Document:

exhibit4_2.htm

    Exhibit
      4.2

     

    THE
      SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES
      HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS
      AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144(K), OR (III)
      THE
      COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT
      SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES
      ACT
      OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

     

    THIS
      WARRANT SHALL BE VOID AFTER 5:00 P.M. EASTERN TIME ON DECEMBER 5, 2012 (the
      “EXPIRATION DATE”).

     

    No.
      FPA-1

     

    CAPRIUS,
      INC.

     

    PLACEMENT
      AGENT WARRANT TO PURCHASE 400,000 SHARES OF

    COMMON
      STOCK, PAR VALUE $0.01 PER SHARE

     

    For
      VALUE
      RECEIVED, EQUITY SOURCE PARTNERS, LLC (“Warrantholder”), is entitled to
      purchase, subject to the provisions of this Warrant, from Caprius, Inc., a
      Delaware corporation (the “Company”), at any time commencing six (6)
      months after the date hereof (the “Initial Exercise Date”) and not later
      than 5:00 P.M., Eastern time, on the Expiration Date (as defined above), at
      an
      exercise price per share equal to eighty-five ($0.85) cents (the exercise price
      in effect being herein called the “Warrant Price”), four
      hundred thousand (400,000)(“Warrant Shares”) of the Company’s Common
      Stock, par value $0.01 per share (“Common Stock”).  The number
      of Warrant Shares purchasable upon exercise of this Warrant and the Warrant
      Price shall be subject to adjustment from time to time as described
      herein.

     

    This
      Warrant has been initially issued as additional consideration to the initial
      Warrantholder for its services in connection with a private placement by the
      Company, pursuant to a Purchase Agreement, dated as of December 6, 2007, among
      the Company and the purchasers signatory thereto (the “Purchase
      Agreement”), in accordance with a Retainer Letter, dated November 7, 2007,
      between the initial Warrantholder and the Company.

     

    Section
      1.               Registration.  The
      Company shall maintain books for the transfer and registration of the
      Warrant.  Upon the initial issuance of this initial Warrant, the
      Company shall issue and register the Warrant in the name of the
      Warrantholder.

     

    Section
      2.               Transfers.  As
      provided herein, this Warrant may be transferred only pursuant to a registration
      statement filed under the Securities Act of 1933, as amended (the “Securities
      Act”), or an exemption from such registration or to an affiliate of the
      Warrantholder.  Subject to such restrictions, the Company shall
      transfer this Warrant from time to time upon the books to be maintained by
      the
      Company for that purpose, upon surrender thereof for transfer properly endorsed
      or  accompanied by appropriate instructions for transfer and such
      other documents as may be reasonably required by the Company, including, if
      required by the Company, an opinion of its counsel to the effect that such
      transfer is exempt from the registration requirements of the

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Securities
      Act, to establish that such transfer is being made in accordance with the terms
      hereof, and a new Warrant shall be issued to the transferee and the surrendered
      Warrant shall be canceled by the Company.

     

    Section
      3.               Exercise
      of Warrant.  (a)  Exercise.  Subject to
      the provisions hereof, the Warrantholder may exercise this Warrant in whole
      or
      in part at any time commencing on the Initial Exercise Date and not later than
      5:00 P.M., Eastern time, on the Expiration Date upon surrender of the Warrant,
      together with delivery of the duly executed Warrant Exercise Form attached
      hereto as Appendix A and payment by cash, certified check or wire transfer
      of
      funds (or, in certain circumstances, by cashless exercise as provided in
      subsection (b) below) for the aggregate Warrant Price for that number of Warrant
      Shares then being purchased, to the Company during normal business hours on
      any
      business day at the Company’s principal executive offices (or such other office
      or agency of the Company as it may designate by notice to the
      Warrantholder).  The Warrant Shares so purchased shall be deemed to be
      issued to the Warrantholder or the Warrantholder’s designee, as the record owner
      of such shares, as of the close of business on the date on which this Warrant
      shall have been duly surrendered (or evidence of loss, theft or destruction
      thereof and security or indemnity satisfactory to the Company), the Warrant
      Price shall have been paid and the completed Warrant Exercise Form shall have
      been delivered.  Certificates for the Warrant Shares so purchased,
      representing the aggregate number of shares specified in the Warrant Exercise
      Form, shall be delivered to the Warrantholder within a reasonable time, not
      exceeding three (3) business days, after this Warrant shall have been so
      exercised (the “Warrant Share Delivery Date”).  The
      certificates so delivered shall be in such denominations as may be requested
      by
      the Warrantholder and shall be registered in the name of the Warrantholder
      or
      such other name as shall be designated by the Warrantholder.  If this
      Warrant shall have been exercised only in part, then, unless this Warrant has
      expired, the Company shall, at its expense, at the time of delivery of such
      certificates, within four (4) business days of exercise, deliver to the
      Warrantholder a new Warrant representing the number of shares with respect
      to
      which this Warrant shall not then have been exercised.  As used
      herein, “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.  Each exercise hereof shall constitute the re-affirmation by
      the Warrantholder that the representations and warranties contained in Section
      5
      of the Purchase Agreement (as defined below) are true and correct in all
      material respects with respect to the Warrantholder as of the time of such
      exercise.

     

    (b)           Cashless
      Exercise.  (i) Notwithstanding any other provision contained
      herein to the contrary, the Warrantholder may elect to receive, without the
      payment by the Warrantholder of the aggregate Warrant Price in respect of the
      shares of Common Stock to be acquired, shares of Common Stock equal to the
      value
      of this Warrant or any portion hereof by the surrender of this Warrant (or
      such
      portion of this Warrant being so exercised) together with the Net Issue Election
      Notice annexed hereto as Appendix B duly executed, at the office of the
      Company.  The Net Issue Election Notice must be received by the
      Company not more than five (5) business days after the date the election is
      made.  Thereupon, the Company shall issue to the Warrantholder such
      number of fully paid, validly issued and nonassessable shares of Common Stock
      as
      is computed using the following formula:

     

    
      
        
        

      

      
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    X
      = Y
      (A - B)

           A

     

    where

     

    X
      =           the number of
      shares of Common Stock which the Warrantholder has then requested be issued
      to
      the Warrantholder;

     

    Y
      =           the total
      number of shares of Common Stock covered by this Warrant which the Warrantholder
      has surrendered at such time for cashless exercise (including both shares to
      be
      issued to the Warrantholder and shares to be canceled as payment
      therefor);

     

    A
      =           the average
      closing “Market Price” of one share of Common Stock for the five (5) consecutive
      business days preceding the date the net issue election is made;
      and

     

    B
      =           the Warrant
      Price in effect under this Warrant at the time the net issue election is
      made.

     

    (ii)    For
      the
      purposes of this Agreement, “Market Price” as of a particular date (the
“Valuation Date”) shall mean the following: (a) if the Common Stock is
      then listed on a national stock exchange, the closing sale price of one share
      of
      Common Stock on such exchange on the last trading day prior to the Valuation
      Date; (b) if the Common Stock is then quoted on The Nasdaq Stock Market, Inc.
      (“Nasdaq”), the National Association of Securities Dealers, Inc. OTC
      Bulletin Board (the “Bulletin Board”) or such similar exchange or
      association, the closing sale price of one share of Common Stock on Nasdaq,
      the
      Bulletin Board or such other exchange or association on the last trading day
      prior to the Valuation Date or, if no such closing sale price is available,
      the
      average of the high bid and the low asked price quoted thereon on the last
      trading day prior to the Valuation Date; or (c) if the Common Stock is not
      then
      listed on a national stock exchange or quoted on Nasdaq, the Bulletin Board
      or
      such other exchange or association, the fair market value of one share of Common
      Stock as of the Valuation Date, shall be determined in good faith by the Board
      of Directors of the Company and the Warrantholder.  If the Common
      Stock is not then listed on a national securities exchange, the Bulletin Board
      or such other exchange or association, the Board of Directors of the Company
      shall respond promptly, in writing, to an inquiry by the Warrantholder prior
      to
      the exercise hereunder as to the fair market value of a share of Common Stock
      as
      determined by the Board of Directors of the Company.  In the event
      that the Board of Directors of the Company and the Warrantholder are unable
      to
      agree upon the fair market value, the Company and the Warrantholder shall
      jointly select an appraiser, who is experienced in such matters.  The
      decision of such appraiser shall be final and conclusive, and the cost of such
      appraiser shall be borne equally by the Company and the
      Warrantholder.  Such adjustment shall be made successively whenever
      such a payment date is fixed.

     

    Section
      4.               Compliance
      with the Securities Act of 1933.  The Company may cause the legend set
      forth on the first page of this Warrant to be set forth on each Warrant or
      similar legend on any security issued or issuable upon exercise of this Warrant,
      unless counsel for the Company is of the opinion as to any such security that
      such legend is unnecessary.

     

    
      
        
        

      

      
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    Section
      5.               Payment
      of Taxes.  The Company will pay any documentary stamp taxes
      attributable to the initial issuance of Warrant Shares issuable upon the
      exercise of the Warrant; provided, however, that the Company shall not be
      required to pay any tax or taxes which may be payable in respect of any transfer
      involved in the issuance or delivery of any certificates for Warrant Shares
      in a
      name other than that of the Warrantholder in respect of which such shares are
      issued, and in such case, the Company shall not be required to issue or deliver
      any certificate for Warrant Shares or any Warrant until the person requesting
      the same has paid to the Company the amount of such tax or has established
      to
      the Company’s reasonable satisfaction that such tax has been
      paid.  The Warrantholder shall be responsible for income taxes due
      under federal, state or other law, if any such tax is due.

     

    Section
      6.               Mutilated
      or Missing Warrants.  In case this Warrant shall be mutilated,
      lost, stolen, or destroyed, the Company shall issue in exchange and substitution
      of and upon cancellation of the mutilated Warrant, or in lieu of and
      substitution for the Warrant lost, stolen or destroyed, a new Warrant of like
      tenor and for the purchase of a like number of Warrant Shares, but only upon
      receipt of evidence reasonably satisfactory to the Company of such loss, theft
      or destruction of the Warrant, and with respect to a lost, stolen or destroyed
      Warrant, reasonable indemnity or bond with respect thereto, if requested by
      the
      Company.

