the Closing, the Company shall deliver
      to
      the undersigned certificates representing the Warrants purchased by the
      undersigned and cause its Transfer Agent to deliver the undersigned
      certificates.

     

    2.  Representations,
      Warranties and Agreements of the Subscriber.
      (a)
      The
      undersigned acknowledges that the undersigned has access to and has reviewed
      copies of (i) the Company’s filings with the Securities and Exchange Commission
      (the “SEC”) via EDGAR, including, without limitation, the Company’s Form 10-K
      for the year ended December 31, 2005 (including all of the exhibits thereto),
      and the Company’s Form 10-Q for the quarter ended March 31, 2006 (including, in
      each case, all of the exhibits thereto), the Company’s Current Reports on Form
      8-K (including, in each case, as amended, and all of the exhibits thereto)
      filed
      since December 31, 2005 and the Company’s definitive proxy statement filed with
      the SEC on May 22, 2006 (collectively, the “SEC Reports”), and (ii) the draft of
      the Company’s Form 10-Q for the quarter ended June 30, 2006 which was
      distributed to the undersigned with this Subscription Agreement on or subsequent
      to August 4, 2006 (the “Draft Form 10-Q”), and the undersigned has performed its
      own due diligence in connection with its subscription for the Shares and
      Warrants and has had a reasonable opportunity to ask questions of and receive
      answers from qualified representatives of the Company concerning the business
      and financial condition of the Company, the terms and conditions of this
      Subscription Agreement, and all of such questions have been answered to the
      satisfaction of the undersigned.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)  The
      undersigned is an “accredited investor,” as such term is defined in Regulation D
      of the Rules and Regulations promulgated under the Securities Act of 1933,
      as
      amended (the “Act”), and as set forth below by checking the appropriate
      box(es):

     

    
      	
              r

            	
              A
                bank as defined in Section 3(a)(2) of the Act, or any savings and
                loan
                association or other institution as defined in Section 3(a)(5)(A)
                of the
                Act whether acting in its individual or fiduciary capacity; a broker
                or
                dealer registered pursuant to Section 15 of the Securities Exchange
                Act of
                1934 (the “Exchange Act”); an insurance company as defined in section
                2(13) of the Securities Act; an investment company registered under
                the
                Investment Company Act of 1940 or a business development company,
                as
                defined in section 2(a)(48) of that act; a Small Business Investment
                Company licensed by the U.S. Small Business Administration under
                Section
                301 (c) or (d) of the Small Business Investment Act of 1958; a plan
                established and maintained by a state, its political subdivisions,
                or any
                agency or instrumentality of a state or its political subdivisions,
                for
                the benefit of its employees, if such plan has total assets in excess
                of
                $5,000,000; an employee benefit plan within the meaning of the Employee
                Retirement Income Security Act of 1974 if the investment decision
                is made
                by a plan fiduciary, as defined in Section 3(21) of such act, which
                is
                either a bank, savings and loan association, insurance company, or
                registered investment adviser, or if the employee benefit plan has
                total
                assets in excess of $5,000,000 or, if a self-directed plan, with
                investment decisions made solely by persons that are accredited
                investors;

            
	 	 
	
              
                r

              

            	
              A
                private business development company as defined in Section 202(a)22
                of the
                Investment Advisers Act of 1940;

            
	 	 
	
              
                r

              

            	
              An
                organization described in Section 501(c)(3) of the Internal Revenue
                Code,
                corporation, Massachusetts or similar business trust, or partnership,
                not
                formed for the specific purpose of acquiring the securities offered,
                with
                total assets in excess of $5,000,000;

            
	 	 
	
              
                r

              

            	
              A
                director or executive officer of the Company;

            
	 	 
	
              
                r

              

            	
              A
                natural person whose individual net worth, or joint net worth with
                that
                person’s spouse, at the time of his purchase exceeds
                $1,000,000;

            
	 	 


    

     

     

    
      
        
        

      

      
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                r

              

            	
              A
                natural person who had an individual income in excess of $200,000
                in each
                of the two most recent years or joint income with that person’s spouse in
                excess of $300,000 in each of those years and has a reasonable expectation
                of reaching the same income level in the current year;

            
	 	 
	
              
                r

              

            	
              A
                trust, with total assets in excess of $5,000,000, not formed for
                the
                specific purpose of acquiring the securities offered, whose purchase
                is
                directed by a sophisticated person as described in Rule 506(b)(2)(ii);
                and

            
	 	 
	
              
                r

              

            	
              An
                entity in which all of the equity owners are accredited
                investors.

            


    

     

    (c)  The
      undersigned understands that the Company has determined that the exemption
      from
      the registration provisions of the Act, which is based upon non-public offerings
      are applicable to the offer and sale of the Shares and Warrants based, in part,
      upon the representations, warranties and agreements made by the undersigned
      herein;

     

    (d)  The
      undersigned understands that (A) none of Shares, Warrants or Warrant Shares
      have
      been registered under the Act or the securities laws of any state, based upon
      an
      exemption from such registration requirements for non-public offerings pursuant
      to Regulation D under the Act; (B) the Shares, Warrants and Warrant Shares
      are
      and will be “restricted securities,” as said term is defined in Rule 144 of the
      Rules and Regulations promulgated under the Act; (C) unless they have been
      first
      registered under the Act and all applicable state securities laws, the Shares,
      Warrants and Warrant Shares may only be offered, sold or otherwise transferred
      (1) to the Company, (2) pursuant to the exemption from registration under the
      Act provided by Rule 144, or (3) pursuant to another exemption from registration
      after providing a satisfactory legal opinion to the Company; (D) except as
      set
      forth in this Subscription Agreement, the Company is under no obligation to
      register any of the Shares, Warrants or Warrant Shares under the Act or any
      state securities laws, or to take any action to make any exemption from any
      such
      registration provisions available; (E) the certificates for the Shares, Warrants
      and Warrant Shares will bear the legend set forth in Section 2(n); and (F)
      stop
      transfer instructions will be placed with the transfer agent for the Common
      Stock;

     

    (e)  The
      undersigned is acquiring the Shares and Warrants solely for the account of
      the
      undersigned, for investment purposes only, and not with a view towards the
      resale or distribution thereof within the meaning of the Act;

     

    (f)  The
      undersigned has full power and authority to execute and deliver this
      Subscription Agreement and to perform the obligations of the undersigned
      hereunder; and this Subscription Agreement is a legally binding obligation
      of
      the undersigned in accordance with its terms;

     

    (g)  The
      address set forth below is the undersigned’s true and correct residence, and the
      undersigned has no present intention of becoming a resident of any other state
      or jurisdiction. (If a corporation, trust or partnership, the undersigned has
      its principal place of business at the address set forth below and was not
      organized (or has the jurisdiction of its organization and the address of its
      investment manager as set forth on the signature page) for the specific purpose
      of subscribing to this offering);

     

    
      
        
        

      

      
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    (h)  If
      the
      undersigned is a corporation or trust, the undersigned represents and warrants
      that he is authorized to so sign; that the corporation or trust is authorized
      by
      the Articles (or Certificate) of Incorporation and Bylaws of the corporation
      or
      by the trust agreement, as the case may be, or applicable law to make this
      investment and to enter into this Subscription Agreement; in the case of a
      trust, the undersigned will, upon the request of the Company or counsel to
      the
      Company, furnish to the Company a true and correct copy of the trust agreement;
      

     

    (i)  If
      the
      undersigned is a partnership, by signing below the partner executing this
      Subscription Agreement represents and warrants that each one of the foregoing
      representations or agreements or understandings set forth herein applies to
      each
      partner (unless such representation, agreement or understanding is by its terms
      applicable only to the partnership as an entity); that he is authorized to
      so
      sign; in the case of any partner that is a trust, a trustee (or co-trustee)
      of
      the trust is authorized by the trust agreement to make this investment and
      to
      enter into this Subscription Agreement and will, upon request of the Company
      or
      counsel to the Company, furnish to the Company a true and correct copy of the
      trust agreement; and in the case of any partner that is a corporation, the
      corporate officer so signing is authorized to sign on behalf of the corporation
      and will, upon request of the Company or counsel to the Company, furnish to
      the
      Company a true and correct copy of the provisions of the Articles (or
      Certificate) of Incorporation or Bylaws, or both, authorizing the corporation
      to
      make such investment, and a copy (certified by the secretary or other authorized
      officer) of appropriate corporate resolutions authorizing the specific
      investment;

     

    (j)  The
      undersigned does not have any contract, undertaking, agreement or arrangement
      with any person to sell, transfer or grant participations to such person or
      to
      any third person, with respect to any of the Shares, Warrants or Warrant Shares
      for which the undersigned is subscribing;

     

    (k)  The
      foregoing representations, warranties and agreements shall survive the
      execution, delivery and acceptance of this Subscription Agreement and the
      closings of the sale of the Shares and Warrants and shall continue in full
      force
      and effect notwithstanding any subsequent disposition by the undersigned of
      any
      of the Shares, Warrants or Warrant Shares;

     

    (l)  The
      undersigned understands that (i) this subscription is not binding upon the
      Company until the Company accepts it, which acceptance is to be evidenced by
      the
      Company’s execution of this Subscription Agreement where indicated and (ii) the
      Company may, in its sole discretion, reject this subscription, in which case
      this Subscription Agreement shall be null and void or reduce this Subscription
      in any amount;

     

    (m)  The
      undersigned understands that neither this Subscription Agreement nor any of
      the
      rights of the undersigned hereunder may be transferred or assigned by the
      undersigned prior to Closing; and

     

    (n)  (i)The
      undersigned agrees to the imprinting of the following (or a substantially
      similar) legend on any certificate representing the Shares, Warrants or Warrant
      Shares:

     

    
      
        
        

      

      
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    THE
      SHARES [WARRANTS REPRESENTED BY THIS CERTIFICATE 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 OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION
      STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS
      OR
      (ii) UPON THE DELIVERY BY THE HOLDER TO THE COMPANY OF AN OPINION OF COUNSEL,
      REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, STATING THAT AN EXEMPTION
      FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
      LAWS
      IS AVAILABLE FOR THE OFFER AND SALE OF SUCH SECURITIES.

