Document:

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR EXERCISED UNLESS (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER.

AN INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK.  HOLDERS MUST RELY ON THEIR OWN ANALYSIS OF THE INVESTMENT AND ASSESSMENT OF THE RISKS INVOLVED.  

Warrant to Purchase

__________ shares Warrant Number G-____

"G" Warrant to Purchase Common Stock

of

Universal Energy Corp.

THIS CERTIFIES that _________________________., a ______________________ Company or any subsequent holder hereof ("Holder") has the right to purchase from Universal Energy Corp. a Delaware corporation, (the "Company"), up to __________ Million(____________) fully paid and nonassessable shares, of the Company's common stock, $0.0001 par value per share ("Common Stock"), subject to adjustment as provided herein, at a price equal to the Exercise Price as defined in Section 3 below, at any time during the Term (as defined below).  

Holder agrees with the Company that this Warrant to Purchase Common Stock of the Company (this "Warrant" or this "Agreement") is issued and all rights hereunder shall be held subject to all of the conditions, limitations and provisions set forth herein.

1.Date of Issuance and Term.

This Warrant shall be deemed to be issued on November ___, 2007 ("Date of Issuance").  The term of this Warrant begins on the Date of Issuance and ends at 5:00 p.m., New York City time, on the date that is five (5) years after the Date of Issuance (the "Term").  This Warrant was issued in conjunction with the issuance of Debentures of the Company ("the "Debentures") to the Holder pursuant to the terms of the Securities Purchase Agreement ("Securities Purchase Agreement"), and the Registration Rights Agreement ("Registration Rights Agreement") by and between the Company and Holder dated on or about November ____, 2007.  

Notwithstanding anything to the contrary herein, the applicable portion of this Warrant shall not be exercisable during any time that, and only to the extent that, the number of shares of Common Stock to be issued to Holder upon such Exercise (as defined in Section 2(a)), when added to the number of shares of Common Stock, if any, that the Holder otherwise beneficially owns (outside of this Warrant, and not including any other warrants or securities of Holder's having a provision substantially similar to this paragraph) at the time of such Exercise, would exceed 4.99% (the "Maximum Percentage") of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon Exercise of this Warrant held by the Holder, as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934 (the "Beneficial Ownership Limitation").  The Beneficial Ownership Limitation shall be conclusively satisfied if the applicable Notice of Exercise includes a signed representation by the Holder that the issuance of the shares in such Notice of Exercise will not violate the Limitation, and the Company shall not be entitled to require additional documentation of such satisfaction.

Notwithstanding the above, in the event that the Company receives any purchase, tender or exchange offer or any offer to enter into a merger with another entity whereby the Company shall not be the surviving entity (an "Offer"), then the Maximum Percentage shall be increased (but not decreased) to 9.99%, and "4.99%" shall be automatically revised immediately after such offer to read "9.99%" each place it occurs in this Section 1.  The Beneficial Ownership Limitation provisions of this Section 1 may be waived by such Holder, at the election of such Holder, upon not less than 61 days' prior notice to the Company, to change the Beneficial Ownership Limitation to any amount not in excess of 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon Exercise of this Warrant held by the Holder and the Beneficial Ownership Limitation shall continue to apply.  Upon such a change by a Holder of the Beneficial Ownership Limitation from such 4.99% limitation to such 9.99% limitation, the Beneficial Ownership Limitation may not be further waived by such Holder, provided that, if an Event of Default occurs, thereafter the Beneficial Ownership Limitation provisions of this Section 1 may be waived by such Holder, at the election of such Holder, upon not less than 61 days' prior notice to the Company, to change the Maximum Percentage to any other percentage (and not limited to 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon Exercise of the Warrants held by the Holder and the provisions of this Section 1 shall continue to apply.  The limitations on Exercise set forth in this subsection are referred to as the "Beneficial Ownership Limitations."  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1 to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. 

Notwithstanding the above, Holder shall retain the option to either Exercise or not Exercise its option(s) to acquire Common Stock pursuant to the terms hereof after an Offer, and, in the event of a cash Exercise following a tender offer, the Exercise Price per share that would otherwise be due shall instead be offset against the tender price per share to be received by the Holder, provided, however, that in the event a tender offer is not completed, Holder, at its option may either (i) complete any Exercise that was initiated after the Offer by promptly paying to the Company the Exercise Price that would have been due at the time the Warrant was Exercised, or (ii) cancel such Exercise by providing written notice to the Company, in which case such Exercise shall be deemed void ad initio.

           Maximum Exercise of Rights. In the event the Holder notifies the Company that the Exercise of the rights described herein would result in the issuance of an amount of Common Stock of the Company that would exceed the maximum amount that may be issued to a Holder calculated in the manner described above, then the issuance of such additional shares of Common Stock of the Company to such Holder will be deferred in whole or in part until such time as such Holder is able to beneficially own such Common Stock without exceeding the maximum amount calculated in the manner described herein. The determination of when such Common Stock may be issued shall be made by each Holder as to only such Holder. 

2.Exercise.

(a) Manner of Exercise.  During the Term this Warrant may be Exercised as to all or any lesser number of full shares of Common Stock covered hereby (the "Warrant Shares" or the "Shares") upon surrender of this Warrant, with the Notice of Exercise Form attached hereto as Exhibit A (the "Notice of Exercise") duly completed and executed, together with the full Exercise Price (as defined below, which may be satisfied by either a Cash Exercise or a Cashless Exercise, as each is defined below) for each share of Common Stock as to which this Warrant is Exercised, at the office of the Company, Universal Energy Corp.; 30 Skyline Drive, Lake Mary, FL 32746; Phone: 800-975-2076, Fax: 800-805-4561, or at such other location as the Company may then be located or such other office or agency as the Company may designate in writing, by overnight mail, by facsimile (such surrender and payment of the Exercise Price hereinafter called the "Exercise" of this Warrant).   In the case of a Cashless Exercise, the Exercise Price is deemed to have been delivered upon the Holder's deliver of a Notice of Exercise to the Company.

(b) Date of Exercise.  The "Date of Exercise" of the Warrant shall be defined as the date that a copy of the Notice of Exercise Form attached hereto as Exhibit A, completed and executed, is sent by facsimile to the Company , provided that the original Warrant  and Notice of Exercise Form are received by the Company and the Exercise Price is satisfied, each as soon as practicable thereafter.  Alternatively, the Date of Exercise shall be defined as the date the original Notice of Exercise Form are received by the Company and the Exercise Price is satisfied, if Holder has not sent advance notice by facsimile.  Upon delivery of the Date of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder's DTC account or the date of delivery of the certificates evidencing such Warrant Shares as the case may be.  The Company shall deliver any objection to any Notice of Exercise within 1 Business Day of receipt of such notice.  In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

(c) Delivery of Common Stock Upon Exercise.  Within 3 Trading Days from the delivery to the Company of the Notice of Exercise, surrender of this Warrant (if required) and payment of the aggregate Exercise Price (which, in the case of a Cashless Exercise, shall be deemed to have been paid upon the submission by the Holder of a Notice of Exercise)(the "Warrant Shares Delivery Deadline"), the Company shall issue and deliver (or cause its transfer agent so to issue and deliver) in accordance with the terms hereof to or upon the order of the Holder that number of shares of Common Stock ("Exercise Shares") for the portion of this Warrant converted as shall be determined in accordance herewith.  Upon the Exercise of this Warrant or any part thereof, the Company shall, at its own cost and expense, take all necessary action, including obtaining and delivering, an opinion of counsel to assure that the Company's transfer agent shall issue stock certificates in the name of Holder (or its nominee) or such other persons as designated by Holder and in such denominations to be specified at Exercise representing the number of shares of Common Stock issuable upon such Exercise. The Company warrants that no instructions other than these instructions have been or will be given to the transfer agent of the Company's Common Stock and that, unless waived by the Holder, the Exercise Shares will be free-trading, and freely transferable, and will not contain a legend restricting the resale or transferability of the Exercise Shares if the Unrestricted Conditions (as defined below) are met. If the Company fails for any reason to deliver to the Holder certificates evidencing the Warrant Shares subject to a Notice of Exercise by the Warrant Shares Delivery Deadline (a "Warrant Share Delivery Failure").   

(d)   Revocation of Exercise Upon Delivery Failure.  In addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect delivery of the Exercise Shares by the Warrant Shares Delivery Deadline, the Holder will be entitled to revoke all or part of the relevant Notice of Exercise by delivery of a notice to such effect to the Company whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to the delivery of such notice, except that the liquidated damages described above shall be payable through the date notice of revocation or rescission is given to the Company.

(e)   Legends.  

(i) Restrictive Legend. The Holder understands that the Warrant and, until such time as Exercise Shares have been registered under the 1933 Act as contemplated by the Registration Rights Agreement or otherwise may be sold pursuant to Rule 144 or Rule 144(k) under the 1933 Act without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Exercise Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such securities):

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT."

(ii) Removal of Restrictive Legends.  Certificates evidencing the Exercise Shares shall not contain any legend restricting the transfer thereof (including the legend set forth above in subsection 2(e)(i)): (i) while a registration statement (including the Registration Statement, as defined in the Registration Rights Agreement) covering the resale of such security is effective under the Securities Act, or (ii) following any sale of such Exercise Shares pursuant to Rule 144, or (iii) if such Exercise Shares are eligible for sale under Rule 144(k), or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) (collectively, the "Unrestricted Conditions"). The Company shall cause its counsel to issue a legal opinion to the Company's transfer agent promptly after the Effective Date (as defined below) of the Registration Statement if required by the Company's transfer agent to effect the issuance of Exercise Shares without a restrictive legend or removal of the legend hereunder. If the Unrestricted Conditions are met at the time of issuance of Exercise Shares, then such Exercise Shares shall be issued free of all legends.  The Company agrees that following the Effective Date or at such time as the Unrestricted Conditions are met or such legend is otherwise no longer required under this Section 2(e), it will, no later than three (3) Trading Days following the delivery (the "Unlegended Shares Delivery Deadline") by the Holder to the Company or the Company's transfer agent of a certificate representing Exercise Shares, as applicable, issued with a restrictive legend (such third Trading Day, the "Legend Removal Date"), deliver or cause to be delivered to such Holder a certificate (or electronic transfer) representing such shares that is free from all restrictive and other legends.  For purposes hereof, "Effective Date" shall mean the date that the Registration Statement that the Company is required to file pursuant to the Registration Rights Agreement has been declared effective by the Securities and Exchange Commission (the "Commission").  

(iii) Sale of Unlegended Shares.  Holder agrees that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 2(e)(i) above is predicated upon the Company's reliance that the Holder will sell any Exercise Shares pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are sold pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution set forth therein.  

(f) Cancellation of Warrant.  This Warrant shall be canceled upon the full Exercise of this Warrant, and, as soon as practical after the Date of Exercise, Holder shall be entitled to receive Common Stock for the number of shares purchased upon such Exercise of this Warrant, and if this Warrant is not Exercised in full, Holder shall be entitled to receive a new Warrant (containing terms identical to this Warrant) representing any unexercised portion of this Warrant in addition to such Common Stock. 

(g) Holder of Record.  Each person in whose name any Warrant for shares of Common Stock is issued shall, for all purposes, be deemed to be the Holder of record of such shares on the Date of Exercise of this Warrant, irrespective of the date of delivery of the Common Stock purchased upon the Exercise of this Warrant.  Nothing in this Warrant shall be construed as conferring upon Holder any rights as a stockholder of the Company.

(h) Delivery of Electronic Shares.   In lieu of delivering physical certificates representing the unlegended shares of Common Stock issuable upon Exercise (the "Unlegended Shares"), provided the Company's transfer agent is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon written request of the Holder, so long as the certificates therefor are not required to bear a legend, and the Holder is not obligated to return such certificate for the placement of a legend thereon, the Company shall cause its transfer agent to electronically transmit the Unlegended Shares to the Holder by crediting the account of the Holder's prime broker with DTC identified in the written request through its Deposit Withdrawal Agent Commission ("DWAC") system.   

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

(j)  Surrender of Warrant Upon Exercise; Book-Entry.  Notwithstanding anything to the contrary set forth herein, upon Exercise of this Warrant in accordance with the terms hereof, the Holder shall not be required to physically surrender the original Warrant Certificate to the Company unless all of this Warrant is Exercised, in which case such Holder shall deliver the original Warrant being Exercised to the Company promptly following the Date of Exercise at issue.  Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.  The Holder and the Company shall maintain records showing the amount of this Warrant that is so Exercised and the dates of such Exercises or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this original Warrant upon each such Exercise.  In the event of any dispute or discrepancy, such records of the Holder shall be controlling and determinative in the absence of manifest error.  The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.  

3.Payment of Warrant Exercise Price.

(a) Exercise Price.  The Exercise Price ("Exercise Price") shall initially equal $1.00 per share (the "Initial Exercise Price"), subject to adjustment pursuant to the terms hereof, including but not limited to Section 5 below.    

Payment of the Exercise Price may be made by either of the following, or a combination thereof, at the election of Holder:

(i)Cash Exercise: The Holder may exercise this Warrant in cash, bank or cashiers check or wire transfer (a "Cash Exercise"); or

(ii)Cashless Exercise:  If at any time after one year from the Date of Issuance, there is no effective Registration Statement (as defined in the Registration Rights Agreement) covering the resale of the Warrant Shares issuable upon the exercise of this Warrant, the Holder, at its option, may exercise this Warrant in a Cashless Exercise transaction (as defined below).  Notwithstanding the above limitations, the Holder may effect a Cashless Exercise transaction at any time after (A) the Company fails to file any Registration Statement by the date that such filing is required under the Registration Rights Agreement, or (B) the Company fails to provide a commercially reasonable written response to any comments ("SEC Comments") to a Registration Statement submitted by the Commission within 20 days of the date that such SEC Comments are received by the Company, so long as there is no effective Registration Statement covering the resale of the Warrant Shares issuable upon the exercise of this Warrant. 

In order to effect a Cashless Exercise, the Holder shall surrender of this Warrant at the principal office of the Company together with notice of cashless election, in which event the Company shall issue Holder a number of shares of Common Stock computed using the following formula (a "Cashless Exercise"):

X = Y (A-B)/A

where:X = the number of shares of Common Stock to be issued to Holder.

Y = the number of shares of Common Stock for which this Warrant is beingExercised.

A = the Market Price of one (1) share of Common Stock (for purposes of this Section 3(ii), 

B = the Exercise Price.