     

    Section
      7.               Reservation
      of Common Stock.  The Company hereby represents and warrants that
      there have been reserved, and the Company shall at all applicable times keep
      reserved until issued (if necessary) as contemplated by this Section 7, out
      of
      the authorized and unissued shares of Common Stock, sufficient shares to provide
      for the exercise of the rights of purchase represented by this
      Warrant.  The Company agrees that all Warrant Shares issued upon due
      exercise of the Warrant shall be, at the time of delivery of the certificates
      for such Warrant Shares, duly authorized, validly issued, fully paid and
      non-assessable shares of Common Stock of the Company.

     

    Section
      8.               Adjustments.  Subject
      and pursuant to the provisions of this Section 8, the Warrant Price and number
      of Warrant Shares subject to this Warrant shall be subject to adjustment from
      time to time as set forth hereinafter.

     

    (a)           If
      the Company shall, at any time or from time to time while this Warrant is
      outstanding, pay a dividend or make a distribution on its Common Stock in shares
      of Common Stock, subdivide its outstanding shares of Common Stock into a greater
      number of shares or combine its outstanding shares of Common Stock into a
      smaller number of shares or issue by reclassification of its outstanding shares
      of Common Stock any shares of its capital stock (including any such
      reclassification in connection with a consolidation or merger in which the
      Company is the continuing corporation), then the number of Warrant Shares
      purchasable upon exercise of the Warrant and the Warrant Price in effect
      immediately prior to the date upon which such change shall become effective,
      shall be adjusted by the Company so that the Warrantholder thereafter exercising
      the Warrant shall be entitled to receive the number of shares of Common Stock
      or
      other capital stock which the Warrantholder would have received if the Warrant
      had been exercised immediately prior to such event upon payment of a Warrant
      Price that has been adjusted to reflect a fair allocation of the economics
      of
      such event to the Warrantholder.  Such adjustments shall be made
      successively whenever any event listed above shall occur.

     

    
      
        
        

      

      
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    (b)           If
      any capital reorganization, reclassification of the capital stock of the
      Company, consolidation or merger of the Company with another corporation in
      which the Company is not the survivor, or sale, transfer or other disposition
      of
      all or substantially all of the Company’s assets to another corporation shall be
      effected, then, as a condition of such reorganization, reclassification,
      consolidation, merger, sale, transfer or other disposition, lawful and adequate
      provision shall be made whereby each Warrantholder shall thereafter have the
      right to purchase and receive upon the basis and upon the terms and conditions
      herein specified and in lieu of the Warrant Shares immediately theretofore
      issuable upon exercise of the Warrant, such shares of stock, securities or
      assets as would have been issuable or payable with respect to or in exchange
      for
      a number of Warrant Shares equal to the number of Warrant Shares immediately
      theretofore issuable upon exercise of the Warrant, had such reorganization,
      reclassification, consolidation, merger, sale, transfer or other disposition
      not
      taken place, and in any such case appropriate provision shall be made with
      respect to the rights and interests of each Warrantholder to the end that the
      provisions hereof (including, without limitation, provision for adjustment
      of
      the Warrant Price) shall thereafter be applicable, as nearly equivalent as
      may
      be practicable in relation to any shares of stock, securities or assets
      thereafter deliverable upon the exercise hereof.  The Company shall
      not effect any such consolidation, merger, sale, transfer or other disposition
      unless prior to or simultaneously with the consummation thereof the successor
      corporation (if other than the Company) resulting from such consolidation or
      merger, or the corporation purchasing or otherwise acquiring such assets or
      other appropriate corporation or entity shall assume the obligation to deliver
      to the Warrantholder, at the last address of the Warrantholder appearing on
      the
      books of the Company, such shares of stock, securities or assets as, in
      accordance with the foregoing provisions, the Warrantholder may be entitled
      to
      purchase, and the other obligations under this Warrant.  The
      provisions of this subsection (b) shall similarly apply to successive
      reorganizations, reclassifications, consolidations, mergers, sales, transfers
      or
      other dispositions.  Notwithstanding the provisions of the subsection
      (b), in the event that (i) holders of Common Stock receive only cash for their
      shares of Common Stock as a result of any such reorganization, reclassification,
      consolidation, merger, sale, transfer or other disposition, or (ii) the
      surviving entity’s common stock is not registered under the Securities Exchange
      Act of 1934, as amended, not later than one (1) business day after the effective
      date of such reorganization, reclassification, consolidation, merger, sale,
      transfer or other disposition or transaction, the Warrantholder shall be
      entitled to receive in full satisfaction of its rights under this Warrant an
      amount in cash (the “Spread”) equal to (x) the difference between (A) the
      per share cash to be received by holders of Common Stock in connection with
      such
      reorganization, reclassification, consolidation, merger, sale, transfer or
      other
      disposition and (B) the Warrant Price in effect immediately prior to the
      effective date of such reorganization, reclassification, consolidation, merger,
      sale, transfer or other disposition, multiplied by (y) the number of shares
      of
      Common Stock for which this Warrant is exercisable immediately prior to the
      effective date of such reorganization, reclassification, consolidation, merger,
      sale, transfer or other disposition.  Upon payment in full of the
      Spread to the Warrantholder as provided above, this Warrant shall expire and
      be
      of no further force and effect.  In the event that the Spread is not a
      positive number, no amount shall be payable to the Warrantholder as a result
      of
      such reorganization, reclassification, consolidation, merger, sale, transfer
      or
      other disposition or transaction, and this Warrant shall expire and be of no
      further force and effect as of the effective date of such reorganization,
      reclassification, consolidation, merger, sale, transfer or other
      disposition.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (c)           In
      case the Company shall fix a record date for the making of a distribution to
      all
      holders of Common Stock (including any such distribution made in connection
      with
      a consolidation or merger in which the Company is the continuing corporation)
      of
      evidences of indebtedness or assets (other than cash dividends or cash
      distributions payable out of consolidated earnings or earned surplus or
      dividends or distributions referred to in Section 8(a)), or subscription rights
      or warrants, the Warrant Price to be in effect after such record date shall
      be
      determined by multiplying the Warrant Price in effect immediately prior to
      such
      record date by a fraction, the numerator of which shall be the total number
      of
      shares of Common Stock outstanding multiplied by the Market Price per share
      of
      Common Stock immediately prior to such payment date, less the fair market value
      (as determined by the Company’s Board of Directors in good faith) of said assets
      or evidences of indebtedness so distributed, or of such subscription rights
      or
      warrants, and the denominator of which shall be the total number of shares
      of
      Common Stock outstanding multiplied by such Market Price per share of Common
      Stock immediately prior to such payment date.

     

    (d)           An
      adjustment to the Warrant Price shall become effective immediately after the
      payment date in the case of each dividend or distribution and immediately after
      the effective date of each other event which requires an
      adjustment.

     

    (e)           In
      the event that, as a result of an adjustment made pursuant to this Section
      8,
      the Warrantholder shall become entitled to receive any shares of capital stock
      of the Company other than shares of Common Stock, the number of such other
      shares so receivable upon exercise of this Warrant shall be subject thereafter
      to adjustment from time to time in a manner and on terms as nearly equivalent
      as
      practicable to the provisions with respect to the Warrant Shares contained
      in
      this Warrant.

     

    Section
      9.               Fractional
      Interest.  The Company shall not be required to issue fractions of
      Warrant Shares upon the exercise of this Warrant.  If any fractional
      share of Common Stock would, except for the provisions of the first sentence
      of
      this Section 9, be deliverable upon such exercise, the Company, in lieu of
      delivering such fractional share, shall pay to the exercising Warrantholder
      an
      amount in cash equal to the Market Price of such fractional share of Common
      Stock on the date of exercise.

     

    Section
      10.             Benefits.  Nothing
      in this Warrant shall be construed to give any person, firm or corporation
      (other than the Company and the Warrantholder) any legal or equitable right,
      remedy or claim, it being agreed that this Warrant shall be for the sole and
      exclusive benefit of the Company and the Warrantholder.

     

    Section
      11.            Notices
      to Warrantholder.  Upon the happening of any event requiring an
      adjustment of the Warrant Price and/or the Warrant Shares, the Company shall
      promptly give written notice thereof to the Warrantholder at the address
      appearing in the records of the Company, stating the adjusted Warrant Price
      and
      the adjusted number of Warrant Shares resulting from such event and setting
      forth in reasonable detail the method of calculation and the facts upon which
      such calculation is based.  Failure to give such notice to the
      Warrantholder or any defect therein shall not affect the legality or validity
      of
      the subject adjustment.

     

    
      
        
        

      

      
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    Section
      12.             Identity
      of Transfer Agent.  The Transfer Agent for the Common Stock is
      American Stock Transfer & Trust Company.  Upon the appointment of
      any subsequent transfer agent for the Common Stock or other shares of the
      Company’s capital stock issuable upon the exercise of the rights of purchase
      represented by the Warrant, the Company will mail to the Warrantholder a
      statement setting forth the name and address of such transfer
      agent.

     

    Section
      13.             Notices.  Unless
      otherwise provided, any notice required or permitted under this Warrant shall
      be
      given in writing and shall be deemed effectively given as hereinafter described
      (i) if given by personal delivery, then such notice shall be deemed given upon
      such delivery, (ii) if given by telex or facsimile, then such notice shall
      be
      deemed given upon receipt of confirmation of complete transmittal, (iii) if
      given by mail, then such notice shall be deemed given upon the earlier of (A)
      receipt of such notice by the recipient or (B) three (3) days after such notice
      is deposited in first class mail, postage prepaid, and (iv) if given by an
      internationally recognized overnight air courier, then such notice shall be
      deemed given one (1) business day after delivery to such carrier.  All
      notices shall be addressed as follows: if to the Warrantholder, at its address
      as set forth in the Company’s books and records and, if to the Company, at the
      address as follows, or at such other address as the Warrantholder or the Company
      may designate by ten (10) days’ advance written notice to the
      other:

     

    
      	
              If
                to the Company:

               

              Caprius,
                Inc.

              One
                University Plaza

              Hackensack,
                NJ 07601

              Attention:  Jonathan
                Joels, CFO

              Fax:  (201)
                342-0991

               

            

    

    Section
      14.            Registration
      Rights.  The initial Warrantholder is entitled to include the
      Warrant Shares in any registration statement filed by the Company pursuant
      to
      the Registration Rights Agreement, dated December 6, 2007, entered into in
      connection with the closing of the Purchase Agreement, and any subsequent
      Warrantholder may be entitled to such rights at the discretion of the
      Company.

