Document:

Exhibit
      4.16

     

    THIS
      WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER
      SECURITIES LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR
      TRANSFERRED OR OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT
      UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT
      TO
      SUCH SECURITIES IS THEN IN EFFECT, OR IN THE OPINION OF COUNSEL (WHICH OPINION
      IS REASONABLY SATISFACTORY TO THE ISSUER OF THESE SECURITIES), SUCH REGISTRATION
      UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS IS NOT
      REQUIRED.

     

    
      	
              Date:
                ______________

            	 	
              Warrant
                to Purchase

              ***______***

              Shares

            

    

     

     

    IGNIS
      PETROLEUM GROUP, INC.

     

    (INCORPORATED
      UNDER THE LAWS OF THE STATE OF NEVADA)

     

    REPRESENTATIVE’S
      WARRANT FOR THE PURCHASE OF SHARES OF

     

    COMMON
      STOCK [THE WARRANT WILL BE FOR THE SAME SECURITIES SOLD IN THE
      PLACEMENT]

     

    WARRANT
      PRICE: $_____ PER SHARE, SUBJECT TO ADJUSTMENT AS PROVIDED BELOW.

     

    THIS
      IS
      TO CERTIFY that, for value received, Stonegate Securities, Inc. (“Stonegate”)
      and its assigns (collectively, the “Holder”), is entitled to purchase, subject
      to the terms and conditions hereinafter set forth, up to ***______*** shares
      of
      the common stock, par value $_____ per share (“Common Stock”), of Ignis
      Petroleum Group, Inc. a Nevada corporation (the “Company”), and to receive
      certificate(s) for the Common Stock so purchased. 

     

    i.  Exercise
      Period and Vesting.
      The
      exercise period is the period beginning on the date of this Warrant (the
“Issuance Date”) and ending at 5:00 p.m., Dallas, Texas time, five years from
      the Issuance Date (the “Exercise Period”). This Warrant is vested in full as of
      the Issuance Date and is immediately exercisable by Holder. This Warrant will
      terminate automatically and immediately upon the expiration of the Exercise
      Period.

     

    ii.  Exercise
      of Warrant; Cashless Exercise.
      This
      Warrant may be exercised, in whole or in part, at any time and from time to
      time
      during the Exercise Period. Such exercise shall be accomplished by tender to
      the
      Company of the purchase price set forth above as the warrant price (the “Warrant
      Price”), either (a) in cash, by wire transfer or by certified check or bank
      cashier’s check, payable to the order of the Company, or (b) by surrendering
      such number of shares of Common Stock received upon exercise of this Warrant
      with a current market price equal to the Warrant Price (a “Cashless Exercise”),
      together with presentation and surrender to the Company of this Warrant with
      an
      executed subscription in substantially the form attached hereto as Exhibit
      A
      (the
“Subscription”). Upon receipt of the foregoing, the Company will deliver to the
      Holder, as promptly as possible, a certificate or certificates representing
      the
      shares of Common Stock so purchased, registered in the name of the Holder or
      its
      transferee (as permitted under Section 3 below). With respect to any exercise
      of
      this Warrant, the Holder will for all purposes be deemed to have become the
      holder of record of the number of shares of Common Stock purchased hereunder
      on
      the date this Warrant, a properly executed subscription and payment of the
      Warrant Price is received by the Company (the “Exercise Date”), irrespective of
      the date of delivery of the certificate evidencing such shares, except that,
      if
      the date of such receipt is a date on which the stock transfer books of the
      Company are closed, such person will be deemed to have become the holder of
      such
      shares at the close of business on the next succeeding date on which the stock
      transfer books are open. Fractional shares of Common Stock will not be issued
      upon the exercise of this Warrant. In lieu of any fractional shares that would
      have been issued but for the immediately preceding sentence, the Holder will
      be
      entitled to receive cash equal to the current market price of such fraction
      of a
      share of Common Stock on the trading day immediately preceding the Exercise
      Date. In the event this Warrant is exercised in part, the Company shall issue
      a
      new Warrant to the Holder covering the aggregate number of shares of Common
      Stock as to which this Warrant remains exercisable for.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    If
      the
      Holder elects to conduct a Cashless Exercise, the Company shall cause to be
      delivered to the Holder a certificate or certificates representing the number
      of
      shares of Common Stock computed using the following formula:

     

    
      X
        = Y
(A-B)

      A

       

      Where:

      X = the
        number of shares of Common Stock to be issued to Holder;

       

      Y = the
        portion of the Warrant (in number of shares of Common Stock)
        being exercised by Holder (at the date of such calculation);

       

      A = the
        fair
        market value of one share of Common Stock on the Exercise
        Date (as calculated below); and 

       

      B = Warrant
        Price (as adjusted to the date of such calculation).

    

     

    For
      purposes of the foregoing calculation, “fair market value of one share of Common
      Stock on the Exercise Date” shall mean: (i) if the principal trading market for
      such securities is a national or regional securities exchange, the closing
      price
      on such exchange for day immediately prior to such Exercise Date; (ii) if sales
      prices for shares of Common Stock are reported by the Nasdaq National Market
      System or Nasdaq Small Cap Market (or a similar system then in use), the last
      reported sales price for the day immediately prior to such Exercise Date; or
      (iii) if neither (i) nor (ii) above are applicable, and if bid and ask prices
      for shares of Common Stock are reported in the over-the-counter market by Nasdaq
      (or, if not so reported, by the National Quotation Bureau), at the option of
      the
      holder, the last reported bid price for the common stock for the trading day
      immediately prior to the Exercise Date or the average of the high bid and low
      ask prices so reported for the ten (10) trading days immediately prior to such
      Exercise Date. Notwithstanding the foregoing, if there is no reported closing
      price, last reported sales price, or bid and ask prices, as the case may be,
      for
      the period in question, then the current market price shall be determined as
      of
      the latest ten (10) day period prior to such day for which such closing price,
      last reported sales price, or bid and ask prices, as the case may be, are
      available, unless such securities have not been traded on an exchange or in
      the
      over-the-counter market for 30 or more days immediately prior to the day in
      question, in which case the current market price shall be determined in good
      faith by, and reflected in a formal resolution of, the Board of Directors of
      the
      Company. The Company acknowledges and agrees that this Warrant was issued on
      the
      Issuance Date.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    iii.  Transferability
      and Exchange.

     

    (1)  This
      Warrant, and the Common Stock issuable upon the exercise hereof, may not be
      sold, transferred, pledged or hypothecated unless the Company shall have been
      provided with an opinion of counsel, or other evidence reasonably satisfactory
      to it, that such transfer is not in violation of the Securities Act, and any
      applicable state securities laws. Subject to the satisfaction of the aforesaid
      condition, this Warrant and the underlying shares of Common Stock shall be
      transferable from time to time by the Holder upon written notice to the Company.
      If this Warrant is transferred, in whole or in part, the Company shall, upon
      surrender of this Warrant to the Company, deliver to each transferee a Warrant
      evidencing the rights of such transferee to purchase the number of shares of
      Common Stock that such transferee is entitled to purchase pursuant to such
      transfer. The Company may place a legend similar to the legend at the top of
      this Warrant on any replacement Warrant and on each certificate representing
      shares issuable upon exercise of this Warrant or any replacement Warrants.
      Only
      a registered Holder may enforce the provisions of this Warrant against the
      Company. A transferee of the original registered Holder becomes a registered
      Holder only upon delivery to the Company of the original Warrant and an original
      Assignment, substantially in the form set forth in Exhibit
      B
      attached
      hereto.

     

    (2)  This
      Warrant is exchangeable upon its surrender by the Holder to the Company for
      new
      Warrants of like tenor and date representing in the aggregate the right to
      purchase the number of shares purchasable hereunder, each of such new Warrants
      to represent the right to purchase such number of shares as may be designated
      by
      the Holder at the time of such surrender.

     

    iv.  Adjustments
      to Warrant Price and Number of Shares Subject to Warrant.
      The
      Warrant Price and the number of shares of Common Stock purchasable upon the
      exercise of this Warrant are subject to adjustment from time to time upon the
      occurrence of any of the events specified in this Section 4. For the purpose
      of
      this Section 4, “Common Stock” means shares now or hereafter authorized of any
      class of common stock of the Company and any other stock of the Company, however
      designated, that has the right to participate in any distribution of the assets
      or earnings of the Company without limit as to per share amount (excluding,
      and
      subject to any prior rights of, any class or series of preferred
      stock).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (1)  In
      case
      the Company shall (i) pay a dividend or make a distribution in shares of Common
      Stock, (ii) subdivide its outstanding shares of Common Stock into a greater
      number of shares, (iii) combine its outstanding shares of Common Stock into
      a
      smaller number of shares, or (iv) issue by reclassification of its shares of
      Common Stock other securities of the Company, then the Warrant Price in effect
      at the time of the record date for such dividend or on the effective date of
      such subdivision, combination or reclassification, and/or the number and kind
      of
      securities issuable on such date, shall be proportionately adjusted so that
      the
      Holder of any Warrant thereafter exercised shall be entitled to receive the
      aggregate number and kind of shares of Common Stock (or such other securities
      other than Common Stock) of the Company, at the same aggregate Warrant Price,
      that, if such Warrant had been exercised immediately prior to such date, the
      Holder would have owned upon such exercise and been entitled to receive by
      virtue of such dividend, distribution, subdivision, combination or
      reclassification. Such adjustment shall be made successively whenever any event
      listed above shall occur. 

     

    (2)  For
      the
      purpose of any computation under any subsection of this Section 4, the “current
      market price” per share of Common Stock on any date shall be the per share price
      of the Common Stock on the trading day immediately prior to the event requiring
      an adjustment hereunder and shall be: (i) if the principal trading market for
      such securities is a national or regional securities exchange, the closing
      price
      on such exchange on such day; or (ii) if sales prices for shares of Common
      Stock
      are reported by the Nasdaq National Market System or Small Cap Market System
      (or
      a similar system then in use), the last reported sales price so reported on
      such
      day; or (iii) if neither (i) nor (ii) above are applicable, and if bid and
      ask
      prices for shares of Common Stock are reported in the over-the-counter market
      by
      Nasdaq (or, if not so reported, by the National Quotation Bureau), the average
      of the high bid and low ask prices so reported on such day. Notwithstanding
      the
      foregoing, if there is no reported closing price, last reported sales price,
      or
      bid and ask prices, as the case may be, for the day in question, then the
      current market price shall be determined as of the latest date prior to such
      day
      for which such closing price, last reported sales price, or bid and ask prices,
      as the case may be, are available, unless such securities have not been traded
      on an exchange or in the over-the-counter market for 30 or more days immediately
      prior to the day in question, in which case the current market price shall
      be
      determined in good faith by, and reflected in a formal resolution of, the Board
      of Directors of the Company. 

     

    (3)  Notwithstanding
      any provision herein to the contrary, no adjustment in the Warrant Price shall
      be required unless such adjustment would require an increase or decrease of
      at
      least 1% in the Warrant Price; provided, however, that any adjustments which
      by
      reason of this subsection (c) are not required to be made shall be carried
      forward and taken into account in any subsequent adjustment. All calculations
      under this Section 4 shall be made to the nearest cent or the nearest
      one-hundredth of a share, as the case may be.

     

    (4)  In
      the
      event that at any time, as a result of an adjustment made pursuant to subsection
      (a) above, the Holder of any Warrant thereafter exercised shall become entitled
      to receive any shares of capital stock of the Company other than shares of
      Common Stock, thereafter the number of such other shares so receivable upon
      exercise of any Warrant shall be subject to adjustment from time to time in
      a
      manner and on terms as nearly equivalent as practicable to the provisions with
      respect to the shares of Common Stock contained in this Section 4, and the
      other
      provisions of this Warrant shall apply on like terms to any such other
      shares.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (5)  If
      the
      Company merges or consolidates into or with another corporation or entity,
      or if
      another corporation or entity merges into or with the Company (excluding such
      a
      merger in which the Company is the surviving or continuing corporation and
      which
      does not result in any reclassification, conversion, exchange, or cancellation
      of the outstanding shares of Common Stock), or if all or substantially all
      of
      the assets or business of the Company are sold or transferred to another
      corporation, entity, or person, then, as a condition to such consolidation,
      merger, or sale (a “Transaction”), lawful and adequate provision shall be made
      whereby the Holder shall have the right from and after the Transaction to
      receive, upon exercise of this Warrant and upon the terms and conditions
      specified herein and in lieu of the shares of the Common Stock that would have
      been issuable if this Warrant had been exercised immediately before the
      Transaction, such shares of stock, securities, or assets as the Holder would
      have owned immediately after the Transaction if the Holder had exercised this
      Warrant immediately before the effective date of the Transaction.

     

    v.  Registration
      Rights. The Company hereby grants to Holder, with respect to the shares
      of Common Stock underlying this Warrant, registration rights identical to those
      that are granted to Purchasers in the Placement (as such terms are defined
      in
      that certain Placement Agency Agreement, dated as of __________, by and between
      the Company and Stonegate); it being specifically agreed and understood that
      the
      shares of Common Stock underlying this Warrant will be included in any
      registration statement filed by the Company which includes shares of Common
      Stock, or shares of Common Stock underlying any securities, issued to Purchasers
      in the Placement. 

     

    vi.  Reservation
      of Shares.
      The
      Company agrees at all times to reserve and hold available out of its authorized
      but unissued shares of Common Stock the number of shares of Common Stock
      issuable upon the full exercise of this Warrant. The Company further covenants
      and agrees that all shares of Common Stock that may be delivered upon the
      exercise of this Warrant will, upon delivery, be fully paid and nonassessable
      and free from all taxes, liens and charges with respect to the purchase thereof
      hereunder. Notwithstanding the foregoing, the Holder shall be solely responsible
      for any income taxes payable and arising from the issuance or exercise of this
      Warrant and attributable to Holder or any ad
      valorem
      property, or intangible tax assessed against the Holder.

     

    vii.  Notices
      to Holder.
      Upon
      any adjustment of the Warrant Price (or number of shares of Common Stock
      purchasable upon the exercise of this Warrant) pursuant to Section 4, the
      Company shall promptly thereafter cause to be given to the Holder written notice
      of such adjustment. Such notice shall include the Warrant Price (and/or the
      number of shares of Common Stock purchasable upon the exercise of this Warrant)
      after such adjustment, and shall set forth in reasonable detail the Company’s
      method of calculation and the facts upon which such calculations were based.
      Where appropriate, such notice shall be given in advance and included as a
      part
      of any notice required to be given under the other provisions of this Section
      7.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    In
      the
      event of (a) any fixing by the Company of a record date with respect to the
      holders of any class of securities of the Company for the purpose of determining
      which of such holders are entitled to dividends or other distributions, or
      any
      rights to subscribe for, purchase or otherwise acquire any shares of capital
      stock of any class or any other securities or property, or to receive any other
      right, (b) any capital reorganization of the Company, or reclassification or
      recapitalization of the capital stock of the Company or any transfer of all
      or
      substantially all of the assets or business of the Company to, or consolidation
      or merger of the Company with or into, any other entity or person, or (c) any
      voluntary or involuntary dissolution or winding up of the Company, then and
      in
      each such event the Company will give the Holder a written notice specifying,
      as
      the case may be (i) the record date for the purpose of such dividend,
      distribution, or right, and stating the amount and character of such dividend,
      distribution, or right; or (ii) the date on which any such reorganization,
      reclassification, recapitalization, transfer, consolidation, merger, conveyance,
      dissolution, liquidation, or winding up is to take place and the time, if any
      is
      to be fixed, as of which the holders of record of Common Stock (or such capital
      stock or securities receivable upon the exercise of this Warrant) shall be
      entitled to exchange their shares of Common Stock (or such other stock
      securities) for securities or other property deliverable upon such event. Any
      such notice shall be given at least 10 days prior to the earliest date therein
      specified.