As used herein, "Market Price," as of any date, means the Volume Weighted Average Price (as defined herein) of the Company's Common Stock during the five (5) consecutive trading day period immediately preceding the date of Exercise, or other applicable date, and the "Volume Weighted Average Price" or "VWAP" for any security as of any date means the volume weighted average sale price on the Over the Counter Electronic Bulletin Board (the "OTC-BB") as reported by, or based upon data reported by, Bloomberg Financial Markets or an equivalent, reliable reporting service mutually acceptable to and hereafter designated by holders of a majority in interest of the Warrants and the Company ("Bloomberg") or, if the OTC-BB is not the principal trading market for such security, the volume weighted average sale price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or, if no volume weighted average sale price is reported for such security, then the last closing trade price of such security as reported by Bloomberg, or, if no last closing trade price is reported for such security by Bloomberg, the average of the bid prices of any market makers for such security that are listed in the "pink sheets" by the National Quotation Bureau, Inc. If the Volume Weighted Average Price cannot be calculated for such security on such date in the manner provided above, the volume weighted average price shall be the fair market value as mutually determined by the Company and the holders of a majority in interest of the Warrants being Exercised for which the calculation of the volume weighted average price is required in order to determine the Exercise Price of such Warrants. "Trading Day" shall mean any day on which the Common Sock is traded for any period on the OTC-BB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.  

For purposes of Rule 144 and sub-section (d)(3)(ii) thereof, it is intended, understood and acknowledged that the Common Stock issuable upon Exercise of this Warrant in a cashless Exercise transaction shall be deemed to have been acquired at the time this Warrant was issued.  Moreover, it is intended, understood and acknowledged that the holding period for the Common Stock issuable upon Exercise of this Warrant in a cashless Exercise transaction shall be deemed to have commenced on the date this Warrant was issued.  

(b)  Dispute Resolution. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant Shares issuable upon any exercise of this Warrant, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with this subsection.  In the case of a dispute as to the determination of the closing price or the Volume Weighted Average Price of the Company's Common Stock or the arithmetic calculation of the Exercise Price, Market Price or any Redemption Price, or the determination of whether or not a Dilutive Issuance or a Milestone Failure has occurred, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two (2) Business Days of receipt, or deemed receipt, of the Notice of Exercise or Redemption Notice or other event giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation within two (2) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two (2) Business Days submit via facsimile (i) the disputed determination of the closing price or the Volume Weighted Average Price of the Company's Common Stock to an independent, reputable investment bank selected by the Company and approved by the Holder, which approval shall not be unreasonably withheld, (ii) the disputed arithmetic calculation of the Exercise Price, Market Price or any Redemption Price to the Company's independent, outside accountant or (iii) the disputed facts regarding the occurrence of a Dilutive Issuance or Milestone Failure (or any other matter referred to above that is not expressly designated to the independent investment bank or the independent outside accountant pursuant to (i) or (ii) immediately above) to an expert attorney from a nationally recognized outside law firm (having at least 100 attorneys and having with no prior relationship with the Company) selected by the Company and approved by the Holder. The Company, at the Company's expense, shall cause the investment bank or the accountant, law firm, or other expert, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than five (5) Business Days from the time it receives the disputed determinations or calculations. Such investment bank's or accountant's determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error (collectively, the "Dispute Resolution Procedures").

4.Transfer and Registration.

(a) Transfer Rights.  Subject to the provisions of Section 8 of this Warrant, this Warrant may be transferred on the books of the Company, in whole or in part, in person or by attorney, upon surrender of this Warrant properly completed and endorsed.  This Warrant shall be canceled upon such surrender and, as soon as practicable thereafter, the person to whom such transfer is made shall be entitled to receive a new Warrant or Warrants as to the portion of this Warrant transferred, and Holder shall be entitled to receive a new Warrant as to the portion hereof retained. 

(b) Registrable Securities.  The Common Stock issuable upon the Exercise of this Warrant has registration rights pursuant to that certain Registration Rights Agreements between the Company and the Holder dated even herewith.

5.Anti-Dilution Adjustments; Additional Adjustments; Purchase Rights. 

(a)Participation. The Holder, as the holder of this Warrant, shall be entitled to receive such dividends paid and distributions of any kind made to the holders of Common Stock of the Company to the same extent as if the Holder had Exercised this Warrant into Common Stock (without regard to any limitations on exercise herein or elsewhere and without regard to whether or not a sufficient number of shares are authorized and reserved to effect any such exercise and issuance) and had held such shares of Common Stock on the record date for such dividends and distributions. Payments under the preceding sentence shall be made concurrently with the dividend or distribution to the holders of Common Stock.  

(b) Recapitalization or Reclassification.  If the Company shall at any time effect a recapitalization, reclassification or other similar transaction of such character that the shares of Common Stock shall be changed into or become exchangeable for a larger or smaller number of shares, then upon the effective date thereof, the number of shares of Common Stock which Holder shall be entitled to purchase upon Exercise of this Warrant shall be increased or decreased, as the case may be, in direct proportion to the increase or decrease in the number of shares of Common Stock by reason of such recapitalization, reclassification or similar transaction, and the Exercise Price shall be, in the case of an increase in the number of shares, proportionally decreased and, in the case of decrease in the number of shares, proportionally increased.  The Company shall give Holder the same notice it provides to holders of Common Stock of any transaction described in this Section 5(b).

 (c)  Exercise Price Adjusted.  As used in this Warrant, the term "Exercise Price" shall mean the purchase price per share specified in Section 3 of this Warrant, until the occurrence of an event stated in this Section 5 or otherwise set forth in this Warrant, and thereafter shall mean said price as adjusted from time to time in accordance with the provisions of said subsection.  No such adjustment under this Section 5 shall be made unless such adjustment would change the Exercise Price at the time by $.01 or more; provided, however, that all adjustments not so made shall be deferred and made when the aggregate thereof would change the Exercise Price at the time by $.01 or more. No adjustment made pursuant to any provision of this Section 5 shall have the net effect of increasing the Exercise Price in relation to the split adjusted and distribution adjusted price of the Common Stock.  

(d)  Adjustments: Additional Shares, Securities or Assets.  In the event that at any time, as a result of an adjustment made pursuant to this Section 5 or otherwise, Holder shall, upon Exercise of this Warrant, become entitled to receive shares and/or other securities or assets (other than Common Stock) then, wherever appropriate, all references herein to shares of Common Stock shall be deemed to refer to and include such shares and/or other securities or assets; and thereafter the number of such shares and/or other securities or assets shall be subject to adjustment from time to time in a manner and upon terms as nearly equivalent as practicable to the provisions of this Section 5.  

(e)Adjustments to Exercise Price Due to Subsequent Equity Sales.  If at any time after the Date of Issuance for so long as any Warrants are outstanding, the Company or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per share that is lower than the then Exercise Price (such lower price, the "Base Exercise Price" and such issuances, collectively, a "Dilutive Issuance") (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance), regardless of whether or not any such issuance or repricing of securities is conditional upon circumstances or events that may occur in the future, then the Exercise Price shall be reduced (each, a "Dilutive Issuance Adjustment") to equal the Base Exercise Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued.  Notwithstanding the foregoing, no adjustment will be made under this Section 5(e) in respect of an Exempt Issuance (as defined in the Securities Purchase Agreement).  If the Company issues Variable Equity Securities, despite the prohibition set forth in the Securities Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion price at which such securities may be converted or exercised.  The Company shall notify the Holder in writing, no later than 1 Business Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 5(e), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the "Dilutive Issuance Notice").  For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5(e), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Exercise Shares based upon the Base Exercise Price on or after the date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Exercise Price in the Notice of Exercise.  No adjustment shall be made hereunder if such adjustment would result in an increase of the Exercise Price then in effect.

For purposes hereof:

 

"Common Stock Equivalents," "Exempt Issuance" and "Variable Equity Securities" shall each have the meanings ascribed to them in the Securities Purchase Agreement.  

"Convertible Securities" means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for Common Stock.

"Options" means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.

 

(f)  Subsequent Rights Offerings.  If the Company, at anytime prior to the date that all of the Warrants have been Exercised, redeemed or otherwise satisfied in accordance with their terms, shall issue rights, options or warrants to all holders of Common Stock (and not to Holders) entitling them to subscribe for or purchase shares of Common Stock at a price per share (the "Base Rights Offering Price") that is lower than the Exercise Price then in effect, then the Exercise Price then in effect shall be reduced (but not increased) to the Base Rights Offering Price (a "Subsequent Rights Offering Adjustment").  Such adjustment shall be made whenever such rights or warrants are issued, and shall become effective immediately after the record date for the determination of stockholders entitled to receive such rights, options or warrants.  No adjustment shall be made hereunder if such adjustment would result in an increase of the Exercise Price then in effect.

(g)  Milestone Adjustments to Exercise Price.  The Company has provided to the Holder pro forma financial projections and a list of milestone events that are evidenced on Schedule 5(g) attached hereto (the "Projections"). If the Company shall have failed (each a "Milestone Failure") to meet or exceed such Projections for the six (6) month period (the "Milestone Period") ending March 31, 2008 (the  "Milestone Date"), in each case as reported in the Company's Form 10-QSB for such fiscal quarter, then the Exercise Price shall be reduced (but not increased) (a "Milestone Adjustment") to equal the lesser of (a) the Exercise Price then in effect, (b) the Market Price as determined on the date that is five (5) Trading Days after the applicable Milestone Date, or (c) the Market Price as determined on the date that is five (5) Trading Days after the date that Company files its next Form 10Q-SB or 10-KSB, as applicable, with the Commission following the end of the applicable Milestone Period (the "Milestone Adjustment Price").

Each such adjustment shall be effective as of the first day following each Milestone Date (by way of example, if the Projections are not met for the Milestone Period ending March 31, 2008, the reduction is effective immediately on April 1, 2008).  As to any Exercises by the Holder that occurred following the end of a Milestone Period but prior to the date the Company's periodic report was filed ("Interim Period"), the Company shall retroactively send the Holder additional Warrant Shares within 3 Trading Days of the date of the applicable filing if an adjustment is required hereunder (provided that to the extent any such shares would cause the Beneficial Ownership Limitation to be exceeded, such excess shares shall not be issued and delivered until such time as such shares may be so issued without exceeding the Beneficial Ownership Limitation).  The number of additional Warrant Shares issued shall be equal to the number of Warrant Shares receivable from such Exercises based on the adjusted Exercise Price less any Warrant Shares previously received on account of such Exercises.  Any subsequent restatements of the Company's financials shall require similar retroactive issuances if the aforementioned events are subsequently deemed to have occurred.  The Company shall provide written notice to the Holder no later than 5 Business Day following the Company's filing of the applicable periodic report with the Commission, indicating therein the new Exercise Price and the Revenue for the applicable quarter.  In the event that there is an adjustment to the Exercise Price pursuant to any other provision under this Warrant during the Interim Period, the Exercise Price shall be the lower of (i) the Exercise Price as adjusted pursuant to the other provisions of this Warrant and (ii) the new Exercise Price as determined hereunder.  Notwithstanding anything herein to the contrary, (i) the provision shall only have the effect of reducing the Exercise Price and (ii) each adjustment shall be permanent notwithstanding future Revenue or the achievement of any other milestones and cumulative with any other adjustments hereunder.   

(h)Adjustments to Exercise Price During Major Announcements.  Notwithstanding anything contained in this Warrant to the contrary, in the event the Company makes any public announcement (the date of such announcement is hereinafter referred to as the "Announcement Date") anytime during the period beginning five (5) Business Days before any Milestone Adjustment Date and ending five (5) Business Days after such Milestone Adjustment Date (the "Protected Period"), then the "Milestone Adjustment Price" for such Milestone Adjustment shall equal the lesser of (X) the Milestone Adjustment Price as determined pursuant to Section 5(g) above, (Y) the Market Price as determined on the Trading Day immediately preceding the Announcement Date and (Z) the Market Price as determined on the date that is ten (10) Trading Days after the Announcement Date.  

(i)  Subdivision or Combination of Common Stock.  If the Company at any time subdivides (by any stock split, stock dividend, recapitalization, reorganization, reclassification or otherwise) the shares of Common Stock acquirable hereunder into a greater number of shares, then, after the date of record for effecting such subdivision, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of shares represented by this Warrant shall proportionally increase.  If the Company at any time combines (by reverse stock split, recapitalization, reorganization, reclassification or otherwise) the shares of Common Stock acquirable hereunder into a smaller number of shares, then, after the date of record for effecting such combination, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of shares represented by this Warrant shall proportionally decrease.

(j)Voluntary Adjustment By Company. The Company may at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company (a "Voluntary Adjustment").   

(k)  Adjustment to Number of Shares.  In the event of any adjustment to the Exercise Price pursuant to the terms of this Warrant, including but not limited to any Milestone Adjustment, any Dilutive Issuance Adjustment any Subsequent Rights Offering Adjustment, Default Adjustment or any Voluntary Adjustment, the number of Warrant Shares issuable upon Exercise of this Warrant shall be increased (except as otherwise provided in Section 5(b) or (i)) such that the aggregate Exercise Price payable in a full Cash Exercise hereunder, after taking into account the decrease in the Exercise Price, shall be equal to the aggregate Exercise Price payable in a full Cash Exercise prior to such adjustment, and the number of Warrant Shares issuable in a Cashless Exercise shall be increased accordingly.  

(l)  Notice of Adjustments.  Whenever the Exercise Price is adjusted pursuant to the terms of this Warrant, the Company shall within Five (5) Business Days mail to the Holder a notice (a "Exercise Price Adjustment Notice") setting forth the Exercise Price after such adjustment and setting forth a statement of the facts requiring such adjustment.  The Company shall, upon the written request at any time of the Holder, furnish to such Holder a like Warrant setting forth (i) such adjustment or readjustment, (ii) the Exercise Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon Exercise of the Warrant, following delivery of the original Warrant to the Company for exchange.  For purposes of clarification, whether or not the Corporation provides an Exercise Price Adjustment Notice pursuant to this Section 5(l), upon the occurrence of any event that leads to an adjustment of the Exercise Price, the Holders are entitled to receive a number of Exercise Shares based upon the new Exercise Price, as adjusted, for exercises occurring on or after the date of such adjustment, regardless of whether a Holder accurately refers to the adjusted Exercise Price in the Notice of Exercise.  

(m)  Notice to Holder.  

(i) Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 5, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. If the Company issues Variable Equity Securities (as defined in the Purchase Agreement), despite the prohibition thereon in the Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion or exercise price at which such securities may be converted or exercised. 

(ii) Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.  The Holder is entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice.

(n) Purchase Rights.  In addition to any other adjustments described herein, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the "Purchase Rights"), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the proportionate number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

6.Fractional Interests.