     

    Section
      15.            Successors.  All
      the covenants and provisions hereof by or for the benefit of the Warrantholder
      shall bind and inure to the benefit of the Warrantholder and the Company and
      their respective successors and assigns hereunder.

     

    Section
      16.             Governing
      Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Warrant
      shall be governed by, and construed in accordance with, the internal laws of
      the
      State of New York, without reference to the choice of law provisions
      thereof.  The Company and, by accepting this Warrant, the
      Warrantholder, each irrevocably submits to the exclusive jurisdiction of the
      courts of the State of New York located in New York County and the United States
      District Court for the Southern District of New York for the purpose of any
      suit, action, proceeding or judgment relating to or arising out of this Warrant
      and the transactions contemplated hereby.  Service of process in
      connection with any such suit, action or proceeding may be served on each party
      hereto anywhere in the world by the same methods as are specified for the giving
      of notices under this Warrant.  The Company and, by accepting this
      Warrant, the 

     

    
      
        
        

      

      
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    Warrantholder,
      each irrevocably consents to the jurisdiction of any such court in any such
      suit, action or proceeding and to the laying of venue in such
      court.  The Company and, by accepting this Warrant, the Warrantholder,
      each irrevocably waives any objection to the laying of venue of any such suit,
      action or proceeding brought in such courts and irrevocably waives any claim
      that any such suit, action or proceeding brought in any such court has been
      brought in an inconvenient forum. EACH OF THE COMPANY AND, BY ITS
      ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL
      BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT
      COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

     

    Section
      17.             No
      Rights as Stockholder.  Prior to the exercise of this Warrant in
      accordance with Section 3 hereof, the Warrantholder shall not have or exercise
      any rights as a stockholder of the Company by virtue of its ownership of this
      Warrant.

     

    Section
      18.             Amendment;
      Waiver; Reduction of Warrant Price.  Any term of this Warrant may
      be amended or waived (including the adjustment provisions included in Section
      8
      of this Warrant) upon the written consent of the Company and the
      Warrantholder.  Notwithstanding the proviso in the immediately
      preceding sentence, to the extent permitted by applicable law, the Company
      from
      time to time may unilaterally reduce the Warrant Price by any amount so long
      as
      (i) the period during which such reduction is in effect is at least twenty
      (20)
      days, (ii) the reduction is irrevocable during such period and (iii) the
      Company's Board of Directors shall have made a determination that such reduction
      would be in the best interests of the Company.  Whenever the Warrant
      Price is reduced pursuant to the preceding sentence, the Company shall mail
      or
      cause to be mailed to the Warrantholder a notice of the reduction at least
      five
      (5) days prior to the date the reduced Warrant Price is to take effect, which
      notice shall state the reduced Warrant Price and the period during which it
      will
      be in effect.

     

    Section
      19.            
Section Headings.  The section headings in this Warrant are for
      the convenience of the Company and the Warrantholder and in no way alter,
      modify, amend, limit or restrict the provisions hereof.

     

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as
      of
      the 6th day of
      December, 2007.

     

    
      	 	 	
              CAPRIUS,
                INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 /s/
              Jonathan Joels
	 	 	
              Name:  Jonathan
                Joels

            
	 	 	
              Title:  Vice
                President

            

    

    

    

    
      
        
        

      

      
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    APPENDIX
      A

    CAPRIUS,
      INC.

    WARRANT
      EXERCISE FORM

     

    To
      Caprius, Inc.:

     

    The
      undersigned hereby irrevocably elects to exercise the right of purchase
      represented by the within Warrant (“Warrant”) for, and to purchase thereunder by
      the payment of the Warrant Price and surrender of the Warrant, _______________
      shares of Common Stock (“Warrant Shares”) provided for therein, and requests
      that certificates for the Warrant Shares be issued as follows:

     

    

    _______________________________

    Name

    ________________________________

    Address

    ________________________________

    ________________________________

    Federal
      Tax ID or Social Security
      No.

     

     

    
      and
        delivered
        by              (certified
        mail to the above address, or

      (electronically
        (provide DWAC
        Instructions:___________________), or

      (other
        (specify):
        __________________________________________).

    

     

    and,
      if
      the number of Warrant Shares shall not be all the Warrant Shares purchasable
      upon exercise of the Warrant, that a new Warrant for the balance of the Warrant
      Shares purchasable upon exercise of this Warrant be registered in the name
      of
      the undersigned Warrantholder or the undersigned’s Assignee as below indicated
      and delivered to the address stated below.

     

    Dated:
      ___________________, ____

     

    
      	
              Note:  The
                signature must correspond with

            	 
	
              the
                name of the Warrantholder as written

            	 
	
              on
                the first page of the Warrant in every

            	
              Name
                (please print)

            
	
              particular,
                without alteration or enlargement

            	 
	
              or
                any change whatever, unless the Warrant

            	 
	
              has
                been assigned.

            	 
	 	
              Address

            
	 	 
	 	
              Federal
                Identification or

            
	 	
              Social
                Security No.

            
	 	 

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	 	 
	 	
              Assignee:

            
	 	 
	 	 
	 	 

    

    

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
 

    APPENDIX
      B

    CAPRIUS,
      INC.

    NET
      ISSUE
      ELECTION NOTICE

     

    To:
      Caprius, Inc.

     

    Date:[_________________________]

     

     

    The
      undersigned hereby elects under Section 3(b) of this Warrant to surrender
      the right to purchase [____________] shares of Common Stock pursuant to this
      Warrant and hereby requests the issuance of [_____________] shares of Common
      Stock.  The certificate(s) for the shares issuable upon such net issue
      election shall be issued in the name of the undersigned or as otherwise
      indicated below.

     

    
      	
               

               

            	 
	
              Signature

            	 
	
               

               

            	 
	
              Name
                for Registration

            	 
	
               

               

            	 
	
              Mailing
                Addressexhibit10_1.htm

    Exhibit
      10.1

     

     

    PURCHASE
      AGREEMENT

    

    

    THIS
      PURCHASE AGREEMENT (“Agreement”)
      is made as of the 6th day of
      December,
      2007 by and among Caprius, Inc., a Delaware corporation (the “Company”), and the
      Investors set forth on the signature pages affixed hereto (each an “Investor”
and collectively the “Investors”).

     

    
 

    Recitals

     

    A.           The
      Company and the Investors are executing and delivering this Agreement in
      reliance upon the exemption from securities registration afforded by the
      provisions of Regulation D (“Regulation D”), as promulgated by the U.S.
      Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933,
      as amended; and

    

    B.           The
      Investors wish to purchase from the Company, and the Company wishes to sell
      and
      issue to the Investors, upon the terms and conditions stated in this Agreement,
      (i) up to an aggregate of 80,000 shares of the Company’s Series F Convertible
      Preferred Stock, stated value $60 per share (the “Preferred Stock”), such
      Preferred Stock to have the relative rights, preferences and designations set
      forth in the Certificate of Designations set forth in Exhibit A hereto
      (the “Certificate of Designations”), at a purchase price of $60 per share and
      (ii) Warrants to purchase up to an aggregate of 3,200,000 shares of the
      Company’s Common Stock, par value $0.01 per share (together with any securities
      into which such shares may be reclassified the “Common Stock”) (subject to
      adjustment) at an exercise price of $0.80 per share (subject to adjustment)
      in
      the form attached hereto as Exhibit B (the “Warrants”); and

    

    C.           Contemporaneous
      with the sale of the Preferred Stock and Warrants, the parties hereto will
      execute and deliver a Registration Rights Agreement, in the form attached hereto
      as Exhibit C (the “Registration Rights Agreement”), pursuant to which the
      Company will agree to provide certain registration rights under the Securities
      Act of 1933, as amended, and the rules and regulations promulgated thereunder,
      and applicable state securities laws.

    

    In
      consideration of the mutual promises
      made herein and for other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the parties hereto agree as
      follows:

    

    1.           Definitions.  In
      addition to those terms defined above and elsewhere in this Agreement, for
      the
      purposes of this Agreement, the following terms shall have the meanings set
      forth below:

     

    “Affiliate”
      means, with respect to any Person, any other Person which 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 under the 1933 Act.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    “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.

    

    “Common
      Stock Equivalents” means
      any securities of the Company or the Subsidiaries 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 instruments that
      is at
      any time convertible into or exchangeable for, or otherwise entitles the holders
      thereof to receive, Common Stock.

    

    “Company’s
      Knowledge” means the
      actual knowledge of the executive officers (as defined in Rule 405 under the
      1933 Act) of the Company, after due inquiry.

    

    “Confidential
      Information” means
      trade secrets, confidential information and know-how (including but not limited
      to ideas, formulae, compositions, processes, procedures and techniques, research
      and development information, computer program code, performance specifications,
      support documentation, drawings, specifications, designs, business and marketing
      plans, and customer and supplier lists and related information).

    

    “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.

    

    “Conversion
      Shares” means the
      shares of Common Stock issuable upon conversion of the Preferred
      Stock.

    

    “Effective
      Date” means the date
      on which the initial Registration Statement is declared effective by the
      SEC.

    

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

    

    “Excluded
      Stock” has the meaning
      set forth in the Certificate of Designations.

    

    “Intellectual
      Property” means
      all of the following: (i) patents, patent applications, patent disclosures
      and
      inventions (whether or not patentable and whether or not reduced to practice);
      (ii) trademarks, service marks, trade dress, trade names, corporate names,
      logos, slogans and Internet domain names, together with all goodwill associated
      with each of the foregoing; (iii) copyrights and copyrightable works; (iv)
      registrations, applications and renewals for any of the foregoing; and (v)
      proprietary computer software (including but not limited to data, data bases
      and
      documentation).

    

    “Material
      Adverse Effect” means
      a material adverse effect on (i) the assets, liabilities, results of operations,
      condition (financial or otherwise), business, or prospects of the 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Company
      and its Subsidiaries taken as a whole, or (ii) the ability of the Company to
      perform its obligations under the Transaction Documents.

    

    “Maximum
      Amount” means the sale of up to 80,000 shares of Preferred Stock for total
      gross proceeds of $4.8 million, together with Warrants to acquire up to
      3,200,000 shares of Common Stock.