     

    viii.  No
      Rights as a Stockholder.
      This
      Warrant does not entitle the Holder to any voting rights or other rights as
      a
      stockholder of the Company, nor to any other rights whatsoever except the rights
      herein set forth.

     

    ix.  Additional
      Covenants of the Company.
      For so
      long as the Common Stock is listed for trading on any regional or national
      securities exchange or Nasdaq (National Market or Small Cap System), the Company
      shall, upon issuance of any shares for which this Warrant is exercisable, at
      its
      expense, promptly obtain and maintain the listing of such shares. The Company
      shall also comply with the reporting requirements of Sections 13 and 15(d)
      of
      the Exchange Act for so long as and to the extent that such requirements apply
      to the Company.

     

    The
      Company shall not, by amendment of its Articles of Incorporation or through
      any
      reorganization, transfer of assets, consolidation, merger, 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. Without limiting
      the generality of the foregoing, the Company (a) will at all times reserve
      and
      keep available, solely for issuance and delivery upon exercise of this Warrant,
      shares of Common Stock issuable from time to time upon exercise of this Warrant,
      (b) will not increase the par value of any shares of capital stock receivable
      upon exercise of this Warrant above the amount payable therefor upon such
      exercise, and (c) will take all such actions as may be necessary or appropriate
      in order that the Company may validly and legally issue fully paid and
      nonassessable stock. 

     

    x.  Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the Company, the
      Holder and their respective successors and permitted assigns.

     

    xi.  Notices.
      The
      Company agrees to maintain a ledger of the ownership of this Warrant (the
“Ledger”). Any notice hereunder shall be given by registered or certified mail
      if to the Company, at its principal executive office and, if to the Holder,
      to
      its address shown in the Ledger of the Company; provided, however, that the
      Holder may at any time on three (3) days written notice to the Company designate
      or substitute another address where notice is to be given. Notice shall be
      deemed given and received after a certified or registered letter, properly
      addressed with postage prepaid, is deposited in the U.S. mail. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    xii.  Severability.
      Every
      provision of this Warrant is intended to be severable. If any term or provision
      hereof is illegal or invalid for any reason whatsoever, such illegality or
      invalidity shall not affect the remainder of this Warrant.

     

    xiii.  Governing
      Law.
      This
      Warrant shall be governed by and construed in accordance with the laws of the
      State of Texas without giving effect to the principles of choice of laws
      thereof.

     

    xiv.  Attorneys’
      Fees.
      In any
      action or proceeding brought to enforce any provision of this Warrant, the
      prevailing party shall be entitled to recover reasonable attorneys’ fees in
      addition to its costs and expenses and any other available remedy.

     

    xv.  Entire
      Agreement.
      This
      Warrant (including the Exhibits attached hereto) constitutes the entire
      understanding between the Company and the Holder with respect to the subject
      matter hereof, and supersedes all prior negotiations, discussions, agreements
      and understandings relating to such subject matter.

     

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
      duly
      authorized officer as of the date first set forth above.

     

    
      	
              IGNIS
                PETROLEUM GROUP, INC.

               

               

              By: 
                ______________________________

              Title:
                _____________________________EXECUTION
      COPY

    

     

    EXHIBIT
      10.1

     

    SECURITIES
      PURCHASE AGREEMENT

     

    This
      Securities Purchase Agreement (this “Agreement”)
      is
      dated as of May 2, 2006, by and among HydroGen Corporation, a Nevada corporation
      (the “Company”),
      and
      each purchaser identified on the signature pages hereto (each, a “Purchaser”
and
      collectively, the “Purchasers”).

     

    RECITALS

     

    A. The
      Company and each Purchaser are executing and delivering this agreement in
      reliance upon the exemption from securities registration afforded by Section
      4(2) of the Securities Act of 1933, as amended (the “Securities
      Act”),
      and
      Rule 506 of Regulation D (“Regulation
      D”)
      as
      promulgated by the United States Securities and Exchange Commission under the
      Securities Act.

    

    B. Each
      Purchaser, severally and not jointly, wishes to purchase, and the Company wishes
      to sell, upon the terms and conditions stated in this Agreement, (i) that
      aggregate number of shares of the Common Stock, par value $0.001 per share
      (the
“Common
      Stock”),
      of
      the Company set forth below such Purchaser’s name on the signature page of this
      Agreement (which aggregate amount for all Purchasers together shall be 4,955,000
      shares of Common Stock and shall be collectively referred to herein as the
      “Shares”)
      and
      (ii) warrants, in the form attached hereto as Exhibit
      A
      (the
“Warrants”),
      to
      acquire up to that number of additional shares of Common Stock equal to 25.0%
      of
      the number of Shares purchased by such Purchaser (the shares of Common Stock
      issuable upon exercise of or otherwise pursuant to the Warrants, collectively,
      the “Warrant
      Shares”).
      Simultaneously with or prior to the Closing, the Company shall have sold 200,000
      shares of Common Stock and Warrants to purchase up to 50,000 shares of Common
      Stock to a third party purchaser, who is not acting in concert with the
      Purchasers.

    

    C. The
      Shares, the Warrants and the Warrant Shares issued pursuant to this Agreement
      are collectively referred to herein as the “Securities”.

    

    D. The
      Company has engaged Piper Jaffray & Co. as its placement agent (the
“Placement
      Agent”)
      for
      the offering of the Securities on a “best efforts” basis.

    

    E. Contemporaneous
      with the sale of the Shares and the Warrants, the parties hereto will enter
      into
      a Registration Rights Agreement, in the form attached hereto as Exhibit
      B
      (the
“Registration
      Rights Agreement”),
      pursuant to which, among other things, the Company will agree to provide certain
      registration rights under the Securities Act and applicable state securities
      laws.

    

    NOW,
      THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
      and for other good and valuable consideration the receipt and adequacy of which
      are hereby acknowledged, the Company and the Purchasers hereby agree as
      follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      I.

    DEFINITIONS

     

    1.1 Definitions.
      In
      addition to the terms defined elsewhere in this Agreement, for all purposes
      of
      this Agreement, the following terms shall have the meanings indicated in this
      Section
      1.1:

     

    “Action”
means
      any action, suit, inquiry, notice of violation, proceeding (including any
      partial proceeding such as a deposition) or investigation pending or threatened
      in writing against or affecting the Company, any Subsidiary or any of their
      respective properties before or by any court, arbitrator, governmental or
      administrative agency, regulatory authority (federal, state, county, local
      or
      foreign), stock market, stock exchange or trading facility.

     

    “Affiliate”
means,
      with respect to any Person, any other Person that, directly or indirectly
      through one or more intermediaries, Controls, is controlled by or is under
      common control with such Person, as such terms are used in and construed under
      Rule 144. With respect to a Purchaser, any investment fund or managed account
      that is managed on a discretionary basis by the same investment manager as
      such
      Purchaser will be deemed to be an Affiliate of such Purchaser.

     

    “Business
      Day”
means
      a
      day, other than a Saturday or Sunday, on which banks in New York City are open
      for the general transaction of business.

     

    “Buy-In”
has
      the
      meaning set forth in Section
      4.1(e).

     

    “Buy-In
      Price”
has
      the
      meaning set forth in Section
      4.1(e).

     

    “Cash
      Placement Agent Fee”
means
      the cash fee to be paid to the Placement Agent for services rendered to the
      Company in connection with the offering of the Securities.

     

    “Commission”
means
      the United States Securities and Exchange Commission.

     

    “Common
      Stock”
has
      the
      meaning set forth in the Recitals, and also includes any securities into which
      the Common Stock may hereafter be reclassified. 

     

    “Common
      Stock Equivalents”
means
      any securities of the Company or any Subsidiary which would entitle the holder
      thereof to acquire at any time Common Stock, including without limitation,
      any
      debt, preferred stock, rights, options, warrants or other instrument that is
      at
      any time convertible into or exchangeable for, or otherwise entitles the holder
      thereof to receive, Common Stock or other securities that entitle the holder
      to
      receive, directly or indirectly, Common Stock.

     

    “Company
      Counsel”
means
      Graubard Miller.

     

    “Company
      Deliverables”
has
      the
      meaning set forth in Section
      2.2(a).

     

    “Company’s
      Knowledge”
means
      with respect to any statement made to the knowledge of a party, that the
      statement is based upon the actual knowledge of the officers of such party
      having responsibility for the matter or matters that are the subject of the
      statement, after due inquiry and investigation.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Control”
      (including the terms “controlling”, “controlled by” or “under common control
      with”) means the possession, direct or indirect, of the power to direct or cause
      the direction of the management and policies of a Person, whether through the
      ownership of voting securities, by contract or otherwise.

     

    “Disclosure
      Materials”
has
      the
      meaning set forth in Section
      3.1(h).

     

    “Effective
      Date”
means
      the date on which the initial Registration Statement required by Section 2(a)
      of
      the Registration Rights Agreement is first declared effective by the
      Commission.

     

    “Effectiveness
      Deadline”
means
      the date on which the initial Registration Statement is required to be declared
      effective by the Commission under the terms of the Registration Rights
      Agreement.

     

    “Environmental
      Laws”
has
      the
      meaning set forth in Section
      3.1(l).

     

    “Evaluation
      Date”
has
      the
      meaning set forth in Section
      3.1(v).

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended, or any successor statute,
      and
      the rules and regulations promulgated thereunder.

     

    “GAAP”
means
      U.S. generally accepted accounting principles, as applied by the
      Company.

     

    “Indemnified
      Person”
has
      the
      meaning set forth in Section
      4.7(b).

     

    “Intellectual
      Property”
has
      the
      meaning set forth in Section
      3.1(r).

     

    “Lien”
means
      any lien, charge, claim, encumbrance, security interest, right of first refusal,
      preemptive right or other restrictions of any kind.

     

    “Losses”
has
      the
      meaning set forth in Section
      4.7(a).

     

    “Material
      Adverse Effect”
means
      any of (i) a material and adverse effect on the legality, validity or
      enforceability of any Transaction Document, (ii) a material and adverse effect
      on the results of operations, assets, business or financial condition of the
      Company and the Subsidiaries, taken as a whole, or (iii) any material adverse
      impairment to the Company's ability to perform on a timely basis its obligations
      under any Transaction Document.

     

    “Material
      Contract”
means
      any contract of the Company that was filed as an exhibit to the SEC Filings
      pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation S-B.

    

    “New
      York Courts”
means
      the state and federal courts sitting in the City of New York, Borough of
      Manhattan.

     

    “Outside
      Date”
means
      May 12, 2006.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “Person”
means
      an individual, corporation, partnership, limited liability company, trust,
      business trust, association, joint stock company, joint venture, sole
      proprietorship, unincorporated organization, governmental authority or any
      other
      form of entity not specifically listed herein.

     

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

     

    “Purchaser
      Deliverables”
has
      the
      meaning set forth in Section
      2.2(b).

     

    “Purchaser
      Party”
has
      the
      meaning set forth in Section
      4.7(a).

     

    “Registration
      Statement”
means
      a
      registration statement meeting the requirements set forth in the Registration
      Rights Agreement and covering the resale by the Purchasers of the Registrable
      Securities (as defined in the Registration Rights Agreement).

     

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

     

    “SEC
      Reports”
has
      the meaning set forth in Section
      3.1(h).

     

    “Secretary’s
      Certificate”
has
      the
      meaning set forth in Section
      2.2(a)(vi).

     

    “Short
      Sales”
      include, without limitation, all “short sales” as defined in Rule 200
      promulgated under Regulation SHO under the Exchange Act, whether or not against
      the box, and all types of direct and indirect stock pledges, forward sale
      contracts, options, puts, calls, short sales, swaps, “put equivalent positions”
(as defined in Rule 16a-1(h) under the Exchange Act) and similar arrangements
      (including on a total return basis), and sales and other transactions through
      non-US broker dealers or foreign regulated brokers.

     

    “Subscription
      Amount”
means,
      with respect to each Purchaser, the Subscription Amount indicated on such
      Purchaser’s signature page to this Agreement.

     

    “Subsidiary”
means
      any “significant subsidiary” as defined in Rule 1-02(w) of the Regulation S-X
      promulgated by the Commission under the Exchange Act.

     

    “Trading
      Affiliate”
has
      the
      meaning set forth in Section
      3.2(h).

     

    “Trading
      Day”
means
      (i) a day on which the Common Stock is listed or quoted and traded on its
      primary Trading Market (other than the OTC Bulletin Board), or (ii) if the
      Common Stock is not listed on a Trading Market (other than the OTC Bulletin
      Board), a day on which the Common Stock is traded in the over-the-counter
      market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock
      is
      not quoted on any Trading Market, a day on which the Common Stock is quoted
      in
      the over-the-counter market as reported by the National Quotation Bureau
      Incorporated (or any similar organization or agency succeeding to its functions
      of reporting prices); provided,
      that in
      the event that the Common Stock is not listed or quoted as set forth in (i),
      (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    “Trading
      Market”
means
      whichever of the New York Stock Exchange, the American Stock Exchange, the
      NASDAQ National Market, the NASDAQ Capital Market or OTC Bulletin Board on
      which
      the Common Stock is listed or quoted for trading on the date in
      question.

     

    “Transaction
      Documents”
means
      this Agreement, the schedules and exhibits attached hereto, the Warrants, the
      Registration Rights Agreement, the Transfer Agent Instructions and any other
      documents or agreements executed in connection with the transactions
      contemplated hereunder.

     

    “Transfer
      Agent”
means
      Computershare Trust Company, Inc., or any successor transfer agent for the
      Company.

     

    “Transfer
      Agent Instructions”
means,
      with respect to the Company, the Transfer Agent Instructions, in the form of
      Exhibit
      E,
      executed by the Company and delivered to and acknowledged in writing by the
      Transfer Agent.

     

    “Warrants”
has
      the
      meaning set forth in the Preamble to this Agreement. The Placement Agent and/or
      its designees are also receiving placement agent warrants as compensation for
      services rendered in connection with the transactions set forth herein, which
      warrants shall also constitute “Warrants” for all purposes
      hereunder.

     

    ARTICLE
      II.

    PURCHASE
      AND SALE

     

    2.1 Closing.
      Subject
      to the terms and conditions set forth in this Agreement, at the Closing, the
      Company shall issue and sell to each Purchaser, and each Purchaser shall,
      severally and not jointly, purchase from the Company, such number of shares
      of
      Common Stock and a Warrant to purchase a number of Warrant Shares, each as
      indicated below such Purchaser’s name on the signature page of this Agreement,
      for an aggregate purchase price for such Purchaser as indicated below such
      Purchaser’s name on the signature page of this Agreement. Upon confirmation that
      the other conditions to closing specified herein have been satisfied or duly
      waived by the Purchasers, the Company shall deliver to Lowenstein Sandler PC
      (“Placement
      Agent Counsel”),
      in
      trust, a certificate or certificates, registered in such name or names as the
      Purchasers may designate, representing the Shares and Warrants, with
      instructions that such certificates are to be held for release to the Purchasers
      only upon payment in full of the Purchase Price to the Company by all the
      Purchasers. Upon such receipt by Placement Agent Counsel of the certificates,
      each Purchaser shall promptly, but no more than one Business Day thereafter,
      cause a wire transfer in same day funds to be sent to the account of the Company
      as instructed in writing by the Company, in an amount representing the purchase
      price for such Purchaser as indicated below such Purchaser’s name on the
      signature page of this Agreement. On the date (the “Closing
      Date”)
      the
      Company receives the Purchase Price, the certificates evidencing the Shares
      and
      Warrants shall be released to the Purchasers (the “Closing”).
      The
      Closing of the purchase and sale of the Shares and Warrants shall take place
      at
      the offices of Lowenstein Sandler PC, 1251 Avenue of the Americas, 18th Floor,
      New York, New York 10020, or at such other location and on such other date
      as
      the Company and the Purchasers shall mutually agree.