     

    Certificates
      evidencing Shares, Warrants and/or Warrant Shares (collectively, the
“Securities”) shall not be required to contain a legend restricting transfer
      under the Act (i) while a registration statement covering the resale of such
      Securities is effective under the Act, or (ii) following any sale of such
      Securities pursuant to Rule 144, or (iii) if such Securities are eligible for
      sale under Rule 144(k), or (iv) if such legend is not required under applicable
      requirements of the Act (including judicial interpretations and pronouncements
      issued by the Staff of the SEC). The Company shall cause its counsel to issue
      a
      legal opinion to the Company’s transfer agent within three (3) business days
      following the date the Registration Statement (defined below) is declared
      effective by the SEC (the “Effective Date”) (provided that any transferee of the
      undersigned must deliver an affidavit with respect to the matters set forth
      in
      this Section 2(n). Upon the written consent of the undersigned, following the
      Effective Date or at such earlier time as a legend is no longer required for
      certain Securities, the Company will no later than three trading days following
      the delivery by the undersigned to the Company or the Company’s transfer agent
      of a legended certificate representing such Securities, deliver or cause to
      be
      delivered to the undersigned a certificate representing such Securities that
      is
      free from all restrictive and other legends. The undersigned covenants
      and agrees that it will comply with the prospectus delivery requirements set
      forth in Section 5 of the Act, in connection with any sale of Securities
      pursuant to the Registration Statement. The Company may, at its option, issue
      a
      blanket letter of instruction to its transfer agent placing “stop transfer”
orders on Securities, which stop transfer order may be lifted upon request
      by
      the transfer agent of written certification that the Shares are being sold
      pursuant to an effective registration statement and a duly delivered
      prospectus.

     

    (ii)  The
      undersigned understands that any sales by it of any of the Shares, Warrants
      or
      Warrant Shares that are not made in compliance with this Section 2(n) could
      subject the Company and the undersigned to possible civil and criminal liability
      under applicable federal securities laws and state securities or “blue sky”
laws. 

     

    (iii)  The
      undersigned (i) will only sell the Securities in a bona fide transaction that
      complies with the applicable federal and state securities laws, (ii) will not
      sell or otherwise dispose of or transfer the Securities or any interest therein
      in a transaction that is part of a plan or scheme to avoid the registration
      requirements of the Act and (iii) acknowledges and agrees that notwithstanding
      the removal of the legend set forth in this Section 2(n) from the Securities
      upon effectiveness of a Registration Statement covering the Securities, the
      Securities will remain “restricted securities,” and the undersigned, (iv) will
      not sell or otherwise transfer the Shares other than pursuant to the
      Registration Statement or, if applicable, Rule 144 promulgated under the Act,
      (v) will remain responsible for compliance with the federal and state securities
      laws in connection with any resale or other transfer of the Securities, any
      such
      sale or transfer will be made in compliance with Section 2(n) and the Company
      and any Company Related Person (as defined below) may produce this Subscription
      Agreement to any interested party in any proceeding or other inquiry with
      respect to the matters set forth in this Section 2(n).

     

    
      
        
        

      

      
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    (iv)  The
      undersigned understands that the Company, its officers, directors and agents
      are
      relying on the representation of the undersigned set forth in this Section
      2(n)
      in order to determine compliance with applicable securities laws in connection
      with the sale of the Securities to the undersigned.

     

    3.  Representations
      and Warranties of the Company.
      The
      Company hereby makes the following representations and warranties to the
      undersigned as of the date hereof and the Closing Date.
      Each of
      the representations and warranties are qualified in their entirety by the
      information contained in the SEC Reports, Draft Form 10-Q and Disclosure
      Schedules hereto.

     

    (a)  As
      of
      their respective dates, each of the SEC Reports, as any of such documents may
      have been subsequently amended by filings made by the Company with the SEC
      prior
      to the Closing Date, complied in all material respects with the requirements
      of
      the Exchange Act and the applicable rules and regulations of the SEC thereunder
      and none of the SEC Reports contains, and on the Closing Date, none of the
      SEC
      Reports will contain any untrue statement of a material fact or omit to state
      a
      material fact necessary to make the statements therein, in the light of the
      circumstances under which they were made, not misleading.
      The
      Company is eligible to register the Registrable Securities (defined below)
      for
      resale by the undersigned (provided that the undersigned is not a broker/dealer
      registered with the National Association of Securities Dealers, Inc.) on a
      registration statement on Form S-3 under the Act.

     

    (b)  The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware, with full power and authority,
      corporate and other to own or lease, as the case may be, and operate its
      properties, whether tangible or intangible, and to conduct its business as
      described in the SEC Reports and is duly qualified as a foreign corporation
      to
      transact business and is in good standing in each jurisdiction in which the
      conduct of its business or its ownership or leasing of property requires such
      qualification, except to the extent that the failure to be so qualified or
      be in
      good standing would not have a material adverse effect on the
      Company.

     

    (c)  The
      Company’s subsidiaries are set forth in the Disclosure Schedules (the
“Subsidiaries”).
      Unless the context requires otherwise, all references to the Company include
      the
      Subsidiaries. Each Subsidiary is a corporation duly organized, validly existing
      and in good standing under the laws of its state of incorporation as set forth
      in the Disclosure Schedules, with full power and authority, corporate and other,
      to own or lease, as the case may be, and operate its properties, whether
      tangible or intangible, and to conduct its business as currently conducted.
      Each
      Subsidiary is duly qualified as a foreign corporation to transact business
      and
      is in good standing in each jurisdiction in which the conduct of its business
      or
      the ownership or leasing of property requires such qualification, except to
      the
      extent that the failure to be so qualified or be in good standing would not
      have
      a material adverse effect on the Company and the Subsidiaries taken as a whole.
      The Company owns all of the issued and outstanding shares of capital stock
      (or
      other equity or ownership interests) of each Subsidiary, such ownership is
      free
      and clear of any security interests, liens, encumbrances, claims and charges,
      and all of such shares have been duly authorized and validly issued, and are
      fully paid and nonassessable. 

     

    
      
        
        

      

      
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    (d)  The
      Company does not presently own, directly or indirectly, an interest in any
      corporation, association, or other business entity, and is not a party to any
      joint venture, partnership, or similar arrangement, other than the
      Subsidiaries.

     

    (e)  The
      authorized capital stock of the Company conforms in all material respects to
      the
      description thereof contained in the SEC Reports and such description conforms
      in all material respects to the rights in the instruments defining the
      same.
      The
      issued and outstanding capital stock of the Company is as set forth in the
      Disclosure Schedules.

     

    (f)  The
      shares of common stock of the Company outstanding prior to the issuance of
      the
      Shares and Warrants have been duly authorized and are validly issued, fully
      paid
      and non-assessable.

     

    (g)  The
      Shares to be sold under this Agreement have been duly authorized and, when
      issued and sold and paid for by the undersigned in accordance with the terms
      of
      this Subscription Agreement, will be duly authorized, validly issued, fully
      paid
      and non assessable, and the undersigned will not be subject to personal
      liability solely by reason of being such holders and will not be subject to
      the
      preemptive or similar rights of any holders of any security of the
      Company.
      The
      Warrants to be sold under this Agreement have been duly authorized and, when
      issued and sold and paid for by the undersigned in accordance with the terms
      of
      this Subscription Agreement, will be the valid and binding obligation of the
      Company, enforceable in accordance with its terms. The Warrant Shares when
      issued and paid for in accordance with the terms of the Warrants, will be duly
      authorized, validly issued, fully paid and non assessable, and the undersigned
      will not be subject to personal liability solely by reason of being such holders
      and will not be subject to the preemptive or similar rights of any holders
      of
      any security of the Company. The issuance of the Shares and Warrants and the
      Warrant Shares upon exercise of the Warrants will not result in the right of
      any
      holder of securities of the Company to adjust the exercise, conversion or
      exchange price of such securities or otherwise reset the price paid for its
      securities.

     

    (h)  The
      Company has not granted or agreed to grant to any person any rights (including
      “piggy-back” registration rights) to have any securities of the Company
      registered with the SEC or any other governmental authority that have not been
      satisfied or waived.

     

    (i)  This
      Agreement has been duly authorized, executed and delivered by, and is a valid
      and binding agreement of, the Company enforceable in accordance with its terms,
      subject to applicable bankruptcy, reorganization, insolvency, moratorium and
      similar laws affecting creditors’ rights generally (including, without
      limitation, statutory or other laws regarding fraudulent preferential transfers)
      and equitable principles of general applicability.

     

    
      
        
        

      

      
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    (j)  The
      execution and delivery by the Company, and the performance by the Company of
      its
      obligations under this Subscription Agreement will not conflict with or
      contravene in any material respect, cause a breach or violation of or default
      under, any provision of applicable law or the certificate of incorporation
      or
      by-laws of the Company or any agreement or other instrument binding upon the
      Company that is material to the Company, or any judgment, order or decree of
      any
      governmental body, agency or court having jurisdiction over the Company, and
      no
      consent, approval, authorization or order of, or qualification with, any
      governmental body or agency is required for the performance by the Company
      of
      its obligations under this Subscription Agreement, except such as may be
      required by the securities or Blue Sky laws of the various states in connection
      with the offer and sale of the Shares and Warrants and by Federal and state
      securities laws with respect to the obligations of the Company under this
      Subscription Agreement or the listing of the Shares and Warrants Shares on
      the
      Nasdaq Stock Market as may be required by the National Association of Securities
      Dealers, Inc. which have been or will be obtained or such the failure of which
      to obtain would not have a material adverse effect on the Company and the
      Subscribers taken as a whole.