     

    “Minimum
      Amount“ means the sale of a minimum of 33,333 shares of Preferred Stock for
      gross proceeds of $1,999,980, together with Warrants to acquire 1,333,320 shares
      of Common Stock.

     

    “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.

    

    “Purchase
      Price” means, as to
      each Investor, the aggregate amount to be paid for the Shares and Warrants
      purchased hereunder as specified below such Investor’s name on the signature
      pages of this Agreement.

    

    “Registration
      Statement” has the
      meaning set forth in the Registration Rights Agreement.

    

    “SEC
      Filings” has the meaning
      set forth in Section 4.6.

    

    “Securities”
means
      the Shares,
      the Conversion Shares, the Warrants and the Warrant Shares.

    

    “Series
      D Preferred Stock” means
      the Company’s Series D Convertible Redeemable Preferred Stock, par value $0.01
      per share.

    

    “Series
      E Preferred Stock” means
      the Company’s Series E Convertible Redeemable Preferred Stock, par value $0.01
      per share.

    

    “Shares”
means
      the shares of
      Preferred Stock being purchased by the Investors hereunder.

    

    “Subsidiary”
of
      any Person means
      another Person, an amount of the voting securities, other voting ownership
      or
      voting partnership interests of which is sufficient to elect at least a majority
      of its Board of Directors or other governing body (or, if there are no such
      voting interests, 50% or more of the equity interests of which) is owned
      directly or indirectly by such first Person.

    

    “Transaction
      Documents” means
      this Agreement, the Certificate of Designations, the Warrants and the
      Registration Rights Agreement.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    “Warrant
      Shares” means the
      shares of Common Stock issuable upon the exercise of the Warrants.

    

    “1933
      Act” means the Securities
      Act of 1933, as amended, or any successor statute, and the rules and regulations
      promulgated thereunder.

    

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

    

    2.           Purchase
      and Sale of the Shares and Warrants.  Subject to the terms and
      conditions of this Agreement, on the Closing Date, each of the Investors shall
      severally, and not jointly, purchase, and the Company shall sell and issue
      to
      the Investors, the Shares and Warrants in the respective amounts set forth
      opposite the Investors’ names on the signature pages attached hereto in exchange
      for the Purchase Price as specified in Section 3 below.

    

    3.           Closing.  Upon
      confirmation that the other conditions to closing specified herein have been
      satisfied or duly waived by the Investors, the Company shall file the
      Certificate of Designations with the Secretary of State of
      Delaware.  Upon confirmation that the Certificate of Designations has
      been filed and has become effective, unless other arrangements have been made
      between the Company and a particular Investor, the Company shall deliver to
      Lowenstein Sandler PC, in trust, a certificate or certificates, registered
      in
      such name or names as the Investors may designate, representing the Shares
      and
      Warrants being purchased, with instructions that such certificates are to be
      held for release to the Investors only upon payment in full of the applicable
      portion of the Purchase Price to the Company.  Upon such receipt by
      Lowenstein Sandler PC of the certificates (or as specified in any alternative
      arrangement entered into between the Company and an Investor), each Investor
      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 such Investor’s
      Purchase Price.  On the date (the “Initial Closing Date”) the Company
      receives the Purchase Price from the Investors purchasing Shares and Warrants
      on
      the Initial Closing Date, the certificates evidencing the Shares and Warrants
      shall be released to the Investors (the “Initial Closing”).  The
      Initial 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 Investors shall mutually agree.  The
      subsequent closing(s) of the purchase and sale of up to the Maximum Amount
      under
      this Agreement (the “Subsequent Closings”) shall take place at a time agreed
      upon by the Company and the Investors participating therein (the date(s) of
      the
      Subsequent Closing(s) is hereinafter referred to as the “Subsequent Closing
      Date(s)”), all of which shall occur in any event no later than fifteen (15) days
      after the Initial Closing.  The Investors agree that any additional
      Persons that acquire Shares and Warrants at any “Subsequent Closing” shall
      become “Investors” under this Agreement and the Registration Rights Agreement
      with all the rights and obligations attendant thereto, upon their execution
      of
      this Agreement and the Registration Rights Agreement without further action
      by
      any other Investor.  For purposes of this Agreement, the terms
“Closing” and “Closing Date”, unless otherwise indicated, refer to the
      applicable closing and closing date of the Initial Closing or the Subsequent
      Closing(s), as the case may be.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    4.           Representations
      and Warranties of the Company.  The Company hereby represents and
      warrants to the Investors that, except as set forth in the schedules delivered
      herewith (collectively, the “Disclosure Schedules”):

    

    4.1           Organization,
      Good Standing and Qualification.  Each of the Company and its
      Subsidiaries is a corporation duly organized, validly existing and in good
      standing under the laws of the jurisdiction of its incorporation and has all
      requisite corporate power and authority to carry on its business as now
      conducted and to own its properties.  Each of the Company and its
      Subsidiaries is duly qualified to do business as a foreign corporation and
      is in
      good standing in each jurisdiction in which the conduct of its business or
      its
      ownership or leasing of property makes such qualification or leasing necessary
      unless the failure to so qualify has not had and could not reasonably be
      expected to have a Material Adverse Effect.  The Company’s
      Subsidiaries are listed on Schedule 4.1 hereto.  Neither the
      Company nor any Subsidiary is in violation of any of the provisions of its
      respective certificate or articles of incorporation, by-laws or other
      organizational or charter documents.

    

    4.2           Authorization.  The
      Company has full power and authority and has taken all requisite action on
      the
      part of the Company, its officers, directors and stockholders necessary for
      (i)
      the authorization, execution and delivery of the Transaction Documents, (ii)
      the
      authorization of the performance of all obligations of the Company hereunder
      or
      thereunder, and (iii) the authorization, issuance (or reservation for issuance)
      and delivery of the Securities.  The Transaction Documents constitute
      the legal, valid and binding obligations of the Company, enforceable against
      the
      Company in accordance with their terms, subject to bankruptcy, insolvency,
      fraudulent transfer, reorganization, moratorium and similar laws of general
      applicability, relating to or affecting creditors’ rights
      generally.

    

    4.3           Capitalization.  Schedule
      4.3 sets forth (a) the authorized capital stock of the Company on the date
      hereof; (b) the number of shares of capital stock issued and outstanding; (c)
      the number of shares of capital stock issuable pursuant to the Company’s
      outstanding stock award; and (d) the number of shares of capital stock issuable
      pursuant to future grants of awards eligible to be made under the Company’s
      stock plans; (e) the number of shares of Common Stock issuable upon conversion
      of the outstanding Series D Preferred Stock and the outstanding Series E
      Preferred Stock; and (f) the number of shares of capital stock issuable and
      reserved for issuance pursuant to securities (other than the Series D Preferred
      Stock, the Series E Preferred Stock, the Shares and the Warrants) exercisable
      for, or convertible into or exchangeable for any shares of capital stock of
      the
      Company.  All of the issued and outstanding shares of the Company’s
      capital stock have been duly authorized and validly issued and are fully paid,
      nonassessable and free of pre-emptive rights and were issued in full compliance
      with applicable state and federal securities law and any rights of third
      parties.  Except as described on Schedule 4.3, all of the
      issued and outstanding shares of capital stock of each Subsidiary have been
      duly
      authorized and validly issued and are fully paid, nonassessable and free of
      pre-emptive rights, were issued in full compliance with applicable state and
      federal securities law and any rights of third parties and are owned by the
      Company, beneficially and of record, subject to no lien, encumbrance or other
      adverse claim.  Except as described on Schedule 4.3, no Person
      is entitled to pre-emptive or similar statutory or contractual rights with
      respect to any securities of 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    the
      Company.  Except as described on Schedule 4.3, there are no
      outstanding warrants, options, convertible securities or other rights,
      agreements or arrangements of any character under which the Company or any
      of
      its Subsidiaries is or may be obligated to issue any equity securities of any
      kind and except as contemplated by this Agreement, neither the Company nor
      any
      of its Subsidiaries is currently in negotiations for the issuance of any equity
      securities of any kind.  Except as described on Schedule 4.3
      and except for the Registration Rights Agreement, there are no voting
      agreements, buy-sell agreements, option or right of first purchase agreements
      or
      other agreements of any kind among the Company and any of the securityholders
      of
      the Company relating to the securities of the Company held by
      them.  Except as described on Schedule 4.3 and except as
      provided in the Registration Rights Agreement, no Person has the right to
      require the Company to register any securities of the Company under the 1933
      Act, whether on a demand basis or in connection with the registration of
      securities of the Company for its own account or for the account of any other
      Person.

    

    Except
      as described on Schedule
      4.3, the issuance and sale of the Securities hereunder will not obligate the
      Company to issue shares of Common Stock or other securities to any other Person
      (other than the Investors) and will not result in the adjustment of the
      exercise, conversion, exchange or reset price of any outstanding
      security.

    

    The
      Company does not have outstanding
      stockholder purchase rights or “poison pill” or any similar arrangement in
      effect giving any Person the right to purchase any equity interest in the
      Company upon the occurrence of certain events.

    

    4.4           Valid
      Issuance.  The Shares have been duly and validly authorized and,
      when issued and paid for pursuant to this Agreement, will be validly issued,
      fully paid and nonassessable, and shall be free and clear of all encumbrances
      and restrictions (other than those created by the Investors), except for
      restrictions on transfer set forth in the Transaction Documents or imposed
      by
      applicable securities laws and will be entitled to the relative rights, powers
      and preferences set forth in the Certificate of Designations.  Upon
      the due conversion of the Shares in accordance with the Certificate of
      Designations, the Conversion Shares will be validly issued, fully paid and
      nonassessable, and shall be free and clear of all encumbrances and restrictions
      (other than those created by the Investors), except for restrictions on transfer
      set forth in the Transaction Documents or imposed by applicable securities
      laws.  The Warrants have been duly and validly
      authorized.  Upon the due exercise of the Warrants, the Warrant Shares
      will be validly issued, fully paid and non-assessable free and clear of all
      encumbrances and restrictions, except for restrictions on transfer set forth
      in
      the Transaction Documents or imposed by applicable securities laws and except
      for those created by the Investors.  The Company has reserved a
      sufficient number of shares of Common Stock for issuance upon the conversion
      of
      the Preferred Stock and the exercise of the Warrants, free and clear of all
      encumbrances and restrictions, except for restrictions on transfer set forth
      in
      the Transaction Documents or imposed by applicable securities laws and except
      for those created by the Investors.