     

    2.2 Closing
      Deliveries.
        (a) At
      the
      Closing, the Company shall issue, deliver or cause to be delivered to each
      Purchaser the following (the “Company
      Deliverables”):

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (i) This
      Agreement, duly executed by the Company;

     

    (ii) One
      or
      more stock certificates, free and clear of all restrictive and other legends
      (except as expressly provided in Section
      4.1(b)
      hereof),
      evidencing a number of Shares indicated below such Purchaser’s name on the
      signature page of this Agreement, registered in the name of such
      Purchaser;

     

    (iii) a
      Warrant, executed by the Company and registered in the name of such Purchaser,
      pursuant to which such Purchaser shall have the right to acquire such number
      of
      Warrant Shares equal to 25.0% of the number of Shares issuable to such Purchaser
      pursuant to Section
      2.2(a)(ii)
      on the
      terms set forth therein;

     

    (iv) a
      legal
      opinion of Company Counsel, in the form attached hereto as Exhibit
      D,
      executed by such counsel and addressed to the Purchasers and the Placement
      Agent; 

     

    (v) the
      Registration Rights Agreement, duly executed by the Company; 

     

    (vi) duly
      executed Transfer Agent Instructions acknowledged in writing by the Transfer
      Agent; and

     

    (vii) a
      certificate of the Secretary of the Company (the “Secretary’s
      Certificate”),
      dated
      as of the Closing Date, certifying the resolutions adopted by the Board of
      Directors of the Company approving the transactions contemplated by this
      Agreement and the other Transaction Documents and the issuance of the
      Securities, certifying the current versions of the articles of incorporation,
      as
      amended, and by-laws of the Company and certifying as to the signatures and
      authority of persons signing the Transaction Documents and related documents
      on
      behalf of the Company.

     

    (b) At
      the
      Closing, each Purchaser shall deliver or cause to be delivered to the Company
      the following (the “Purchaser
      Deliverables”):

     

    (i) This
      Agreement, duly executed by such Purchaser;

     

    (ii) Its
      Subscription Amount, in United States dollars and in immediately available
      funds, in the amount set forth as the “Purchase Price” indicated below such
      Purchaser’s name on the applicable signature page hereto; 

     

    (iii) the
      Registration Rights Agreement, duly executed by such Purchaser; 

     

    (iv) a
      fully
      completed and duly executed Selling Stockholder Questionnaire in the form
      attached as Annex B to the Registration Rights Agreement; and

     

    (v) a
      fully
      completed and duly executed Accredited Investor Questionnaire and Stock
      Certificate Questionnaire in the forms attached hereto as Exhibits
      C-1
      and
C-2
      respectively.

     

    (c) Allocation.
      The
      portion of the “Subscription Amount” attributable to the Shares is $4.925 per
      share and the portion of the “Subscription Amount” attributable to each full
      Warrant to purchase Shares of Common Stock is $0.30 per Warrant.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    ARTICLE
      III.

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1 Representations
      and Warranties of the Company.
      The
      Company hereby represents and warrants to the Purchasers and to the Placement
      Agent that, except as set forth in the Schedules delivered
      herewith:

     

    (a) Subsidiaries.
      The
      Company has no direct or indirect Subsidiaries other than those listed in
Schedule
      3.1(a)
      hereto.
      Except as disclosed in Schedule
      3.1(a),
      the
      Company owns, directly or indirectly, all of the capital stock or comparable
      equity interests of each Subsidiary free and clear of any and all Liens, and
      all
      the issued and outstanding shares of capital stock or comparable equity interest
      of each Subsidiary are validly issued and are fully paid, non-assessable and
      free of preemptive and similar rights. 

     

    (b) Organization
      and Qualification.
      The
      Company and each Subsidiary is an entity duly incorporated or otherwise
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its incorporation or organization (as applicable), with the
      requisite power and authority to own or lease and use its properties and assets
      and to carry on its business as currently conducted. Neither the Company nor
      any
      Subsidiary is in violation of any of the provisions of its respective
      certificate or articles of incorporation, bylaws or other organizational or
      charter documents. Each of the Company and the Subsidiaries is duly qualified
      to
      conduct business and is in good standing as a foreign corporation or other
      entity in each jurisdiction in which the nature of the business conducted or
      property owned by it makes such qualification necessary, except where the
      failure to be so qualified or in good standing, as the case may be, could not
      reasonably be expected to, individually or in the aggregate, result in a
      Material Adverse Effect. 

     

    (c) Authorization;
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and to
      consummate the transactions contemplated by each of the Transaction Documents
      to
      which it is a party and otherwise to carry out its obligations hereunder and
      thereunder. The execution and delivery of each of the Transaction Documents
      to
      which it is a party by the Company and the consummation by it of the
      transactions contemplated hereby and thereby (including, but not limited to,
      the
      sale and delivery of the Shares and the Warrants and the subsequent issuance
      of
      the Warrant Shares upon exercise of the Warrants) have been duly authorized
      by
      all necessary corporate action on the part of the Company and no further
      corporate action is required by the Company, its Board of Directors or its
      stockholders. Each of the Transaction Documents to which it is a party has
      been
      (or upon delivery will have been) duly executed by the Company and is, or when
      delivered in accordance with the terms hereof, will constitute the valid and
      binding obligation of the Company enforceable against the Company in accordance
      with its terms, except as such enforceability may be limited by applicable
      bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
      laws
      relating to, or affecting generally the enforcement of, creditors’ rights and
      remedies or by other equitable principles of general application. Except as
      set
      forth on Schedule
      3.1(c),
      there
      are no stockholders agreements, voting agreements, or other similar arrangements
      with respect to the Company’s capital stock to which the Company is a party or,
      to the Company’s Knowledge, between or among any of the Company’s
      stockholders.

     

    (d) No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents to which it
      is
      a party by the Company and the consummation by the Company of the transactions
      contemplated hereby or thereby do not and will not (i) conflict with or violate
      any provision of the Company’s or any Subsidiary’s certificate or articles of
      incorporation, bylaws or other organizational or charter documents, (ii)
      conflict with, or constitute a default (or an event that with notice or lapse
      of
      time or both would become a default) under, or give to others any rights of
      termination, amendment, acceleration or cancellation (with or without notice,
      lapse of time or both) of, any agreement, credit facility, debt or other
      instrument (evidencing a Company or Subsidiary debt or otherwise) or other
      understanding to which the Company or any Subsidiary is a party or by which
      any
      property or asset of the Company or any Subsidiary is bound, or affected, or
      (iii) result in a violation of any law, rule, regulation, order, judgment,
      injunction, decree or other restriction of any court or governmental authority
      to which the Company or a Subsidiary is subject (including federal and state
      securities laws and regulations and the rules and regulations, assuming the
      correctness of the representations and warranties made by the Purchasers herein,
      of any self-regulatory organization to which the Company or its securities
      are
      subject, including all applicable Trading Markets), or by which any property
      or
      asset of the Company or a Subsidiary is bound or affected, except in the case
      of
      clauses (ii) and (iii) such as would not, individually or in the aggregate,
      have
      or reasonably be expected to result in a Material Adverse Effect.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (e) Filings,
      Consents and Approvals.
      Neither
      the Company nor any Subsidiary is required to obtain any consent, waiver,
      authorization or order of, give any notice to, or make any filing or
      registration with, any court or other federal, state, local or other
      governmental authority or other Person in connection with the execution,
      delivery and performance by the Company of the Transaction Documents (including
      the issuance of the Securities), other than (i) the filing with the Commission
      of one or more Registration Statements in accordance with the requirements
      of
      the Registration Rights Agreement, (ii) filings required by applicable state
      securities laws, (iii) the filing of a Notice of Sale of Securities on Form
      D
      with the Commission under Regulation D of the Securities Act, (iv) the filing
      of
      any requisite notices and/or application(s) to each applicable Trading Market
      for the issuance and sale of the Common Stock and the Warrants and the listing
      of the Common Stock for trading or quotation, as the case may be, thereon in
      the
      time and manner required thereby, (v) the filings required in accordance with
      Section
      4.6
      and (vi)
      those that have been made or obtained prior to the date of this
      Agreement.

     

    (f) Issuance
      of the Securities.
      The
      Shares and the Warrant Shares have been duly authorized and, when issued and
      paid for in accordance with the terms of the Transaction Documents, will be
      duly
      and validly issued, fully paid and nonassessable, free and clear of all Liens
      other than restrictions on transfer provided for in the Transaction Documents
      or
      imposed by applicable securities laws and shall not be subject to preemptive
      or
      similar rights of stockholders. Assuming the accuracy of the representations
      and
      warranties of the Purchasers, the Shares and the Warrant Shares will be issued
      in compliance with all applicable federal and state securities laws. The Company
      has reserved from its duly authorized capital stock the maximum number of shares
      of Common Stock issuable upon exercise of the Warrants.

     

    (g) Capitalization.
      The
      number of shares and type of all authorized, issued and outstanding capital
      stock, options and other securities of the Company (whether or not presently
      convertible into or exercisable or exchangeable for shares of capital stock
      of
      the Company) is set forth in Schedule
      3.1(g).
      All of
      the outstanding shares of capital stock of the Company are duly authorized,
      validly issued, fully paid and non-assessable, have been issued in compliance
      in
      all material respects with all applicable federal and state securities laws,
      and
      none of such outstanding shares was issued in violation of any preemptive rights
      or similar rights to subscribe for or purchase any capital stock of the Company.
      Except as specified in Schedule
      3.1(g),
      there
      are no outstanding options, warrants or scrip rights to subscribe to, calls
      or
      commitments of any character whatsoever relating to, or securities, rights
      or
      obligations convertible into or exchangeable for, or giving any Person any
      right
      to subscribe for or acquire, any shares of the Company’s capital stock, or
      contracts, commitments, understandings or arrangements by which the Company
      or
      any Subsidiary is or may become bound to issue additional shares of capital
      stock of the Company, or options, securities or rights convertible or
      exchangeable into shares of capital stock of the Company. Except for customary
      adjustments as a result of stock dividends, stock splits, combination of shares,
      reorganizations, recapitalizations, reclassifications or other similar events,
      or as disclosed in Schedule
      3.1(g)
      or any
      Schedule 13D or Schedule 13G or Company report on file with the Commission,
      there are no anti-dilution or price adjustment provisions contained in any
      security issued by the Company (or in any agreement providing rights to security
      holders) and the issuance and sale of the Securities will not, immediately
      or
      with the passage of time, obligate the Company to issue shares of Common Stock
      or other securities to any Person (other than the Purchasers) and will not,
      result in a right of any holder of securities to adjust the exercise,
      conversion, exchange or reset price under such securities. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (h) SEC
      Reports.
      The
      Company has filed all reports required to be filed by it under the Exchange
      Act,
      including pursuant to Section 13(a) or 15(d) thereof since July 8, 2005 (the
      foregoing materials being collectively referred to herein as the “SEC
      Reports”
and
      together with this Agreement and the Schedules to this Agreement (if any),
      the
“Disclosure
      Materials”)
      on a
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Reports prior to the expiration of any such extension. As
      of
      the date hereof, the Company is not aware of any event occurring on or prior
      to
      the Closing Date (other than the transactions contemplated by the Transaction
      Documents) that requires the filing of a Form 8-K after the Closing. As of
      their
      respective dates, or to the extent corrected by a subsequent restatement, the
      SEC Reports complied in all material respects with the requirements of the
      Securities Act and the Exchange Act and the rules and regulations of the
      Commission promulgated thereunder, and none of the SEC Reports, when filed,
      contained any untrue statement of a material fact or omitted to state a material
      fact required to be stated therein or necessary in order to make the statements
      therein, in light of the circumstances under which they were made, not
      misleading.

     

    (i) Financial
      Statements. The
      financial statements of the Company included in the SEC Reports comply in all
      material respects with applicable accounting requirements and the rules and
      regulations of the Commission with respect thereto as in effect at the time
      of
      filing (or to the extent corrected by a subsequent restatement). Such financial
      statements have been prepared in accordance with GAAP applied on a consistent
      basis during the periods involved, except as may be otherwise specified in
      such
      financial statements or the notes thereto and except that unaudited financial
      statements may not contain all footnotes required by GAAP, and fairly present
      in
      all material respects the financial position of the Company and its consolidated
      subsidiaries as of and for the dates thereof and the results of operations
      and
      cash flows for the periods then ended, subject, in the case of unaudited
      statements, to normal, year-end audit adjustments. All material agreements
      to
      which the Company or any Subsidiary is a party or to which the property or
      assets of the Company or any Subsidiary are subject are included as part of
      or
      specifically identified in the SEC Reports.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (j) Tax
      Matters.
      Each of
      the Company and its Subsidiaries (i) has accurately and timely prepared and
      filed all foreign, federal and state income and all other tax returns, reports
      and declarations required by any jurisdiction to which it is subject, (ii)
      has
      paid all material taxes and other governmental assessments and charges that
      are
      material in amount, shown or determined to be due on such returns, reports
      and
      declarations, except those being contested in good faith, with respect to which
      adequate reserves have been set aside on the books of the Company and (iii)
      has
      set aside on its books provision reasonably adequate for the payment of all
      taxes for periods subsequent to the periods to which such returns, reports
      or
      declarations apply. There are no unpaid taxes in any material amount claimed
      to
      be due by the taxing authority of any jurisdiction. 

     

    (k) Material
      Changes.
      Since
      the date of the latest audited financial statements included within the SEC
      Reports, except as specifically disclosed in the SEC Reports or Schedule
      3.1(k),
      (i)
      there have been no events, occurrences or developments that have had or that
      could reasonably be expected to result, either individually or in the aggregate,
      in a Material Adverse Effect, (ii) the Company has not incurred any liabilities
      (contingent or otherwise) other than (A) trade payables, accrued expenses and
      other liabilities incurred in the ordinary course of business consistent with
      past practice and (B) liabilities not required to be reflected in the Company's
      financial statements pursuant to GAAP or required to be disclosed in filings
      made with the Commission, (iii) the Company has not altered its method of
      accounting or the manner in which it keeps its accounting books and records,
      (iv) the Company has not declared or made any dividend or distribution of cash
      or other property to its stockholders or purchased, redeemed or made any
      agreements to purchase or redeem any shares of its capital stock (other than
      in
      connection with repurchases of unvested stock issued to employees of the
      Company) and (v) the Company has not issued any equity securities to any
      officer, director or Affiliate, except Common Stock issued in the ordinary
      course as dividends on outstanding preferred stock and pursuant to existing
      Company stock option or stock purchase plans or executive and director corporate
      arrangements disclosed in the SEC Reports and (vi) there has not been any
      material change or amendment to, or any waiver of any material right under,
      any
      contract under which the Company, any subsidiary thereof, or any of their assets
      is bound or subject. The Company does not have pending before the Commission
      any
      request for confidential treatment of information.

     

    (l) Environmental
      Matters.
      To the
      Company’s Knowledge, neither the Company nor any Subsidiary (i) is in violation
      of any statute, rule, regulation, decision or order of any governmental agency
      or body or any court, domestic or foreign, relating to the use, disposal or
      release of hazardous or toxic substances or relating to the protection or
      restoration of the environment or human exposure to hazardous or toxic
      substances (collectively, “Environmental
      Laws”),
      (ii)
      owns or operates any real property contaminated with any substance that is
      in
      violation of any Environmental Laws, (iii) is liable for any off-site disposal
      or contamination pursuant to any Environmental Laws, and (iv) is subject to
      any
      claim relating to any Environmental Laws; which violation, contamination,
      liability or claim has had or could reasonably be expected to have a Material
      Adverse Effect, individually or in the aggregate; and there is no pending or,
      to
      the Company’s Knowledge, threatened investigation that might lead to such a
      claim.