No fractional shares or scrip representing fractional shares shall be issuable upon the Exercise of this Warrant, but on Exercise of this Warrant, Holder may purchase only a whole number of shares of Common Stock.  If, on Exercise of this Warrant, Holder would be entitled to a fractional share of Common Stock or a right to acquire a fractional share of Common Stock, such fractional share shall be disregarded and the number of shares of Common Stock issuable upon Exercise shall be the next closest number of whole shares.

7.Reservation of Shares.

From and after the date hereof, the Company shall at all times reserve for issuance such number of authorized and unissued shares of Common Stock (or other securities substituted therefor as herein above provided) as shall be sufficient for the Exercise of this Warrant and payment of the Exercise Price in full without regard to any Beneficial Ownership Limitation. If at any time the number of shares of Common Stock authorized and reserved for issuance is below the number of shares sufficient for the Exercise of this Warrant (a "Share Authorization Failure")(based on the Exercise Price in effect from time to time), the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling a special meeting of stockholders to authorize additional shares to meet the Company's obligations under this Section 7, in the case of an insufficient number of authorized shares, and using its best efforts to obtain stockholder approval of an increase in such authorized number of shares. The Company covenants and agrees that upon the Exercise of this Warrant, all shares of Common Stock issuable upon such Exercise shall be duly and validly issued, fully paid, nonassessable and not subject to liens, claims, preemptive rights, rights of first refusal or similar rights of any person or entity.

8.Restrictions on Transfer.

(a) Registration or Exemption Required.  This Warrant has been issued in a transaction exempt from the registration requirements of the Act by virtue of Regulation D and exempt from state registration under applicable state laws. The Warrant and the Common Stock issuable upon the Exercise of this Warrant may not be transferred, sold or assigned except pursuant to an effective registration statement or an exemption to the registration requirements of the Act and applicable state laws.

(b) Assignment.  If Holder can provide the Company with reasonably satisfactory evidence that the conditions of (a) above regarding registration or exemption have been satisfied, Holder may sell, transfer, assign, pledge or otherwise dispose of this Warrant, in whole or in part. Holder shall deliver a written notice to Company, substantially in the form of the Assignment attached hereto as Exhibit B, indicating the person or persons to whom the Warrant shall be assigned and the respective number of warrants to be assigned to each assignee. The Company shall effect the assignment within ten (10) days of receipt of the original Warrant and other information required by this Section 8(b), and shall deliver to the assignee(s) designated by Holder a Warrant or Warrants of like tenor and terms for the appropriate number of shares.

9.Noncircumvention.  The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder.  Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

10.Rights Upon Major Transaction or Change of Entity Transaction. 

(a) Definitions. For purposes hereof, 

"Change of Entity Transaction" means (i) a consolidation, merger, exchange of shares, recapitalization, reorganization, business combination or other similar event,  (A) following which the holders of Common Stock immediately preceding such consolidation, merger, combination or event either (1) no longer hold a majority of the shares of Common Stock of the Company or (2) no longer have the ability to elect the board of directors of the Company or (B) as a result of which shares of Common Stock shall be changed into (or the shares of Common Stock become entitled to receive) the same or a different number of shares of the same or another class or classes of stock or securities of the Company or another entity.

"Sufficient Trading Characteristics" shall mean that the average daily dollar trading volume of the common stock of such entity on its primary exchange or market is equal to or in excess of $100,000 for the 90th through the 31st day prior to the public announcement of such transaction.

"Permissible Change of Entity Transaction" shall mean a Change of Entity Transaction where the Successor Entity (as defined below) (A) is a publicly traded Company, which is a "Reporting Issuer" under the 1934 Act and whose common stock is quoted on or listed for trading on an Eligible Market, (B) has Sufficient Trading Characteristics (as defined below) and (C) meets the Assumption Requirements (as required in Section 10(b) below).

"Eligible Market" means the over the counter Bulletin Board ("OTC-BB"), the New York Stock Exchange, Inc., the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market or the American Stock Exchange.

 "Impermissible Change of Entity Transaction" shall mean a Change of Entity Transaction which does not qualify as a Permissible Change of Entity Transaction.

" Major Transaction" means 

(i)an Impermissible Change of Entity Transaction; and

(ii)the sale or transfer of more than 40%, in the aggregate, of the properties or assets of the Company to another Person or Persons in any rolling 12 month period (an "Asset Sale");  and

(iii)a purchase, tender or exchange offer made to and accepted by the holders of more than the 50% of the outstanding shares of Common Stock.

(b)  Assumption Upon Change of Entity Transaction.  The Company shall not, so long as any portion of this Warrant remains outstanding, enter into or be party to a Change of Entity Transaction unless any Person purchasing the Company's assets or Common Stock, or any successor entity resulting from such Change of Entity Transaction (in each case, an "Successor Entity"), assumes (an "Assumption") in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 10(b) pursuant to written agreements in form and substance satisfactory to the Required Warrant Holders (as defined below) and approved by the Required Warrant Holders prior to such Change of Entity Transaction, including agreements to deliver to each holder of Warrants in exchange for such Warrants a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, having an exercise price equal to the Exercise Price of this Warrant, having similar exercise rights as this Warrant (including but not limited to similar exercise price adjustment provisions), and satisfactory to the Required Warrant Holders.  Upon the occurrence of any Change of Entity Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Change of Entity Transaction, the provisions of this Warrant referring to the "Company" shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under the Warrant with the same effect as if such Successor Entity had been named as the Company herein.  Upon consummation of a Change of Entity Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise or redemption of the Warrant at any time after the consummation of the Change of Entity Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property) issuable upon the exercise of this Warrant prior to such Change of Entity Transaction, such shares of publicly traded common stock (or their equivalent) of the Successor Entity, as adjusted in accordance with the provisions of this Warrant.  The provisions of this Section shall apply similarly and equally to successive Change of Entity Transactions and shall be applied without regard to any limitations on the exercise of the Warrant.  The requirements of this Section 10(b) are referred to herein as the "Assumption Requirements."

For purposes hereof, "Required Warrant Holders" shall mean the Holders of two-thirds (2/3) of the then outstanding Warrants (determined by the number of unexercised underlying shares).

(c) Notice of Major Transaction; Redemption Right Upon Major Transaction.  At least thirty (30) days prior to the consummation of a Major Transaction, but not prior to the public announcement of such transaction, the Company shall deliver written notice thereof via facsimile and overnight courier to the Holder (a "Major Transaction Notice"), which notice shall specify the nature and terms of the proposed transaction and nature of the Successor Entity (if any).   

(d)  Redemption Right Upon Major Transaction.  At any time during the period beginning after the Holder's receipt of a Major Transaction Notice and ending on the Trading Day immediately prior to the consummation of such Major Transaction, the Holder may require the Company to redeem all or any portion of the Holder's Warrant by delivering written notice thereof ("Major Transaction Redemption Notice") to the Company, which Major Transaction Redemption Notice shall indicate the number of Warrant Shares  of its Warrant (the "Redemption Warrant Amount")  that the Holder is electing to be redeemed.  

The portion of this Warrant subject to redemption pursuant to this Section 10(d) shall be redeemed by the Company in cash at a price equal to 100% of the greater of (i) the Black Scholes value (as defined below) of the remaining outstanding portion of the Warrant to be redeemed on the date the Major Transaction is consummated calculated using the Black Scholes Option Pricing Model and (ii) the Black-Scholes value of the remaining unexercised portion of this Warrant to be redeemed on the Trading Day immediately preceding the date that the Major Transaction Redemption Price (as defined below) is paid to the Holder (the greater of which is referred to as the "Major Transaction Redemption Price").  For purposes hereof, the "Black-Scholes" value of a Warrant shall be determined by use of the Black Scholes Option Pricing Model reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of such date of request and (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg.  

(e) Escrow; Payment of Major Transaction Redemption Price.  Following the receipt of a Major Transaction Redemption Notice from the Holder, the Company shall not effect a Major Transaction unless it shall first place, or shall cause the Successor Entity to place, into an escrow account with an independent escrow agent, at least three (3) Business Days prior to the closing date of the Major Transaction (the "Major Transaction Escrow Deadline"), an amount equal to the Major Transaction Redemption Price.  Concurrently upon closing of any Major Transaction, the Company shall pay or shall instruct the escrow agent to pay the Major Transaction Redemption Price to the Holder, which payment shall constitute a Redemption Upon Major Transaction of the Debentures.  

(f) Injunction.  Following the receipt of a Major Transaction Redemption Notice from the Holder, in the event that the Company attempts to consummate a Major Transaction without placing the Major Transaction Redemption Price in escrow in accordance with subsection (e) above or without payment of the Major Transaction Redemption Price to the Holder upon consummation of such Major Transaction, the Buyer shall have the right to apply for an injunction in any state or federal courts sitting in the City of New York, borough of Manhattan to prevent the closing of such Major Transaction until the Major Transaction Redemption Price is paid to the Holder, in full.

(g) Mechanics of Redemptions Upon Major Transactions.  

Redemptions required by this Section 10 shall be made in accordance with the provisions of Section 12 and shall have priority to payments to shareholders in connection with a Major Transaction.  Notwithstanding anything to the contrary in this Section 10, until the Major Transaction Redemption Price is paid in full, the portion of the Warrant submitted for redemption under this Section may be converted, in whole or in part, by the Holder into shares of Common Stock, or in the event the Date of Exercise is after the consummation of a Major Transaction, into shares of publicly traded common stock (or their equivalent) of the Successor Entity pursuant to Section 10(b). Unless otherwise indicated by the Holder in the applicable Notice of Exercise, any amount of this Warrant exercised during the period from the date of the Major Transaction Redemption Notice until the date the Major Transaction Redemption Price is paid in full shall be considered to be an exercise (instead of a Redemption) of a portion of the Warrant that would have been subject to such Redemption, and any amounts of this Warrant exercised from time to time during such period shall exercised in full into Common Stock at the Exercise Price then in effect, and the number of shares of this Warrant so exercised into Common Stock shall be deducted from the number of Warrants that are subject to redemption hereunder. The parties hereto agree that in the event of the Company's redemption of any portion of the Warrant under this Section 10(d), the Holder's damages would be uncertain and difficult to estimate because of the parties' inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder.  Accordingly, any redemption premium due under this Section 10 is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder's actual loss of its investment opportunity and not as a penalty.

11.Default and Redemption.   

(a) Events Of Default.  Each of the following events which occur while any Warrants are outstanding shall be considered to be an "Event Of Default":  

(i)  Failure To File and Maintain Registration.  An Event of Default occurs under Section 10(c) of the Debentures with respect to any Warrant Shares (a "Registration Default");

(ii)  Failure To Authorize And Reserve Common Stock.  An Event of Default occurs under Section 10(g) of the Debentures with respect to any Warrant Shares (a "Share Reservation Default");

(iii)  Failure To Deliver Common Stock. A Warrant Share Delivery Failure (as defined above) occurs and remains uncured for a period of more than twenty (20) days.  

(iv)  Legend Removal Failure.   A Legend Removal Failure occurs and remains uncured for a period of twenty (20) days, where a "Legend Removal Failure" shall be deemed to have occurred if the Company fails to issue Exercise Shares without a restrictive legend, when and as required under Section 2(e)(ii) hereof.

(v) Failure to Pay the Buy-In Amount.  The Company fails to pay any Buy-In Amount due to the Holder pursuant to a Buy-In hereunder, and such failure continues for ten (10) days after the Holder notifies the Company in writing that such amounts are payable.

(vi)  Corporate Existence; Major Transaction.  The Company has effected a Major Transaction without paying the Major Transaction Redemption Price to the Holder pursuant to Section 10(d) or, if the Holder did not elect a Redemption Upon Major Transaction, the Company has failed to meet the Assumption Requirements of Section 10(b) prior to effecting a Major Transaction. 

(vii) Failure to Adjust Exercise Price; Failure to Comply With Dispute Resolution Procedures.  The Company shall have failed to comply in good faith with the Dispute Resolution Procedures (as defined herein) or shall have failed to adjust the Exercise Price as required hereunder following a Dilutive Issuance, a Milestone Event, or otherwise (after any applicable Dispute Resolution Procedure required herein) ), and such failure continues for ten (10) Business Days after the Holder provides written notice to the Company that such performance by the Company is past due.

 (b) Mandatory Redemption.  If any Events of Default shall occur and any such Event of Default continues for an additional ten (10) Business Days after the Holder provides written notice to the Company that an Event of Default has occurred and specifying the factual basis therefor then thereafter, unless waived by the Holder, , at the option of the Holder, such option exercisable through the delivery of written notice to the Company by such Holder (the "Default Notice"), the outstanding amount of this Warrant shall be immediately redeemed by the Company and the Company shall pay to the Holder (a "Mandatory Redemption") an amount (the "Mandatory Redemption Amount" or the "Default Amount") equal to 100% of the greater of (i) the Black-Scholes value of the remaining unexercised portion of this Warrant on the date of such Default Notice  and (2) the Black-Scholes value of the remaining unexercised portion of this Warrant on the Trading Day immediately preceding the date that the Mandatory Redemption Amount is paid to the Holder.  

The Mandatory Redemption Amount shall be payable, in cash or cash equivalent, within five (5) business days of the Date of the applicable Default Notice (the "Default Amount Due Date").  If the Company fails to pay the Mandatory Redemption Amount within thirty (30) days of the Default Amount Due Date, then (A) the Exercise Price shall be permanently decreased (but not increased) (each a "Default Adjustment") on the first Trading Day of each calendar month thereafter (each a "Default Adjustment Date") until the Default Amount is paid in full, to a price equal to the lesser of (i) the Exercise Price then in effect, or (ii) the lowest Market Price that has occurred on any Default Adjustment Date since the date that the Event of Default began.  Notwithstanding the occurrence of an Event of Default, Failure Payments and any other Required Cash Payments (as defined in the Securities Purchase Agreement) shall continue to accrue.  On the date that is five (5) Business Days after the Company's receipt of the Holder's Default Notice, the Default Amount, together with all other amounts payable hereunder, shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity, and (B) the Holder shall have the right at any time, so long as the Company remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Company, upon written notice ("Default Exercise Notice") (which may be given one or more times, from time to time anytime after the Default Amount Due Date), to immediately issue (a "Default Exercise"), in lieu of all or any specified portion (the "Specified Portion") of the unpaid portion (the "Unpaid Portion") of the Default Amount, a number (the "Default Share Amount") of shares (the "Default Shares") of Common Stock, subject to the Beneficial Ownership Limitation, equal to the Specified Portion of the Default Amount divided by the Exercise Price in effect on the date such shares are issued to the Holder, PROVIDED THAT, the Holder may require that such payment of shares be made in one or more installments at such time and in such amounts as Holder chooses.   The Default shares are due within five (5) Business Days of the date that the Holder delivers a Default Exercise Notice to the Company with the original Warrant (if delivery of the original is required hereunder) (the "Default Share Delivery Deadline").