     

    (k)  There
      has
      not occurred any material adverse change, or any development involving a
      prospective material adverse change, in the condition, financial or otherwise,
      or in the earnings, business, operations or prospects of the Company whether
      or
      not arising in the ordinary course of business from that set forth in the SEC
      Reports and the Draft Form 10-Q.
      Except
      as set forth in the SEC Reports and Draft From 10-Q, there has been no
      obligation, contingent or otherwise, directly or indirectly incurred by the
      Company or any Subsidiary made to the Company and other Subsidiaries taken
      as a
      whole.

     

    (l)  None
      of
      the Company nor any Subsidiary is in violation of its charter or by-laws or
      in
      default in the performance of any obligation, agreement, covenant or condition
      contained in any indenture, loan agreement, mortgage, lease or other agreement
      or instrument that is material to the Company and the Subsidiaries taken as
      a
      whole to which the Company or any Subsidiary is a party or by which the Company,
      any Subsidiary or any of their properties is bound, except for such defaults
      that would not, singly or in the aggregate, have a material adverse effect
      on
      the Company and the Subsidiaries taken as a whole.

     

    (m)  There
      are
      no legal or governmental proceedings, orders, judgments, writs, injunctions,
      decrees or demands pending or, to the Company’s knowledge, threatened to which
      the Company or any Subsidiary is a party or to which any of the properties
      of
      the Company or any Subsidiary is subject other than proceedings, orders,
      judgments, writs, injunctions, decrees or demands accurately described in all
      material respects in the SEC Reports and Draft Form 10-Q and proceedings,
      orders, judgments, writs, injunctions, decrees or demands that would not have
      a
      material adverse effect on the Company and the Subsidiaries taken as a whole
      or
      on the power or ability of the Company to perform its obligations under this
      Subscription Agreement or to consummate the transactions contemplated by this
      Subscription Agreement

     

    (n)  The
      Company and each Subsidiary (a) is in compliance with any and all applicable
      foreign, federal, state and local laws and regulations relating to the
      protection of human health and safety, the environment or hazardous or toxic
      substances or wastes, pollutants or contaminants (“Environmental Laws”), (b) has
      received all permits, licenses or other approvals required of it under
      applicable Environmental Laws to conduct its business, (c) is in compliance
      with
      all material terms and conditions of any such permit, license or approval,
      (d)
      is in compliance with any provisions of the employee Retirement Income Security
      Act of 1974, as amended, (“ERISA”) or the rules and regulations promulgated
      thereunder and (e) is in compliance with any provisions of the Foreign Corrupt
      Practice Act or the rules and regulations promulgated thereunder, except, with
      respect to clauses (a) through (e), where such noncompliance with Environmental
      Laws, failure to receive required permits, licenses or other approvals, or
      noncompliance with ERISA or the Foreign Corrupt Practices Act or failure to
      comply with the terms and conditions of such permits, licenses or approvals,
      would not, singly or in the aggregate, have a material adverse effect on the
      Company and the Subsidiaries, taken as a whole.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (o)  There
      are
      no costs or liabilities to the Company or any Subsidiary associated with
      Environmental Laws (including, without limitation, any capital or operating
      expenditures required for clean-up, closure of properties or compliance with
      Environmental Laws or any permit, license or approval, any related constraints
      on operating activities and any potential liabilities to third parties) which
      would, singly or in the aggregate, have a material adverse effect on the Company
      and the Subsidiaries taken as a whole.

     

    (p)  None
      of
      the Company nor any of the Subsidiaries is and, after giving effect to the
      offering and sale of the Shares and Warrants and the application of the proceeds
      from the sale of the Shares and Warrants will be, required to register as an
      “investment company” as such term is defined in the Investment Company Act of
      1940, as amended.

     

    (q)  Neither
      the Company nor any of its affiliates (as defined in Rule 501(b) of Regulation
      D, each an “Affiliate”)
      has
      directly, or through any agent, (a) sold, offered for sale, solicited offers to
      buy or otherwise negotiated in respect of, any security (as defined in the
      Securities Act) which is or will be integrated with the sale of the Shares
      and
      Warrants in a manner that would require the registration under the Act of the
      Shares and Warrants or (b) offered, solicited offers to buy or sold the Shares
      by any form of general solicitation or general advertising (as those terms
      are
      used in Regulation D) or in any manner involving a public offering within the
      meaning of Section 4(2) of the Act.
      No
      registration under the Act of the Shares and Warrants is required for the sale
      of the Shares and Warrants to the undersigned under this Subscription Agreement,
      assuming the accuracy of the undersigned representations, warranties and
      agreements set forth in Section 2.

     

    (r)  The
      Company maintains a system of accounting controls sufficient to provide
      reasonable assurances that (a) transactions are executed in accordance with
      management’s general or specific authorization, (b) transactions are recorded as
      necessary to permit preparation of financial statements in conformity with
      generally accepted accounting principles and to maintain accountability for
      assets, (c) access to assets is permitted only in accordance with management’s
      general or specific authorization and (d) the recorded accountability for assets
      is compared with existing assets at reasonable intervals and appropriate action
      is taken with respect to any differences.

     

    (s)  The
      Company and each Subsidiary owns or possesses, or has the right to use, all
      material patents, patent rights, licenses, inventions, copyrights, know-how
      (including trade secrets and other unpatented and/or unpatentable proprietary
      or
      confidential information, systems or procedures), trademarks, service marks
      and
      trade names currently employed or required by it in connection with the business
      currently conducted by it as described in the SEC Reports and Draft Form 10-Q,
      except such as the failure to so own or possess or have the right to use would
      not have, singly or in the aggregate, a material adverse effect on the Company
      and the Subsidiaries taken as a whole. To the Company’s knowledge, there are no
      valid and enforceable United States patents that are infringed by the business
      currently conducted by the Company or any Subsidiary, or as currently proposed
      to be conducted by the Company or any Subsidiary, as described in the SEC
      Reports and Draft Form 10-Q and which infringement would have a material adverse
      effect on the Company and the Subsidiaries taken as a whole. The Company is
      not
      aware of any basis for a finding that the Company or ay Subsidiary does not
      have
      valid title or license rights to the patents and patent applications referenced
      in the SEC Reports as owned or licensed by the Company or any Subsidiary, and,
      to the Company’s knowledge, neither the Company nor any Subsidiary is subject to
      any judgment, order, writ, injunction or decree of any court or any Federal,
      state, local, foreign or other governmental department, commission, board,
      bureau, agency or instrumentality, domestic or foreign, or any arbitrator,
      nor
      has it entered into or is it a party to any contract, which restricts or impairs
      the use of any of the foregoing which would have a material adverse effect
      on
      the Company and the Subsidiaries taken as a whole. Neither the Company nor
      any
      Subsidiary has received any written notice of infringement of or conflict with
      asserted rights of any third party with respect to the business currently
      conducted by it as described in the SEC Reports and which, if determined
      adversely to the Company or any Subsidiary, would have a material adverse effect
      on the Company and the Subsidiaries taken as a whole and the Company has no
      knowledge of any facts or circumstances that would serve as a reasonable basis
      for any such claims. 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (t)  Other
      than with respect to Environmental Laws and ERISA (which are governed by Section
      3(n) above) each of the Company and each Subsidiary has such permits, licenses,
      consents, exemptions, franchises, authorizations and other approvals (each,
      an
“Authorization”) of, and has made all filings with and notices to, all
      appropriate federal, state, local or foreign governmental or regulatory
      authorities and self regulatory organizations and all courts and other
      tribunals, as are necessary to own, lease, license and operate its respective
      properties and to conduct its business, except to the extent the failure to
      have
      any such Authorization or to make any such filing or notice would not, singly
      or
      in the aggregate, have a material adverse effect on the Company and the
      Subsidiaries taken as a whole. Each such Authorization is valid and in full
      force and effect and the Company and each Subsidiary is in compliance with
      all
      the material terms and conditions thereof and with the rules and regulations
      of
      the authorities and governing bodies having jurisdiction with respect thereto,
      and no event has occurred (including, without limitation, the receipt of any
      notice from any authority or governing body) which allows or, after notice
      or
      lapse of time or both, would allow, revocation, suspension or termination of
      any
      such Authorization or results or, after notice or lapse of time or both, would
      result in any other impairment of the rights of the holder of any such
      Authorization except to the extent such failure to be valid and in full force
      and effect or to be in compliance, the occurrence of any such event or the
      presence of any such restriction would not, singly or in the aggregate, have
      a
      material adverse effect on the Company and the Subsidiaries taken as a
      whole.

     

    (u)  There
      are
      no outstanding rights, warrants, options, convertible securities or commitments
      to sell granted or issued by the Company entitling any person to purchase or
      otherwise acquire any shares of the capital stock of the Company, except as
      otherwise disclosed in the SEC Reports or Draft Form 10-Q and except for options
      granted to directors and employees of the Company in the ordinary course of
      business since June 30, 2006.

     

    (v)  The
      financial statements included or incorporated by reference in the SEC Reports
      as
      the same may have been amended prior to the date of the SEC Reports, together
      with related schedules and notes, present fairly in all material respects the
      financial position, results of operations and changes in financial position
      of
      the Company and its consolidated subsidiaries on the basis stated therein at
      the
      respective dates or for the respective periods to which they apply; such
      statements and related schedules and notes have been prepared in accordance
      with
      generally accepted accounting principles consistently applied throughout the
      periods involved, except as disclosed therein. 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (w)  There
      are
      no existing or, to the Company’s knowledge, threatened labor disputes with the
      employees of the Company or any Subsidiary which would have a material adverse
      effect on the Company and the Subsidiaries taken as a whole.