    

    4.5           Consents.  The
      execution, delivery and performance by the Company of the Transaction Documents
      and the offer, issuance and sale of the Securities require no consent of, action
      by or in respect of, or filing with, any Person, governmental body, agency,
      or
      official other than filings that have been made pursuant to applicable state
      securities laws and post-sale 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    filings
      pursuant to applicable state and federal securities laws which the Company
      undertakes to file within the applicable time periods.  Subject to the
      accuracy of the representations and warranties of each Investor set forth in
      Section 5 hereof, the Company has taken all action necessary to exempt (i)
      the
      issuance and sale of the Securities, (ii) the issuance of the Conversion Shares
      upon due exercise of the Shares, (iii) the issuance of the Warrant Shares upon
      due exercise of the Warrants, and (iv) the other transactions contemplated
      by
      the Transaction Documents from the provisions of any stockholder rights plan
      or
      other “poison pill” arrangement, any anti-takeover, business combination or
      control share law or statute binding on the Company or to which the Company
      or
      any of its assets and properties may be subject and any provision of the
      Company’s Certificate of Incorporation or Bylaws that is or could reasonably be
      expected to become applicable to the Investors as a result of the transactions
      contemplated hereby, including without limitation, the issuance of the
      Securities and the ownership, disposition or voting of the Securities by the
      Investors or the exercise of any right granted to the Investors pursuant to
      this
      Agreement or the other Transaction Documents.

    

    4.6           Delivery
      of SEC Filings; Business.  The Company has made available to the
      Investors through the EDGAR system, true and complete copies of the Company’s
      most recent Annual Report on Form 10-KSB for the fiscal year ended September
      30,
      2006 (the “10-KSB”), and all other reports filed by the Company pursuant to the
      1934 Act since the filing of the 10-KSB and prior to the date hereof
      (collectively, the “SEC Filings”).  The SEC Filings are the only
      filings required of the Company pursuant to the 1934 Act for such period and
      have been made on a timely basis or the Company has received a valid extension
      of such time of filing and has filed any such SEC Filings prior to the
      expiration of such extension.  The Company and its Subsidiaries are
      engaged in all material respects only in the business described in the SEC
      Filings and the SEC Filings contain a complete and accurate description in
      all
      material respects of the business of the Company and its Subsidiaries, taken
      as
      a whole.

    

    4.7           Use
      of Proceeds.  The net proceeds of the sale of the Shares and the
      Warrants hereunder shall be used by the Company for working capital and general
      corporate purposes.

     

            4.8           No
      Material Adverse Change.  Since September 30, 2006, except as
      identified and described in the SEC Filings or as described on Schedule
      4.8, there has not been:

    

    (i)           any
      change in the consolidated assets, liabilities, financial condition or operating
      results of the Company from that reflected in the financial statements included
      in the Company’s Quarterly Report on Form 10-QSB for the quarter ended June 30,
      2007, except for changes in the ordinary course of business which have not
      had
      and could not reasonably be expected to have a Material Adverse Effect,
      individually or in the aggregate;

    

    (ii)           any
      declaration or payment of any dividend, or any authorization or payment of
      any
      distribution, on any of the capital stock of the Company, or any redemption
      or
      repurchase of any securities of the Company;

    

    (iii)           any
      material damage, destruction or loss, whether or not covered by insurance to
      any
      assets or properties of the Company or its Subsidiaries;

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    (iv)           any
      waiver, not in the ordinary course of business, by the Company or any Subsidiary
      of a material right or of a material debt owed to it;

    

    (v)           any
      satisfaction or discharge of any lien, claim or encumbrance or payment of any
      obligation by the Company or a Subsidiary, except in the ordinary course of
      business and which is not material to the assets, properties, financial
      condition, operating results or business of the Company and its Subsidiaries
      taken as a whole (as such business is presently conducted and as it is proposed
      to be conducted);

    

    (vi)           any
      change or amendment to the Company's Certificate of Incorporation or Bylaws,
      or
      material change to any material contract or arrangement by which the Company
      or
      any Subsidiary is bound or to which any of their respective assets or properties
      is subject;

    

    (vii)           any
      material labor difficulties or labor union organizing activities with respect
      to
      employees of the Company or any Subsidiary;

    

    (viii)                      any
      material transaction entered into by the Company or a Subsidiary other than
      in
      the ordinary course of business;

    

    (ix)           the
      loss of the services of any key employee, or material change in the composition
      or duties of the senior management of the Company or any
      Subsidiary;

    

    (x)           the
      loss or threatened loss of any customer which has had or could reasonably be
      expected to have a Material Adverse Effect; or

    

    (xi)           any
      other event or condition of any character that has had or could reasonably
      be
      expected to have a Material Adverse Effect.

    

    4.9           SEC
      Filings.

    

    (a)           At
      the time of filing thereof, the SEC Filings complied as to form in all material
      respects with the requirements of the 1934 Act and did 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 the light of the circumstances
      under which they were made, not misleading.

    

    (b)           Each
      registration statement and any amendment thereto filed by the Company since
      January 1, 2004 pursuant to the 1933 Act and the rules and regulations
      thereunder, as of the date such statement or amendment became effective,
      complied as to form in all material respects with the 1933 Act and did not
      contain any untrue statement of a material fact or omit to state any material
      fact required to be stated therein or necessary in order to make the statements
      made therein not misleading; and each prospectus filed pursuant to Rule 424(b)
      under the 1933 Act, as of its issue date and as of the closing of any sale
      of
      securities pursuant thereto did not contain any untrue statement of a material
      fact or omit to state any material fact 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    required
      to be stated therein or necessary in order to make the statements made therein,
      in the light of the circumstances under which they were made, not
      misleading.

    

    4.10          No
      Conflict, Breach, Violation or Default.  The execution, delivery
      and performance of the Transaction Documents by the Company and the issuance
      and
      sale of the Securities will not conflict with or result in a breach or violation
      of any of the terms and provisions of, or constitute a default under (i) the
      Company’s Certificate of Incorporation or the Company’s Bylaws, both as in
      effect on the date hereof (true and complete copies of which have been made
      available to the Investors through the EDGAR system), or (ii)(a) any statute,
      rule, regulation or order of any governmental agency or body or any court,
      domestic or foreign, having jurisdiction over the Company, any Subsidiary or
      any
      of their respective assets or properties, or (b) any agreement or instrument
      to
      which the Company or any Subsidiary is a party or by which the Company or a
      Subsidiary is bound or to which any of their respective assets or properties
      is
      subject.

    

    4.11          Tax
      Matters.  The Company and each Subsidiary has timely prepared and
      filed all tax returns required to have been filed by the Company or such
      Subsidiary with all appropriate governmental agencies and timely paid all taxes
      shown thereon or otherwise owed by it.  The charges, accruals and
      reserves on the books of the Company in respect of taxes for all fiscal periods
      are adequate in all material respects, and there are no material unpaid
      assessments against the Company or any Subsidiary nor, to the Company’s
      Knowledge, any basis for the assessment of any additional taxes, penalties
      or
      interest for any fiscal period or audits by any federal, state or local taxing
      authority except for any assessment which is not material to the Company and
      its
      Subsidiaries, taken as a whole.  All taxes and other assessments and
      levies that the Company or any Subsidiary is required to withhold or to collect
      for payment have been duly withheld and collected and paid to the proper
      governmental entity or third party when due.  There are no tax liens
      or claims pending or, to the Company’s Knowledge, threatened against the Company
      or any Subsidiary or any of their respective assets or
      property.  Except as described on Schedule 4.11, there are no
      outstanding tax payment or tax sharing agreements or other such arrangements
      between the Company and any Subsidiary or other corporation or
      entity.

    

    4.12          Title
      to Properties.  Except as disclosed in the SEC Filings or as
      described on Schedule 4.12, the Company and each Subsidiary has good and
      marketable title to all real properties and all other properties and assets
      owned by it, in each case free from liens, encumbrances and defects that would
      materially affect the value thereof or materially interfere with the use made
      or
      currently planned to be made thereof by them; and except as disclosed in the
      SEC
      Filings, the Company and each Subsidiary holds any leased real or personal
      property under valid and enforceable leases with no exceptions that would
      materially interfere with the use made or currently planned to be made thereof
      by them.

    

    4.13          Certificates,
      Authorities and Permits.  Except as disclosed in the 10-KSB or as
      described on Schedule 4.13, the Company and each Subsidiary possess
      adequate certificates, authorities or permits issued by appropriate governmental
      agencies or bodies necessary to conduct the business now operated by it, and
      neither the Company nor any Subsidiary has received any notice of proceedings
      relating to the revocation or modification of any such certificate, authority
      or
      permit that, if determined adversely to the Company or such 

     

    
      
        
        

      

      
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    Subsidiary,
      could reasonably be expected to have a Material Adverse Effect, individually
      or
      in the aggregate.

     

            4.14          Labor
      Matters.

    

                    (a)           Except
      as set forth on Schedule 4.14, the Company is not a party to or bound by
      any collective bargaining agreements or other agreements with labor
      organizations.  The Company has not violated in any material respect
      any laws, regulations, orders or contract terms, affecting the collective
      bargaining rights of employees, labor organizations or any laws, regulations
      or
      orders affecting employment discrimination, equal opportunity employment, or
      employees’ health, safety, welfare, wages and hours.

    

                    (b)           (i)
      There are no labor disputes existing, or to the Company's Knowledge, threatened,
      involving strikes, slow-downs, work stoppages, job actions, disputes, lockouts
      or any other disruptions of or by the Company's employees, (ii) there are no
      unfair labor practices or petitions for election pending or, to the Company's
      Knowledge, threatened before the National Labor Relations Board or any other
      federal, state or local labor commission relating to the Company's employees,
      (iii) no demand for recognition or certification heretofore made by any labor
      organization or group of employees is pending with respect to the Company and
      (iv) to the Company's Knowledge, the Company enjoys good labor and employee
      relations with its employees and labor organizations.