If the Company is unable to redeem all of the Warrants submitted for redemption, the Company shall redeem a pro rata amount from each Holder based on the number of Warrants submitted for redemption by such Holder relative to the total number of Warrants submitted for redemption by all Holders. 

The Holder shall not be entitled to receive Default Shares on a given date if and to the extent that such issuance would cause the Beneficial Ownership Limitation then in effect to be exceeded.  If and to the extent that the issuance of Default Shares with respect to a given Specified Portion would result in the a violation of the Beneficial Ownership Limitation, then that particular Specified Portion shall be automatically reduced to a value that would cause the number of Default Shares to be issued to equal the Maximum Percentage, and the amount of such reduction shall be added back to the Unpaid Portion of the Default Amount.

(c)Redemption by Other Holders.  Upon the Company's receipt of notice from any of the holders for redemption or repayment of other Warrants that were issued pursuant to the Securities Purchase Agreement (the "Other Warrants") as a result of an event or occurrence of an Event of Default or a Major Transaction (each, an "Other Redemption Notice"), the Company shall immediately, but no later than one (1) Business Day of its receipt thereof, forward to the Holder by facsimile a copy of such notice.  If the Company receives a Redemption Notice and one or more Other Redemption Notices, during the seven (7) Business Day period beginning on and including the date which is three (3) Business Days prior to the Company's receipt of the Holder's Redemption Notice and ending on and including the date which is three (3) Business Days after the Company's receipt of the Holder's Redemption Notice and the Company is unable to redeem all amounts designated in such Redemption Notice and such Other Redemption Notices received during such seven (7) Business Day period, then the Company shall redeem a pro rata amount from each holder of the Warrants (including the Holder) based on the number of Warrants submitted for redemption pursuant to such Redemption Notice and such Other Redemption Notices received by the Company during such seven (7) Business Day period.

(d) Posting Of Bond.  In the event that any Event of Default occurs hereunder or any Event of Default occurs under any of the Transaction Documents, the Company may not raise as a legal defense (in any Lawsuit, as defined below, or otherwise) or justification to such Event of Default any claim that such Holder or any one associated or affiliated with such Holder has been engaged in any violation of law, unless the Company has posted a surety bond (a "Surety Bond") for the benefit of such Holder in the amount of 130% of the aggregate Surety Bond Value (as defined below) of all of the Holder's Debentures and Warrants (the "Bond Amount"), which Surety Bond shall remain in effect until the completion of litigation of the dispute and the proceeds of which shall be payable to such Holder to the extent Holder obtains judgment. 

For purposes hereof, a "Lawsuit" shall mean any lawsuit, arbitration or other dispute resolution filed by either party herein pertaining to any of the Transaction Documents. 

"Surety Bond Value," for the Warrants shall mean 130% of the of the Black-Scholes value of the remaining unexercised portion of this Warrant on the Trading Day immediately preceding the date that such bond goes into effect) and "Surety Bond Value" for the Debentures shall have the meaning ascribed to it in the Certificate of Designation.  

(e) Injunction And Posting Of Bond.  In the event that the Event of Default referred to in subsection (c) above pertains to the Company's failure to deliver unlegended shares of Common Stock to the Holder pursuant to a Warrant Exercise, legend removal request, the Company may not refuse such unlegended share delivery based on any claim that such Holder or any one associated or affiliated with such Holder has been engaged in any violation of law, unless an injunction from a court, on prior notice to Holder, restraining and or enjoining Exercise of all or part of said Warrant shall have been sought and obtained by the Company and the Company has posted a Surety Bond for the benefit of such Holder in the amount of the Bond Amount (as described above), which Surety Bond shall remain in effect until the completion of litigation of the dispute and the proceeds of which shall be payable to such Holder to the extent Holder obtains judgment.  

12.Holder's Redemptions.  

(a)  Mechanics of Holder's Redemptions.  In the event that the Holder has sent a Major Transaction Redemption Notice to the Company pursuant to Section 10(d) or a Default Notice pursuant to Section 11(b)(i), respectively (each, a "Redemption Notice"), the Holder shall promptly submit this Warrant to the Company (if delivery of the original Warrant is required pursuant to Section 2(j). In the event of a redemption of less than all of the outstanding portion of this Warrant, the Company shall promptly cause to be issued and delivered to the Holder a new Warrant representing the outstanding number of underlying Warrant Shares which have not been redeemed.  In the event that the Company does not pay the applicable Redemption Price to the Holder within the time period required, at any time thereafter and until the Company pays such unpaid Redemption Price in full, the Holder shall have the option, in lieu of redemption, to require the Company to promptly return to the Holder all or any portion of this Warrant that was submitted for redemption and for which the applicable Major Transaction Redemption Price (together with any late charges thereon) has not been paid.  Upon the Company's receipt of such notice, (x) the applicable Redemption Notice shall be null and void with respect to such Redemption Share Amount, and (y) the Company shall immediately return this Warrant, or issue a new Warrant to the Holder representing the portion of this Warrant that was submitted for redemption The Holder's delivery of a notice voiding a Redemption Notice and exercise of its rights following such notice shall not affect the Company's obligations to make any payments of Failure Payments which have accrued prior to the date of such notice with respect to the Warrant subject to such notice.

(b) Warrants Detachable.  The Warrants constitute a separate, detachable security from the Debentures.   In the event of any redemption of the Debentures, in whole or in part, by the Company, the Holder shall retain any of its Warrants that have not been exercised or redeemed in accordance with their terms and in the event of any redemption of the Warrants, in whole or in part, by the Company, the Holder shall retain any of its Warrants that have not been exercised or redeemed in accordance with their terms.

14. Remedies, Other Obligations, Breaches And Injunctive Relief.  

The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder right to pursue actual damages for any failure by the Company to comply with the terms of this Warrant.  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.  The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.

15.Benefits of this Warrant.

Nothing in this Warrant shall be construed to confer upon any person other than the Company and Holder any legal or equitable right, remedy or claim under this Warrant and this Warrant shall be for the sole and exclusive benefit of the Company and Holder.

16.Governing Law.   

All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.  The parties hereby waive all rights to a trial by jury.  If either party shall commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorneys' fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. 

17.Loss of Warrant.

Upon receipt by the Company of evidence of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) of indemnity or security reasonably satisfactory to the Company, and upon surrender and cancellation of this Warrant, if mutilated, the Company shall execute and deliver a new Warrant of like tenor and date.

18.Amendment.  

This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

19.Notice or Demands.

Notices or demands pursuant to this Warrant to be given or made by Holder to or on the Company shall be sufficiently given or made if sent by certified or registered mail, return receipt requested, postage prepaid, and addressed, until another address is designated in writing by the Company, to the address set forth in Section 2(a) above. Notices or demands pursuant to this Warrant to be given or made by the Company to or on Holder shall be sufficiently given or made if sent by certified or registered mail, return receipt requested, postage prepaid, and addressed, to the address of Holder set forth in the Company's records, until another address is designated in writing by Holder.

20.    Warrant Holder Not a Stockholder. 

The Holder of this Warrant, as such, shall not be entitled by reason of this Warrant to any rights whatsoever as a stockholder of the Company, including but not limited to voting rights.

 

IN WITNESS WHEREOF, the undersigned has executed this Warrant as of the ____ day of November, 2007.

Universal Energy Corp.

 
By:  ________________________

Print Name: _Dyron M. Watford__

Title: __CFO__________________

 

 

 

 

EXHIBIT A

NOTICE OF EXERCISE FORM FOR WARRANT

TO:  UNIVERSAL ENERGY CORP.

The undersigned hereby irrevocably Exercises the right to purchase ____________ of the shares of Common Stock (the "Common Stock") of UNIVERSAL ENERGY CORP., a Delaware corporation (the "Company"), evidenced by the attached warrant (the "Warrant"), and herewith makes payment of the Exercise price with respect to such shares in full, all in accordance with the conditions and provisions of said Warrant.

1. The undersigned agrees not to offer, sell, transfer or otherwise dispose of any of the Common Stock obtained on Exercise of the Warrant, except in accordance with the provisions of Section 8(a) of the Warrant.

2.  The undersigned requests that stock certificates for such shares be issued free of any restrictive legend, if appropriate, and a warrant representing any unexercised portion hereof be issued, pursuant to the Warrant in the name of the undersigned and delivered to the undersigned at the address set forth below:

Dated:________

________________________________________________________________________

Signature

 

_______________________________________________________________________

Print Name

 

________________________________________________________________________

Address

_______________________________________________________________________

NOTICE

The signature to the foregoing Notice of Exercise Form must correspond to the name as written upon the face of the attached Warrant in every particular, without alteration or enlargement or any change whatsoever.

________________________________________________________________________

 

EXHIBIT B

ASSIGNMENT

(To be executed by the registered holder

desiring to transfer the Warrant)

FOR VALUE RECEIVED, the undersigned holder of the attached warrant (the "Warrant") hereby sells, assigns and transfers unto the person or persons below named the right to purchase _______ shares of the Common Stock of UNIVERSAL ENERGY CORP., a Delaware corporation, evidenced by the attached Warrant and does hereby irrevocably constitute and appoint _______________________ attorney to transfer the said Warrant on the books of the Company, with full power of substitution in the premises.

Dated:_______________________________________

Signature

 

Fill in for new registration of Warrant:

 ___________________________________

Name

___________________________________

Address

___________________________________

Please print name and address of assignee

(including zip code number)

_______________________________________________________________________

NOTICE

The signature to the foregoing Assignment must correspond to the name as written upon the face of the attached Warrant in every particular, without alteration or enlargement or any change whatsoever.

________________________________________________________________________

 

SCHEDULE 5(g)

MILESTONES

 

 

	
Milestone Date
	
Milestone Goals

	
 

 

March 31, 2008
	
$1,750,000 in revenues, from any combination of the oil and gas prospects listed in the Company's Form 10-Q for the period ending June 30, 2007 and from Lone Oak, for the two fiscal quarter period ending on March 31, 2008.EX10-11

                                                                   Exhibit 10.11

                                 RAJESH VAISHNAV

                          EXECUTIVE SERVICES AGREEMENT

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

                                 AMONG EACH OF:

                             MIV THERAPEUTICS, INC.

                                      AND:

                          BIOSYNC SCIENTIFIC PVT. INC.

                                      AND:

                                 RAJESH VAISHNAV

                             MIV THERAPEUTICS, INC.

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

       #1 - 8765 Ash Street, Vancouver, British Columbia, Canada, V6P 6T3

                                   ----------

                  RAJESH VAISHNAV EXECUTIVE SERVICES AGREEMENT

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

         THIS EXECUTIVE SERVICES AGREEMENT is made and dated for reference

effective as at __________ __, 2007 (the "EFFECTIVE DATE") as fully executed on

this _____ day of __________, 2007.

AMONG EACH OF:

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

         MIV THERAPEUTICS, INC., having a business office and an address for

         notice and delivery located at #1 - 8765 Ash Street, Vancouver, British

         Columbia, Canada, V6P 6T3

         (the "COMPANY");

                                                               OF THE FIRST PART

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

AND:

----

         BIOSYNC SCIENTIFIC PVT. LTD., having a business office and an address

         for notice and delivery located at 136B Surat Special Economic Zone,

         G.I.D.C., Sachin-394 230, Gujarat, India

         ("BIOSYNC");

                                                              OF THE SECOND PART

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

         (the Company and BioSync being hereinafter collectively also referred

         to as the "COMPANIES" as the context so requires);

AND:

----

         RAJESH VAISHNAV, having an address for notice and delivery located at

         136 Surat Special Economic Zone, G.I.D.C., Sachin-394 230, Gujarat,

         India

         (the "EXECUTIVE");

                                                               OF THE THIRD PART

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

         (the Company, BioSync and the Executive being hereinafter singularly

         also referred to as a "PARTY" and collectively referred to as the

         "PARTIES" as the context so requires).

         WHEREAS:

         --------

A. The Company is a reporting company incorporated under the laws of the State

of Nevada, U.S.A., and has its common shares listed for trading on the NASDAQ

Over-The-Counter Bulletin Board;

B. BioSync is a non-reporting company incorporated under the laws of India and,

in accordance with the recent closing of the terms and conditions of that

certain "Agreement In Principle", as amended (the "UNDERLYING AGREEMENT"), as

entered into among the Parties hereto, the Executive sold and the Company

purchased all of the issued and outstanding shares of BioSync; making BioSync a

wholly-owned subsidiary of the Company;

                                       1

C. The Executive, individually and through his ongoing association with BioSync,

specializes in the design and manufacturing of coated and non-coated vascular

stents and various PTCA accessories;

D. In conjunction with the recent completion by the Company of its acquisition

of BioSync, BioSync is now involved in the principal business of the Company;

which is the design, manufacture and development of a new generation of

implantable medical devices that will utilize the Company's advanced

biocompatible stent coating and drug-delivery technologies (collectively, the

"BUSINESS"); and, as a consequence thereof, and as contemplated by the terms and

conditions of the Underlying Agreement, the Companies are hereby desirous of

retaining the Executive as the President and Chief Operating Officer of BioSync,

and the Executive is hereby desirous of accepting such positions, in order to

provide such related services to BioSync (collectively, the "GENERAL SERVICES");

E. Since the introduction of the Parties hereto the Parties hereby acknowledge

and agree that there have been various discussions, negotiations, understandings

and agreements between them relating to the terms and conditions of the General

Services and, correspondingly, that it is their intention by the terms and

conditions of this agreement (the "AGREEMENT") to hereby replace, in their

entirety, all such prior discussions, negotiations, understandings and

agreements with respect to the General Services; and

F. The Parties hereto have agreed to enter into this Agreement which replaces,

in its entirety, all such prior discussions, negotiations, understandings and

agreements, and, furthermore, which necessarily clarifies their respective

duties and obligations with respect to the within General Services to be

provided hereunder, all in accordance with the terms and conditions of this

Agreement;

         NOW THEREFORE THIS AGREEMENT WITNESSETH that, in consideration of the

mutual covenants and provisos herein CONTAINED, THE PARTIES HERETO AGREE AS

FOLLOWS:

                                    ARTICLE 1

                         DEFINITIONS AND INTERPRETATION

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

1.1 DEFINITIONS. For all purposes of this Agreement, except as otherwise

expressly provided or unless the context otherwise requires, the following words

and phrases shall have the following meanings:

         (a)      "AGREEMENT" means this Executive Services Agreement as from

                  time to time supplemented or amended by one or more agreements

                  entered into pursuant to the applicable provisions hereof,

                  together with any Schedules attached hereto;

         (b)      "ARBITRATION ACT" means the British Columbia COMMERCIAL

                  ARBITRATION ACT, as amended from time to time, as set forth in

                  Article "8" hereinbelow;

         (c)      "BIOSYNC" means BioSync Scientific Ptv. Ltd., a company

                  incorporated under the laws of India, or any successor

                  company, however formed, whether as a result of merger,

                  amalgamation or other action;

                                       2

         (d)      "BOARD OF DIRECTORS" means the Board of Directors of each or

                  either of the Companies as duly constituted from time to time;

         (e)      "BONUS" has the meaning ascribed to it in section "4.5"

                  hereinbelow;

         (f)      "BONUS SHARES" has the meaning ascribed to it in section "4.4"

                  hereinbelow;

         (g)      "BUSINESS" has the meaning ascribed to it in recital "D."

                  hereinabove.