    
       

    

    (x)  The
      Company’s manufacturing, distribution and marketing practices are in compliance
      with all applicable laws, rules, regulations, orders, licenses, judgments,
      writs, injunctions and decrees in each country in which the Company’s and the
      Subsidiaries’ products are marketed, except for such noncompliances that,
      individually or in the aggregate, would not have a material adverse effect
      on
      the Company and the Subsidiaries taken as a whole.

     

    (y)  Neither
      the Company nor any Subsidiary, nor to the Company’s knowledge, any of its
      officers, directors or Affiliates has taken, directly or indirectly, any action
      designed to or which has constituted the stabilization or manipulation of the
      price of the Common Stock of the Company and the Subsidiaries taken as a
      whole.

     

    (z)  None
      of
      the Company nor any Subsidiary has received any written communication notifying
      the Company or such Subsidiary as to the termination or threatened termination
      or modification or threatened modification of any consulting, licensing,
      marketing, research and development, cooperative or any similar agreement
      described in this Subscription Agreement.

     

    (aa)  Each
      of
      the Company and each Subsidiary has filed all Federal, state, local and foreign
      tax returns which are required to be filed through the date hereof (except
      where
      the failure to so file would not have a material adverse effect on the Company
      and the Subsidiaries taken as a whole), which returns are true and correct
      in
      all material respects, or have received extensions thereof, and have paid all
      taxes shown on such returns and all assessments received by them to the extent
      that the same are material and have become due. All tax liabilities are
      adequately provided for on the books of the Company and the Subsidiaries. To
      the
      Company’s knowledge, there are no tax audits or investigations pending, which if
      adversely determined, would have a material adverse effect on the Company and
      the Subsidiaries taken as a whole.

     

    (bb)  Each
      of
      the Company and each Subsidiary is insured against such losses and risks and
      in
      such amounts as are customary in the businesses in which it is engaged,
      including but not limited to, insurance covering product liability and real
      or
      personal property owned or leased against theft, damage, destruction, act of
      vandalism and all other risks customarily insured against. All policies of
      insurance and fidelity or surety bonds insuring the Company, any Subsidiary
      or
      the Company’s or any Subsidiary’s businesses, assets, employees, officers and
      directors are in full force and effect. The Company and each Subsidiary is
      in
      compliance with the terms of such policies and instruments in all material
      respects. The Company has no reason to believe that it and the Subsidiaries
      will
      not be able to renew their 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. Since January 1, 2004, neither the Company nor any
      Subsidiary has been denied any insurance coverage which it has sought or for
      which it has applied.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (cc)  The
      Company and each Subsidiary has good and marketable title in fee simple to
      all
      real property and good and marketable title to all personal property owned
      by
      it, in each case free and clear of all liens, encumbrances and defects except
      such as are described in the SEC Reports and Draft Form 10-Q or such as do
      not
      materially affect the value of such property and do not materially interfere
      with the use made and proposed to be made of such property by the Company or
      such Subsidiary. Any real property and buildings held under lease by the Company
      and any Subsidiary is held by it under valid, subsisting and enforceable leases
      with such exceptions as are not material and do not materially interfere with
      the use made and proposed to be made of such property and buildings by the
      Company or such Subsidiary.

     

    (dd)  The
      Company is subject to the reporting requirements of Section 13 or Section 15(d)
      of the Exchange Act. Since January 1, 2004, the Company has timely filed with
      the SEC all reports required to be filed under the Exchange Act and the Company
      is and, as of the time of the Closing will be, current in its reporting
      obligations under the Exchange Act. To the Company’s knowledge, the Company has
      responded to all comments raised by the SEC with respect to the Company’s
      reports, registration statements and other filings made with the SEC to the
      SEC’s satisfaction, and there are no comments which could have an adverse effect
      on the Company’s consolidated financial condition or results of operations (past
      or future) or could require a restatement of previously filed financial
      statements remained unresolved with the SEC. 

     

    (ee)  There
      is
      and there has been no failure on the part of the Company or, to the Company’s
      knowledge, any of the officers or directors of the Company in their capacities
      as such to comply in all material respects with the Sarbanes-Oxley Act of 2002
      and the rules and regulations promulgated in connection therewith.

     

    (ff)  Neither
      the Company nor any of its affiliates has directly or indirectly, solicited
      any
      offer to buy, sold or offered to sell or otherwise negotiated in respect of,
      or
      will solicit an offer to buy, sell or offer to sell, or otherwise negotiate
      in
      respect of any security which might be integrated with the sale of the Shares
      in
      a manner that would require the Shares to be registered
      under
      the Act. Neither the Company nor any of its Affiliates has directly or
      indirectly, solicited any offer to buy, sold or offered to sell or otherwise
      negotiated in respect of, or will solicit an offer to buy, sell or offer to
      sell, or otherwise negotiate in respect of any security which might be
      integrated with the sale of the Shares and Warrants in a manner that would
      require the Shares to be registered under the Securities Act. There are no
      persons with registration rights or similar rights to have any securities
      registered by the Company under the Act that are not covered by an effective
      registration statement or are eligible for sale without any restrictions on
      transfer. No registration under the Act and Warrants is required for the sale
      of
      the Shares and Warrants to the undersigned under this Subscription Agreement,
      assuming the accuracy of the undersigned’s representations, warranties and
      agreements set forth in Section 2.

     

    (gg)  The
      Company has established and maintains disclosure controls and procedures (as
      such term in defined in Rule 13a-14 and 15d-14 under the Exchange Act); such
      disclosure controls and procedures are designed to ensure that material
      information relating to the Company, including its consolidated subsidiaries,
      is
      made known to the Company’s Chief Executive Officer and its Chief Financial
      Officer by others within those entities, and such disclosure controls and
      procedures are reasonably effective to perform the functions for which they
      were
      established, subject to the limitation of any such control system; the Company’s
      auditors and the Audit Committee of the Board of Directors of the Company have
      been advised of: (A) any significant deficiencies in the Company’s ability to
      record, process, summarize, and report financial data; and (B) any fraud,
      whether or not material, that involves management or other employees who have
      a
      role in the Company’s internal controls; any material weaknesses in internal
      controls have been identified for the Company’s auditors; and since the date of
      the most recent evaluation of such disclosure controls and procedures, there
      have been no significant changes in internal controls or in other factors that
      could significantly affect internal controls, including any corrective actions
      with regard to significant deficiencies and material weaknesses.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (hh)  The
      Company has caused or will cause to be timely filed with each applicable
      jurisdiction corresponding to the principal place(s) of business of the
      undersigned (as same has been provided by the undersigned) and such other
      jurisdictions as reasonably requested by the undersigned all appropriate
      documentation required for the registration of the Offering under applicable
      state law or required to secure an exemption from such registration
      requirements.

     

    (ii)  The
      Company represents and warrants that it has agreed to pay J Giordano a fee
      for
      serving as placement agent in connection with the Offering equal to 6% of the
      aggregate gross proceeds received by the Company for the Shares and Warrants.
      In
      addition, the Company has agreed that, if within twelve (12) months following
      the Closing Date the Company sells, directly or indirectly, equity securities
      to
      the undersigned or any other purchaser of Shares and Warrants in the Offering
      (other than securities in connection with a working capital loan or facility
      or
      project debt financing), J Giordano will be entitled to receive the same
      compensation with respect to such sale of securities as it will receive in
      connection with the Offering.

     

    4.  Registration
      Rights.
      (a)
      As used
      herein the term “Registrable Security” means each of the Shares and Warrant
      Shares; provided, however, that with respect to any particular Registrable
      Security, such security shall cease to be a Registrable Security when, as of
      the
      date of determination, (i) it has been effectively registered under the Act
      and
      disposed of pursuant thereto, (ii) registration under the Act is no longer
      required for subsequent public distribution of such security without any filing
      requirement or volume limitation, or (iii) it has ceased to be outstanding.
      In
      the event of any merger, reorganization, consolidation, recapitalization or
      other change in corporate structure affecting the Common Stock, such adjustment
      shall be made to the definition of “Registrable Security” as is appropriate in
      order to prevent any dilution or enlargement of the rights granted pursuant
      to
      this Section 4. 