    

                    (c)           The
      Company is, and at all times has been, in compliance in all material respects
      with all applicable laws respecting employment (including laws relating to
      classification of employees and independent contractors) and employment
      practices, terms and conditions of employment, wages and hours, and immigration
      and naturalization.  There are no claims pending against the Company
      before the Equal Employment Opportunity Commission or any other administrative
      body or in any court asserting any violation of Title VII of the Civil Rights
      Act of 1964, the Age Discrimination Act of 1967, 42 U.S.C. §§ 1981 or 1983 or
      any other federal, state or local Law, statute or ordinance barring
      discrimination in employment.

    

                    (d)           The
      Company is not a party to, or bound by, any employment or other contract or
      agreement that contains any severance, termination pay or change of control
      liability or obligation, including, without limitation, any “excess parachute
      payment,” as defined in Section 2806(b) of the Internal Revenue
      Code.

    

                    (e)           Except
      as specified in Schedule 4.14, each of the Company's employees who works
      in the United States is a Person who is either a United States citizen or a
      permanent resident entitled to work in the United States.  To the
      Company's Knowledge, the Company has no liability for the improper
      classification by the Company of such employees as independent contractors
      or
      leased employees prior to the Closing.

    

    4.15          Intellectual
      Property.

    

    (a)           All
      Intellectual Property of the Company and its Subsidiaries is currently in
      compliance with all legal requirements (including timely filings, proofs and
      

     

    
      
        
        

      

      
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    payments
      of fees) and, to the Company’s Knowledge, is valid and
      enforceable.  No Intellectual Property of the Company or its
      Subsidiaries which is necessary for the conduct of Company’s and each of its
      Subsidiaries’ respective businesses as currently conducted or as currently
      proposed to be conducted has been or is now involved in any cancellation,
      dispute or litigation, and, to the Company’s Knowledge, no such action is
      threatened.  No patent of the Company or its Subsidiaries has been or
      is now involved in any interference, reissue, re-examination or opposition
      proceeding.

    

    (b)           All
      of the licenses and sublicenses and consent, royalty or other agreements
      concerning Intellectual Property which are necessary for the conduct of the
      Company’s and each of its Subsidiaries’ respective businesses as currently
      conducted or as currently proposed to be conducted to which the Company or
      any
      Subsidiary is a party or by which any of their assets are bound (other than
       generally commercially available, non-custom, off-the-shelf software
      application programs having a retail acquisition price of less than $10,000
      per
      license) (collectively, “License Agreements”) are valid and binding obligations
      of the Company or its Subsidiaries that are parties thereto and, to the
      Company’s Knowledge, the other parties thereto, enforceable in accordance with
      their terms, except to the extent that enforcement thereof may be limited by
      bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
      other similar laws affecting the enforcement of creditors’ rights generally, and
      there exists no event or condition which will result in a material violation
      or
      breach of or constitute (with or without due notice or lapse of time or both)
      a
      default by the Company or any of its Subsidiaries under any such License
      Agreement.

    

    (c)           The
      Company and its Subsidiaries own or have the valid right to use all of the
      Intellectual Property that is necessary for the conduct of the Company’s and
      each of its Subsidiaries’ respective businesses as currently conducted or as
      currently proposed to be conducted and for the ownership, maintenance and
      operation of the Company’s and its Subsidiaries’ properties and assets, free and
      clear of all liens, encumbrances, adverse claims or obligations to license
      all
      such owned Intellectual Property and Confidential Information, other than
      licenses entered into in the ordinary course of the Company’s and its
      Subsidiaries’ businesses.  The Company and its Subsidiaries have a
      valid and enforceable right to use all third party Intellectual Property and
      Confidential Information used or held for use in the respective businesses
      of
      the Company and its Subsidiaries.

    

    (d)           To
      the Company’s Knowledge, the conduct of the Company’s and its Subsidiaries’
businesses as currently conducted does not infringe or otherwise impair or
      conflict with (collectively, “Infringe”) any Intellectual Property rights of any
      third party or any confidentiality obligation owed to a third party, and, to
      the
      Company’s Knowledge, the Intellectual Property and Confidential Information of
      the Company and its Subsidiaries which are necessary for the conduct of
      Company’s and each of its Subsidiaries’ respective businesses as currently
      conducted or as currently proposed to be conducted are not being Infringed
      by
      any third party.  There is no litigation or order pending or
      outstanding or, to the Company’s Knowledge, threatened or imminent, that seeks
      to limit or challenge or that concerns the ownership, use, validity or
      enforceability of any Intellectual Property or Confidential Information of
      the
      Company and its Subsidiaries and the Company’s and its Subsidiaries’ use of

     

    
      
        
        

      

      
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    any
      Intellectual Property or Confidential Information owned by a third party, and,
      to the Company’s Knowledge, there is no valid basis for the same.

    

    (e)           The
      consummation of the transactions contemplated hereby and by the other
      Transaction Documents will not result in the alteration, loss, impairment of
      or
      restriction on the Company’s or any of its Subsidiaries’ ownership or right to
      use any of the Intellectual Property or Confidential Information which is
      necessary for the conduct of Company’s and each of its Subsidiaries’ respective
      businesses as currently conducted or as currently proposed to be
      conducted.

    

    (f)           The
      Company and its Subsidiaries have taken reasonable steps to protect the
      Company’s and its Subsidiaries’ rights in their Intellectual Property and
      Confidential Information.  Each employee, consultant and contractor
      who has had access to Confidential Information which is necessary for the
      conduct of Company’s and each of its Subsidiaries’ respective businesses as
      currently conducted or as currently proposed to be conducted has executed an
      agreement to maintain the confidentiality of such Confidential Information
      and
      has executed appropriate agreements that are substantially consistent with
      the
      Company’s standard forms thereof.  Except under confidentiality
      obligations, there has been no material disclosure of any of the Company’s or
      its Subsidiaries’ Confidential Information to any third party.

    

    4.16          Environmental
      Matters.  Neither the Company nor any Subsidiary 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”), owns or operates any real
      property contaminated with any substance that is subject to any Environmental
      Laws, is liable for any off-site disposal or contamination pursuant to any
      Environmental Laws, or 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.

    

    4.17          Litigation.  Except
      as described on Schedule 4.17, there are no pending actions, suits or
      proceedings against or affecting the Company, its Subsidiaries or any of its
      or
      their properties; and to the Company’s Knowledge, no such actions, suits or
      proceedings are threatened or contemplated.  Except as described on
Schedule 4.17, neither the Company nor any Subsidiary, nor any director
      or officer thereof, is or since January 1, 2004 has been 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 with respect to the
      Company.  There has not been, and to the Company’s Knowledge, there is
      not pending or contemplated, any investigation by the SEC involving the Company
      or any current or former director or officer of the Company.  The SEC
      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 1933
      Act
      or the 1934 Act.

    

    4.18          Financial
      Statements.  The financial statements included in each SEC Filing
      present fairly, in all material respects, the consolidated financial position
      of
      the Company 

     

    
      
        
        

      

      
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    as
      of the
      dates shown and its consolidated results of operations and cash flows for the
      periods shown, and such financial statements have been prepared in conformity
      with United States generally accepted accounting principles applied on a
      consistent basis (“GAAP”) (except as may be disclosed therein or in the notes
      thereto, and, in the case of quarterly financial statements, as permitted by
      Form 10-QSB under the 1934 Act).  Except as set forth in the financial
      statements of the Company included in the SEC Filings filed prior to the date
      hereof or as described on Schedule 4.18, neither the Company nor any of
      its Subsidiaries has incurred any liabilities, contingent or otherwise, except
      those incurred in the ordinary course of business, consistent (as to amount
      and
      nature) with past practices since the date of such financial statements, none
      of
      which, individually or in the aggregate, have had or could reasonably be
      expected to have a Material Adverse Effect.

    

    4.19          Insurance
      Coverage.  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 in which
      the
      Company and the Subsidiaries are engaged, including, but not limited to,
      directors and officers insurance coverage at least equal to the aggregate
      Purchase Price.  To the Company’s Knowledge, its current insurance
      carriers have not notified the Company that any of them will not be able or
      willing to renew its existing insurance coverage as and when such coverage
      expires.

    

    4.20          Brokers
      and Finders.  No Person will have, as a result of the transactions
      contemplated by the Transaction Documents, any valid right, interest or claim
      against or upon the Company, any Subsidiary or an Investor 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 as
      described in Schedule 4.20.

    

    4.21          No
      Directed Selling Efforts or General Solicitation.  Neither the
      Company nor any Person acting on its 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.

    

    4.22          No
      Integrated Offering.  Neither the Company nor any of its
      Affiliates, nor any Person acting on its or their behalf has, directly or
      indirectly, made any offers or sales of any Company security or solicited any
      offers to buy any security, under circumstances that would adversely affect
      reliance by the Company on Section 4(2) for the exemption from registration
      for
      the transactions contemplated hereby or would require registration of the
      Securities under the 1933 Act.

    

    4.23          Private
      Placement.  Subject to the accuracy of the Investors’
representations in Section 5 of this Agreement, the offer and sale of the
      Securities to the Investors as contemplated hereby is exempt from the
      registration requirements of the 1933 Act.

    

    4.24          Questionable
      Payments.  Neither the Company nor any
      of its Subsidiaries nor, to the Company’s Knowledge, any of their respective
      current or former stockholders, directors, officers, employees, agents or other
      Persons acting on behalf of the Company or any Subsidiary, has on behalf of
      the
      Company or any Subsidiary or in connection with their 

     

    
      
        
        

      

      
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    respective
      businesses: (a) used any corporate funds for unlawful contributions, gifts,
      entertainment or other unlawful expenses relating to political activity; (b)
      made any direct or indirect unlawful payments to any governmental officials
      or
      employees from corporate funds; (c) established or maintained any unlawful
      or
      unrecorded fund of corporate monies or other assets; (d) made any false or
      fictitious entries on the books and records of the Company or any Subsidiary;
      or
      (e) made any unlawful bribe, rebate, payoff, influence payment, kickback or
      other unlawful payment of any nature.

    

    4.25          Transactions
      with Affiliates.  Except as disclosed on Schedule 4.25,
      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 (other than as holders of stock
      options and/or warrants, and for services as employees, officers and directors),
      including any contract, agreement or other arrangement providing for the
      furnishing of services to or by, providing for rental of real or personal
      property to or from, or otherwise requiring payments to or from any officer,
      director or such employee or, to the Company’s Knowledge, any entity in which
      any officer, director, or any such employee has a substantial interest or is
      an
      officer, director, trustee or partner.