     

    (m) Litigation.
      There
      is no Action which (i) adversely affects or challenges the legality, validity
      or
      enforceability of any of the Transaction Documents or the Securities or (ii)
      except as specifically disclosed in the SEC Reports, could, if there were an
      unfavorable decision, individually or in the aggregate, have or reasonably
      be
      expected to result in a Material Adverse Effect. Neither the Company nor any
      Subsidiary, nor, to the Company’s Knowledge (based solely on officer and
      director questionnaires requested and obtained by the Company in connection
      with
      this offering), any current director or officer thereof (in his or her capacity
      thereof), is or has been during the five-year period prior to the Closing Date
      the subject of any Action involving a claim of violation of or liability under
      federal or state securities laws or a claim of breach of fiduciary duty. There
      has not been and to the Company’s Knowledge, there is not pending or
      contemplated, any investigation by the Commission involving the Company or,
      to
      the Company’s Knowledge (based solely on officer and director questionnaires
      requested and obtained by the Company in connection with this offering) any
      current or former director or officer of the Company (in his or her capacity
      as
      such). Since July 8, 2005, the Commission has not issued any stop order or
      other
      order suspending the effectiveness of any registration statement filed by the
      Company or any subsidiary under the Exchange Act or the Securities
      Act.

     

    
      
        
        

      

      
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    (n) Employment
      Matters.
      The
      Company and its Subsidiaries are in compliance with all federal, state, local
      and foreign laws and regulations respecting labor, employment and employment
      practices and benefits, terms and conditions of employment and wages and hours,
      except where the failure to be in compliance would not, either individually
      or
      in the aggregate, reasonably be expected to result in a Material Adverse Effect.
      Neither the Company nor any of its Subsidiaries is a party to any collective
      bargaining agreement. No executive officer of the Company or any of its
      Subsidiaries (as defined in Rule 501(f) of the Securities Act) has notified
      the
      Company or any such Subsidiary that such officer intends to leave the Company
      or
      any such Subsidiary or otherwise terminate such officer’s employment with the
      Company or any such Subsidiary. 

     

    (o) Compliance.
      Neither
      the Company nor any Subsidiary, except in each case as could not, individually
      or in the aggregate, have or reasonably be expected to result in a Material
      Adverse Effect, (i) is in default under or in violation of (and no event has
      occurred that has not been waived that, with notice or lapse of time or both,
      would result in a default by the Company or any Subsidiary under), nor has
      the
      Company or any Subsidiary received notice of a claim that it is in default
      under
      or that it is in violation of, any indenture, loan or credit agreement or any
      other agreement or instrument to which it is a party or by which it or any
      of
      its properties is bound (whether or not such default or violation has been
      waived), (ii) is in violation of any order of any court, arbitrator or
      governmental body having jurisdiction over the Company or its properties or
      assets, or (iii) is or has been in violation of, or, to the Company’s Knowledge,
      is in receipt of notice that it is in violation of, any statute, rule or
      regulation of any governmental authority applicable to the Company.

     

    (p) Regulatory
      Permits.
      The
      Company and the Subsidiaries possess all certificates, authorizations and
      permits issued by the appropriate federal, state, local or foreign regulatory
      authorities necessary to conduct their respective businesses as described in
      the
      SEC Reports, except where the failure to possess such permits, individually
      or
      in the aggregate, has not and could not reasonably be expected to result in
      a
      Material Adverse Effect, and, to the Company’s Knowledge, neither the Company
      nor any Subsidiary has received any notice of proceedings relating to the
      revocation or modification of any such permits. 

     

    (q) Title
      to Assets.
      Except
      for property that is specifically the subject of, and covered by, other
      representations and warranties as to ownership or title contained herein, the
      Company and the Subsidiaries have good and marketable title in fee simple to
      all
      real property owned by them that is material to their respective businesses
      and
      good and marketable title in all personal property owned by them that is
      material to their respective businesses, in each case free and clear of all
      Liens, except for Liens that do not, individually or in the aggregate, have
      or
      result in a Material Adverse Effect. Any real property and facilities held
      under
      lease by the Company and the Subsidiaries are held by them under valid,
      subsisting and enforceable leases of which the Company and the Subsidiaries
      are
      in material compliance.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (r) Patents
      and Trademarks.
      The
      Company and its Subsidiaries own, possess, license or have other rights to
      use
      all foreign and domestic patents, patent applications, trade and service marks,
      trade and service mark registrations, trade names, copyrights, licenses,
      inventions, trade secrets, technology, Internet domain names, know-how and
      other
      intellectual property (collectively, the “Intellectual
      Property”)
      necessary for and material to the conduct of their respective businesses as
      now
      conducted. Except as set forth in the SEC Reports and except where such
      violations or infringements would not reasonably be expected to result, either
      individually or in the aggregate, in a Material Adverse Effect, (a) there
      are no rights of third parties to any such Intellectual Property; (b) to the
      Company’s Knowledge, there is no infringement by third parties of any such
      Intellectual Property; (c) there is no pending or, to the Company’s Knowledge,
      threatened action, suit, proceeding or claim by others challenging the Company’s
      and its Subsidiaries’ rights in or to any such Intellectual Property, and the
      Company is unaware of any facts which would form a reasonable basis for any
      such
      claim; (d) there is no pending or, to the Company’s Knowledge, threatened
      action, suit, proceeding or claim by others challenging the validity or scope
      of
      any such Intellectual Property; and (e) there is no pending or, to the Company’s
      Knowledge, threatened action, suit, proceeding or claim by others that the
      Company and/or any of its Subsidiaries infringe or otherwise violate any patent,
      trademark, copyright, trade secret or other proprietary rights of others, and
      the Company is unaware of any other fact which would form a reasonable basis
      for
      any such claim.

     

    (s) Insurance.
      The
      Company and the Subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are prudent
      and customary in the businesses and location in which the Company and the
      Subsidiaries are engaged. Neither the Company nor any Subsidiary has any
      knowledge that it will be unable to renew its existing insurance coverage for
      the Company and the Subsidiaries as and when such coverage expires or to obtain
      similar coverage from similar insurers as may be necessary to continue its
      business without a significant increase in cost.

     

    (t) Transactions
      With Affiliates and Employees.
      Except
      as set forth in the SEC Reports made on or prior to the date hereof, none of
      the
      officers or directors of the Company and, to the Company’s Knowledge, none of
      the employees of the Company is presently a party to any transaction with the
      Company or any Subsidiary or to a presently contemplated transaction (other
      than
      for services as employees, officers and directors) that would be required to
      be
      disclosed pursuant to Item 404 of Regulation S-B promulgated under the
      Securities Act. 

     

    (u) Internal
      Accounting Controls.
      The
      Company and the Subsidiaries maintain a system of internal accounting controls
      sufficient to provide reasonable assurance that (i) transactions are executed
      in
      accordance with management's general or specific authorizations, (ii)
      transactions are recorded as necessary to permit preparation of financial
      statements in conformity with generally accepted accounting principles and
      to
      maintain asset accountability, (iii) access to assets is permitted only in
      accordance with management's general or specific authorization, and (iv) the
      recorded accountability for assets is compared with the existing assets at
      reasonable intervals and appropriate action is taken with respect to any
      differences. 

     

    
      
        
        

      

      
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    (v) Sarbanes-Oxley;
      Disclosure Controls.
      The
      Company is in compliance in all material respects with all of the applicable
      provisions of the Sarbanes-Oxley Act of 2002. The Company has established
      disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
      and 15d-15(e)) for the Company and designed such disclosure controls and
      procedures to ensure that material information relating to the Company is made
      known to the certifying officers by others within those entities, particularly
      during the period in which the Company’s most recently filed periodic report
      under the Exchange Act, as the case may be, is being prepared. The Company's
      certifying officers have evaluated the effectiveness of the Company's disclosure
      controls and procedures as of the end of the most recent periodic reporting
      period under the Exchange Act (such date, the “Evaluation
      Date”).
      The
      Company presented in its most recently filed periodic report under the Exchange
      Act the conclusions of the certifying officers about the effectiveness of the
      disclosure controls and procedures based on their evaluations as of the
      Evaluation Date. Since the Evaluation Date, except with respect to the
      remediation of the material weakness in internal control over financial
      reporting and the ineffectiveness of disclosure controls and procedures as
      described in the SEC Filings, there have been no significant changes in the
      Company's internal controls over financial reporting (as such term is defined
      in
      Exchange Act Rules 13a-15(f) and 15d-15(f)) or, to the Company's Knowledge,
      in
      other factors that could significantly affect the Company's internal controls
      over financial reporting. 

     

    (w) Certain
      Fees.
      No
      person
      or entity will have, as a result of the transactions contemplated by this
      Agreement, any valid right, interest or claim against or upon the Company or
      a
      Purchaser for any commission, fee or other compensation pursuant to any
      agreement, arrangement or understanding entered into by or on behalf of the
      Company, other than Piper Jaffray & Co. as placement agent with respect to
      the offer and sale of the Securities (which placement agent fees are being
      paid
      by the Company). 

     

    (x) Private
      Placement.
      Assuming the accuracy of the Purchasers’ representations and warranties set
      forth in Section
      3.2(b)-(e),
      no
      registration under the Securities Act is required for the offer and sale of
      the
      Securities by the Company to the Purchasers under the Transaction Documents.
      The
      Company is eligible to register the Shares and the Warrant Shares for resale
      by
      the Purchasers using Form SB-2 promulgated under the Securities Act. Except
      as
      specified in Schedule
      3.1(x),
      the
      Company has not granted or agreed to grant to any Person any rights (including
      “piggy-back” registration rights) to have any securities of the Company
      registered with the Commission or any other governmental authority that have
      not
      been satisfied or waived. 

     

    (y) No
      Directed Selling Efforts or General Solicitation.
      Neither
      the Company, nor any of its Affiliates, nor any Person acting on its or their
      behalf has conducted any “general solicitation” or “general advertising” (as
      those terms are used in Regulation D) in connection with the offer or sale
      of
      any of the Securities.

     

    (z) No
      Integrated Offering.
      Neither
      the Company nor any of its Affiliates, nor any Person acting on its or their
      behalf has, directly or indirectly, at any time within the past six months
      made
      any offers or sales of any Company security or solicited any offers to buy
      any
      security, under circumstances that would (i) eliminate the availability of
      the
      exemption from registration under Regulation D under the Securities Act in
      connection with the offer and sale by the Company of the Securities as
      contemplated hereby or (ii) cause the offering of the Securities pursuant to
      the
      Transaction Documents to be integrated with prior offerings by the Company
      for
      purposes of any applicable law, regulation or stockholder approval provisions,
      including, without limitation, under the rules and regulations of any Trading
      Market.

     

    
      
        
        

      

      
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    (aa) Listing
      and Maintenance Requirements.
      The
      Company’s Common Stock is registered pursuant to Section 12(g) of the Exchange
      Act, and the Company has taken no action designed to terminate the registration
      of the Common Stock under the Exchange Act nor has the Company received any
      notification that the Commission is contemplating terminating such registration.
      Except as specified in the SEC Reports, the Company has not, since July 8,
      2005,
      received written notice from any Trading Market on which the Common Stock has
      been listed or quoted to the effect that the Company is not in compliance with
      the listing or maintenance requirements of such Trading Market. To the Company’s
      Knowledge, the Company is in compliance in all material respects with the
      requirements for continued trading of the Common Stock on the Trading Market
      on
      which the Common Stock is currently quoted. 

     

    (bb) Investment
      Company.
      Neither
      the Company nor any of its Subsidiaries is required to be registered as, and
      is
      not an Affiliate of, and immediately following the Closing will not be required
      to register as, an “investment company” within the meaning of the Investment
      Company Act of 1940, as amended.

     

    (cc) Questionable
      Payments. Neither
      the Company nor any of its Subsidiaries, nor, to the Company’s Knowledge, any
      directors, officers, employees, agents or other Persons acting on behalf of
      the
      Company or any of its Subsidiaries has, in the course of its actions for, or
      on
      behalf of, the Company: (a) used any corporate funds for unlawful contributions,
      gifts, entertainment or other unlawful expenses relating to foreign or domestic
      political activity; (b) made any direct or indirect unlawful payments to any
      foreign or domestic governmental officials or employees from corporate funds;
      (c) violated in any material respect any provision of the Foreign Corrupt
      Practices Act of 1977, as amended or (d) made any other unlawful bribe, rebate,
      payoff, influence payment, kickback or other unlawful payment to any foreign
      or
      domestic government official or employee.

     

    (dd) Application
      of Takeover Protections.
      There
      is no control share acquisition, business combination, poison pill (including
      any distribution under a rights agreement) or other similar anti-takeover
      provision under the Company's charter documents or the laws of its state of
      incorporation that is or could reasonably be expected to become applicable
      to
      any of the Purchasers as a result of the Purchasers and the Company fulfilling
      their obligations or exercising their rights under the Transaction Documents,
      including without limitation the Company's issuance of the Securities and the
      Purchasers' ownership of the Securities.

     

    (ee) Disclosure.
      The
      Company confirms that it and its officers and directors have not provided,
      and
      it has not authorized the Placement Agent to provide, any Purchaser with any
      information that constitutes or might constitute material, non-public
      information except insofar as the existence, provisions and terms of the
      Transaction Documents and the proposed transactions hereunder may constitute
      such information. The Company understands and confirms that the Purchasers
      will
      rely on the foregoing representations in effecting transactions in securities
      of
      the Company. All disclosure provided to the Purchasers regarding the Company,
      its business and the transactions contemplated hereby, furnished by the Company
      or authorized by the Company and furnished by the Placement Agent on behalf
      of
      the Company (including the Company’s representations and warranties set forth in
      this Agreement) are true and correct in all material respects and do not contain
      any untrue statement of a material fact or omit to state any material fact
      necessary in order to make the statements made therein, in light of the
      circumstances under which they were made, not misleading. No event or
      circumstance has occurred or information exists with respect to the Company
      nor
      any of its Subsidiaries or its or their business, properties, operations or
      financial conditions, which, under applicable law, rule or regulation, requires
      public disclosure or announcement by the Company but which has not been so
      publicly announced or disclosed, except for the announcement of this Agreement
      and related transactions.

     

    
      
        
        

      

      
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    (ff) Off
      Balance Sheet Arrangements.
      There
      is no transaction, arrangement, or other relationship between the Company and
      an
      unconsolidated or other off balance sheet entity that is required to be
      disclosed by the Company in its Exchange Act filings and is not so
      disclosed.

     

    (gg) Consultation
      with Auditors.
      The
      Company has consulted its independent auditors concerning the accounting
      treatment of the transactions contemplated by the Transaction Documents, and
      in
      connection therewith has furnished such auditors complete copies of the
      Transaction Documents. The Company intends to account for the gross proceeds
      raised from the financing which is the subject of this Agreement as equity
      in
      its financial statements.

     

    3.2 Representations
      and Warranties of the Purchasers.
      Each
      Purchaser hereby, for itself and for no other Purchaser, represents and warrants
      to the Company and the Placement Agent as follows:

     

    (a) Organization;
      Authority.
      Such
      Purchaser is an entity duly organized, validly existing and in good standing
      under the laws of the jurisdiction of its organization with the requisite
      corporate or partnership power and authority to enter into and to consummate
      the
      transactions contemplated by the applicable Transaction Documents and otherwise
      to carry out its obligations hereunder and thereunder. The execution, delivery
      and performance by such Purchaser of the transactions contemplated by this
      Agreement have been duly authorized by all necessary corporate or, if such
      Purchaser is not a corporation, such partnership, limited liability company
      or
      other applicable like action, on the part of such Purchaser. Each of this
      Agreement and the Registration Rights Agreement has been duly executed by such
      Purchaser, and when delivered by such Purchaser in accordance with terms hereof,
      will constitute the valid and legally binding obligation of such Purchaser,
      enforceable against it in accordance with its terms, except as such
      enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium, liquidation or similar laws relating to, or
      affecting generally the enforcement of, creditors’ rights and remedies or by
      other equitable principles of general application.