     

    (b)  The
      Company shall use its best efforts to, within 45 days of the Closing Date (the
      “Filing Date”), prepare and file with the SEC, at the sole expense of the
      Company (other than the fees of any counsel retained by the undersigned in
      connection with such registration and any transfer taxes or underwriting
      discounts, commissions or fees applicable to the Registrable Securities sold
      by
      the undersigned pursuant thereto), a registration statement (the “Registration
      Statement”) and such other documents, including a prospectus, as may be
      necessary, in order to comply with the provisions of the Act, so as to permit
      a
      public offering and sale of the Registrable Securities by the undersigned.
      The
      Company shall use its best efforts to have the Registration Statement declared
      effective by the SEC within 150 days of the Closing Date (and as soon or
      reasonably practicable (i) in the event the Company is notified by the SEC
      that
      the SEC will not review the Registration Statement, or (ii) following
      notification from the SEC that it has no further comments with respect to the
      Registration Statement) and to remain effective of the Registration Statement
      in
      order to permit a public offering and sale of the Registrable Securities for
      a
      period of two years from the date hereof or for such period that will terminate
      when all the Registrable Securities have been sold pursuant to the Registrable
      Securities or Rule 144 under the Act or cease to be Registrable Securities.
      The
      Company shall telephonically request effectiveness of a Registration Statement
      as of 4:30 pm Eastern Time (or later) on a trading day. The Company shall
      immediately notify the undersigned via facsimile of the effectiveness of a
      Registration Statement on the same trading day that the Company telephonically
      confirms effectiveness with the SEC, which shall be the date requested for
      effectiveness of a Registration Statement. The Company shall, by 9:30 am Eastern
      Time on the trading day after the Effective Date, file a Form 424(b) with the
      SEC.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (c)  If:
      (i) a
      Registration Statement is not filed on or prior to the Filing Date or (ii)
      a
      Registration Statement filed or required to be filed hereunder is not declared
      effective by the SEC on or before 150 days after the date hereof (any such
      failure being referred to as an “Event”, and the date on which such Event occurs
      being referred to as “Event Date”), then, on each such Event Date and on each
      monthly anniversary of each such Event Date (if the applicable Event shall
      not
      have been cured by such date) until the earlier of the applicable Event being
      cured and the Registrable Securities being eligible to be sold under Rule 144
      under the Act, the Company shall pay equal to 1.0% of the aggregate purchase
      price paid by the undersigned for any Registrable Securities then held by the
      undersigned; provided, however that the maximum amount payable to the
      undersigned shall be 10% of the aggregate purchase price paid by the undersigned
      for the Shares and Warrants. Notwithstanding anything to the foregoing, in
      no
      event shall the Company be required to make a partial liquidated damages payment
      for more than one Event during any 30-day period.

     

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

     

    (i)  Not
      less
      than five trading days prior to the filing of the Registration Statement or
      one
      trading day prior to the filing of any related prospectus or any amendment
      or
      supplement thereto in which any change is made with respect to disclosure
      regarding the undersigned, the undersigned’s ownership of securities of the
      Company or the “Plan of Distribution” section of the prospectus, the Company
      shall, furnish to the undersigned copies of all such documents proposed to
      be
      filed, which documents (other than those incorporated or deemed to be
      incorporated by reference) will be subject to the review of the undersigned.
      

     

    (ii)  (A)Prepare
      and file with the SEC such amendments, including post-effective amendments,
      to a
      Registration Statement and the prospectus included therein used in connection
      therewith as may be necessary to keep a Registration Statement continuously
      effective as to the applicable Registrable Securities for the period set forth
      in Section 4(b) and prepare and file with the SEC such additional Registration
      Statements in order to register for resale under the Act all of the Registrable
      Securities; (B) cause the related prospectus to be amended or supplemented
      by
      any required prospectus supplement (subject to the terms of this Subscription
      Agreement), and as so supplemented or amended to be filed pursuant to Rule
      424
      under the Act; (C) respond as promptly as reasonably practicable to any comments
      received from the SEC with respect to a Registration Statement or any amendment
      thereto; (D) use reasonable efforts to comply in all material respects with
      the
      provisions of the Act and the Exchange Act with respect to the disposition
      of
      all Registrable Securities covered by a Registration Statement during the
      applicable period in accordance (subject to the terms of this Subscription
      Agreement) with the intended methods of disposition by the undersigned thereof
      set forth in such Registration Statement as so amended or in such prospectus
      as
      so supplemented; and (E) promptly inform the undersigned in writing if, at
      any
      time during the period during the period set forth in Section 4(b), the Company
      does not satisfy the conditions specified in Rule 172 under the Act and, as
      a
      result thereof, the undersigned are required to deliver a Prospectus in
      connection with any disposition of Registrable Securities and take such other
      actions as may be reasonably necessary to facilitate the registration of the
      Registrable Securities hereunder; and make available to its security holders,
      as
      soon as reasonably practicable, but not later than the Availability Date
      (defined below), an earnings statement covering a period of at least twelve
      (12)
      months, beginning after the effective date of each Registration Statement,
      which
      earnings statement shall satisfy the provisions of Section 11(a) of the Act,
      including Rule 158 under the Act promulgated thereunder (for the purpose of
      this
      subsection 4(d)(ii), “Availability Date” means the 45th day following the end of
      the fourth fiscal quarter that includes the effective date of such Registration
      Statement, except that, if such fourth fiscal quarter is the last quarter of
      the
      Company’s fiscal year, “Availability Date” means the 90th day after the end of
      such fourth fiscal quarter).

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    (iii)  Use
      its
      best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
      of
      (A) any order suspending the effectiveness of a Registration Statement, or
      (B)
      any suspension of the qualification (or exemption from qualification) of any
      of
      the Registrable Securities for sale in any jurisdiction, at the earliest
      practicable moment.

     

    (iv)  Furnish
      to the undersigned, if requested, without charge, at least one conformed copy
      of
      each such Registration Statement and each amendment thereto, including financial
      statements and schedules, all documents incorporated or deemed to be
      incorporated therein by reference to the extent reasonably requested by the
      undersigned and all exhibits to the extent requested by the undersigned
      (including those previously furnished or incorporated by reference) promptly
      after the filing of such documents with the SEC.

     

    (v)  Promptly
      deliver to the undersigned, without charge, as many copies of the prospectus
      or
      prospectuses (including each form of prospectus) and each amendment or
      supplement thereto as the undersigned may reasonably request in connection
      with
      resales by the undersigned of Registrable Securities. Subject to the terms
      of
      this Subscription Agreement, the Company hereby consents to the use of such
      prospectus and each amendment or supplement thereto by the undersigned in
      connection with the offering and sale of the Registrable Securities covered
      by
      such prospectus and any amendment or supplement thereto, except after the giving
      on any notice pursuant to Section 4(e).

     

    (vi)  The
      Company shall use its best efforts to register or qualify the Registrable
      Securities under all applicable state securities or “blue sky” laws of such
      jurisdictions as the undersigned may reasonably request, and do any and all
      other acts and things which may be reasonably necessary or advisable to enable
      the undersigned and underwriter to consummate the disposition in the
      jurisdiction of such Registrable Securities owned by the undersigned;
      provided, however,
      that the Company shall not be required to (i) qualify as a foreign corporation
      or as a dealer in securities in any jurisdiction where it would not otherwise
      be
      required to qualify but for this Section 4(d)(vi), or (ii) take any action
      which
      would subject it to general service of process or taxation in any such
      jurisdiction where it is not then so subject;

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (vii)  If
      requested by the undersigned, cooperate with the undersigned to facilitate
      the
      timely preparation and delivery of certificates representing Registrable
      Securities to be delivered to a transferee pursuant to a Registration Statement,
      which certificates shall be free, to the extent permitted by this Subscription
      Agreement, of all restrictive legends, and to enable such Registrable Securities
      to be in such denominations and registered in such names as the undersigned
      may
      request.

     

    (viii)  Upon
      the
      occurrence of any Registration Event (as defined below), as promptly as
      reasonably possible under the circumstances taking into account the Company’s
      good faith assessment of any adverse consequences to the Company and its
      stockholders of the premature disclosure of such event, prepare a supplement
      or
      amendment, including a post-effective amendment, to a 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 a 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 light of the circumstances under which they were made,
      not misleading. The
      Company will use its best efforts to ensure that the use of the prospectus
      may
      be resumed as promptly as is practicable. 

     

    (ix)  Comply
      with all applicable rules and regulations of the SEC.

     

    (x)  With
      a
      view to making available to the undersigned the benefits of Rule 144 of the
      Act
      (or its successor rule) and any other rule or regulation of the SEC that may
      at
      any time permit the undersigned to sell Registrable Securities to the public
      without registration, the Company covenants and agrees to: (i) make and keep
      public information available, as those terms are understood and defined in
      Rule
      144, until the earlier of (A) six months after such date as all of the
      Registrable Securities may be resold pursuant to Rule 144(k) or any other rule
      of similar effect or (B) such date as all of the Registrable Securities shall
      have been resold; (ii) file with the SEC in a timely manner all reports and
      other documents required of the Company under the Exchange Act; and (iii)
      furnish to each Investor upon request, as long as such Investor owns any
      Registrable Securities, (A) a written statement by the Company that it has
      complied with the reporting requirements of the Exchange Act, (B) a copy of
      the
      Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form
      10-Q, and (C) such other information as may be reasonably requested in order
      to
      avail the undersigned of any rule or regulation of the SEC that permits the
      selling of any such Registrable Securities without registration.

     

    (xi)  Notwithstanding
      anything herein to the contrary, the undersigned may not include any of its
      Registrable Securities in the Registration Statement pursuant to this Agreement
      unless and until the undersigned (i) furnishes to the Company the information
      required by the Questionnaire included as Annex I to this Subscription Agreement
      and (ii) agrees to promptly furnish additional information required to be
      disclosed in order to make the information previously furnished to the Company
      by the undersigned not materially misleading.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (e)  The
      undersigned, upon receipt of notice from the Company that a Registration Event
      (defined below) has occurred which requires a post-effective amendment to the
      Registration Statement or a supplement to the prospectus included therein,
      shall
      promptly discontinue the sale of Registrable Securities until the undersigned
      receives a copy of a supplemented or amended prospectus from the Company. The
      Company shall notify the undersigned of the occurrence of a Registration Event
      promptly following the occurrence of a Registration Event. The term
“Registration Event” means (i) the
      issuance by the SEC or any state securities authority of any stop order
      suspending the effectiveness the Registration Statement or the initiation of
      any
      proceedings for that purpose, (ii) the happening of any event or the discovery
      of any facts during the period the Registration Statement is effective which
      makes any statement of a material fact made in the Registration Statement or
      the
      related prospectus untrue in any material respect or which requires the making
      of any changes in the Registration Statement or prospectus in order to make
      the
      statements therein not misleading, (iii) the receipt by the Company of any
      notification with respect to the suspension of the qualification of the
      Registrable Securities for sale in any jurisdiction or the initiation or
      threatening of any proceeding for such purpose and (iv) any determination by
      the
      Company that a post-effective amendment to such Registration Statement would
      be
      appropriate;

     

    (f)  All
      fees
      and expenses incident to the performance of or compliance with this Section
      4 by
      the Company shall be borne by the Company whether or not any Registrable
      Securities are sold pursuant to a 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 Nasdaq, (B) in compliance
      with applicable state securities or Blue Sky laws reasonably agreed to by the
      Company in writing, (ii) fees and disbursements of counsel for the Company,
      and
      (iii) fees and expenses of all other persons retained by the Company in
      connection with the consummation of the transactions contemplated by this
      Section 4. 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 Section 4 (including, without limitation, all salaries
      and
      expenses of its officers and employees performing legal or accounting duties),
      the expense of any annual audit and the fees and expenses incurred in connection
      with the listing of the Registrable Securities on any securities exchange as
      required hereunder. In no event shall the Company be responsible for any broker
      or similar commissions or any legal fees or other costs of the
      undersigned.