    

    4.26          Internal
      Controls.  The Company is in material compliance with the
      provisions of the Sarbanes-Oxley Act of 2002 currently applicable to the
      Company.  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 GAAP 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.
      The
      Company has established disclosure controls and procedures (as defined in 1934
      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, including the Subsidiaries, 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 1934 Act, as the case
      may be, is being prepared.  The Company's certifying officers have
      evaluated the effectiveness of the Company's controls and procedures as of
      the
      end of the period covered by the most recently filed periodic report under
      the
      1934 Act (such date, the "Evaluation Date").  The Company presented in
      its most recently filed periodic report under the 1934 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, there have been no significant
      changes in the Company's internal controls (as such term is defined in Item
      308
      of Regulation S-K) or, to the Company's Knowledge, in other factors that could
      significantly affect the Company's internal controls.  The Company
      maintains and will continue to maintain a standard system of accounting
      established and administered in accordance with GAAP and the applicable
      requirements of the 1934 Act.

    

    4.27          Listing
      and Maintenance Requirements.  The Company’s Common Stock is
      registered pursuant to Section 12(g) of the 1934 Act, and the Company has taken
      no action 

     

    
      
        
        

      

      
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    designed
      to, or which to its knowledge is likely to have the effect of, terminating
      the
      registration of the Common Stock under the 1934 Act nor has the Company received
      any notification that the SEC is contemplating terminating such
      registration.  The Company has not, in the 12 months preceding the
      date hereof, received notice from any Trading Market on which the Common Stock
      is or 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.
      The Company is, and has no reason to believe that it will not in the foreseeable
      future continue to be, in compliance with all such listing and maintenance
      requirements.

    

    4.28          Compliance.  Neither
      the Company nor any Subsidiary (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, or (iii) is or has been in violation of any
      statute, rule or regulation of any governmental authority, including without
      limitation all foreign, federal, state and local laws relating to taxes,
      environmental protection, occupational health and safety, product quality and
      safety and employment and labor matters, except in each case as does not,
      individually or in the aggregate, have or reasonably be expected to result
      in a
      Material Adverse Effect.

    

    4.29          Accountants.  To
      the Knowledge of the Company, the accountants, who the Company expects will
      express their opinion with respect to the financial statements to be included
      in
      the Company’s Annual Report on Form 10-KSB for the year ending September 30,
      2007 are a registered public accounting firm as required by the 1933
      Act.

    

    4.30          Seniority.  Except
      as described on Schedule 4.30, as of the Closing Date, no indebtedness
      for borrowed money or equity of the Company is senior to the Preferred Stock
      in
      right of payment, whether with respect to interest or upon liquidation or
      dissolution, or otherwise, other than indebtedness secured by purchase money
      security interests (which is senior only as to underlying assets covered
      thereby) and capital lease obligations (which is senior only as to the property
      covered thereby).

    

    4.31          No
      Disagreements with Accountants and Lawyers.  There are no
      disagreements of any kind presently existing, or reasonably anticipated by
      the
      Company to arise, between the Company and the accountants and lawyers formerly
      or presently employed by the Company and the Company is current with respect
      to
      any fees billed within the past ninety (90) days from its accountants and
      lawyers.

    

    4.32          Manipulation
      of Price.  The Company has not, and to its knowledge no one acting
      on its behalf has, (i) taken, directly or indirectly, any action designed to
      cause or to result in the stabilization or manipulation of the price of any
      security of the Company to facilitate the sale or resale of any of the
      Securities, (ii) sold, bid for, purchased, or paid any compensation for
      soliciting purchases of, any of the Securities, or (iii) paid or agreed to
      pay
      to any person any compensation for soliciting another to purchase any other
      securities of the Company, other than, 

     

    
      
        
        

      

      
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    in
      the
      case of each of clauses (ii) and (iii), compensation paid to the Company’s
      placement agent in connection with the placement of the Securities.

    

    4.33          Disclosures.  Neither
      the Company nor any Person acting on its behalf has provided the Investors
      or
      their agents or counsel with any information that constitutes or might
      constitute material, non-public information, other than the terms of the
      transactions contemplated hereby.  The written materials delivered to
      the Investors in connection with the transactions contemplated by the
      Transaction Documents do not contain any untrue statement of a material fact
      or
      omit to state a material fact necessary in order to make the statements
      contained therein, in light of the circumstances under which they were made,
      not
      misleading.

    

    5.       
           Representations and Warranties of the
      Investors.  Each of the Investors hereby severally, and not
      jointly, represents and warrants to the Company that:

    

    5.1           Organization
      and Existence.  Such Investor is a validly existing corporation,
      limited partnership or limited liability company and has all requisite
      corporate, partnership or limited liability company power and authority to
      invest in the Securities pursuant to this Agreement, and was not formed solely
      for the purpose of investing in the Securities.

    

    5.2           Authorization.  The
      execution, delivery and performance by such Investor of the Transaction
      Documents to which such Investor is a party have been duly authorized and will
      each constitute the valid and legally binding obligation of such Investor,
      enforceable against such Investor in accordance with their respective terms,
      subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
      moratorium and similar laws of general applicability, relating to or affecting
      creditors’ rights generally.

    

    5.3           Purchase
      Entirely for Own Account.  The Securities to be received by such
      Investor hereunder will be acquired for such Investor’s own account, not as
      nominee or agent, and not with a view to the resale or distribution of any
      part
      thereof in violation of the 1933 Act, and such Investor has no present intention
      of selling, granting any participation in, or otherwise distributing the same
      in
      violation of the 1933 Act without prejudice, however, to such Investor’s right
      at all times to sell or otherwise dispose of all or any part of such Securities
      in compliance with applicable federal and state securities
      laws.  Nothing contained herein shall be deemed a
      representation or warranty by such Investor to hold the Securities for any
      period of time.  Neither such Investor nor any Affiliate of such
      Investor is a broker-dealer registered with the SEC under the 1934 Act or an
      entity engaged in a business that would require it to be so
      registered.

    

    5.4           Investment
      Experience.  Such Investor acknowledges that it can bear the
      economic risk and complete loss of its investment in the Securities and has
      such
      knowledge and experience in financial or business matters that it is capable
      of
      evaluating the merits and risks of the investment contemplated
      hereby.

    

    5.5           Disclosure
      of Information.  Such Investor has had an opportunity to receive
      all information related to the Company requested by it and to ask questions
      of
      and receive answers from the Company regarding the Company, its business, the
      terms and 

     

    
      
        
        

      

      
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    conditions
      of the offering of the Securities and the risk factors included in the Company’s
      SEC Filings.  Such Investor acknowledges receipt of copies of the SEC
      Filings.  Neither such inquiries nor any other due diligence
      investigation conducted by such Investor shall modify, limit or otherwise affect
      such Investor’s right to rely on the Company’s representations and warranties
      contained in this Agreement.

    

    5.6           Restricted
      Securities.  Such Investor understands that the Securities are
      characterized as “restricted securities” under the U.S. federal securities laws
      inasmuch as they are being acquired from the Company in a transaction not
      involving a public offering and that under such laws and applicable regulations
      such securities may be resold or otherwise transferred without registration
      under the 1933 Act only in certain limited circumstances.

    

    5.7           Legends.  It
      is understood that, except as provided below, certificates evidencing the
      Securities may bear the following or any similar legend:

    

    (a)           “The
      securities represented hereby may not be transferred unless (i) such securities
      have been registered for sale pursuant to the Securities Act of 1933, as
      amended, (ii) such securities may be sold pursuant to Rule 144(k), or (iii)
      the
      Company has received an opinion of counsel reasonably satisfactory to it that
      such transfer may lawfully be made without registration under the Securities
      Act
      of 1933 or qualification under applicable state securities laws.”

    

    (b)           If
      required by the authorities of any state in connection with the issuance of
      sale
      of the Securities, the legend required by such state authority.

    

    5.8           Accredited
      Investor.  Such Investor is an accredited investor as defined in
      Rule 501(a) of Regulation D, as amended, under the 1933 Act.

    

    5.9           No
      General Solicitation.  Such Investor did not learn of the
      investment in the Securities as a result of any general solicitation or general
      advertising.

    

    5.10          Brokers
      and Finders.  No Person will have, as a result of the transactions
      contemplated by the Transaction Documents, any valid right, interest or claim
      against or upon the Company, any Subsidiary or an Investor for any commission,
      fee or other compensation pursuant to any agreement, arrangement or
      understanding entered into by or on behalf of such Investor.

    

    5.11          Prohibited
      Transactions.  During the last thirty (30) days prior to the date
      hereof, neither such Investor nor any Affiliate of such Investor which (x)
      had
      knowledge of the transactions contemplated hereby, (y) has or shares discretion
      relating to such Investor’s investments or trading or information concerning
      such Investor’s investments, including in respect of the Securities, or (z) is
      subject to such Investor’s review or input concerning such Affiliate’s
      investments or trading (collectively, “Trading Affiliates”) has, directly or
      indirectly, effected or agreed to effect any short sale, whether or not against
      the box, established any “put equivalent position” (as defined in Rule 16a-1(h)
      under the 1934 Act) with respect to the Common Stock, granted any other right
      (including, without limitation, any put or call option) 

     

    
      
        
        

      

      
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    with
      respect to the Common Stock or with respect to any security that includes,
      relates to or derived any significant part of its value from the Common Stock
      or
      otherwise sought to hedge its position in the Securities (each, a “Prohibited
      Transaction”).  Prior to the earliest to occur of (i) the termination
      of this Agreement, (ii) the Effective Date or (iii) the Effectiveness Deadline,
      such Investor shall not, and shall cause its Trading Affiliates not to, engage,
      directly or indirectly, in a Prohibited Transaction.  Such Investor
      acknowledges that the representations, warranties and covenants contained in
      this Section 5.11 are being made for the benefit of the Investors as well as
      the
      Company and that each of the other Investors shall have an independent right
      to
      assert any claims against such Investor arising out of any breach or violation
      of the provisions of this Section 5.11.