         (h)      "BUSINESS DAY" means any day during which Chartered Banks are

                  open for business in the City of Vancouver, Province of

                  British Columbia, Canada;

         (i)      "CAR ALLOWANCE" has the meaning ascribed to it in section

                  "4.7" hereinbelow;

         (j)      "COMPANIES" means the Company and BioSync;

         (k)      "COMPANY" means MIV Therapeutics, Inc., a company incorporated

                  under the laws of the State of Nevada, U.S.A., or any

                  successor company, however formed, whether as a result of

                  merger, amalgamation or other action;

         (l)      "COMPANY'S NON-RENEWAL NOTICE" has the meaning ascribed to it

                  in section "3.2" hereinbelow;

         (m)      "DATE OF GRANT" has the meaning ascribed to it in section

                  "4.9" hereinbelow;

         (n)      "EFFECTIVE DATE" has the meaning ascribed to it on the front

                  page of this Agreement;

         (o)      "EFFECTIVE TERMINATION DATE" has the meaning ascribed to it in

                  each of sections "3.3", "3.4", "3.5", "3.6" and "5.6"

                  hereinbelow;

         (p)      "EXECUTIVE" means Rajesh Vaishnav;

         (q)      "EXPENSES" has the meaning ascribed to it in section "4.6"

                  hereinbelow;

         (r)      "FEE" has the meaning ascribed to it in section "4.1"

                  hereinbelow;

         (s)      "GENERAL SERVICES" has the meaning ascribed to it in section

                  "2.1" hereinbelow;

         (t)      "INDEMNIFIED PARTY" has the meaning ascribed to it in section

                  "6.1" hereinbelow;

         (u)      "INITIAL TERM" has the meaning ascribed to it in section "3.1"

                  hereinbelow;

         (v)      "INSURANCE" has the meaning ascribed to it in section "5.8"

                  hereinbelow;

         (w)      "NOTICE OF TERMINATION" has the meaning ascribed to it in each

                  of sections "3.3", "3.4", "3.5", "3.6" and "5.6" hereinbelow;

         (x)      "OPTION" has the meaning ascribed to it in section "4.9"

                  hereinbelow;

         (y)      "OPTION PLAN" has the meaning ascribed to it in section "4.9"

                  hereinbelow;

         (z)      "OPTION SHARES" has the meaning ascribed to it in section

                  "4.9" hereinbelow;

                                       3

         (aa)     "OTCBB" means the NASDAQ Over-The-Counter Bulletin Board;

         (ab)     "PARTIES" or "PARTY" means, individually and collectively, the

                  Company, BioSync and/or the Executive hereto, as the context

                  so requires, together with each of their respective successors

                  and permitted assigns as the context so requires;

         (ac)     "PROPERTY" has the meaning ascribed to it in section "5.7"

                  hereinbelow;

         (ad)     "REGULATORY APPROVAL" means the acceptance for filing, if

                  required, of the transactions contemplated by this Agreement

                  by the Regulatory Authorities;

         (ae)     "REGULATORY AUTHORITIES" and "REGULATORY AUTHORITY" means,

                  either singularly or collectively as the context so requires,

                  such regulatory agencies who have jurisdiction over the

                  affairs of either of the Company, MIV and/or the Executive and

                  including, without limitation, and where applicable, the

                  United States Securities and Exchange Commission, the NASD,

                  the OTCBB and all regulatory authorities from whom any such

                  authorization, approval or other action is required to be

                  obtained or to be made in connection with the transactions

                  contemplated by this Agreement;

         (af)     "RENEWAL TERM" has the meaning ascribed to it in section "3.2"

                  hereinbelow;

         (ag)     "SECURITIES ACT", "EXCHANGE ACT", "SEC", "FORM S-8

                  REGISTRATION STATEMENT" and "REGISTRATION STATEMENT" have the

                  meanings ascribed to them in sections "4.4" and "4.10"

                  hereinbelow;

         (ah)     "SUBSIDIARY" means any company or companies of which more than

                  50% of the outstanding shares carrying votes at all times

                  (provided that the ownership of such shares confers the right

                  at all times to elect at least a majority of the directors of

                  such company or companies) are for the time being owned by or

                  held for that company and/or any other company in like

                  relation to that company and includes any company in like

                  relation to the subsidiary;

         (ai)     "UNDERLYING AGREEMENT" has the meaning ascribed to it in

                  recital "B." hereinabove; and

         (aj)     "VACATION" has the meaning ascribed to it in section "4.8"

                  hereinbelow.

1.2 INTERPRETATION. For the purposes of this Agreement, except as otherwise

expressly provided or unless the context otherwise requires:

         (a)      the words "HEREIN", "HEREOF" and "HEREUNDER" and other words

                  of similar import refer to this Agreement as a whole and not

                  to any particular Article, section or other subdivision of

                  this Agreement;

         (b)      any reference to an entity shall include and shall be deemed

                  to be a reference to any entity that is a permitted successor

                  to such entity; and

         (c)      words in the singular include the plural and words in the

                  masculine gender include the feminine and neuter genders, and

                  VICE VERSA.

                                       4

                                    ARTICLE 2

                  GENERAL SERVICES AND DUTIES OF THE EXECUTIVE

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

2.1 GENERAL SERVICES. During the Initial Term (as hereinafter determined) and

during the continuance of this Agreement the Companies hereby agree to retain

the Executive as the President and Chief Operating Officer of BioSync, and the

Executive hereby agrees to be subject to the direction and supervision of, and

to have the authority as is delegated to the Executive by, the Board of

Directors of the Company consistent with such positions, and the Executive also

agrees to accept such positions in order to provide such related services as the

Board of Directors of the Company shall, from time to time, reasonably assign to

the Executive and as may be necessary for the ongoing maintenance and

development of the Companies' various Business interests during the Initial Term

and during the continuance of this Agreement (collectively, the "GENERAL

SERVICES"); it being initially acknowledged and agreed by each of the Parties

hereto that the Executive shall commit and provide to BioSync the General

Services on a reasonably full-time basis during the Initial Term and during

continuance of this Agreement for which the Company, as more particularly set

forth hereinbelow, hereby agrees to provide to the order and direction of the

Executive each of the proposed compensation amounts as set forth in Article "4"

hereinbelow.

2.2 ADDITIONAL DUTIES RESPECTING THE GENERAL SERVICES. Without in any manner

limiting the generality of the General Services to be provided as set forth in

section "2.1" hereinabove, it is hereby also acknowledged and agreed that

Executive will, during the Initial Term (as hereinafter determined) and during

the continuance of this Agreement, devote substantially all of the Executive's

employment time to the General Services of the Executive as may be determined

and required by the Board of Directors of the Company for the performance of

said General Services faithfully, diligently, to the best of the Executive's

abilities and in the best interests of the Companies and, furthermore, that the

Executive's employment time will be prioritized at all times for BioSync in that

regard.

2.3 ADHERENCE TO RULES AND POLICIES OF THE COMPANIES. The Executive hereby

acknowledges and agrees to abide by the reasonable rules, regulations,

instructions, personnel practices and policies of the Companies and any changes

therein which may be adopted from time to time by the same as such rules,

regulations, instructions, personnel practices and policies may be reasonably

applied to the Executive as the President and Chief Operating Officer of

BioSync.

                                    ARTICLE 3

              EFFECTIVENESS, INITIAL TERM, RENEWAL AND TERMINATION

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

3.1 EFFECTIVENESS AND INITIAL TERM OF THE AGREEMENT. This Agreement becomes

effective on the Effective Date hereinabove, however, is subject, at all times,

to the Company's prior receipt, if required, of Regulatory Approval from each of

the Regulatory Authorities to the terms and conditions of and the transactions

contemplated by this Agreement. The initial term of this Agreement (the "INITIAL

TERM") is for a period of two years commencing on the Effective Date hereof.

3.2 RENEWAL BY THE COMPANY AFTER THE INITIAL TERM. Subject at all times to

sections "3.3", "3.4", "3.5", "3.6" and "5.6" hereinbelow, this Agreement shall

renew automatically if not specifically terminated in accordance with the

following provisions. The Company, on behalf of the Companies, agrees to notify

the Executive in writing at least 90 calendar days prior to the end of the

Initial Term of its intent not to renew this Agreement (the "COMPANY'S

NON-RENEWAL NOTICE"). Should the Company fail to provide a Company's Non-Renewal

Notice this Agreement shall automatically renew on a three-month-to-three-month

                                       5

term renewal basis after the Initial Term until otherwise specifically renewed

in writing by each of the Parties hereto for the next three-month term of

renewal or, otherwise, terminated upon delivery by the Company of a

corresponding and follow-up 90 calendar day Company's Non-Renewal Notice in

connection with and within 90 calendar days prior to the end of any such

three-month term renewal period (each such period of time after the Initial Term

being a "RENEWAL TERM" herein). Any such Renewal Term on a three-month basis

shall be on the same terms and conditions contained herein unless modified and

agreed to in writing by the Parties in advance.

3.3 TERMINATION WITHOUT CAUSE BY THE EXECUTIVE. Notwithstanding any other

provision of this Agreement, this Agreement may be terminated by the Executive

at any time after the Effective Date and during the continuance of this

Agreement upon the Executive's delivery to the other Parties hereto of prior

written notice of its intention to do so (the "NOTICE OF TERMINATION" herein) at

least 90 calendar days prior to the effective date of any such termination (the

end of such 90-day period from such Notice of Termination being the "EFFECTIVE

TERMINATION DATE" herein). In any such event the Executive's ongoing obligation

to provide the General Services will continue until the Effective Termination

Date and the Companies' ongoing obligation to provide and to pay to the

Executive all of the amounts otherwise payable to the Executive under Article

"4" hereinbelow will continue until the Effective Termination Date.

3.4 TERMINATION WITHOUT CAUSE BY THE COMPANY. Notwithstanding any other

provision of this Agreement, this Agreement may be terminated by the Companies

at any time after the Effective Date and during the continuance of this

Agreement upon the Company's delivery to the Executive of prior written notice

of its intention to do so (the "NOTICE OF TERMINATION" herein) at least 90

calendar days prior to the effective date of any such termination (the end of

such 90-day period from such Notice of Termination being the "EFFECTIVE

TERMINATION DATE" herein). In any such event the Executive's ongoing obligation

to provide the General Services will immediately cease upon the date of the

Notice of Termination, however, the Companies shall continue to be obligated to

provide and to pay to the Executive all of the amounts otherwise payable to the

Executive under Article "4" hereinbelow until the end of, as then applicable,

the Initial Term or any Renewal Term of this Agreement.

3.5 TERMINATION FOR CAUSE BY ANY PARTY. Notwithstanding any other provision of

this Agreement, this Agreement may be terminated by any of the Parties hereto at

any time upon written notice to the other Parties of such Party's intention to

do so (the "NOTICE OF TERMINATION" herein) at least 30 calendar days prior to

the effective date of any such termination (the end of such 30-day period from

such Notice of Termination being the "EFFECTIVE TERMINATION DATE" herein), and

damages sought, if:

         (a)      any of the other Parties fails to cure a material breach of

                  any provision of this Agreement within 21 calendar days from

                  its receipt of written notice from said Party (unless such

                  material breach cannot be reasonably cured within said 21

                  calendar days and the other Party is actively pursuing to cure

                  said material breach);

         (b)      any of the other Parties is willfully non-compliant in the

                  performance of its respective duties under this Agreement

                  within 21 calendar days from its receipt of written notice

                  from said Party (unless such willful non-compliance cannot be

                  reasonably corrected within said 21 calendar days and the

                  other Party is actively pursuing to cure said willful

                  non-compliance);

         (c)      any of the other Parties commits fraud or serious neglect or

                  misconduct in the discharge of its respective duties hereunder

                  or under the law; or

                                       6

         (d)      any of the other Parties becomes adjudged bankrupt or a

                  petition for reorganization or arrangement under any law

                  relating to bankruptcy, and where any such involuntary

                  petition is not dismissed within five calendar days.

         In any such event the Executive's ongoing obligation to provide the

General Services will continue only until the Effective Termination Date and the

Company shall continue to pay to the Executive all of the amounts otherwise

payable to the Executive under Article "4" hereinbelow until the Effective

Termination Date.

3.6 DISABILITY OR DEATH. Notwithstanding any other provision of this Agreement,

this Agreement may be terminated at any time by any Party within 30 calendar

days after the death or disability of the Executive, as a without fault

termination (the resulting effective date of any such termination being herein

also the "EFFECTIVE TERMINATION DATE"). For the purposes of this Agreement the

term "DISABILITY" shall mean the Executive shall have been unable to provide the

General Services contemplated under this Agreement for a period of 90 calendar

days, whether or not consecutive, during any 360 calendar day period, due to a

physical or mental disability. A determination of disability shall be made by a

physician satisfactory to both the Executive and the Company; provided that if

the Executive and the Company do not agree on a physician, the Executive and the

Company shall each select a physician and these two together shall select a

third physician whose determination as to disability shall be binding on all

Parties. In the event that the Executive's employment is terminated by death or

because of disability pursuant to this Agreement, the Company shall pay to the

estate of the Executive or to the Executive, as the case may be, all amounts to

which the Executive would otherwise be entitled under Article "4" hereinbelow

until the Effective Termination Date.

3.7 EFFECT OF TERMINATION. Terms of this Agreement relating to accounting,

payments, confidentiality, accountability for damages or claims and all other

matters reasonably extending beyond the terms of this Agreement and to the

benefit of the Parties hereto or for the protection of the Business interests of

the Companies shall survive the termination of this Agreement, and any matter of

interpretation thereto shall be given a wide latitude in this regard. In

addition, and without limiting the foregoing, each of sections "3.2", "3.3",

"3.4", "3.5", "3.6" and "5.6" hereunder shall survive the termination of this

Agreement.