     

    (b) Investment
      Intent.
      Such
      Purchaser understands that the Securities are “restricted securities” and have
      not been registered under the Securities Act or any applicable state securities
      law and is acquiring the Securities and, upon exercise of the Warrants will
      acquire the Warrant Shares issuable upon exercise thereof, as principal for
      its
      own account for investment purposes only and not with a view to or for
      distributing or reselling such Securities or any part thereof, without
      prejudice, however, to such Purchaser's right, subject to the provisions of
      this
      Agreement and the Registration Rights Agreement, at all times to sell or
      otherwise dispose of all or any part of such Securities or Warrant Shares
      pursuant to an effective registration statement under the Securities Act or
      under an exemption from such registration and in compliance with applicable
      federal and state securities laws. Subject to the immediately preceding
      sentence, nothing contained herein shall be deemed a representation or warranty
      by such Purchaser to hold the Securities for any period of time. Such Purchaser
      is acquiring the Securities hereunder in the ordinary course of its business.
      Such Purchaser does not have any agreement, plan or understanding, directly
      or
      indirectly, with any Person to distribute any of the Securities.

     

    
      
        
        

      

      
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    (c) Purchaser
      Status.
      At the
      time such Purchaser was offered the Securities, it was, and at the date hereof
      it is, and on each date on which it exercises the Warrants it will be, an
“accredited investor” as defined in Rule 501(a) under the Securities Act. Such
      Purchaser is not a registered broker-dealer under Section 15 of the Exchange
      Act.

     

    (d) General
      Solicitation. Such
      Purchaser is not purchasing the Securities as a result of any advertisement,
      article, notice or other communication regarding the Securities published in
      any
      newspaper, magazine or similar media or broadcast over television or radio
      or
      presented at any seminar or any other general solicitation or general
      advertisement.

     

    (e) Experience
      of Such Purchaser.
      Such
      Purchaser, either alone or together with its representatives, has such
      knowledge, sophistication and experience in business and financial matters
      so as
      to be capable of evaluating the merits and risks of the prospective investment
      in the Securities, and has so evaluated the merits and risks of such investment.
      Such Purchaser is able to bear the economic risk of an investment in the
      Securities and, at the present time, is able to afford a complete loss of such
      investment.

     

    (f) Access
      to Information.
      Such
      Purchaser acknowledges that it reviewed the Disclosure Materials and has been
      afforded (i) the opportunity to ask such questions as it has deemed necessary
      of, and to receive answers from, representatives of the Company concerning
      the
      terms and conditions of the offering of the Securities and the merits and risks
      of investing in the Securities; (ii) access to information (other than material
      non-public information) about the Company and the Subsidiaries and their
      respective financial condition, results of operations, business, properties,
      management and prospects sufficient to enable it to evaluate its investment;
      and
      (iii) the opportunity to obtain such additional information that the Company
      possesses or can acquire without unreasonable effort or expense that is
      necessary to make an informed investment decision with respect to the
      investment. Neither such inquiries nor any other investigation conducted by
      or
      on behalf of such Purchaser or its representatives or counsel shall modify,
      amend or affect such Purchaser's right to rely on the truth, accuracy and
      completeness of the Disclosure Materials and the Company's representations
      and
      warranties contained in the Transaction Documents.

     

    (g) Residency.
      Such
      Purchaser has, if an entity, its principal place of business or, if an
      individual, its primary residence in the jurisdiction set forth immediately
      below such Purchaser’s name on the signature pages hereto.

     

    (h) Certain
      Trading Activities.
      Other
      than with respect to the transactions contemplated herein, since the earlier
      to
      occur of (1) the time that such Purchaser was first contacted by the Company,
      the Placement Agent or any other Person regarding an investment in the Company
      and (2) the tenth (10th)
      day
      prior to the date of this Agreement, neither the Purchaser nor any Affiliate
      of
      such Purchaser which (x) had knowledge of the transactions contemplated hereby,
      (y) has or shares discretion relating to such Purchaser’s investments or trading
      or information concerning such Purchaser’s investments, including in respect of
      the Securities, or (z) is subject to such Purchaser’s review or input concerning
      such Affiliate’s investments or trading (collectively, “Trading
      Affiliates”)
      has
      directly or indirectly, nor has any Person acting on behalf of or pursuant
      to
      any understanding with such Purchaser or Trading Affiliate, effected or agreed
      to effect any transactions in the securities of the Company (including, without
      limitation, any Short Sales involving the Company’s securities). Such
      Purchaser shall
      not, and shall cause its Trading Affiliates not to, engage, directly or
      indirectly, in any transactions in the securities of the Company (including,
      without limitation, any Short Sales involving the Company’s securities) during
      the period from the date hereof until such time as (i) the transactions
      contemplated by this Agreement are first publicly announced as described in
      Section 4.6 or (ii) this Agreement is terminated in full pursuant to Section
      6.18. Each Purchaser understands and acknowledges, severally and not jointly
      with any other Purchaser, that the Commission currently takes the position
      that
      covering a short position established prior to effectiveness of a resale
      registration statement with shares included in such registration statement
      would
      be a violation of Section 5 of the Securities Act, as set forth in Item 65,
      Section 5 under Section A, of the Manual of Publicly Available Telephone
      Interpretations, dated July 1997, compiled by the Office of Chief Counsel,
      Division of Corporation Finance. Except in compliance with the Securities Act
      and the rules and regulations promulgated thereunder and applicable state
      securities laws, the Purchaser will not engage in any Short Sales that result
      in
      the disposition of the Securities (including the Warrant Shares) acquired
      hereunder by the Purchaser.

     

    
      
        
        

      

      
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    (i) Brokers
      and Finders.
      No
      Person will have, as a result of the transactions contemplated by this
      Agreement, any valid right, interest or claim against or upon the Company,
      or
      any Purchaser for any commission, fee or other compensation pursuant to any
      agreement, arrangement or understanding entered into by or on behalf of the
      Purchaser.

     

    (j) Independent
      Investment Decision.
      Such
      Purchaser has independently evaluated the merits of its decision to purchase
      Securities pursuant to the Transaction Documents, and such Purchaser confirms
      that it has not relied on the advice of any other Purchaser’s business and/or
      legal counsel in making such decision. Such Purchaser understands that nothing
      in this Agreement or any other materials presented by or on behalf of the
      Company to the Purchaser in connection with the purchase of the Securities
      constitutes legal, tax or investment advice. Such Purchaser has consulted such
      legal, tax and investment advisors as it, in its sole discretion, has deemed
      necessary or appropriate in connection with its purchase of the Securities.
      Such
      Purchaser understands that the Placement Agent has acted solely as the agent
      of
      the Company in this placement of the Securities and such Purchaser has not
      relied on the business or legal advice of the Placement Agent or any of its
      agents, counsel or Affiliates in making its investment decision hereunder,
      and
      confirms that none of such Persons has made any representations or warranties
      to
      such Purchaser in connection with the transactions contemplated by the
      Transaction Documents.

     

    The
      Company acknowledges and agrees that no Purchaser has made or makes any
      representations or warranties with respect to the transactions contemplated
      hereby other than those specifically set forth in this Section
      3.2.

     

    
      
        
        

      

      
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    ARTICLE
      IV.

    OTHER
      AGREEMENTS OF THE PARTIES

     

    4.1         
      (a) Compliance
      with Laws.
      Notwithstanding any other provision of this Article
      IV,
      each
      Purchaser covenants that the securities may only be disposed of pursuant to
      an
      effective registration statement under, and in compliance with the requirements
      of, the Securities Act, or pursuant to an available exemption from, or in a
      transaction not subject to, the registration requirements of the Securities
      Act,
      and in compliance with any applicable state and federal securities laws. In
      connection with any transfer of the Securities other than pursuant to an
      effective registration statement, pursuant to Rule 144(k) or in connection
      with
      a pledge as contemplated in Section
      4.1(b),
      except
      as otherwise provided herein, the transferor will provide to the Company, at
      its
      request, an opinion of counsel selected by the transferor, which counsel and
      the
      form and substance of which opinion shall be reasonably satisfactory to the
      Company and its legal counsel, to the effect that such transfer does not require
      registration of such transferred Securities under the Securities Act.
      Notwithstanding the foregoing, the Company hereby consents to and agrees to
      register on the books of the Company and with its transfer agent, without any
      such legal opinion, except to the extent that the transfer agent requests such
      legal opinion, any transfer of Securities by a Purchaser to an Affiliate of
      such
      Purchaser, provided that the transferee agrees to the terms and conditions
      of
      the Securities, certifies to the Company that it is an “accredited investor” as
      defined in Rule 501(a) under the Securities Act and provided that such Affiliate
      does not request any removal of any existing legends on any certificate
      evidencing the Securities.

     

    (b) Legends.
      Certificates evidencing the Securities will contain the following legend, until
      such time as they are not required under Section
      4.1(c):

     

    [NEITHER
      THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
      HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED] WITH THE
      SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE
      IN
      RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
      AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
      EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
      ACT
      OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
      TO,
      THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
      APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS.

     

    The
      Company acknowledges and agrees that a Purchaser may from time to time pledge,
      and/or grant a security interest in some or all of the legended Securities,
      in
      connection with applicable securities laws, pursuant to a bona fide margin
      agreement in compliance with a bona fide margin loan. Such a pledge would not
      be
      subject to approval or consent of the Company and no legal opinion of legal
      counsel to the pledgee, secured party or pledgor shall be required in connection
      with the pledge, but such legal opinion shall be required in connection with
      a
      subsequent transfer or foreclosure following default by the Purchaser transferee
      of the pledge. No notice shall be required of such pledge but Purchaser’s
      transferee shall promptly notify the Company of the pledge. Each Purchaser
      acknowledges that the Company shall not be responsible for any pledges relating
      to, or the grant of any security interest in, any of the Securities or for
      any
      agreement, understanding or arrangement between any Purchaser and its pledgee
      or
      secured party. The Company’s indemnification obligations pursuant to this
      Agreement shall not extend to any Proceeding or Losses arising out of or related
      to this Section
      4.1(b).

     

    
      
        
        

      

      
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    (c) Removal
      of Legends.
      Certificates evidencing Securities shall not be required to contain such legend
      or any other legend (i) while a registration statement (including the
      Registration Statement) covering the resale of such Securities is effective
      under the Securities Act, (ii) following any sale of such Securities pursuant
      to
      Rule 144 (assuming the transferor is not an affiliate of the Company), (iii)
      if
      such Securities are eligible for sale under Rule 144(k) (to the extent that
      the
      applicable Purchaser provides a certification or legal opinion to the Company
      to
      that effect), or (iv) if such legend is not required under applicable
      requirements of the Securities Act (including controlling judicial
      interpretations and pronouncements issued by the Commission). The Company shall
      cause its counsel to issue the legal opinion referred to in the Transfer Agent
      Instructions to the Company’s transfer agent on the Effective Date. Any fees
      (with respect to the Transfer Agent, counsel to the Company or otherwise)
      associated with the issuance of such opinion or the removal of such legend
      shall
      be borne by the Company. If any portion of the Warrant is exercised at a time
      when there is an effective registration statement to cover the resale of the
      Warrant Shares, or if such Warrant Shares may be sold under Rule 144(k), then
      such Warrant Shares shall be issued free of all legends. Following the Effective
      Date or at such earlier time as a legend is no longer required for certain
      Securities, the Company will no later than three (3) Trading Days following
      the
      delivery by a Purchaser to the Company or the Transfer Agent (with notice to
      the
      Company) of (i) a legended certificate representing such Shares or Warrant
      Shares (endorsed or with stock powers attached, signatures guaranteed, and
      otherwise in form necessary to affect the reissuance and/or transfer) or (ii)
      an
      Exercise Notice in the manner stated in the Warrants to affect the exercise
      of
      such Warrant in accordance with its terms and an opinion of counsel to the
      extent required by Section
      4.1(a),
      deliver
      or cause to be delivered to such Purchaser a certificate representing such
      Securities that is free from all restrictive and other legends. The Company
      may
      not make any notation on its records or give instructions to the Transfer Agent
      that enlarge the restrictions on transfer set forth in this Section.

    

    (d) Acknowledgement.
      Each
      Purchaser hereunder acknowledges its primary responsibilities under the
      Securities Act and accordingly will not sell the Shares, the Warrant Shares
      or
      any interest therein without complying with the requirements of the Securities
      Act. While the above-referenced registration statement remains effective, each
      Purchaser hereunder may sell the shares in accordance with the plan of
      distribution contained in the registration statement and if it does so it will
      comply therewith and with the related prospectus delivery requirements. To
      provide further assurance in connection with de-legending, each Purchaser
      hereunder commits that it will continue to hold the shares in its own name,
      and
      not in the name of a nominee, until such time as the shares are duly and
      properly sold in compliance with all relevant securities laws. Both the Company
      and its transfer agent, and their respective directors, officers, employees
      and
      agents, may rely on this subsection (d) and each Purchaser hereunder will
      indemnify and hold harmless each of such persons from any breaches or violations
      of this paragraph.

    

    (e) Buy-In.
      If
      within three (3) Trading Days after the Company’s receipt of a legended
      certificate representing such Securities (the “Delivery
      Date”),
      the
      Company shall fail to issue and deliver to such Purchaser a certificate
      representing such Securities that is free from all restrictive and other
      legends, and if on or after such Delivery Date the Purchaser purchases (in
      an
      open market transaction or otherwise) shares of Common Stock to deliver in
      satisfaction of a sale by the Purchaser of shares of Common Stock that the
      Purchaser anticipated receiving from the Company without any restrictive legend
      (a “Buy-In”),
      then
      the Company shall, within three (3) Trading Days after the Purchaser’s request
      and in the Purchaser’s sole discretion, either (i) pay cash to the Purchaser in
      an amount equal to the Purchaser’s total purchase price (including brokerage
      commissions, if any) for the shares of Common Stock so purchased (the
“Buy-In
      Price”),
      at
      which point the Company’s obligation to deliver such certificate shall terminate
      and such shares shall be cancelled, or (ii) promptly honor its obligation to
      deliver to the Purchaser a certificate or certificates representing such number
      of shares of Common Stock that would have been issued if the Company timely
      complied with its obligations hereunder and pay cash to the Purchaser in an
      amount equal to the excess (if any) of the Buy-In Price over the product of
      (a)
      such number of shares of Common Stock that the Company was required to deliver
      to the Purchaser on the Delivery Date, times (b) the closing bid price of the
      Common Stock on the Delivery Date.

    

    
      
        
        

      

      
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    4.2 Reservation
      of Common Stock.
      The
      Company shall maintain a reserve from its duly authorized shares of Common
      Stock
      for issuance pursuant to the Transaction Documents in such amount as may be
      required to fulfill its obligations in full under the Transaction Documents.
      In
      the event that at any time the then authorized shares of Common Stock are
      insufficient for the Company to satisfy its obligations in full under the
      Transaction Documents, the Company shall promptly take such actions as may
      be
      required to increase the number of authorized shares.

     

    4.3 Furnishing
      of Information.
      As long
      as any Purchaser owns the Securities, the Company covenants to timely file
      (or
      obtain extensions in respect thereof and file within the applicable grace
      period) all reports required to be filed by the Company after the date hereof
      pursuant to the Exchange Act. As long as any Purchaser owns Securities, if
      the
      Company is not required to file reports pursuant to such laws, it will prepare
      and furnish to the Purchasers and make publicly available in accordance with
      Rule 144(c) such information as is required for the Purchasers to sell the
      Shares and Warrant Shares under Rule 144. The Company further covenants that
      it
      will take such further action as any holder of Securities may reasonably
      request, all to the extent required from time to time to enable such Person
      to
      sell the Shares and Warrant Shares without registration under the Securities
      Act
      within the limitation of the exemptions provided by Rule 144. 

     

    4.4 No
      Integration.
      The
      Company shall not, and shall use its best efforts to ensure that no Affiliate
      of
      the Company shall, sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the Securities
      Act) that will be integrated with the offer or sale of the Securities in a
      manner that would require the registration under the Securities Act of the
      sale
      of the Securities to the Purchasers, or that will be integrated with the offer
      or sale of the Securities for purposes of the rules and regulations of any
      Trading Market.