     

    (g)  (i)The
      Company shall, indemnify and hold harmless the undersigned, the officers,
      directors, agents, brokers (including brokers who offer and sell Registrable
      Securities as principal as a result of a pledge or any failure to perform under
      a margin call of Common Stock), investment advisors and employees of each of
      them, each Person who controls the undersigned (within the meaning of Section
      15
      of the 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, reasonable
      attorneys’ fees) and expenses (collectively, “Losses”),
      as
      incurred, arising out of or relating to any untrue or alleged untrue statement
      of a material fact contained in a 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 light of the circumstances under which they were made)
      not misleading, except to the extent, but only to the extent, that (x) such
      untrue or alleged untrue statements or omissions or alleged omissions are based
      solely upon information regarding the undersigned furnished in writing to the
      Company by the undersigned expressly for use therein, or to the extent that
      such
      information relates to the undersigned or the undersigned’s proposed method of
      distribution of Registrable Securities or (y) the failure of the undersigned
      to
      satisfy the prospectus delivery requests or, in the case of an occurrence of
      a
      Registration Event, of the use by the undersigned of an outdated or defective
      prospectus after the Company has notified the undersigned in writing that the
      prospectus is outdated or defective and prior to the receipt by the undersigned
      of the notice contemplated in Section 4(e). The Company shall notify the
      undersigned promptly of the institution, threat or assertion of any proceeding
      arising from or in connection with the transactions contemplated by this Section
      4 of which the Company is aware.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (ii)  The
      undersigned shall, severally and not jointly, indemnify and hold harmless the
      Company, its directors, officers, agents and employees, each Person who controls
      the Company (within the meaning of Section 15 of the Act and Section 20 of
      the
      Exchange Act), and the directors, officers, agents or employees of such
      controlling persons, to the fullest extent permitted by applicable law, from
      and
      against all Losses, as incurred, to the extent arising out of or based solely
      upon: (x) the undersigned’s failure to comply with the prospectus delivery
      requirements of the Act or (y) any untrue or alleged untrue statement of a
      material fact contained in any 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 not misleading (A) to the extent, but only to the extent,
      that such untrue or alleged untrue statement or omission or alleged omission
      is
      contained in any information so furnished in writing by the undersigned to
      the
      Company specifically for inclusion in such Registration Statement or such
      prospectus or (B) to the extent that (1) such untrue or alleged untrue
      statements or omissions or alleged omissions are based solely upon information
      regarding the undersigned furnished in writing to the Company by the undersigned
      expressly for use therein, or to the extent that such information relates to
      the
      undersigned or the undersigned’s proposed method of distribution of Registrable
      Securities or (2) the failure of the undersigned to satisfy the prospectus
      delivery requests or, in the case of a Registration Event, the use by the
      undersigned of an outdated or defective prospectus after the Company has
      notified the undersigned in writing that the prospectus is outdated or defective
      and prior to the receipt by the undersigned of the notice contemplated in
      Section 4(e). In no event shall the liability of the undersigned hereunder
      be
      greater in amount than the proceeds received from the sale of the Registrable
      Securities.

     

    (iii)  If
      any
      proceeding shall be brought or asserted against any Person entitled to indemnity
      hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify
      the Person from whom indemnity is sought (the “Indemnifying Party”) in writing,
      and the Indemnifying Party shall have the right 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 to the extent that it shall
      be
      finally determined by a court of competent jurisdiction that such failure shall
      have prejudiced the Indemnifying Party.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    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; (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 Indemnified Party shall reasonably believe
      that a material 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
      the reasonable fees and expenses of one separate counsel shall be at the expense
      of all Indemnifying Parties). 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. No Indemnifying Party shall, without
      the prior written consent of the Indemnified Party, effect any settlement of
      any
      pending Proceeding in respect of which any Indemnified Party is a party, unless
      such settlement includes an unconditional release of such Indemnified Party
      from
      all liability on claims that are the subject matter of such
      Proceeding.

     

    (iv)  If
      the
      indemnification under this Section 4(g) is unavailable to an Indemnified Party
      or insufficient to hold an Indemnified Party harmless for any Losses, then
      each
      Indemnifying Party shall contribute to the amount paid or payable by such
      Indemnified Party, 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 this Agreement, 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.

     

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 4(g)(iv) 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.
      Notwithstanding the provisions of this Section 4(g), the undersigned shall
      not
      be required to contribute, in the aggregate, any amount in excess of the amount
      by which the proceeds actually received by the undersigned from the sale of
      the
      Registrable Securities subject to the proceeding exceeds the amount of any
      damages that the undersigned has otherwise been required to pay by reason of
      such untrue or alleged untrue statement or omission or alleged omission, except
      in the case of fraud by the undersigned.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    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.

     

    (h)  If
      at any
      time during the period set forth in Section 4(b) there is not an effective
      Registration Statement covering all of the Registrable Securities and the
      Company shall determine to prepare and file with the SEC a registration
      statement relating to an offering for its own account or the account of others
      under the Act of any of its equity securities, other than on Form S-4 or Form
      S-8 (each as promulgated under the Act) or their then equivalents relating
      to
      equity securities to be issued solely in connection with any acquisition of
      any
      entity or business or equity securities issuable in connection with the stock
      option or other employee benefit plans, then the Company shall send to the
      undersigned a written notice of such determination and, if within five days
      after the date of such notice, the undersigned shall so request in writing,
      the
      Company shall include in such registration statement all or any part of such
      Registrable Securities the undersigned requests to be registered.

     

    5.  Conditions
      to the Undersigned’s Obligations.
      The
      obligations of the undersigned to purchase and pay for the Shares and Warrants
      for which it is subscribing to purchase on the Closing Date are subject to
      the
      accuracy of the representations and warranties of the Company contained in
      this
      Agreement or in any certificate of any officer of the Company delivered pursuant
      to this Agreement and to the following further conditions:

     

    5.1  Officer’s
      Certificate.
      The
      Company shall have delivered to J Giordano, on behalf of the undersigned, on
      the
      Closing Date a certificate, dated the Closing Date and signed by an executive
      officer of the Company, to the effect that the representations and warranties
      of
      the Company contained in this Agreement are true and correct as of the Closing
      Date and that the Company has complied with all of the agreements and satisfied
      all of the conditions on its part to be performed or satisfied hereunder on
      or
      before such Closing Date.

     

    5.2  Opinion
      of Counsel.
      The
      Company shall have delivered to J Giordano, on behalf of the undersigned, on
      the
      Closing Date the opinion of Blank Rome LLP, counsel for the Company, dated
      such
      Closing Date, to the effect set forth in Exhibit B attached hereto. Such opinion
      shall be rendered to the undersigned at the request of the Company and shall
      so
      state therein.

     

    5.3  Good
      Standing Certificate.
      The
      Company shall have delivered to J
      Giordano, on behalf of the undersigned, on the Closing Date a certificate,
      dated
      as of a reasonably current date prior to such Closing, issued by the proper
      authority in Delaware to the effect that the Company is legally existing and
      in
      good standing.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    6.  Indemnification.
      In
      consideration of the undersigned's execution and delivery of this Subscription
      Agreement and acquiring the Securities and in addition to all of the Company's
      other obligations under this Subscription Agreement, the Company shall defend,
      protect, indemnify and hold harmless the undersigned and each other holder
      of
      the Securities and all of their officers, directors, agents, Affiliates, brokers
      (including brokers who offer and sell Registrable Securities as principal as
      a
      result of a pledge or any failure to perform under a margin call of Common
      Stock), investment advisors and employees of each of them, each person who
      controls the undersigned (within the meaning of Section 15 of the Act or Section
      20 of the Exchange Act) and the officers, directors, agents, Affiliates and
      employees of each such controlling person (collectively, the "Indemnitees")
      from
      and against any and all actions, causes of action, suits, claims, losses, costs,
      penalties, fees, liabilities and damages, and expenses in connection therewith
      (irrespective of whether any such Indemnitee is a party to the action for which
      indemnification hereunder is sought), and including reasonable attorneys' fees
      and disbursements (the "Indemnified Liabilities"), incurred by any Indemnitee
      as
      a result of, or arising out of, or relating to (a) any misrepresentation or
      breach of any representation or warranty made by the Company in this
      Subscription Agreement and the Warrant or any other certificate, instrument
      or
      document contemplated hereby or thereby, (b) any breach of any covenant,
      agreement or obligation of the Company contained in this Subscription Agreement
      and the Warrant or any other certificate, instrument or document contemplated
      hereby or thereby or (c) any cause of action, suit or claim brought or made
      against such Indemnitee by a third party (including for these purposes a
      derivative action brought on behalf of the Company) and arising out of or
      resulting from the execution, delivery, performance or enforcement of this
      Subscription Agreement and the Warrant or any other certificate, instrument
      or
      document contemplated hereby or thereby; provided that any indemnification
      obligation arising out of Section 4 shall be governed by Section 4(g). To the
      extent that the foregoing undertaking by the Company may be unenforceable for
      any reason, the Company shall make the maximum contribution to the payment
      and
      satisfaction of each of the Indemnified Liabilities which is permissible under
      applicable law. Except as otherwise set forth herein, the mechanics and
      procedures with respect to the rights and obligations under this Section 6(h)
      shall be the same as those set forth in Section 4(g)(iii).