                                    ARTICLE 4

                          COMPENSATION OF THE EXECUTIVE

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

4.1 FEE. It is hereby acknowledged and agreed that the Executive shall render

the General Services as defined hereinabove during the Initial Term and during

the continuance of this Agreement and shall thus be compensated from the

Effective Date of this Agreement to the termination of the same by way of the

payment by BioSync to the Executive, or to the further order or direction of the

Executive as the Executive may determine, in the Executive's sole and absolute

discretion, and advise BioSync of prior to such payment, of the gross monthly

fee of U.S. $12,000.00 (the "FEE"). All such Fees will be due and payable by

BioSync to the Executive, or to the further order or direction of the Executive

as the Executive may determine, in the Executive's sole and absolute discretion,

and advise BioSync of prior to any such Fee payment, bi-monthly and on or about

the fifteenth and thirtieth day of each month of the then monthly period of

service during the continuance of this Agreement.

4.2 PAYMENT OF FEE AND STATUS AS AN EMPLOYEE. It is hereby also acknowledged and

agreed that the Executive will be classified as a taxable employee of the

Companies for all purposes, such that all compensation which is provided by the

Companies to the Executive under this Agreement, or otherwise, will be

calculated on the foregoing and gross basis, however, will then actually be

distributed to the Executive by the Companies on a net basis; that being net of

all applicable statutory taxes which will first be deducted by the Companies and

                                       7

remitted to the applicable taxing authority before any such compensation will

actually be paid by the Companies to the Executive hereunder on such net basis.

In this regard, and for all matters relating to this Agreement, the Executive

will be an employee of BioSync under the meaning or application of all

applicable federal and state unemployment, insurance and workers' compensation

laws, and otherwise.

4.3 INCREASE IN THE FEE. It is hereby acknowledged that the proposed Fee

payments under this Agreement were negotiated as between the Parties hereto in

the context of the stage of development of BioSync existing as at the Effective

Date of this Agreement as represented by the closing of the Underlying

Agreement. Correspondingly, it is hereby acknowledged and agreed that the Fee

shall be reviewed and renegotiated at the request of either Party on a

reasonably consistent basis during the continuance of this Agreement and, in the

event that the Parties cannot agree, then the Fee shall be increased on an

annual basis by the greater of (i) 10% and (ii) the percentage which is the

average percentage of all increases to management salaries and fees within the

Companies during the previous 12-month period. Any dispute respecting either the

effectiveness or magnitude of the final Fee hereunder shall be determined by

arbitration in accordance with Article "8" hereinbelow.

4.4 BONUS SHARES. It is hereby also acknowledged and agreed that, as the

proposed compensation under this Agreement was negotiated as between the Parties

hereto in the context of the early stage of development of BioSync and,

correspondingly, was intended to recognize and ensure the ongoing commitment of

the Executive and management of BioSync to further the development of BioSync's

ongoing business interests in line with the Company's ongoing and various

Business interests as contemplated by the terms and conditions of the Underlying

Agreement, as a further inducement to the Executive to enter into and consummate

this Agreement, the Executive will issue to the Executive, or to the further

order or direction of the Executive as the Executive may determine, in the

Executive's sole and absolute discretion, and advise the Company of prior to

such issuance, up to an aggregate of 4,000,000 common shares from the treasury

of the Company (each a "BONUS SHARE"), at a deemed issuance price of U.S. $0.50

per Bonus Share, in the following manner:

         (a)      an initial 750,000 of the Bonus Shares within five calendar

                  days of the date upon which BioSync receives a CE Mark for its

                  present bare-metal stent;

         (b)      an additional 750,000 of the Bonus Shares within five calendar

                  days of the date which is the earlier of:

                  (i)      the date upon which BioSync first launches the sale

                           of a Hap stent in India;

                  (ii)     the date upon which BioSync first launches the sale

                           of a drug-eluting stent in India; or

                  (iii)    the date upon which BioSync first reaches U.S.

                           $3,000,000 in gross product sales during any fiscal

                           year after the Effective Date of this Agreement;

         (c)      an additional 1,000,000 of the Bonus Shares within five

                  calendar days of the date upon which BioSync first reaches

                  U.S. $6,000,000 in gross product sales during any fiscal year

                  after the Effective Date of this Agreement; and

         (d)      the balance of 1,500,000 of the Bonus Shares in the following

                  manner:

                                       8

 

                  (i)      an initial 375,000 of such Bonus Shares within five

                           calendar days of the end of the first six months from

                           the Effective Date during the Initial Term of this

                           Agreement;

                  (ii)     a further 375,000 of such Bonus Shares within five

                           calendar days of the end of the first year from the

                           Effective Date during the Initial Term of this

                           Agreement;

                  (iii)    a further 375,000 of such Bonus Shares within five

                           calendar days of the end of the first 18 months from

                           the Effective Date during the Initial Term of this

                           Agreement; and

                  (iv)     a final 375,000 of such Bonus Shares within five

                           calendar days of the end the Initial Term of this

                           Agreement.

         RESPECTING THE SIGNING BONUS UNRESTRICTED SHARES: In this regard the

Parties hereby also acknowledge and agree that the Company shall use its

reasonable commercial efforts to file with the SEC a Form S-8 Registration

Statement within 21 calendar days after the Execution Date hereof covering the

issuance of all Signing Bonus Unrestricted Shares hereunder and pursuant to the

Company's existing Stock Incentive Plan; with such Form S-8 Registration

Statement necessarily complying with all requirements of the United States

SECURITIES ACT of 1933 (the "SECURITIES ACT"). In this regard the Company

confirms that it will use its reasonable commercial efforts to ensure that the

Form S-8 Registration Statement remains effective for a period of at least one

year from the issuance date of the Signing Bonus Unrestricted Shares hereunder,

and the Consultant fully understands and acknowledges that the Signing Bonus

Unrestricted Shares will be issued in reliance upon the exemption afforded under

the Form S-8 Registration Statement which is available only if the Consultant

acquires such Signing Bonus Unrestricted Shares for investment and not with a

view to distribution. The Consultant is familiar with the phrase "acquired for

investment and not with a view to distribution" as it relates to the Securities

Act and the special meaning given to such term in various releases of the SEC.

In addition, the Company shall use its reasonable commercial efforts to ensure

that the issuance of the Signing Bonus Unrestricted Shares is made to ensure

compliance with all applicable provisions of the exemption afforded under Rule

16b-3 promulgated under the SECURITIES AND EXCHANGE ACT OF 1934, as amended (the

"EXCHANGE ACT"). Without limiting the foregoing, the Company shall have an

independent committee of the Board of Directors approve the issuance of the

Signing Bonus Unrestricted Shares to the Consultant and, if required, by the

applicable Regulatory Authorities and the shareholders of the Company. The

Company shall file, on behalf of the Consultant, all reports required to filed

with the SEC pursuant to the requirements of Section 16(a) under the Exchange

Act and applicable rules and regulations. In this regard the Consultant further

acknowledges and understands that, without in anyway limiting the

acknowledgements and understandings as set forth hereinabove, the Consultant

agrees that the Consultant shall in no event make any disposition of all or any

portion of the Signing Bonus Unrestricted Shares unless and until: (i) there is

then in effect a "REGISTRATION STATEMENT" (like the Form S-8 Registration

Statement) under the Securities Act covering such proposed disposition and such

disposition is made in accordance with said Registration Statement; and (ii) (A)

the Consultant shall have notified the Company of the proposed disposition and

shall have furnished the Company with a detailed statement of the circumstances

surrounding the proposed disposition, (B) the Consultant shall have furnished

the Company with an opinion of the Consultant's own counsel to the effect that

such disposition will not require registration of any such Signing Bonus

Unrestricted Shares under the Securities Act and (C) such opinion of the

Consultant's counsel shall have been concurred in by counsel for the Company and

the Company shall have advised the Consultant of such concurrence.

                                       9

 

         In this regard the Parties hereby also acknowledge and agree that the

Company makes no representations as to any resale or other restriction affecting

the Bonus Shares and that it is presently contemplated that the Bonus Shares

will be issued by the Company to the Executive in reliance upon the registration

and prospectus exemptions contained in certain sections of the United States

SECURITIES ACT of 1933 (the "SECURITIES ACT") or "REGULATION S" promulgated

under the Securities Act which will impose a trading restriction in the United

States on the Bonus Shares for a period of up to 24 months from the date of

issuance. In addition, the Executive hereby also acknowledges and agrees that

the within obligation of the Company to issue the Bonus Shares will be subject

to the Company being satisfied that an exemption from applicable registration

and prospectus requirements is available under the Securities Act and all

applicable securities laws, in respect of each of the Executive and the Bonus

Shares, and the Company shall be relieved of any obligation whatsoever to issue

any Bonus Shares in respect of the Executive where the Company reasonably

determines that a suitable exemption is not available to it. The Executive

hereby also acknowledges and understands that neither the sale of the Bonus

Shares which the Executive is acquiring nor any of the Bonus Shares themselves

have been registered under the Securities Act or any state securities laws, and,

furthermore, that the Bonus Shares must be held indefinitely unless subsequently

registered under the Securities Act or an exemption from such registration is

available. The Executive also acknowledges and understands that the

certificate(s) representing the Bonus Shares will be stamped with the following

legend (or substantially equivalent language) restricting transfer in the

following manner if such restriction is required by the Regulatory Authorities:

         "The transfer of the securities represented by this certificate is

         prohibited except in accordance with the provisions of Regulation S

         promulgated under the United States Securities Act of 1933, as amended

         (the "Act"), pursuant to registration under the Act or pursuant to an

         available exemption from registration. In addition, hedging

         transactions involving such securities may not be conducted unless in

         compliance with the Act.";

and the Executive hereby consents to the Company making a notation on its

records or giving instructions to any transfer agent of the Company in order to

implement the restrictions on transfer set forth and described hereinabove. The

Executive also acknowledges and understands that: (i) the Bonus Shares are

restricted securities within the meaning of "RULE 144" promulgated under the

Securities Act; (ii) the exemption from registration under Rule 144 will not be

available in any event for at least one year from the date of issuance of the

Bonus Shares to the Executive, and even then will not be available unless (A) a

public trading market then exists for the common stock of the Company, (B)

adequate information concerning the Company is then available to the public and

(C) other terms and conditions of Rule 144 are complied with; and (iii) any sale

of the Bonus Shares may be made by the Executive only in limited amounts in

accordance with such terms and conditions.

4.5 BONUS PAYMENTS. It is hereby further acknowledged and agreed that the Board

of Directors of the Company shall, in good faith, consider the payment of

reasonable industry standard annual bonuses (each being a "BONUS") based upon

the performance of the Companies and upon the achievement by the Executive

and/or the Companies of reasonable management objectives to be reasonably

established by the Board of Directors of the Company (after reviewing proposals

with respect thereto defined by the Executive in the Executive's capacity as the

President and Chief Operating Officer of BioSync, and delivered to the Board of

Directors of the Company by the Executive at least 30 calendar days before the

beginning of the relevant year of the Company (or within 90 calendar days

following the commencement of the Company's first calendar year commencing on

the Effective Date)). These management objectives shall consist of both

financial and subjective goals and shall be specified in writing by the Board of

Directors of the Company, and a copy shall be given to the Executive prior to

the commencement of the applicable year. The payment of any such Bonus shall be

payable no later than within 120 calendar days of the ensuing year after any

calendar year commencing on the Effective Date. Any dispute respecting either

the effectiveness or the magnitude of any Bonus hereunder shall be determined by

arbitration in accordance with Article "8" hereinbelow.

                                       10

 

4.6 REIMBURSEMENT OF EXPENSES. It is hereby acknowledged and agreed that the

Executive shall also be reimbursed for all direct, reasonable expenses actually

and properly incurred by the Executive for the benefit of the Companies

(collectively, the "EXPENSES"); and which Expenses, it is hereby acknowledged

and agreed, shall be payable by BioSync to the order, direction and account of

the Executive as the Executive may designate in writing, from time to time, in

the Executive's sole and absolute discretion, as soon as conveniently possible

after the prior delivery by the Executive to the Company of written

substantiation on account of each such reimbursable Expense.

4.7 CAR ALLOWANCE. It is hereby also acknowledged and agreed that, during the

continuance of this Agreement, the Executive shall be entitled to a monthly car

allowance in the amount of U.S. $500.00 (the "CAR ALLOWANCE") payable each month

in advance; with the further acknowledgement that, in the event that this

Agreement is terminated in accordance with either of sections "3.2", "3.3",

"3.4", "3.5", "3.6" or "5.6" hereunder, the Car Allowance shall be maintained by

the Company for a period of not more than one month following any such Effective

Termination Date.

4.8 PAID VACATION. It is hereby also acknowledged and agreed that, during the

continuance of this Agreement, the Executive shall also be entitled to three

weeks paid vacation (collectively, the "VACATION") during each and every year

during the continuance of this Agreement. In this regard it is further

understood hereby that the Executive's entitlement to any such paid Vacation

during any year (including the initial year) during the continuance of this

Agreement will be subject, at all times, to the Executive's entitlement to only

a pro rata portion of any such paid Vacation time during any year (including the

initial year) and to the effective date upon which this Agreement is terminated

prior to the end of any such year for any reason whatsoever.

4.9 OPTIONS. Subject to the following and the provisions of section "4.9"

hereinbelow, and as soon as reasonably practicable after the Effective Date

hereof (in such instance being the "DATE OF GRANT"), it is hereby acknowledged

and agreed that the Executive will be granted, subject to the rules and policies

of the Regulatory Authorities and applicable securities legislation, the terms

and conditions of the Company's existing stock option plan (the "OPTION PLAN")

and the final determination of the Board of Directors of the Company, acting

reasonably, the following incentive stock option or options (each an "OPTION")

for the purchase of up to an aggregate of 1,000,000 common shares of the Company

(each an "OPTION SHARE"); exercisable for a period of not less than ten years

from the Date of Grant and at an exercise price of U.S. $0.60 per Option Share;

in the following manner:

         (a)      an initial and fully vested Option to acquire up to 250,000

                  Option Shares commencing on the Date of Grant;

         (b)      an further Option to acquire up to an additional 375,000

                  Option Shares commencing on the day which is one year from the

                  Date of Grant; and

         (c)      a further and final Option to acquire up to an additional and

                  final 375,000 Option Shares commencing on the day which is two

                  years from the Date of Grant.

4.10 OPTIONS SUBJECT TO THE FOLLOWING PROVISIONS. In this regard, and subject

also to the following, it is hereby acknowledged and agreed that the exercise of

any such Options shall be subject, at all times, to such vesting and resale

provisions as may then be contained in the Company's Option Plan and as may be

finally determined by the Board of Directors of the Company, acting reasonably.