     

    4.5 Subsequent
      Registrations.
      Other
      than pursuant to the Registration Statement and those certain Registration
      Rights Agreements between the Company and certain investors party thereto,
      dated
      July 8, 2005, the Company shall not file any registration statement (other
      than
      on Form S-8) with the Commission with respect to any securities of the
      Company.

     

    4.6 Securities
      Laws Disclosure; Publicity.
      By 9:00
      a.m. (New York City time) on the Trading Day immediately following the execution
      of this Agreement and by 9:00 a.m. (New York City time) on the Trading Day
      following the Closing Date, the Company shall issue press releases disclosing
      the transactions contemplated hereby and the Closing. On the Trading Day
      following the execution of this Agreement, the Company will file a Current
      Report on Form 8-K with the Commission describing the material terms of the
      Transaction Documents (and including as exhibits to such Current Report on
      Form
      8-K the Transaction Documents), and on the Trading Day following the Closing
      Date, the Company will file an additional Current Report on Form 8-K to disclose
      the Closing. Thereafter, the Company shall timely file any filings and notices
      required by the Commission and the Trading Market on which the Common Stock
      is
      listed. Notwithstanding the foregoing, the Company shall not publicly disclose
      the name of any Purchaser, or include the name of any Purchaser in any press
      release or filing with the Commission (other than the Registration Statement)
      or
      any regulatory agency or Trading Market, without the prior written consent
      of
      such Purchaser, except to the extent such disclosure is required by law, request
      of the Staff of the Commission or Trading Market regulations. 

     

    
      
        
        

      

      
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    4.7 Indemnification.

     

    (a) Indemnification
      of Purchasers.
      In
      addition to the indemnity provided in the Registration Rights Agreement, the
      Company will indemnify and hold the Purchasers and their directors, officers,
      shareholders, partners, members, managers, employees and agents (each, a
“Purchaser
      Party”)
      harmless from any and all losses, liabilities, obligations, claims,
      contingencies, damages, costs and expenses, including all judgments, amounts
      paid in settlements, court costs and reasonable attorneys' fees and costs of
      investigation (collectively, “Losses”)
      that
      any such Purchaser Party may suffer or incur as a result of or relating to
      any
      misrepresentation, breach or inaccuracy of any representation, warranty,
      covenant or agreement made by the Company in any Transaction Document. In
      addition to the indemnity contained herein, the Company will reimburse each
      Purchaser Party for its reasonable legal and other expenses (including the
      cost
      of any investigation, preparation and travel in connection therewith) incurred
      in connection therewith, as such expenses are incurred. If and to the extent
      that such indemnification is unenforceable for any reason, the Company shall
      make the maximum contribution to the payment and satisfaction of such losses
      permissible under applicable law.

     

    (b) Conduct
      of Indemnification Proceedings.
      Promptly
      after receipt by any Person (the “Indemnified
      Person”)
      of
      notice of any demand, claim or circumstances which would or might give rise
      to a
      claim or the commencement of any action, proceeding or investigation in respect
      of which indemnity may be sought pursuant to Section
      4.7(a),
      such
      Indemnified Person shall promptly notify the Company in writing and the Company
      shall assume the defense thereof, including the employment of counsel reasonably
      satisfactory to such Indemnified Person, and shall assume the payment of all
      fees and expenses; provided,
      however, that
      the
      failure of any Indemnified Person so to notify the Company shall not relieve
      the
      Company of its obligations hereunder except to the extent that the Company
      is
      actually and materially prejudiced by such failure to notify. In any such
      proceeding, any Indemnified Person shall have the right to retain its own
      counsel, but the fees and expenses of such counsel shall be at the expense
      of
      such Indemnified Person unless: (i) the Company and the Indemnified Person
      shall
      have mutually agreed to the retention of such counsel, or (ii) in the reasonable
      judgment of counsel to such Indemnified Person representation of both parties
      by
      the same counsel would be inappropriate due to actual or potential differing
      interests between them. The Company shall not be liable for any settlement
      of
      any proceeding effected without its written consent, which consent shall not
      be
      unreasonably withheld, delayed or conditions, but if settled without such
      consent, or if there be a final judgment for the plaintiff, the Company shall
      indemnify and hold harmless such Indemnified Person from and against any Losses
      by reason of such settlement or judgment. Without the prior written consent
      of
      the Indemnified Person, the Company shall not effect any settlement of any
      pending or threatened proceeding in respect of which any Indemnified Person
      is
      or could have been a party and indemnity could have been sought hereunder by
      such Indemnified Party, unless such settlement includes an unconditional release
      of such Indemnified Person from all liability arising out of such
      proceeding.

     

    
      
        
        

      

      
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    4.8 Non-Public
      Information.
      The
      Company covenants and agrees that it and its officers and directors have not
      provided, and it has not authorized the Placement Agent to provide any Purchaser
      with any information that the Company believes constitutes material non-public
      information (other than the contemplated Transaction Documents and the
      transactions contemplated thereby), unless prior thereto such Purchaser shall
      have executed a written agreement regarding the confidentiality and use of
      such
      information. Notwithstanding the foregoing, if the Company provides
      (inadvertently or otherwise) material non-public information to a Purchaser,
      other than in accordance with the immediately preceding sentence, the Company
      shall promptly take corrective action by disclosing such material non-public
      information in a Current Report on Form 8-K. The Company understands and
      confirms that each Purchaser shall be relying on the foregoing representations
      in effecting transactions in securities of the Company.

     

    4.9 Listing
      of Securities.
      If the
      Company applies to have its Common Stock or other securities listed on any
      Trading Market, it shall include in such application the Shares, the Warrant
      Shares and the shares of Common Stock issuable upon exercise of the Placement
      Agent Warrants and will take such other action as is necessary to cause the
      Shares and the Warrant Shares (including the shares of Common Stock issuable
      upon exercise of the warrants issued to the Placement Agent) to be listed on
      such Trading Market as promptly as practicable. The Company will use
      commercially reasonable efforts to continue the listing and trading of its
      Common Stock on a Trading Market and, in accordance, therewith, will use
      commercially reasonable efforts to comply in all respects with the Company’s
      reporting, filing and other obligations applicable to issuers whose securities
      are listed on such Trading Market.

     

    4.10 Use
      of
      Proceeds.
      The
      Company intends to use the net proceeds from the sale of the Securities
      hereunder for working capital and general corporate purposes and not for the
      satisfaction of any portion of the Company’s debt (other than payment of trade
      payables and accrued expenses in the ordinary course of the Company’s business
      and consistent with prior practices), or to redeem any Common Stock or Common
      Stock Equivalents or to settle any outstanding Action.

     

    ARTICLE
      V.

    CONDITIONS
      PRECEDENT TO CLOSING

    

    5.1 Conditions
      Precedent to the Obligations of the Purchasers to Purchase
      Securities.
      The
      obligation of each Purchaser to acquire Securities at the Closing is subject
      to
      the fulfillment to such Purchase’s satisfaction, on or prior to the Closing
      Date, of each of the following conditions, any of which may be waived by such
      Purchaser (as to itself only):

     

    (a) Representations
      and Warranties.
      The
      representations and warranties of the Company contained herein shall be true
      and
      correct in all material respects (except to the extent that any such
      representation or warranty is already qualified by materiality, in which case
      it
      shall be true and correct in all respects) as of the date when made and as
      of
      the Closing Date, as though made on and as of such date; 

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    (b) Performance.
      The
      Company and each other Purchaser shall have performed, satisfied and complied
      in
      all material respects with all covenants, agreements and conditions required
      by
      the Transaction Documents to be performed, satisfied or complied with by it
      at
      or prior to the Closing;

     

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

     

    (d) Consents. The
      Company shall have obtained in a timely fashion any and all consents, permits,
      approvals, registrations and waivers necessary or appropriate for consummation
      of the purchase and sale of the Securities, all of which shall be and remain
      so
      long as necessary in full force and effect;

     

    (e) Adverse
      Changes.
      Since
      the date of execution of this Agreement, no event or series of events shall
      have
      occurred that reasonably could have or result in a Material Adverse Effect;
      

     

    (f) No
      Suspensions of Trading in Common Stock; Listing.
      Trading
      in the Common Stock shall not have been suspended by the Commission or any
      Trading Market (except for any suspensions of trading of not more than one
      Trading Day solely to permit dissemination of material information regarding
      the
      Company) at any time since the date of execution of this Agreement, and the
      Common Stock shall have been at all times since such date listed for trading
      on
      a Trading Market; 

     

    (g) Company
      Deliverables.
      The
      Company shall have delivered the Company Deliverables in accordance with
Section
      2.2(a);
      

     

    (h) Compliance
      Certificate.
      The
      Company shall have delivered to each Purchaser a certificate, dated as of the
      Closing Date and signed by its Chief Executive Officer or its Chief Financial
      Officer, dated as of the Closing Date, certifying to the fulfillment of the
      conditions specified in Sections
      5.1(a),
      (b),
      (c),
      (d)
      and
(f);
      and

     

    (i) Termination. This
      Agreement shall not have been terminated as to such Purchaser in accordance
      with
Section
      6.18
      herein.

     

    5.2 Conditions
      Precedent to the Obligations of the Company to sell Securities.
      The
      Company's obligation to sell and issue the Securities at the Closing is subject
      to the fulfillment to the satisfaction of the Company on or prior to the Closing
      Date of the following conditions, any of which may be waived by the
      Company:

     

    (a) Representations
      and Warranties.
      The
      representations and warranties made by the Purchasers in Section
      3.2
      hereof
      shall be true and correct in all material respects as of the date when made,
      and
      as of the Closing Date as though made on and as of such date;

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    (b) Performance.
      The
      Purchasers shall have performed, satisfied and complied in all material respects
      with all covenants, agreements and conditions required by the Transaction
      Documents to be performed, satisfied or complied with by the Purchasers at
      or
      prior to the Closing;

     

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

     

    (d) Purchasers
      Deliverables.
      Each
      Purchaser shall have delivered its Purchaser Deliverables in accordance with
      Section
      2.2(b);
      and

     

    (e) Termination. This
      Agreement shall not have been terminated as to such Purchaser in accordance
      with
Section
      6.18
      herein.

     

    ARTICLE
      VI.

    MISCELLANEOUS

     

    6.1 Fees
      and Expenses.
      At
      Closing, the Company shall reimburse the Placement Agent for the reasonable
      fees
      and expenses in connection with the transactions contemplated by this Agreement,
      which the Company agrees shall include the reasonable fees and expenses of
      the
      Placement Agent Counsel (which fees shall include, without limitation, the
      fees
      and expenses associated with the negotiation, preparation and execution and
      delivery of this Agreement and the other Transaction Documents and any
      amendments, modifications or waivers thereto), subject to the consent of the
      Company for fees and expenses in excess of Fifty Thousand Dollars ($50,000),
      which consent shall not be unreasonably withheld. Except as set forth above,
      the
      Company and the Purchasers shall each pay the fees and expenses of their
      respective advisers, counsel, accountants and other experts, if any and all
      other expenses incurred by such party in connection with the negotiation,
      preparation, execution, delivery and performance of this Agreement. The Company
      shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied
      in connection with the sale and issuance of the Securities. Each party
      acknowledges that Lowenstein Sandler PC has rendered legal advice to the
      Placement Agent, and not to such party in connection with the transactions
      contemplated hereby, and that such party has relied for such matters on the
      advice of its own respective counsel.

     

    6.2 Entire
      Agreement.
      The
      Transaction Documents, together with the Exhibits and Schedules thereto, contain
      the entire understanding of the parties with respect to the subject matter
      hereof and supersede all prior agreements, understandings, discussions and
      representations, oral or written, with respect to such matters, which the
      parties acknowledge have been merged into such documents, exhibits and
      schedules. At or after the Closing, and without further consideration, the
      Company and the Purchasers will execute and deliver to the other such further
      documents as may be reasonably requested in order to give practical effect
      to
      the intention of the parties under the Transaction Documents.

     

    6.3 Notices.
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be in writing and shall be deemed given and effective
      on the earliest of (a) the date of transmission, if such notice or communication
      is delivered via facsimile (provided the sender receives a machine-generated
      confirmation of successful transmission) at the facsimile number specified
      in
      this Section prior to 5:00 p.m. (New York City time) on a Trading Day, (b)
      the
      next Trading Day after the date of transmission, if such notice or communication
      is delivered via facsimile at the facsimile number specified in this Section
      on
      a day that is not a Trading Day or later than 5:00 p.m. (New York City time)
      on
      any Trading Day, (c) the Trading Day following the date of mailing, if sent
      by
      U.S. nationally recognized overnight courier service, or (d) upon actual receipt
      by the party to whom such notice is required to be given. The address for such
      notices and communications shall be as follows:

     

    
      
        
        

      

      
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              If
                to the Company:

            	
              HydroGen
                Corporation

            
	 	 	
              10
                East 40th
                Street

            
	 	 	
              Room
                3405

            
	 	 	
              New
                York, New York 10016

            
	 	 	
              Telephone
                No.: (212) 672-0380

            
	 	 	
              Facsimile
                No.: (212) 672-0393

            
	 	 	
              Attention:
                Chief Executive Officer

            
	 	 	 
	 	
              With
                a copy to:

            	
              Graubard
                Miller

            
	 	 	
              The
                Chrysler Building

            
	 	 	
              405
                Lexington Avenue

            
	 	 	
              19th
                Floor

            
	 	 	
              New
                York, New York 10174-1901

            
	 	 	
              Telephone
                No.: 212-818-8614

            
	 	 	
              Facsimile
                No.: (212) 818-8881

            
	 	 	
              Attention:
                Andrew Hudders, Esq.

            
	 	 	 
	 	
              If
                to a Purchaser:

            	
              To
                the address set forth under such Purchaser’s name on the signature page
                hereof;

            

    

    

    or
      such
      other address as may be designated in writing hereafter, in the same manner,
      by
      such Person.

    

    6.4 Amendments;
      Waivers; No Additional Consideration.
      No
      provision of this Agreement may be waived or amended except in a written
      instrument signed, in the case of an amendment, by the Company and each of
      the
      Purchasers or, in the case of a waiver, by the party against whom enforcement
      of
      any such waiver is sought. No waiver of any default with respect to any
      provision, condition or requirement of this Agreement shall be deemed to be
      a
      continuing waiver in the future or a waiver of any subsequent default or a
      waiver of any other provision, condition or requirement hereof, nor shall any
      delay or omission of either party to exercise any right hereunder in any manner
      impair the exercise of any such right. No consideration shall be offered or
      paid
      to any Purchaser to amend or consent to a waiver or modification of any
      provision of any Transaction Document unless the same consideration is also
      offered to all Purchasers who then hold Securities.

     

    6.5 Construction.
      The
      headings herein are for convenience only, do not constitute a part of this
      Agreement and shall not be deemed to limit or affect any of the provisions
      hereof. The language used in this Agreement will be deemed to be the language
      chosen by the parties to express their mutual intent, and no rules of strict
      construction will be applied against any party. This Agreement shall be
      construed as if drafted jointly by the parties, and no presumption or burden
      of
      proof shall arise favoring or disfavoring any party by virtue of the authorship
      of any provisions of this Agreement or any of the Transaction
      Documents.

     

    
      
        
        

      

      
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    6.6 Successors
      and Assigns.
      The
      provisions of this Agreement shall inure to the benefit of and be binding upon
      the parties and their successors and permitted assigns. This Agreement, or
      any
      rights or obligations hereunder, may not be assigned by the Company without
      the
      prior written consent of the Purchasers. Any Purchaser may assign its rights
      hereunder in whole or in part to any Person to whom such Purchaser assigns
      or
      transfers any Securities in compliance with this agreement and applicable law,
      provided such transferee shall agree in writing to be bound, with respect to
      the
      transferred Securities, by the terms and conditions of this Agreement that
      apply
      to the “Purchasers”.