     

    7.  Miscellaneous.
      (a) In
      the event of rejection of this subscription, this Subscription Agreement and
      any
      other agreement entered into between the undersigned and the Company relating
      to
      this subscription shall thereafter have no force or effect and the Company
      shall
      promptly, but in no event later than two business days thereafter, return or
      cause to be returned to the undersigned the subscription amount remitted to
      the
      Company by the undersigned, without interest thereon or deduction
      therefrom.

     

    (b)  Except
      as
      otherwise provided herein, this Subscription Agreement shall be binding upon
      and
      inure to the benefit of the parties and their heirs, executors, administrators,
      successors, legal representatives and assigns. If the undersigned is more than
      one person, the obligation of the undersigned shall be joint and several and
      the
      agreements, representations, warranties and acknowledgements herein contained
      shall be deemed to be made by and be binding upon each such person and his
      heirs, executors, administrators and successors.

     

    (c)  This
      Subscription Agreement and the documents referenced herein contain the entire
      agreement of the parties and there are no representations, covenants or other
      agreements, except as stated or referred to herein and therein.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    (d)  This
      Subscription Agreement shall be governed by and construed in accordance with
      the
      laws of the State of New York, without giving effect to conflicts of law
      principles.

     

    (e)  This
      Subscription Agreement (i) may only be modified by a written instrument executed
      by the undersigned and the Company.

     

    (f)  Unless
      the context otherwise requires, all personal pronouns used in this Subscription
      Agreement, whether in the masculine, feminine or neuter gender, shall include
      all other genders.

     

    (g)  All
      notices or other communications hereunder shall be in writing and shall be
      deemed to have been duly given if delivered personally or mailed by certified
      mail, return receipt requested, postage prepaid, as follows: if to the
      undersigned, to the address set forth on the signature page; and if to the
      Company, to Ionatron, Inc. at the address indicated above, Attention: Chief
      Operating Officer, or to such other address as the Company or the undersigned
      shall have designated to the other by like notice.

     

    IN
      WITNESS WHEREOF, the undersigned has executed this Subscription Agreement this
      _____ day of August 2006.

     

    



    
      
        
        

      

      
        22

        
          

        

      

       

    



    SIGNATURE
      PAGE

    


    
      	
              Organization
                Signature:

              ___________________________________________

              Print
                Name of Subscriber Organization

            	
              Individual
                Signature(s): [If Joint Tenants or Tenants-In-Common, 

              both
                persons must sign and print their names]:

              ___________________________________________

               

            
	
              By: 
                ________________________________________

              (Signature
                and Title)

            	
              _________________________________________________

              Signature(s)

            


    

    


    
      	
              _________________________________________________

              Print
                Name and Title of Person Signing

               

              ___________________________________________

              Print
                Address of Subscriber

            	
              _________________________________________________

              Print
                Name of Subscriber

               

              ___________________________________________

              Print
                Name of Subscriber

               

              ___________________________________________

              Print
                Address of Subscriber

            


    

    


    Number
      of Shares subscribed for:
      ______
      Shares
      (at a purchase of $5.75 per Share) and

     ______
      Warrants
      [20% of the number of Shares]

    


    -----------------------------------------------------------------------------------------------------------------------------------

    


    (All
      Subscribers
      should please print information

    below
      exactly as you wish it to appear

    in
      the records of the Company)

    


    
      	
              _________________________________________________

              Name
                and capacity in which subscription is made -- see below for particular
                requirements

            	
              _________________________________________________

              Social
                Security Number of Individual or other Tax-payer I.D.
                Number

            


    

    


    
      	
              Address:

               

              _________________________________________________

              Number
                and Street

               

              _________________________________________________

              City                                  
                    State                                 
                Zip
                Code

            	
              Address
                for notice if different:

               

              _________________________________________________

              Number
                and Street

               

              _________________________________________________

              
                City                                  
                      State                                 
                  Zip
                  Code

              

            


    

    


    Please
      check the appropriate box to indicate form of ownership (if
      applicable):

    


    
      	
              r 
                TENANTS-IN-COMMON

              (Both
                Parties must sign above)

            	
              r
JOINT
                TENANTS WITH RIGHT OF
                SURVIVORSHIP

              (Both
                Parties must sign above)

            


    

    



    
      
        
        

      

      
        23

        
          

        

      

       

    



    ACCEPTANCE
      OF SUBSCRIPTION

    


    IONATRON,
      INC.

    


    The
      foregoing subscription is hereby accepted by Ionatron, Inc., this _____ day
      of
      August 2006 for __________ Shares and _________ Warrants.

     

    


    IONATRON,
      INC. 

    


    


    By: 
      ____________________________________

    Name:

    Title:

    




    

 

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    


    ANNEX
      1

    


    IONATRON,
      INC.

     

    FORM
      OF SELLING SECURITY HOLDER NOTICE AND QUESTIONNAIRE

     

    The
      undersigned prospective subscriber for, or beneficial owner of, shares (the
      “Shares”) of Common Stock, $.001 par value (the “Common Stock”), of Ionatron,
      Inc. (the “Company”), understands that the Company has filed or intends to file
      with the Securities and Exchange Commission (the “Commission”) a registration
      statement on Form S-3 or another appropriate form (collectively, the “Shelf
      Registration Statement”) for the registration and resale under Rule 415 of the
      Securities Act of 1933, as amended (the “Securities Act”), of the Registrable
      Securities, in accordance with the terms of the Subscription Agreement, dated
      as
      of August __, 2006 (the “Subscription Agreement”), between the Company and the
      undersigned. A copy of the Subscription Agreement is available from the Company
      upon request at the address set forth below. All capitalized terms not otherwise
      defined herein shall have the meaning ascribed thereto in the Subscription
      Agreement.

     

    Each
      beneficial owner of Registrable Securities is entitled to the benefits of its
      Subscription Agreement. In order to sell or otherwise dispose of any Registrable
      Securities pursuant to the Shelf Registration Statement, a beneficial owner
      of
      Registrable Securities will be required to be named as a selling securityholder
      in the related prospectus, deliver a prospectus to purchasers of Registrable
      Securities in accordance with the Securities Act and the resales and
      registrations thereunder and be bound by those provisions of the Subscription
      Agreement applicable to such beneficial owner (including certain indemnification
      provisions described below). Beneficial owners that do not complete this Notice
      and Questionnaire and deliver it to the Company as provided below will not
      be
      named as selling securityholders in the prospectus and therefore will not be
      permitted to sell any Registrable Securities pursuant to the Shelf Registration
      Statement. Beneficial owners must complete and deliver this Notice and
      Questionnaire at least 10 business days prior to the effectiveness of the
      Initial Shelf Registration Statement so that such beneficial owners could be
      named as selling securityholders in the related prospectus at the time of
      effectiveness. 

     

    Certain
      legal consequences arise from being named as a selling securityholder in the
      Shelf Registration Statement and the related prospectus. Accordingly, holders
      and beneficial owners of Registrable Securities are advised to consult their
      own
      securities law counsel regarding the consequences of being named or not being
      named as a selling securityholder in the Shelf Registration Statement and the
      related prospectus.

     

    NOTICE

     

    If
      the
      undersigned is not an original subscribing party to the Subscription Agreement,
      the undersigned, by signing and returning this Questionnaire, understands that
      the undersigned will be bound by the terms and conditions of this Questionnaire
      as if the undersigned were an original party thereto.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    QUESTIONNAIRE

     

    Please
      respond to every item, even if your response is “none.” If you need more space
      for any response, please attach additional sheets of paper. Please be sure
      to
      write your name and the number of the item being responded to on each such
      additional sheet of paper and sign each such additional sheet of paper and
      attach it to this Notice and Questionnaire. Please note that you may be asked
      to
      answer additional questions depending on your responses to the following
      questions.

     

    1. Your
      Identity and Background as the Beneficial Owner of the Registrable
      Securities.

     

    
      	
              (a)

            	
              Your
                full legal name:

            	 
	 	________________________________________________________	 
	 	 	 
	
              (b)

            	
              Your
                business address (including street address) (or residence if no business
                address), telephone number and facsimile number:

            	 
	 	 	 
	
              Address:

            	 _____________________________________________	 
	 	
               

               _____________________________________________

            	 
	 	 	 
	 	 	 
	
              Telephone
                No.:

            	 _____________________________________________	 
	 	 	 
	
              Fax
                No.:

            	 _____________________________________________	 
	 	 	 
	
              (c)

            	
              Are
                you a broker-dealer registered pursuant to Section 15 of the Exchange
                Act?

            	 
	 	 	 
	 	
              o    
                Yes

            	 
	 	 	 
	 	
              o    
                No

            	 
	 	 	 
	
              (d)

            	
              If
                your response to Item 1(c) above is no, are you an “affiliate” of a
                broker-dealer registered pursuant to Section 15 of the Exchange
                Act?

            	 
	 	 	 
	 	
              o    
                Yes

            	 
	 	 	 
	 	
              o    
                No

            	 
	 	 	 
	 	 	 


    

    2. Your
      Relationship with the Company.

    
      	 	 	 
	
              (a)

            	
              Have
                you or, to your knowledge, any of your affiliates, officers, directors
                or
                principal equity holders (owners of 5% or more of the equity securities
                of
                the undersigned) held any position or office or have you had any
                other
                material relationship with the Company (or its predecessors or affiliates)
                within the past three years?