Notwithstanding the foregoing, however, it is hereby also acknowledged and

agreed that, in the event that this Agreement is terminated in accordance with

either of sections "3.2", "3.3", "3.4", "3.5", "3.6" or "5.6" hereunder, such

portion of the within and remaining Options which shall have then not been

 

                                       11

 

exercised on the determined Effective Termination Date shall, notwithstanding

the remaining exercise period of the Option, then be exercisable by the

Executive for a period of 90 calendar days following such Effective Termination

Date. In this regard, and in accordance with the terms and conditions of each

final form of Option agreement, the Parties hereby also acknowledge and agree

that:

         (a)      REGISTRATION OF OPTION SHARES UNDER THE OPTIONS: the Company

                  expects to file with the United States Securities and Exchange

                  Commission (the "SEC") a registration statement on Form S-8

                  (the "FORM S-8 REGISTRATION STATEMENT") within 60 calendar

                  days after the Effective Date hereof covering the issuance of

                  all Option Shares of the Company underlying the then issued

                  Options, and such Form S-8 Registration Statement shall comply

                  with all requirements of the Securities Act. In this regard

                  the Company shall use its best efforts to ensure that the Form

                  S-8 Registration Statement remains effective as long as such

                  Options are outstanding, and the Executive fully understands

                  and acknowledges that these Option Shares will be issued in

                  reliance upon the exemption afforded under the Form S-8

                  Registration Statement which is available only if the

                  Executive acquires such Option Shares for investment and not

                  with a view to distribution. The Executive is familiar with

                  the phrase "acquired for investment and not with a view to

                  distribution" as it relates to the Securities Act and the

                  special meaning given to such term in various releases of the

                  SEC;

         (b)      SECTION 16 COMPLIANCE: the Company shall ensure that all

                  grants of Options are made to ensure compliance with all

                  applicable provisions of the exemption afforded under Rule

                  16b-3 promulgated under the United States SECURITIES AND

                  EXCHANGE ACT OF 1934, as amended (the "EXCHANGE ACT"). Without

                  limiting the foregoing, the Company shall have an independent

                  committee of the Board of Directors of the Company approve

                  each grant of Options to the Executive and, if required, by

                  the applicable Regulatory Authorities and the shareholders of

                  the Company. The Company shall file, on behalf of the

                  Executive, all reports required to filed with the SEC pursuant

                  to the requirements of Section 16(a) under the Exchange Act

                  and applicable rules and regulations;

         (c)      DISPOSITION OF ANY OPTION SHARES: the Executive further

                  acknowledges and understands that, without in anyway limiting

                  the acknowledgements and understandings as set forth

                  hereinabove, the Executive agrees that the Executive shall in

                  no event make any disposition of all or any portion of the

                  Option Shares which the Executive may acquire hereunder unless

                  and until:

                  (i)      there is then in effect a "REGISTRATION STATEMENT"

                           under the Securities Act covering such proposed

                           disposition and such disposition is made in

                           accordance with said Registration Statement; or

                  (ii)     (A) the Executive shall have notified the Company of

                           the proposed disposition and shall have furnished the

                           Company with a detailed statement of the

                           circumstances surrounding the proposed disposition,

                           (B) the Executive shall have furnished the Company

                           with an opinion of the Executive's own counsel to the

                           effect that such disposition will not require

                           registration of any such Option Shares under the

                           Securities Act and (C) such opinion of the

                           Executive's counsel shall have been concurred in by

                           counsel for the Company and the Company shall have

                           advised the Executive of such concurrence; and

                                       12

 

         (d)      PAYMENT FOR ANY OPTION SHARES: it is hereby further

                  acknowledged and agreed that, during the continuance of this

                  Agreement, the Executive shall be entitled to exercise any

                  Option granted hereunder and pay for the same by way of the

                  prior agreement of the Executive, in the Executive's sole and

                  absolute discretion, and with the prior knowledge of the

                  Company, to settle any indebtedness which may be due and owing

                  by the Company under this Agreement in payment for the

                  exercise price of any Option Shares acquired thereunder. In

                  this regard, and subject to further discussion as between the

                  Company and the Executive, together with the prior approval of

                  the Board of Directors of the Company and the establishment by

                  the Company of a new Option Plan predicated upon the same, it

                  is envisioned that, when the Company is in a position to

                  afford the same, the Company may adopt certain additional

                  "cashless exercise" provisions respecting the granting and

                  exercise of incentive stock options during the continuance of

                  this Agreement.

4.10 BENEFITS. It is hereby acknowledged and agreed that, during the continuance

of this Agreement, the Executive shall be entitled to participate fully in each

of the Company's respective medical services plans and management and Executive

benefits program(s).

                                    ARTICLE 5

                     ADDITIONAL OBLIGATIONS OF THE EXECUTIVE

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

5.1 REPORTING. At such time or times as may be required by the Board of

Directors of the Company, acting reasonably, the Executive will provide the

Board of Directors of the Company with such information concerning the results

of the Executive's General Services and activities hereunder for the previous

month as the Board of Directors of the Company may reasonably require.

5.2 NO CONFLICT, NO COMPETITION AND NON-CIRCUMVENTION. During the continuance of

this Agreement the Executive shall not engage in any business or activity which

reasonably may detract from or conflict with the Executive's respective duties

and obligations to the Companies as set forth in this Agreement without the

prior written consent of the Board of Directors of the Company. In addition,

during the continuance of this Agreement, and for a period of at least one year

following the termination of this Agreement in accordance with either of

sections "3.2", "3.3", "3.4", "3.5", "3.6" or "5.6" hereunder, the Executive

shall not engage in any business or activity whatsoever which reasonably may be

determined by the Board of Directors of the Company, in its sole and absolute

discretion, to compete with any portion of the Business interests as

contemplated hereby without the prior written consent of the Board of Directors

of the Company. Furthermore, the Executive hereby acknowledges and agrees, for a

period of at least one year following the termination of this Agreement in

accordance with either of sections "3.3", "3.4", "3.5", "3.6" or "5.6"

hereunder, not to initiate any contact or communication directly with either of

the Companies or any of their respective subsidiaries, as the case may be,

together with each of their respective directors, officers, representatives,

agents or Executives, without the prior written consent of the Board of

Directors of the Company and, notwithstanding the generality of the foregoing,

further acknowledges and agrees, even with the prior written consent of the

Board of Directors of the Company to such contact or communication, to limit

such contact or communication to discussions outside the scope of any

confidential information (as hereinafter determined). For the purposes of the

foregoing the Executive hereby recognizes and agrees that a breach by the

Executive of any of the covenants herein contained would result in irreparable

harm and significant damage to the Companies that would not be adequately

compensated for by monetary award. Accordingly, the Executive agrees that, in

the event of any such breach, in addition to being entitled as a matter of right

                                       13

 

to apply to a Court of competent equitable jurisdiction for relief by way of

restraining order, injunction, decree or otherwise as may be appropriate to

ensure compliance with the provisions hereof, the Executive will also be liable

to the Companies, as liquidated damages, for an amount equal to the amount

received and earned by the Executive as a result of and with respect to any such

breach. The Parties hereby acknowledge and agree that if any of the aforesaid

restrictions, activities, obligations or periods are considered by a Court of

competent jurisdiction as being unreasonable, the Parties agree that said Court

shall have authority to limit such restrictions, activities or periods as the

Court deems proper in the circumstances. In addition, the Parties further

acknowledge and agree that all restrictions or obligations in this Agreement are

necessary and fundamental to the protection of the Business interests and are

reasonable and valid, and all defenses to the strict enforcement thereof by the

Executive are hereby waived.

5.3 CONFIDENTIALITY. The Executive will not, except as authorized or required by

the Executive's duties hereunder, reveal or divulge to any person or companies

any information concerning the organization, business, finances, transactions or

other affairs of the Companies or of any of the Companies' respective

subsidiaries which may come to the Executive's knowledge during the continuance

of this Agreement, and the Executive will keep in complete secrecy all

confidential information entrusted to the Executive and will not use or attempt

to use any such information in any manner which may injure or cause loss either

directly or indirectly to the Companies' respective Business interests. This

restriction will continue to apply after the termination of this Agreement

without limit in point of time but will cease to apply to information or

knowledge which may come into the public domain.

5.4 COMPLIANCE WITH APPLICABLE LAWS. The Executive will comply with all U.S.,

Canadian and foreign laws, whether federal, provincial or state, applicable to

the Executive's duties hereunder and, in addition, hereby represents and

warrants that any information which the Executive may provide to any person or

company hereunder will, to the best of the Executive's knowledge, information

and belief, be accurate and complete in all material respects and not

misleading, and will not omit to state any fact or information which would be

material to such person or company.

5.5 OPINIONS, REPORTS AND ADVICE OF THE EXECUTIVE. The Executive acknowledges

and agrees that all written and oral opinions, reports, advice and materials

provided by the Executive to the Companies in connection with the Executive's

engagement hereunder are intended solely for the Companies' benefit and for the

Companies' uses only, and that any such written and oral opinions, reports,

advice and information are the exclusive property of the Companies. In this

regard the Executive covenants and agrees that the Companies may utilize any

such opinion, report, advice and materials for any other purpose whatsoever and,

furthermore, may reproduce, disseminate, quote from and refer to, in whole or in

part, at any time and in any manner, any such opinion, report, advice and

materials in the Companies' sole and absolute discretion. The Executive further

covenants and agrees that no public references to the Executive or disclosure of

the Executive's role in respect of the Companies may be made by the Executive

without the prior written consent of the Board of Directors of the Company in

each specific instance and, furthermore, that any such written opinions,

reports, advice or materials shall, unless otherwise required by the Board of

Directors of the Company, be provided by the Executive to the Companies in a

form and with such substance as would be acceptable for filing with and approval

by any Regulatory Authority having jurisdiction over the affairs of the Company

from time to time.

5.6 EXECUTIVE'S BUSINESS CONDUCT. The Executive warrants that the Executive

shall conduct the business and other activities in a manner which is lawful and

reputable and which brings good repute to the Companies, the Business interests

and the Executive. In particular, and in this regard, the Executive specifically

warrants to provide the General Services in a sound and professional manner such

that the same meets superior standards of performance quality within the

standards of the industry or as set by the specifications of the Companies. In

the event that either of the Companies has a reasonable concern that the

business as conducted by the Executive is being conducted in a way contrary to

                                       14

 

law or is reasonably likely to bring disrepute to the Business interests or to

the Companies' or the Executive's reputation, the Companies may require that the

Executive make such alterations in the Executive's business conduct or

structure, whether of management or Board representation or Executive or

sub-licensee representation, as the Board of Directors of the Company may

reasonably require, in its sole and absolute discretion, failing which the

Company, in its sole and absolute discretion, may terminate this Agreement upon

prior written notice to the Executive to do so (the "NOTICE OF TERMINATION"

herein) at least 30 calendar days prior to the effective date of any such

termination (the end of such 30-day period from such Notice of Termination being

the "EFFECTIVE TERMINATION DATE" herein). In any such event the Executive's

ongoing obligation to provide the General Services will continue only until the

Effective Termination Date and the Company shall continue to pay to the

Executive all of the amounts otherwise payable to the Executive under Article

"4" hereinabove until the Effective Termination. In the event of any debate or

dispute as to the reasonableness of the Board of Directors of the Company's

request or requirements, the judgment of the Board of Directors of the Company

shall be deemed correct until such time as the matter has been determined by

arbitration in accordance with Article "8" hereinbelow.

5.7 RIGHT OF OWNERSHIP TO THE BUSINESS AND RELATED PROPERTY. The Executive

hereby acknowledges and agrees that any and all Company Business interests,

together with any products or improvements derived therefrom and any trade marks

or trade names used in connection with the same (collectively, the "PROPERTY"),

are wholly owned and controlled by the Company. Correspondingly, neither this

Agreement, nor the operation of the research and development and the

distribution and marketing Business contemplated by this Agreement, confers or

shall be deemed to confer upon the Executive any interest whatsoever in and to

any of the Property. In this regard the Executive hereby further covenants and

agrees not to, during or after the Initial Term and the continuance of this

Agreement, contest the title to any of the Property interests, in any way

dispute or impugn the validity of the Property interests or take any action to

the detriment of the Company's interests therein. The Executive acknowledges

that, by reason of the unique nature of the Property interests, and by reason of

the Executive's knowledge of and association with the Property interests during

the Initial Term and during the continuance of this Agreement, the aforesaid

covenant, both during the Initial Term of this Agreement and thereafter, is

reasonable and commensurate for the protection of the legitimate Business

interests of the Companies. As a final note, the Executive hereby further

covenants and agrees to immediately notify the Companies of any infringement of

or challenge to the any of the Property interests as soon as the Executive

becomes aware of the infringement or challenge.

         In addition, and for even greater certainty, the Executive hereby

assigns to the Companies the entire right, title and interest throughout the

world in and to all work performed, writings, formulas, designs, models,

drawings, photographs, design inventions, and other inventions, made, conceived,

or reduced to practice or authored by Executive or Executive's Executives,

either solely or jointly with others, during the performance of this Agreement,

or which are made, conceived, or reduced to practice, or authored with the use

of information or materials of the Companies either received or used by the

Executive during the performance of this Agreement or any extension or renewal

thereof. The Executive shall promptly disclose to the Companies all works,

writings, formulas, designs, models, photographs, drawings, design inventions

and other inventions made, conceived or reduced to practice, or authored by the

Executive or Executive's Executives as set forth above. The Executive shall

sign, execute and acknowledge, or cause to be signed, executed and acknowledged

without cost to Companies or its nominees, patent, trademark or copyright

protection throughout the world upon all such works, writings, formulas,

 

                                       15

 

designs, models, drawings, photographs, design inventions and other inventions;

title to which the Companies acquire in accordance with the provisions of this

section. The Executive has acquired or shall acquire from each of the

Executive's Executives, if any, the necessary rights to all such works,

writings, formulas, designs, models, drawings, photographs, design inventions

and other inventions made by such Executives within the scope of their

employment by the Executive in performing the General Services under this

Agreement. The Executive shall obtain the cooperation of each such Executive to

secure to the Companies or its nominees the rights to such works, writings,

formulas, designs, models, drawings, photographs, design inventions and other

inventions as the Companies may acquire in accordance with the provisions of

this section. The work performed and the information produced under this

Agreement are works made for hire as defined in 17 U.S.C. ss. 101.

5.8 INSURANCE. During the Initial Term and during the continuance of this

Agreement it is hereby acknowledged and agreed that the Companies will use their

best efforts to seek and obtain directors' and officers' liability insurance

(collectively, the "INSURANCE") for its Board of Directors and senior officers

which in no case shall be less than the insurance which a reasonable and prudent

businessman carrying on a similar line of business would acquire from time to

time. In connection with the foregoing it is hereby further acknowledged and

agreed that any such Insurance shall be placed with a reputable and financially

secure insurance carrier and shall include the Companies as an additional

insured and shall provide primary coverage with respect to the activities

contemplated by this Agreement. Furthermore, it is also intended that any such

Insurance policy(ies) shall include severability of interest and cross-liability

provisions and shall provide that the policy(ies) shall not be canceled or

materially altered except upon at least 30 calendar days' prior written notice

to each of the relevant parties thereto.