     

    6.7  No
      Third-Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      successors and permitted assigns and is not for the benefit of, nor may any
      provision hereof be enforced by, any other Person, except (i) each Purchaser
      Party is an intended third party beneficiary of Section
      4.7,
      and
      (ii) Placement Agent is an intended third party beneficiary of Article III
      hereof, and each Purchaser Party or the Placement Agent, as the case may be,
      may
      enforce the provisions of such Sections directly against the parties with
      obligations thereunder

     

    6.8 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 Proceedings
      concerning the interpretations, enforcement and defense of the transactions
      contemplated by this Agreement and any other Transaction Documents (whether
      brought against a party hereto or its respective Affiliates, employees or
      agents) shall be commenced exclusively in the New York Courts. Each party hereto
      hereby irrevocably submits to the exclusive jurisdiction of the New York Courts
      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 the any of the Transaction Documents), and hereby
      irrevocably waives, and agrees not to assert in any Proceeding, any claim that
      it is not personally subject to the jurisdiction of any such New York Court,
      or
      that such Proceeding has been commenced in an improper or inconvenient forum.
      Each party hereto hereby irrevocably waives personal service of process and
      consents to process being served in any such 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 manner permitted by law.
      Each party hereto hereby irrevocably waives, to the fullest extent permitted
      by
      applicable law, any and all right to trial by jury in any legal proceeding
      arising out of or relating to this Agreement or the transactions contemplated
      hereby. If either party shall commence a Proceeding to enforce any provisions
      of
      a Transaction Document, then the prevailing party in such Proceeding shall
      be
      reimbursed by the other party for its reasonable attorney’s fees and other costs
      and expenses incurred with the investigation, preparation and prosecution of
      such Proceeding.

     

    
      
        
        

      

      
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    6.9 Survival.
      Subject
      to applicable statute of limitations, the representations, warranties,
      agreements and covenants contained herein shall survive the Closing and the
      delivery of the Securities.

     

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

     

    6.11 Severability.
      If any
      provision of this Agreement is held to be invalid or unenforceable in any
      respect, the validity and enforceability of the remaining terms and provisions
      of this Agreement shall not in any way be affected or impaired thereby and
      the
      parties will attempt to agree upon a valid and enforceable provision that is
      a
      reasonable substitute therefor, and upon so agreeing, shall incorporate such
      substitute provision in this Agreement.

     

    6.12 Rescission
      and Withdrawal Right. Notwithstanding
      anything to the contrary contained in (and without limiting any similar
      provisions of) the Transaction Documents, whenever any Purchaser exercises
      a
      right, election, demand or option under a Transaction Document and the Company
      does not timely perform its related obligations within the periods therein
      provided, then such Purchaser may rescind or withdraw, in its sole discretion
      from time to time upon written notice to the Company, any relevant notice,
      demand or election in whole or in part without prejudice to its future actions
      and rights

     

    6.13 Replacement
      of Securities.
      If any
      certificate or instrument evidencing any Securities is mutilated, lost, stolen
      or destroyed, the Company shall issue or cause to be issued in exchange and
      substitution for and upon cancellation thereof, or in lieu of and substitution
      therefor, a new certificate or instrument, but only upon receipt of evidence
      reasonably satisfactory to the Company of such loss, theft or destruction and
      the execution by the holder thereof of a customary lost certificate affidavit
      of
      that fact and an agreement to indemnify and hold harmless the Company for any
      losses in connection therewith. The applicants for a new certificate or
      instrument under such circumstances shall also pay any reasonable third-party
      costs associated with the issuance of such replacement Securities. If a
      replacement certificate or instrument evidencing any Securities is requested
      due
      to a mutilation thereof, the Company may require delivery of such mutilated
      certificate or instrument as a condition precedent to any issuance of a
      replacement.

     

    6.14 Remedies.
      In
      addition to being entitled to exercise all rights provided herein or granted
      by
      law, including recovery of damages, each of the Purchasers and the Company
      will
      be entitled to specific performance under the Transaction Documents. The parties
      agree that monetary damages may not be adequate compensation for any loss
      incurred by reason of any breach of obligations described in the foregoing
      sentence and hereby agrees to waive in any action for specific performance
      of
      any such obligation (other than in connection with any action for a temporary
      restraining order) the defense that a remedy at law would be
      adequate.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    6.15 Payment
      Set Aside.
      To the
      extent that the Company makes a payment or payments to any Purchaser pursuant
      to
      any Transaction Document or a Purchaser enforces or exercises its rights
      thereunder, and such payment or payments or the proceeds of such enforcement
      or
      exercise or any part thereof are subsequently invalidated, declared to be
      fraudulent or preferential, set aside, recovered from, disgorged by or are
      required to be refunded, repaid or otherwise restored to the Company, a trustee,
      receiver or any other person under any law (including, without limitation,
      any
      bankruptcy law, state or federal law, common law or equitable cause of action),
      then to the extent of any such restoration the obligation or part thereof
      originally intended to be satisfied shall be revived and continued in full
      force
      and effect as if such payment had not been made or such enforcement or setoff
      had not occurred. 

     

    6.16 Adjustments
      in Share Numbers and Prices.
      In the
      event of any stock split, subdivision, dividend or distribution payable in
      shares of Common Stock (or other securities or rights convertible into, or
      entitling the holder thereof to receive directly or indirectly shares of Common
      Stock), combination or other similar recapitalization or event occurring after
      the date hereof, each reference in any Transaction Document to a number of
      shares or a price per share shall be amended to appropriately account for such
      event. 

     

    6.17 Independent
      Nature of Purchasers' Obligations and Rights.
      The
      obligations of each Purchaser under any Transaction Document are several and
      not
      joint with the obligations of any other Purchaser, and no Purchaser shall be
      responsible in any way for the performance of the obligations of any other
      Purchaser under any Transaction Document. The decision of each Purchaser to
      purchase Securities pursuant to the Transaction Documents has been made by
      such
      Purchaser independently of any other Purchaser and independently of any
      information, materials, statements or opinions as to the business, affairs,
      operations, assets, properties, liabilities, results of operations, condition
      (financial or otherwise) or prospects of the Company or any Subsidiary which
      may
      have been made or given by any other Purchaser or by any agent or employee
      of
      any other Purchaser, and no Purchaser and any of its agents or employees shall
      have any liability to any other Purchaser (or any other Person) relating to
      or
      arising from any such information, materials, statement or opinions. Nothing
      contained herein or in any Transaction Document, and no action taken by any
      Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as
      a
      partnership, an association, a joint venture or any other kind of entity, or
      create a presumption that the Purchasers are in any way acting in concert or
      as
      a group with respect to such obligations or the transactions contemplated by
      the
      Transaction Documents. Each Purchaser acknowledges that no other Purchaser
      has
      acted as agent for such Purchaser in connection with making its investment
      hereunder and that no Purchaser will be acting as agent of such Purchaser in
      connection with monitoring its investment in the Securities or enforcing its
      rights under the Transaction Documents. Each Purchaser shall be entitled to
      independently protect and enforce its rights, including without limitation
      the
      rights arising out of this Agreement or out of the other Transaction Documents,
      and it shall not be necessary for any other Purchaser to be joined as an
      additional party in any proceeding for such purpose. The Company acknowledges
      that each of the Purchasers has been provided with the same Transaction
      Documents for the purpose of closing a transaction with multiple Purchasers
      and
      not because it was required or requested to do so by any Purchaser. The
      Company’s obligations to each Purchaser under this Agreement are identical to
      its obligations to each other Purchaser other than such differences resulting
      solely from the number of Securities purchased by such Purchaser, but regardless
      of whether such obligations are memorialized herein or in another agreement
      between the Company and a Purchaser.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    6.18 Termination.
      This
      Agreement may be terminated and the sale and purchase of the Shares and the
      Warrants abandoned at any time prior to the Closing by either the Company or
      any
      Purchaser (with respect to itself only) upon written notice to the other, if
      the
      Closing has not been consummated on or prior to 5:00 p.m. (New York City time)
      on the Outside Date; provided,
      however,
      that
      the right to terminate this Agreement under this Section
      6.18
      shall
      not be available to any Person whose failure to comply with its obligations
      under this Agreement has been the cause of or resulted in the failure of the
      Closing to occur on or before such time. Nothing in this Section
      6.18
      shall be
      deemed to release any party from any liability for any breach by such party
      of
      the terms and provisions of this Agreement or the other Transaction Documents
      or
      to impair the right of any party to compel specific performance by any other
      party of its obligations under this Agreement or the other Transaction
      Documents. In the event of a termination pursuant to this Section, the Company
      shall promptly notify all non-terminating Purchasers. Upon a termination in
      accordance with this Section, the Company and the terminating Purchaser(s)
      shall
      not have any further obligation or liability (including arising from such
      termination) to the other and no Purchaser will have any liability to any other
      Purchaser under the Transaction Documents as a result
      therefrom.

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

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

     

    
      	 	
              HYDROGEN
                CORPORATION 

               

               

            
	 	
              By:_______________________________________ 

                
                Name: 

                
                Title:

            

    

    

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    [SIGNATURE
      PAGES FOR PURCHASERS FOLLOW]

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    
      	 	
              NAME
                OF PURCHASER: ____________________________

            
	 	 
	 	 
	 	 
	 	
              By:________________________________

              Name:

            
	 	
              Title:

            
	 	 
	 	
              Purchase
                Price (Subscription Amount): $____________

               

              Number
                of Shares to be acquired: _________________

               

              Underlying
                Shares subject to Warrant: _____________

              (25.0%
                of the number of Shares to be acquired) 

               

              Tax
                ID No.: ____________________

            
	 	
               

              Address
                for Notice: 

            
	 	
               

              __________________________________

              __________________________________

              __________________________________

              Telephone
                No.: _______________________

              Facsimile
                No.: ________________________ 

              Attention:
                _______________________

            

    

    

    

    Delivery
      Instructions:

    (if
      different than above)

    

    c/o
      _______________________________

    

    Street:
      ____________________________

    

    City/State/Zip:
      ______________________

    

    Attention:
      __________________________

    

    Telephone
      No.: ____________________________

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBITS:
      

     

    
      	A:	
              Form
                of Warrant 

            

    

     

    
      	B:	
              Form
                of Registration Rights Agreement

            

    

     

    
      	C-1:	
              Accredited
                Investor Questionnaire

            

    

     

    
      	C-2:	
              Stock
                Certificate Questionnaire

            

    

     

    
      	D:	
              Form
                of Opinion of Company Counsel

            

    

     

    
      	E:	
              Transfer
                Agent Instructions

            

    

     

    
      	F:	
              Wire
                Instructions

            

    

     

    SCHEDULES:
      

     

    3.1(a)
      Subsidiaries

     

    3.1(c)
      Authorization; Enforcement

     

    3.1(g)
      Capitalization 

     

    3.1(k)
      Material Changes 

     

    3.1(q)
      Title to Assets

     

    3.1(x)
      Registration Rights 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

     

    Form
      of
      Warrant

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

     

    Form
      of
      Registration Rights Agreement

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Instruction
      Sheet for Exhibits C thru F

    (to
      be
      read in conjunction with the entire Securities Purchase Agreement and
      Registration Rights Agreement) 

    

    
      	A.	
              Complete
                the following items in the Securities Purchase Agreement and/or
                Registration  Rights
                Agreement: 

            

    

    

    
      	
            	1.	
              Provide
                the information regarding the Purchaser requested on the signature
                page.
                 The
                Securities Purchase Agreement must be executed by an individual authorized
                 to
                bind the Purchaser. 

            

    

    

    
      	
            	2.	
              Exhibit
                C-1
                -
                Accredited Investor Questionnaire: 

            

    

    

    Provide
      the information requested by Exhibit
      C-1-1
      (the
      Certificate for Corporations, Partnerships, Trusts, Foundations, Joint
      Purchasers (other than married couples) and Other Entities) or Exhibit
      C-1-2
      (the
      Certificate for Individuals (including married couples)), as
      applicable.

     

    
      	
            	3.	
              Exhibit
                C-2
                -
                Stock Certificate Questionnaire: 

            

    

    

    Provide
      the information requested by the Stock Certificate Questionnaire.

    

    
      	
            	4.	
              Annex
                B
                to
                the Registration Rights Agreement-Selling
                Securityholder Notice and
                Questionnaire

            

    

    

    Provide
      the information requested by the Selling Securityholder Notice and
      Questionnaire.

    

    
      	
            	5.	
              Return
                the signed Securities Purchase Agreement and Registration Rights
                Agreement
                to: 

            

    

    

    Chad
      E.
      Huber

    Piper
      Jaffray & Co. 

    The
      Chrysler Building

    405
      Lexington Avenue, 58th Floor

    New
      York,
      New York 10174

    Tel:
      (212) 284-9573

    Fax:
      (646) 224-8131

    Email:
      chad.e.huber@pjc.com

    

    
      	
              B.
                

            	
              Instructions
                regarding the transfer of funds for the purchase of Securities is
                set
                forth on Exhibit
                F
                to
                the Securities Purchase Agreement. 

            

    

    

    
      	
              C.
                

            	
              Upon
                the resale of the Registrable Shares by the Purchaser after the
                Registration Statement covering the Registrable Shares is effective,
                as
                described in the Securities Purchase Agreement, the Purchaser:
                

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	
              1.
                

            	
              must
                confirm that a current prospectus is deemed to be delivered to such
                buyer
                in accordance with Rule 172; and 

            

    

    

    
      	
            	2.	
              must
                send a letter to the Company so that the Registrable Shares may be
                properly transferred.

            

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C-1

    

    Accredited
      Investor Questionnaire

    

    

    Note
      to Purchasers:

    

    For
      Corporations, Partnerships, Trusts, Foundations, Joint Purchasers (other than
      married couples) and Other Entities, please provide the information requested
      by
Exhibit
      C-1-1.
      

    

    For
      Individuals (including married couples), please provide the information
      requested by Exhibit
      C-1-2.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C-1-1

    

    Corporations,
      Partnerships, Trusts, Foundations, 

    Joint
      Purchasers (other than married couples) and Other Entities

     

    If
      the
      Purchaser is a corporation, partnership, trust, pension plan, foundation, joint
      purchaser (other than a married couple) or other entity, an authorized officer,
      partner, or trustee must complete, date and sign this Certificate. 

     

    CERTIFICATE
      

     

    The
      undersigned certifies that the representations and responses below are true
      and
      accurate: 

     

    (a)
       The
      Purchaser has been duly formed and is validly existing and has full power and
      authority to invest in the Company. The person signing on behalf of the
      undersigned has the authority to execute and deliver the Securities Purchase
      Agreement on behalf of the Purchaser and to take other actions with respect
      thereto. 

     

    (b) Indicate
      the form of entity of the undersigned: 

     

    __
       Limited
      Partnership 

    __
       General
      Partnership 

    __
       Corporation
      

    
      	 	
              __
                

            	
              Revocable
                Trust (identify each grantor and indicate under what circumstances
                the
                trust is revocable by the grantor: 

            

    

    

    (Continue
      on a separate piece of paper, if necessary.) 

    

    
      	 	
              __
                

            	
              Other
                Type of Trust (indicate type of trust and, for trusts other than
                pension
                trusts, name the grantors and beneficiaries:

            

    

    

    (Continue
      on a separate piece of paper, if necessary.) 

    

    __
       Other
      form of organization (indicate form of organization
      (                            )).

    

    (c)
       Indicate
      the approximate date the undersigned entity was formed: 

    

    (d)
       In
      order
      for the Company to offer and sell the Securities in conformance with state
      and
      federal securities laws, the following information must be obtained regarding
      your investor status. Please initial
      each category applicable
      to you as a Purchaser of Securities of the Company. 