            	 
	 	 	 
	 	
              o    
                Yes

            	 
	 	 	 
	 	
              o    
                No

            	 
	
              (b)

            	
              If
                your response to Item 2(a) above is yes, please state the nature
                and
                duration of the position or office or your relationship with the
                Company
                (or its predecessors or affiliates):

            	 


    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    3.
       Your
      Interest in the Registrable Securities.

    
      	 	 	 
	 	 	 
	
              (a)

            	
              State
                the number of such Registrable Securities beneficially owned by you
                which
                were purchased pursuant to the Subscription Agreement. Check any
                of the
                following that applies to you.

            	 
	 	 	 
	 	Number of
              shares of
              Common Stock which were purchased pursuant to the Subscription
              Agreement:	 
	 	________________________________________________________	 
	 	 	 
	 	
              Number
                of shares of Common Stock issuable upon exercise of Warrants purchased
                pursuant to the Subscription Agreement:

            	 
	 	________________________________________________________	 
	 	 	 
	
              (b)

            	
              Other
                than as set forth in your response to Item 3(a) above, do you beneficially
                own any other securities of the Company?

            	 
	 	 	 
	 	
              o    
                Yes

            	 
	 	 	 
	 	
              o    
                No

            	 
	 	 	 
	
              (c)

            	
              If
                your answer to Item 3(b) above is yes, state the type, and aggregate
                amount of such other securities of the Company beneficially owned
                by
                you:

            	 
	 	 	 
	
               

            	
               Type: ____________________________________________

            	 
	 	 	 
	
               

            	
              
                Aggregate
                  amount: 
                  ________________________________________

              

            	 
	 	 	 
	
              (d)

            	
              Did
                you acquire the securities listed in Item 3(a) above in the ordinary
                course of business?

            	 
	 	 	 
	 	
              o    
                Yes

            	 
	 	 	 
	 	
              o    
                No

            	 
	 	 	 
	
              (e)

            	
              At
                the time of your purchase of the securities listed in Item 3(a) above,
                did
                you have any agreements or understandings, directly or indirectly,
                with
                any person to distribute the securities?

            	 
	 	 	 
	 	
              o    
                Yes

            	 
	 	 	 
	 	
              o    
                No

            	 
	 	 	 
	
              (f)

            	
              If
                your response to Item 3(e) above is yes, please describe such agreements
                or understandings:

            	 
	 	 	 


    

    4.
       Nature
      of Your Beneficial Ownership.

    
      	 	 	 
	 	 	 
	
              (a)

            	
              If
                the name of the beneficial owner of the Registrable Securities set
                forth
                in your response to Item 1(a) above is that of a general or limited
                partnership, state the names of the general partners of such
                partnership:

            	 
	 	________________________________________________________	 
	 	________________________________________________________	 
	 	________________________________________________________	 
	 	 	 
	
              (b)

            	
              With
                respect to each general partner listed in Item 4(a) above who is
                not a
                natural person, and is not publicly held, name each shareholder (or
                holder
                of partnership interests, if applicable) of such general partner.
                If any
                of these named shareholders are not natural persons or publicly held
                entities, please provide the same information. This process should
                be
                repeated until you reach natural persons or a publicly held
                entity.

            	 
	 	
              ________________________________________________________

               

              ________________________________________________________

               

              ________________________________________________________

            	 


    

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	
              (c)

            	
              Name
                your controlling shareholder(s) (the “Controlling Entity”). If the
                Controlling Entity is not a natural person and is not a publicly
                held
                entity, name each shareholder of such Controlling Entity. If any
                of these
                named shareholders are not natural persons or publicly held entities,
                please provide the same information. This process should be repeated
                until
                you reach natural persons or a publicly held entity.

            	 
	 	________________________________________________________	 
	 	________________________________________________________	 
	 	________________________________________________________	 
	 	 	 
	
              (A)(i)

            	
              Full
                legal name of Controlling Entity(ies) or natural person(s) who have
                sole
                or shared voting or dispositive power over the Registrable
                Securities:

            	 
	 	 	 
	 	 	 
	 	 	 
	
              (ii)

            	
              Business
                address (including street address) (or residence if no business address),
                telephone number and facsimile number of such person(s):

            	 
	 	 	 
	
              Address:
                

            	________________________________________________________	 
	 	 	 
	
              Telephone:
                

            	________________________________________________________	 
	 	 	 
	
              Fax:
                

            	________________________________________________________	 
	 	 	 
	
              (iii)

            	
              Name
                of shareholders:

            	 
	 	 	 
	 	 	 
	 	 	 
	
              (B)(i)

            	
              Full
                legal name of Controlling Entity(ies):

            	 
	 	 	 
	 	 	 
	 	 	 
	
              (ii)

            	
              Business
                address (including street address) (or residence if no business address),
                telephone number and facsimile number of such person(s):

            	 
	 	 	 
	
              Address:
                

            	________________________________________________________	 
	 	 	 
	
              Telephone:
                

            	________________________________________________________	 
	 	 	 
	
              Fax:
                

            	________________________________________________________	 
	 	 	 
	
              (iii)

            	
              Name
                of shareholders:

            	 
	 	________________________________________________________	 


    

    


    


    If
      you need more space for this response, please attach additional sheets of paper.
      Please be sure to indicate your name and the number of the item being responded
      to on each such additional sheet of paper, and to sign each such additional
      sheet of paper before attaching it to this Notice and Questionnaire. Please
      note
      that you may be asked to answer additional questions depending on your responses
      to the following questions.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    


     

    5. Plan
      of Distribution.

    


    Except
      as set forth below, the undersigned (including the undersigned’s donees or
      pledgees) intends to distribute the Registrable Securities listed above in
      Item
      3 pursuant to the Shelf Registration Statement only as follows (if at all):
      Such
      Registrable Securities may be sold from time to time directly by the undersigned
      or, alternatively, through underwriters, broker-dealers or agents. If the
      Registrable Securities are sold through underwriters, broker-dealers or agents,
      the undersigned will be responsible for underwriting discounts or commissions
      or
      agents’ commissions. Such Registrable Securities may be sold in one or more
      transactions at fixed prices, at prevailing market prices at the time of sale,
      at varying prices determined at the time of sale or at negotiated prices. Such
      sales may be effected in transactions (which may involve block transactions)
      (i)
      on any national securities exchange or quotation service on which the
      Registrable Securities may be listed or quoted at the time of sale, (ii) in
      the
      over-the-counter market, (iii) in transactions otherwise than on such exchanges
      or services or in the over-the-counter market, (iv) through the writing of
      options or any other method permitted by law. In connection with sales of the
      Registrable Securities or otherwise, the undersigned may enter into hedging
      transactions with broker-dealers or others, who may in turn engage in short
      sales of, or other hedging transactions involving, the Registrable Securities
      or
      the shares of Common Stock in the course of hedging positions they assume.
      The
      undersigned may also sell Registrable Securities short and deliver Registrable
      Securities to close out short positions, or loan or pledge Registrable
      Securities to broker-dealers or others who in turn may sell such
      securities.

     

    State
      any
      exceptions here:

     

      
        

      

    

     

     

    
      	 	
              Note:

            	
              In
                no event will such method(s) of distribution take the form of an
                underwritten offering of the Registrable Securities without the prior
                written agreement of the Company.

            


    

     

    The
      undersigned acknowledges the undersigned’s obligation to comply with the
      applicable prospectus delivery and other provisions of the Securities Act,
      provisions of the Exchange Act and the rules and regulations thereunder,
      particularly Regulation M (or any successor rules or regulations), in connection
      with any offering or sale of Registrable Securities pursuant to the Subscription
      Agreement. The undersigned agrees that the undersigned will not, and will not
      instruct any person acting on the undersigned’s behalf to, engage in any
      transaction in violation of such provisions.

     

    If
      the
      undersigned transfers all or any portion of the Registrable Securities listed
      in
      Item (3) above after the date of this Questionnaire, the undersigned agrees
      to
      notify the transferee(s) at the time of the transfer of such transferee(s)
      rights and obligations under this Questionnaire and the Subscription
      Agreement.

     

    In
      accordance with the undersigned’s obligation under the Subscription Agreement to
      provide such information as may be required by law for inclusion in the Shelf
      Registration Statement, the undersigned agrees to promptly notify the Company
      of
      any inaccuracies or changes in the information provided herein that may occur
      subsequent to the date hereof at any time while a Shelf Registration Statement
      remains effective.

     

    By
      signing below, the undersigned acknowledges that the undersigned has executed
      the Subscription Agreement for, or is, the beneficial owner of the Registrable
      Securities set forth herein, represents that the information provided herein
      is
      accurate, consents to the disclosure of the information contained in Sections
      1(a) and (c), 2, 3 and 4(c)(A)(i) this Questionnaire and the inclusion of such
      information in the Shelf Registration Statement and the related prospectus.
      The
      undersigned understands that the Company will rely on such information in
      connection with the preparation or amendment of the Shelf Registration Statement
      and the related prospectus and any filing of a new Shelf Registration
      Statement.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    


    


     

    IN
      WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
      and Questionnaire to be executed and delivered either in person or by a duly
      authorized agent of the undersigned.

     

    NAME
      OF
      BENEFICIAL OWNER:

     

    ____________________________________________

    (Please
      Print Full Legal Name)

    


    


    Signature:
      _____________________________________

    (Please
      Print Name and Title If Signed on Behalf of an Entity)

    


    


    Date:
      ________________________________________

    


    


     

    
      
        
        

      

      
        6