                                    ARTICLE 6

                      INDEMNIFICATION AND LEGAL PROCEEDINGS

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

6.1 INDEMNIFICATION. The Parties hereto hereby each agree to indemnify and save

harmless the other Party hereto and including, where applicable, their

respective subsidiaries and affiliates and each of their respective directors,

officers, Executives and agents (each such party being an "INDEMNIFIED PARTY")

harmless from and against any and all losses, claims, actions, suits,

proceedings, damages, liabilities or expenses of whatever nature or kind and

including, without limitation, any investigation expenses incurred by any

Indemnified Party, to which an Indemnified Party may become subject by reason of

the terms and conditions of this Agreement.

6.2 NO INDEMNIFICATION. This indemnity will not apply in respect of an

Indemnified Party in the event and to the extent that a Court of competent

jurisdiction in a final judgment shall determine that the Indemnified Party was

grossly negligent or guilty of willful misconduct.

6.3 CLAIM OF INDEMNIFICATION. The Parties hereto agree to waive any right they

might have of first requiring the Indemnified Party to proceed against or

enforce any other right, power, remedy, security or claim payment from any other

person before claiming this indemnity.

6.4 NOTICE OF CLAIM. In case any action is brought against an Indemnified Party

in respect of which indemnity may be sought against either of the Parties

hereto, the Indemnified Party will give both Parties hereto prompt written

notice of any such action of which the Indemnified Party has knowledge and the

relevant Party will undertake the investigation and defense thereof on behalf of

the Indemnified Party, including the prompt employment of counsel acceptable to

the Indemnified Party affected and the relevant Party and the payment of all

expenses. Failure by the Indemnified Party to so notify shall not relieve the

relevant Party of such relevant Party's obligation of indemnification hereunder

unless (and only to the extent that) such failure results in a forfeiture by the

relevant Party of substantive rights or defenses.

6.5 SETTLEMENT. No admission of liability and no settlement of any action shall

be made without the consent of each of the Parties hereto and the consent of the

Indemnified Party affected, such consent not to be unreasonable withheld.

                                       16

 

6.6 LEGAL PROCEEDINGS. Notwithstanding that the relevant Party will undertake

the investigation and defense of any action, an Indemnified Party will have the

right to employ separate counsel in any such action and participate in the

defense thereof, but the fees and expenses of such counsel will be at the

expense of the Indemnified Party unless:

         (a)      such counsel has been authorized by the relevant Party;

         (b)      the relevant Party has not assumed the defense of the action

                  within a reasonable period of time after receiving notice of

                  the action;

         (c)      the named parties to any such action include that any Party

                  hereto and the Indemnified Party shall have been advised by

                  counsel that there may be a conflict of interest between any

                  Party hereto and the Indemnified Party; or

         (d)      there are one or more legal defenses available to the

                  Indemnified Party which are different from or in addition to

                  those available to any Party hereto.

6.7 CONTRIBUTION. If for any reason other than the gross negligence or bad faith

of the Indemnified Party being the primary cause of the loss claim, damage,

liability, cost or expense, the foregoing indemnification is unavailable to the

Indemnified Party or insufficient to hold them harmless, the relevant Party

shall contribute to the amount paid or payable by the Indemnified Party as a

result of any and all such losses, claim, damages or liabilities in such

proportion as is appropriate to reflect not only the relative benefits received

by the relevant Party on the one hand and the Indemnified Party on the other,

but also the relative fault of relevant Party and the Indemnified Party and

other equitable considerations which may be relevant. Notwithstanding the

foregoing, the relevant Party shall in any event contribute to the amount paid

or payable by the Indemnified Party, as a result of the loss, claim, damage,

liability, cost or expense (other than a loss, claim, damage, liability, cost or

expenses, the primary cause of which is the gross negligence or bad faith of the

Indemnified Party), any excess of such amount over the amount of the fees

actually received by the Indemnified Party hereunder.

                                    ARTICLE 7

                                  FORCE MAJEURE

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

7.1 EVENTS. If either Party hereto is at any time either during this Agreement

or thereafter prevented or delayed in complying with any provisions of this

Agreement by reason of strikes, walk-outs, labor shortages, power shortages,

fires, wars, acts of God, earthquakes, storms, floods, explosions, accidents,

protests or demonstrations by environmental lobbyists or native rights groups,

delays in transportation, breakdown of machinery, inability to obtain necessary

materials in the open market, unavailability of equipment, governmental

regulations restricting normal operations, shipping delays or any other reason

or reasons beyond the control of that Party, then the time limited for the

performance by that Party of its respective obligations hereunder shall be

extended by a period of time equal in length to the period of each such

prevention or delay.

7.2 NOTICE. A Party shall within three calendar days give notice to the other

Party of each event of FORCE MAJEURE under section "7.1" hereinabove, and upon

cessation of such event shall furnish the other Party with notice of that event

together with particulars of the number of days by which the obligations of that

Party hereunder have been extended by virtue of such event of FORCE MAJEURE and

all preceding events of FORCE MAJEURE.

                                       17

 

 

                                    ARTICLE 8

                                   ARBITRATION

                                   -----------

8.1 MATTERS FOR ARBITRATION. Except for matters of indemnity or in the case of

urgency to prevent material harm to a substantive right or asset, the Parties

agree that all questions or matters in dispute with respect to this Agreement

shall be submitted to arbitration pursuant to the terms hereof. This provision

shall not prejudice a Party from seeking a Court order or assistance to garnish

or secure sums or to seek summary remedy for such matters as counsel may

consider amenable to summary proceedings.

8.2 NOTICE. It shall be a condition precedent to the right of any Party to

submit any matter to arbitration pursuant to the provisions hereof that any

Party intending to refer any matter to arbitration shall have given not less

than five business days' prior written notice of its intention to do so to the

other Parties together with particulars of the matter in dispute. On the

expiration of such five business days the Party who gave such notice may proceed

to refer the dispute to arbitration as provided for in section "8.3"

hereinbelow.

8.3 APPOINTMENTS. The Party desiring arbitration shall appoint one arbitrator,

and shall notify the other Parties of such appointment, and the other Parties

shall, within five business days after receiving such notice, appoint an

arbitrator, and the two arbitrators so named, before proceeding to act, shall,

within five business days of the appointment of the last appointed arbitrator,

unanimously agree on the appointment of a third arbitrator, to act with them and

be chairperson of the arbitration herein provided for. If the other Parties

shall fail to appoint an arbitrator within five business days after receiving

notice of the appointment of the first arbitrator, and if the two arbitrators

appointed by the Parties shall be unable to agree on the appointment of the

chairperson, the chairperson shall be appointed in accordance with the

Arbitration Act. Except as specifically otherwise provided in this section, the

arbitration herein provided for shall be conducted in accordance with such

Arbitration Act. The chairperson, or in the case where only one arbitrator is

appointed, the single arbitrator, shall fix a time and place for the purpose of

hearing the evidence and representations of the Parties, and the chairperson

shall preside over the arbitration and determine all questions of procedure not

provided for by the Arbitration Act or this section. After hearing any evidence

and representations that the Parties may submit, the single arbitrator, or the

arbitrators, as the case may be, shall make an award and reduce the same to

writing, and deliver one copy thereof to each of the Parties. The expense of the

arbitration shall be paid as specified in the award.

8.4 AWARD. The Parties agree that the award of a majority of the arbitrators, or

in the case of a single arbitrator, of such arbitrator, shall be final and

binding upon each of them.

                                    ARTICLE 9

                               GENERAL PROVISIONS

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

9.1 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement to date

between the Parties hereto and supersedes every previous agreement, expectation,

negotiation, representation or understanding, whether oral or written, express

or implied, statutory or otherwise, between the Parties with respect to the

subject matter of this Agreement.

9.2 NO ASSIGNMENT. This Agreement may not be assigned by any Party hereto except

with the prior written consent of the other Parties.

9.3 NOTICE. Each notice, demand or other communication required or permitted to

be given under this Agreement shall be in writing and shall be sent by prepaid

registered mail deposited in a recognized post office and addressed to the Party

entitled to receive the same, or delivered to such Party, at the address for

                                       18

such Party specified on the front page of this Agreement. The date of receipt of

such notice, demand or other communication shall be the date of delivery thereof

if delivered, or, if given by registered mail as aforesaid, shall be deemed

conclusively to be the third business day after the same shall have been so

mailed, except in the case of interruption of postal services for any reason

whatsoever, in which case the date of receipt shall be the date on which the

notice, demand or other communication is actually received by the addressee. Any

Party may at any time and from time to time notify the other Parties in writing

of a change of address and the new address to which notice shall be given to it

thereafter until further change.

9.4 TIME OF THE ESSENCE. Time will be of the essence of this Agreement.

9.5 ENUREMENT. This Agreement will enure to the benefit of and will be binding

upon the Parties hereto and their respective heirs, executors, administrators

and assigns.

9.6 CURRENCY. Unless otherwise stipulated, all payments required to be made

pursuant to the provisions of this Agreement and all money amount references

contained herein are in lawful currency of the United States.

9.7 FURTHER ASSURANCES. The Parties will from time to time after the execution

of this Agreement make, do, execute or cause or permit to be made, done or

executed, all such further and other acts, deeds, things, devices and assurances

in law whatsoever as may be required to carry out the true intention and to give

full force and effect to this Agreement.

9.8 REPRESENTATION AND COSTS. It is hereby acknowledged by each of the Parties

hereto that Lang Michener LLP, Lawyers - Patent & Trade Mark Agents, acts solely

for the Companies, and, correspondingly, that the Executive has been required by

each of Lang Michener LLP and the Companies to obtain independent legal advice

with respect to its review and execution of this Agreement. In addition, it is

hereby further acknowledged and agreed by the Parties hereto that Lang Michener

LLP, and certain or all of its principal owners or associates, from time to

time, may have both an economic or shareholding interest in and to Company

and/or a fiduciary duty to the same arising from either a directorship,

officership or similar relationship arising out of the request of the Company

for certain of such persons to act in a similar capacity while acting for the

Company as counsel. Correspondingly, and even where, as a result of this

Agreement, the consent of each Party hereto to the role and capacity of Lang

Michener LLP, and its principal owners and associates, as the case may be, is

deemed to have been received, where any conflict or perceived conflict may

arise, or be seen to arise, as a result of any such capacity or representation,

each Party hereto acknowledges and agrees to, once more, obtain independent

legal advice in respect of any such conflict or perceived conflict and,

consequent thereon, Lang Michener LLP, together with any such principal owners

or associates, as the case may be, shall be at liberty at any time to resign any

such position if it or any Party hereto is in any way affected or uncomfortable

with any such capacity or representation. Each Party to this Agreement will also

bear and pay its own costs, legal and otherwise, in connection with its

respective preparation, review and execution of this Agreement and, in

particular, that the costs involved in the preparation of this Agreement, and

all documentation necessarily incidental thereto, by Lang Michener LLP, shall be

at the cost of the Company.

9.9 APPLICABLE LAW. The situs of this Agreement is Vancouver, British Columbia,

Canada, and for all purposes this Agreement will be governed exclusively by and

construed and enforced in accordance with the laws and Courts prevailing in the

Province of British Columbia, Canada, and the federal laws of Canada applicable

therein.

                                       19

9.10 SEVERABILITY AND CONSTRUCTION. Each Article, section, paragraph, term and

provision of this Agreement, and any portion thereof, shall be considered

severable, and if, for any reason, any portion of this Agreement is determined

to be invalid, contrary to or in conflict with any applicable present or future

law, rule or regulation in a final unappealable ruling issued by any court,

agency or tribunal with valid jurisdiction in a proceeding to which any Party

hereto is a party, that ruling shall not impair the operation of, or have any

other effect upon, such other portions of this Agreement as may remain otherwise

intelligible (all of which shall remain binding on the Parties and continue to

be given full force and effect as of the date upon which the ruling becomes

final).

9.11 CAPTIONS. The captions, section numbers and Article numbers appearing in

this Agreement are inserted for convenience of reference only and shall in no

way define, limit, construe or describe the scope or intent of this Agreement

nor in any way affect this Agreement.

9.12 COUNTERPARTS. This Agreement may be signed by the Parties hereto in as many

counterparts as may be necessary, and via facsimile if necessary, each of which

so signed being deemed to be an original and such counterparts together

constituting one and the same instrument and, notwithstanding the date of

execution, being deemed to bear the Effective Date as set forth on the front

page of this Agreement.

9.13 NO PARTNERSHIP OR AGENCY. The Parties have not created a partnership and

nothing contained in this Agreement shall in any manner whatsoever constitute

any Party the partner, agent or legal representative of the other Parties, nor

create any fiduciary relationship between them for any purpose whatsoever.

9.14 CONSENTS AND WAIVERS. No consent or waiver expressed or implied by either

Party in respect of any breach or default by the other in the performance by

such other of its obligations hereunder shall:

         (a)      be valid unless it is in writing and stated to be a consent or

                  waiver pursuant to this section;

         (b)      be relied upon as a consent to or waiver of any other breach

                  or default of the same or any other obligation;

         (c)      constitute a general waiver under this Agreement; or

         (d)      eliminate or modify the need for a specific consent or waiver

                  pursuant to this section in any other or subsequent instance.

         IN WITNESS WHEREOF the Parties hereto have hereunto set their

respective hands and seals as at the Effective Date as set forth hereinabove.

The COMMON SEAL of                          )

MIV THERAPEUTICS, INC.,                     )

----------------------                      )

the Company herein, was hereunto affixed    )

in the presence of:                         )              (C/S)

                                            )

_____________________________________       )

Authorized Signatory                        )

                                       20

 

 

 

The COMMON SEAL of                          )

BIOSYNC SCIENTIFIC PVT. INC.,               )

----------------------------                )

the Consultant herein, was hereunto affixed )

in the presence of:                         )             (C/S)

                                            )

                                            )

Authorized Signatory                        )

SIGNED, SEALED and DELIVERED by             )

RAJESH VAISHNAV,                            )

---------------                             )

the Executive herein, in the presence of:   )

                                            )

                                            )

Witness Signature                           )

                                            )   -----------------------------

                                            )          RAJESH VAISHNAV

                                            )

Witness Address                             )

                                            )

                                            )

Witness Name and Occupation                 )

                                   ----------

                                       21

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