     

    
      	 	
              __
                (1)

            	
              A
                bank as defined in Section 3(a)(2) of the Securities Act, or any
                savings
                and loan association or other institution as defined in Section 3(a)(5)(A)
                of the Securities Act whether acting in its individual or fiduciary
                capacity; 

            

    

    

    
      	 	
              __
                (2)

            	
              A
                broker or dealer registered pursuant to Section 15 of the Securities
                Exchange Act of 1934; 

            

    

    

    
      	 	
              __
                (3)

            	
              An
                insurance company as defined in Section 2(13) of the Securities Act;
                

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	
              __
                (4)

            	
              An
                investment company registered under the Investment Company Act of
                1940 or
                a business development company as defined in Section 2(a)(48) of
                that Act;
                

            

    

    

    
      	 	
              __
                (5) 

            	
              A
                Small Business Investment Company licensed by the U.S. Small Business
                Administration under Section 301(c) or (d) of the Small Business
                Investment Act of 1958; 

            

    

    

    
      	 	
              __
                (6)

            	
              A
                plan established and maintained by a state, its political subdivisions,
                or
                any agency or instrumentality of a state or its political subdivisions,
                for the benefit of its employees, if such plan has total assets in
                excess
                of $5,000,000; 

            

    

    

    
      	 	
              __
                (7) 

            	
              An
                employee benefit plan within the meaning of the Employee Retirement
                Income
                Security Act of 1974, if the investment decision is made by a plan
                fiduciary, as defined in Section 3(21) of such act, which is either
                a
                bank, savings and loan association, insurance company, or registered
                investment adviser, or if the employee benefit plan has total assets
                in
                excess of $5,000,000 or, if a self-directed plan, with investment
                decisions made solely by persons that are accredited investors;
                

            

    

    

    
      	 	
              __
                (8) 

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

            

    

     

    
      	 	
              __
                (9) 

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

            

    

    

    
      	
            	__
              (10)	
              A
                trust, with total assets in excess of $5,000,000, not formed for
                the
                specific purpose of acquiring the Securities, whose purchase is directed
                by a sophisticated person who has such knowledge and experience in
                financial and business matters that such person is capable of evaluating
                the merits and risks of investing in the
                Company;

            

    

     

    
      	
            	__
              (11)	
              An
                entity in which all of the equity owners qualify under any of the
                above
                subparagraphs. If the undersigned belongs to this investor category
                only,
                list the equity owners of the undersigned, and the investor category
                which
                each such equity owner satisfies.

            

    

    

    (Continue
      on a separate piece of paper, if necessary.) 

    

    Dated:                                     
      ,
      2006

     

                                                 
      

    Name
      of
      Purchaser

     

                                                 
      

    Signature
      and title of authorized officer, partner or trustee

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C-1-2

     

    Individuals
      (including married couples)

     

    If
      the
      Purchaser is an Individual (or married couple) the Purchaser must complete,
      date
      and sign this Certificate.

     

    CERTIFICATE

     

    I
      certify
      that the representations and responses below are true and accurate:

     

    (a) In
      order
      for the Company to offer and sell the Securities in conformance with state
      and
      federal securities laws, the following information must be obtained regarding
      your investor status. Please initial
      each category
      applicable to you as a Purchaser of Securities of the Company.

     

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

     

    ___ (2) A
      natural
      person who had an individual income in excess of $200,000 in each of the two
      most recent years, or joint income with that person’s spouse in excess of
      $300,000, in each of those years, and has a reasonable expectation of reaching
      the same income level in the current year;

     

    ___ (3) An
      executive officer or director of the Company.

     

    (b) Set
      forth
      in the space provided below the state(s), if any, in the U.S. in which you
      maintained your residence during the past two years and the dates during which
      you resided in each state:
      _______________________________________________________________

    
      ____________________________________________________________________________________________________

      
        ____________________________________________________________________________________________________

      

    

    
      _______________________________________________________________________________________________.

       

    

    Dated:                                             
      ,
      2006 

     

    Name(s)
      of Purchaser _________________________________________

     

    Signature
      __________________________________________________

     

    
      Signature
        __________________________________________________

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C-2

     

    Stock
      Certificate Questionnaire

     

    Pursuant
      to Section 2.2(b) of the Agreement, please provide us with the following
      information:

     

    
      	
              1.

            	
              The
                exact name that the Shares are to be registered in (this is the name
                that
                will appear on the stock certificate(s)). You may use a nominee name
                if
                appropriate:

            	 	 
	 	 	 	 
	
              2.

            	
              The
                relationship between the Purchaser of the Shares and the Registered
                Holder
                listed in response to Item 1 above:

            	 	 
	 	 	 	 
	
              3.

            	
              The
                mailing address, telephone and telecopy number of the Registered
                Holder
                listed in response to Item 1 above:

            	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
              4.

            	
              The
                Tax Identification Number of the Registered Holder listed in response
                to
                Item 1 above:

            	 	 

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      D

     

    Form
      of
      Opinion of Company Counsel

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      E

     

    Transfer
      Agent Instructions

     

    As
      of
      _________, ____

     

    Computershare
      Trust Company, Inc. 

    350
      Indiana Street, Suite 800 

    Golden,
      CO 80401

    Attn:
      _________________

     

    Ladies
      and Gentlemen: 

     

    Reference
      is made to that certain Securities Purchase Agreement, dated as of May 2, 2006
      (the “Agreement”),
      by
      and among HydroGen Corporation, a Nevada corporation (the “Company”),
      and
      the purchasers named on the signature pages thereto (collectively, the
“Holders”),
      pursuant to which the Company is issuing to the Holders shares (the
“Shares”)
      of
      Common Stock of the Company, par value $0.001 per share (the “Common
      Stock”),
      and
      warrants (the “Warrants”),
      which
      are exercisable into shares of Common Stock. 

     

    This
      letter shall serve as our irrevocable authorization and direction to you
      (provided that you are the transfer agent of the Company at such time):

     

    (i)  to
      issue
      shares of Common Stock upon transfer or resale of the Shares; and 

     

    (ii)  to
      issue
      shares of Common Stock upon the exercise of the Warrants (the “Warrant
      Shares”)
      to or
      upon the order of a Holder from time to time upon delivery to you of a properly
      completed and duly executed Exercise Notice, in the form attached hereto as
      Annex I,
      which
      has been acknowledged by the Company as indicated by the signature of a duly
      authorized officer of the Company thereon together with indication of receipt
      of
      the exercise price therefor. 

     

    You
      acknowledge and agree that so long as you have previously received
      (a) written confirmation from the Company’s legal counsel that either
      (1) a registration statement covering resales of the Shares and the Warrant
      Shares has been declared effective by the Securities and Exchange Commission
      (the “Commission”)
      under
      the Securities Act of 1933, as amended (the “Securities
      Act”),
      or
      (2) sales of the Shares and the Warrant Shares may be made in conformity
      with Rule 144(k) under the Securities Act (“Rule 144”)
      and
      (b) if applicable, a copy of such registration statement, then, unless
      otherwise required by law, within three (3) business days of your receipt
      of the notice referred to in (ii) above, you shall issue the certificates
      representing the Shares and the Warrant Shares so sold to the transferees
      registered in the names of such transferees, and such certificates shall not
      bear any legend restricting transfer of the Shares and the Warrant Shares
      thereby and should not be subject to any stop-transfer restriction.

     

    A
      form of
      written confirmation (to be used in connection with any sale) from the Company’s
      outside legal counsel that a registration statement covering resales of the
      Shares and the Warrant Shares has been declared effective by the Commission
      under the Securities Act is attached hereto as Annex II.
      

     

    Please
      be
      advised that the Holders are relying upon this letter as an inducement to enter
      into the Agreement and, accordingly, each Holder is a third party beneficiary
      to
      these instructions. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Please
      execute this letter in the space indicated to acknowledge your agreement to
      act
      in accordance with these instructions. 

     

    
      	 	
              Very
                truly yours,

            
	 	 
	 	
              HYDROGEN
                CORPORATION

            
	 	 
	 	 
	 	
              By:
                __________________________________

            
	 	
              Name:
                ________________________________

            
	 	
              Title:
                _________________________________

            

    

    

    

    Acknowledged
      and Agreed:

    

    COMPUTERSHARE
      TRUST COMPANY, INC.

    

    By:
      __________________________________

    Name:
      ________________________________ 

    Title:
      _________________________________

    

    Date:
      _________________, 2006

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Annex
      I 

     

    Form
      of
      Exercise Notice 

     

    (To
      be
      executed by the Holder to exercise the right to purchase shares 

    of
      Common
      Stock under the foregoing Warrants) 

     

    To:
       HydroGen
      Corporation 

    

    (1) The
      undersigned hereby elects to purchase _________ shares of Common Stock pursuant
      to the above-referenced Warrant. Capitalized terms used herein and not otherwise
      defined herein have the respective meanings set forth in the Warrant.

      

    (2) The
      Holder intends that payment of the Exercise Price shall be made as (check
      one):

    

      Cash
      Exercise under Section 10

    

      Cashless
      Exercise under Section 10

    

    (3) If
      the
      Holder has elected a Cash Exercise, the holder shall pay the sum of $_______
      to
      the Company in accordance with the terms of the Warrant.

    

    (4) Pursuant
      to this Exercise Notice, the Company shall deliver to the Holder _____________
      Warrant Shares in accordance with the terms of the Warrant.

     

    (5) By
      its
      delivery of this Exercise Notice, the undersigned represents and warrants to
      the
      Company that in giving effect to the exercise evidenced hereby the Holder will
      not beneficially own in excess of the number of shares of Common Stock (as
      determined in accordance with Section 13(d) of the Securities Exchange Act
      of
      1934) permitted to be owned under Section 11 of this Warrant to which this
      notice relates. 

    

     

    Dated:_______________,
      _____ 

     

    Name
      of
      Holder: ___________________________

     

     

    By:__________________________________

    Name:
      _______________________________ 

    Title:
      ________________________________

    (Signature
      must conform in all respects to name of Holder as specified on the face of
      the
      Warrant)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Acknowledgement
      

     

          The
      Company hereby acknowledges this Exercise Notice and receipt of the appropriate
      exercise price and hereby directs Computershare Trust Company, Inc. to issue
      the
      above indicated number of shares of Common Stock in accordance with the Transfer
      Agent Instructions dated __________, 2006, from the Company and acknowledged
      and
      agreed to by Computershare Trust Company, Inc. 

     

    
       

      
        	 	
                HYDROGEN
                  CORPORATION

              
	 	 
	 	 
	 	
                By:
                  __________________________________

              
	 	
                Name:
                  ________________________________

              
	 	
                Title:
                  _________________________________

              

      

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Annex
      II

     

    Form
      of
      Notice of Effectiveness of Registration Statement 

    
      	
               

            	
               

            
	
              Computershare
                Trust Company, Inc. 

              350
                Indiana Street, Suite 800 

              Golden,
                CO 80401

              Attn:  
                _________________

            
	
               

            	
               

            
	
               
                

            	
              Re:
                HydroGen
                Corporation

            

    

     

    Ladies
      and Gentlemen: 

     

             We
      are
      counsel to HydroGen Corporation, a Nevada corporation (the “Company”),
      and
      have represented the Company in connection with that certain Securities Purchase
      Agreement, dated as of May 2, 2006, entered into by and among the Company and
      the buyers named therein (collectively, the “Purchasers”)
      pursuant to which the Company issued to the Purchasers shares of the Company’s
      Common Stock, par value $0.001 per share (the “Common
      Stock”)
      and
      warrants exercisable for shares of Common Stock (the “Warrants”).
      Pursuant to that certain Registration Rights Agreement of even date, the Company
      agreed to register the resale of the Common Stock, including the shares of
      Common Stock issuable upon exercise of the Warrants (collectively, the
“Registrable
      Securities”)
      under
      the Securities Act of 1933, as amended (the “Securities
      Act”).
      In
      connection with the Company’s obligations under the Registration Rights
      Agreement, on                     ,
      2006,
      the Company filed a Registration Statement on Form SB-2 (File
      No. 333-                    )
      (the
“Registration
      Statement”)
      with
      the Securities and Exchange Commission (the “Commission”)
      relating to the Registrable Securities which names each of the Purchasers as
      a
      selling stockholder thereunder. 

     

            In
      connection with the foregoing, we advise you that a member of the Commission’s
      staff has advised us by telephone that the Commission has entered an order
      declaring the Registration Statement effective under the Securities Act at
      ____
      [a.m.][p.m.] on __________, 2006, and we have no knowledge, after telephonic
      inquiry of a member of the staff, that any stop order suspending its
      effectiveness has been issued or that any proceedings for that purpose are
      pending before, or threatened by, the Commission and the Registrable Securities
      are available for resale under the Securities Act pursuant to the Registration
      Statement. 

     

          This
      letter shall serve as our standing notice to you that the Common Stock may
      be
      freely transferred by the Purchasers pursuant to the Registration Statement
      so
      long as the Holders certify they have complied with the plan of distribution
      description in connection with their sales or transfer of the Common Stock
      set
      forth in the Registration Statement and with the prospectus delivery
      requirements of the Securities Act. You need not require further letters from
      us
      to effect any future legend-free issuance or reissuance of shares of Common
      Stock to the transferees of the Purchasers as contemplated by the Company’s
      Transfer Agent Instructions dated __________, 2006. This letter shall serve
      as
      our standing instructions with regard to this matter. 

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    
      	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
              Very
                truly yours,

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
              Graubard
                Miller

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               
                

            	
               

            	
              By:
                ________________________________

            

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      F

    

    Wire
      Instructions

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      3.1(a)

     

    Subsidiaries

     

     

    HydroGen,
      LLC, an Ohio Limited Liability Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      3.1(c)

     

    Authorization;
      Enforcement

     

    Voting
      Agreement between Company and Keating Reverse Merger Fund, LLC, dated July
      7,
      2005

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      3.1(g)

     

    Capitalization

     

    
      
        	
                Common
                  stock, par value $0.001

              	 	 	 
	
                Shares
                  authorized 

              	 	 	
                65,000,000

              	 
	 	 	 	 	 
	
                Issued
                  and outstanding

              	 	 	
                7,614,904

              	 
	 	 	 	 	 
	
                Series
                  B convertible preferred stock, par $0.001, authorized 

              	 	 	 	 
	
                10,000,000
                  shares, no shares issued or outstanding

              	 	 	 	 
	 	 	 	 	 
	
                Equity
                  compensation plans approved by security holders:

              	 	 	 	 
	
                Maximum
                  stock-based awards permitted under the plan

              	 	 	
                1,100,000

              	 
	
                Number
                  of Stock Options Outstanding

              	 	 	
                247,735

              	 
	
                Amount
                  available for future grants

              	 	 	
                852,265

              	 
	 	 	 	 	 
	
                Equity
                  compensation plans not approved by security holders:

              	 	 	 	 
	
                Stock
                  options granted prior to the above plan’s approval

              	 	 	
                342,345

              	 

      
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      3.1(k)

     

    Material
      Changes

     

     

    None.

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      3.1(q)

     

    Title
      to
      Assets

     

    The
      Company owns no real property assets, and leases all of its facilities.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      3.1(x)

     

    Registration
      Rights

     

     

    
      	 	
              1.

            	
              Registration
                rights agreement dated July 7, 2005, between Company and Security
                Management Company, LLC provides for registration of securities acquired
                by their funds in the private placement consummated of even date.
                The same
                registration rights were granted to the investors in HydroGen LLC
                which
                was consummated of even date. The rights require the Company to register
                the shares acquired in the investments within a certain time period
                which
                was met, and to maintain the currency and effectiveness of such
                registration statement. In the event the Company does not maintain
                that
                currency and effectiveness, the investors have piggyback registration
                rights on any subsequent registration statement of the
                Company.

            

    

     

    
      	 	
              2.

            	
              In
                connection with two capital raising transactions by HydroGen LLC,
                the
                Company is obliged to provide piggy back registration rights to investors
                who acquired $100,000 or more of securities in the transactions.
                The
                Company has registered these securities, however, the piggy back
                right
                continues with respect to future registration statements if the initial
                registration statement is not current or effective for some
                reason.

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