    

    6.     Conditions
      to Closing.

    

    6.1           Conditions
      to the Investors’ Obligations. The obligation of each Investor to purchase
      the Shares and the Warrants at the Closing is subject to the fulfillment to
      such
      Investor’s satisfaction, on or prior to the Closing Date, of the following
      conditions, any of which may be waived by such Investor (as to itself
      only):

    

    (a)           The
      representations and warranties made by the Company in Section 4 hereof qualified
      as to materiality shall be true and correct at all times prior to and on the
      Closing Date, except to the extent any such representation or warranty expressly
      speaks as of an earlier date, in which case such representation or warranty
      shall be true and correct as of such earlier date, and, the representations
      and
      warranties made by the Company in Section 4 hereof not qualified as to
      materiality shall be true and correct in all material respects at all times
      prior to and on the Closing Date, except to the extent any such representation
      or warranty expressly speaks as of an earlier date, in which case such
      representation or warranty shall be true and correct in all material respects
      as
      of such earlier date.  The Company shall have performed in all
      material respects all obligations and covenants herein required to be performed
      by it on or prior to the Closing Date.

    

    (b)           The
      Company shall have obtained any and all consents, permits, approvals,
      registrations and waivers necessary or appropriate for consummation of the
      purchase and sale of the Securities and the consummation of the other
      transactions contemplated by the Transaction Documents, all of which shall
      be in
      full force and effect.

    

    (c)           The
      Company shall have executed and delivered the Registration Rights
      Agreement.

    

    (d)           The
      Certificate of Designations shall have been filed with the Secretary of State
      of
      Delaware and shall have become effective.

    

    (e)           The
      Company shall receive gross proceeds at least equal to the Minimum
      Amount.

    

    (f)           No
      judgment, writ, order, injunction, award or decree of or by any court, or judge,
      justice or magistrate, including any bankruptcy court or judge, or any order
      of
      or 

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    by
      any
      governmental authority, shall have been issued, and no action or proceeding
      shall have been instituted by any governmental authority, enjoining or
      preventing the consummation of the transactions contemplated hereby or in the
      other Transaction Documents.

    

    (g)           The
      Company shall have delivered a Certificate, executed on behalf of the Company
      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
      subsections (a), (b), (d), (e), (f) and (j) of this Section 6.1.

    

    (h)           The
      Company shall have delivered a Certificate, executed on behalf of the Company
      by
      its Secretary, 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 Certificate of Incorporation
      and Bylaws 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.

    

    (i)           The
      Investors purchasing Shares and Warrants at the Initial Closing shall have
      received an opinion from Thelen Reid Brown Raysman & Steiner LLP, the
      Company's counsel, dated as of the Closing Date, in form and substance
      reasonably acceptable to the Investors and addressing such legal matters as
      the
      Investors may reasonably request.

    

    (j)           No
      stop order or suspension of trading shall have been imposed by the SEC or any
      other governmental or regulatory body with respect to public trading in the
      Common Stock.

    

    6.2           Conditions
      to Obligations of the Company. The Company's obligation to sell and issue
      the Shares and the Warrants 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)           The
      representations and warranties made by the Investors in Section 5 hereof, other
      than the representations and warranties contained in Sections 5.3, 5.4, 5.5,
      5.6, 5.7, 5.8 and 5.9 (the “Investment Representations”), shall be true and
      correct in all material respects when made, and shall be true and correct in
      all
      material respects on the Closing Date with the same force and effect as if
      they
      had been made on and as of said date.  The Investment Representations
      shall be true and correct in all respects when made, and shall be true and
      correct in all respects on the Closing Date with the same force and effect
      as if
      they had been made on and as of said date.  The Investors shall have
      performed in all material respects all obligations and covenants herein required
      to be performed by them on or prior to the Closing Date.

    

    (b)           The
      Investors shall have executed and delivered the Registration Rights
      Agreement.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (c)           The
      Company shall have received at least the Minimum Amount from the
      Investors.

    

    6.3           Termination
      of Obligations to Effect Closing; Effects.

    

    (a)           The
      obligations of the Company, on the one hand, and the Investors, on the other
      hand, to effect the Closing shall terminate as follows:

    

    (i)           Upon
      the mutual written consent of the Company and the Investors;

    

    (ii)           By
      the Company if any of the conditions set forth in Section 6.2 shall have become
      incapable of fulfillment, and shall not have been waived by the
      Company;

    

    (iii)           By
      an Investor (with respect to itself only) if any of the conditions set forth
      in
      Section 6.1 shall have become incapable of fulfillment, and shall not have
      been
      waived by the Investor; or

    

    (iv)           By
      either the Company or any Investor (with respect to itself only) if the Closing
      has not occurred on or prior to December 31, 2007;

    

    provided,
      however, that, except in the case of clause (i) above, the party seeking to
      terminate its obligation to effect the Closing shall not then be in breach
      of
      any of its representations, warranties, covenants or agreements contained in
      this Agreement or the other Transaction Documents if such breach has resulted
      in
      the circumstances giving rise to such party’s seeking to terminate its
      obligation to effect the Closing.

    

     
         (b)           In
      the event of termination by the Company or any Investor of its obligations
      to
      effect the Closing pursuant to this Section 6.3, written notice thereof shall
      forthwith be given to the other Investors and the other Investors shall have
      the
      right to terminate their obligations to effect the Closing upon written notice
      to the Company and the other Investors.  Nothing in this Section 6.3
      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.

    

    7.      
            Covenants and Agreements of the
      Company.

    

    7.1           Reservation
      of Common Stock.  The Company shall at all times reserve and keep
      available out of its authorized but unissued shares of Common Stock, solely
      for
      the purpose of providing for the conversion of the Preferred Stock and the
      exercise of the Warrants, such number of shares of Common Stock as shall from
      time to time equal the Conversion Shares and the Warrant Shares.

     

    
      
        
        

      

      
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    7.2           Reports.  The
      Company will furnish to the Investors and/or their assignees such information
      relating to the Company and its Subsidiaries as from time to time may reasonably
      be requested by the Investors and/or their assignees; provided, however, that
      the Company shall not disclose material nonpublic information to the Investors,
      or to advisors to or representatives of the Investors, unless prior to
      disclosure of such information the Company identifies such information as being
      material nonpublic information and provides the Investors, such advisors and
      representatives with the opportunity to accept or refuse to accept such material
      nonpublic information for review and any Investor wishing to obtain such
      information enters into an appropriate confidentiality agreement with the
      Company with respect thereto.

    

    7.3           No
      Conflicting Agreements.  The Company will not take any action,
      enter into any agreement or make any commitment that would conflict or interfere
      in any material respect with the Company’s obligations to the Investors under
      the Transaction Documents.

    

    7.4           Insurance.  The
      Company shall not materially reduce the insurance coverages described in Section
      4.19.

    

    7.5           Compliance
      with Laws.  The Company will comply in all material respects with
      all applicable laws, rules, regulations, orders and decrees of all governmental
      authorities.

    

    7.6           Listing
      of Underlying Shares and Related Matters.  If the Company applies
      to have its Common Stock or other securities traded on a stock exchange or
      market, it shall include in such application the Conversion Shares and the
      Warrant Shares and will take such other action as is necessary to cause such
      Common Stock to be so listed.  The Company will use commercially
      reasonable efforts to continue the listing and trading of its Common Stock
      on
      such stock exchange or market and, in accordance, therewith, will use
      commercially reasonable efforts to comply in all respects with the Company’s
      reporting, filing and other obligations under the bylaws or rules of such
      exchange or market, as applicable.

    

    7.7           Integration.  The
      Company shall not sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the 1933 Act)
      that would be integrated with the offer or sale of the Securities in a manner
      that would require the registration under the 1933 Act of the sale of the
      Securities to the Investors or that would be integrated with the offer or sale
      of the Securities for purposes of the rules and regulations of any applicable
      exchange or market on which the Common Stock is listed or quoted.

    

    7.8           Termination
      of Covenants.  The provisions of Sections 7.2 through 7.7 shall
      terminate and be of no further force and effect on the date on which the
      Company’s obligations under the Registration Rights Agreement to register or
      maintain the effectiveness of any registration covering the Registrable
      Securities (as such term is defined in the Registration Rights Agreement) shall
      terminate.

    

    7.9           Removal
      of Legends.  Upon the earlier of (i) registration for resale
      pursuant to the Registration Rights Agreement or (ii) Rule 144(k) becoming
      available the Company shall (A) deliver to the transfer agent for the Common
      Stock (the “Transfer Agent”) 

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    irrevocable
      instructions that the Transfer Agent shall reissue a certificate representing
      shares of Common Stock without legends upon receipt by such Transfer Agent
      of
      the legended certificates for such shares, together with either (1) a customary
      representation by the Investor that Rule 144(k) applies to the shares of Common
      Stock represented thereby or (2) a statement by the Investor that such Investor
      has sold the shares of Common Stock represented thereby in accordance with
      the
      Plan of Distribution contained in the Registration Statement, and (B) cause
      its
      counsel to deliver to the Transfer Agent one or more blanket opinions to the
      effect that the removal of such legends in such circumstances may be effected
      under the 1933 Act.  From and after the earlier of such dates, upon an
      Investor’s written request, the Company shall promptly cause certificates
      evidencing the Investor’s Securities to be replaced with certificates which do
      not bear such restrictive legends, and Conversion Shares subsequently issued
      upon due exercise of the Preferred Stock and Warrant Shares subsequently issued
      upon due exercise of the Warrants shall not bear such restrictive legends
      provided the provisions of either clause (i) or clause (ii) above, as
      applicable, are satisfied with respect to such Conversion Shares or Warrant
      Shares, as applicable.  When the Company is required to cause
      unlegended certificates to replace previously issued legended certificates,
      if
      unlegended certificates are not delivered to an Investor within three (3)
      Business Days of submission by that Investor of legended certificate(s) to
      the
      Transfer Agent as provided above (or to the Company, in the case of the
      Warrants), the Company shall be liable to the Investor for liquidated damages
      in
      an amount equal to 1.5% of the aggregate purchase price of the Securities
      evidenced by such certificate(s) for each thirty (30) day period (or portion
      thereof) beyond such three (3) Business Day that the unlegended certificates
      have not been so delivered.

    

    7.10          Subsequent
      Equity Sales.

    

                    (a)           From
      the date hereof until ninety (90) days after the Effective Date, without the
      consent of the Investors acquiring a majority of the Shares pursuant to this
      Agreement, neither the Company nor any Subsidiary shall issue shares of Common
      Stock or Common Stock Equivalents; provided, however, the ninety (90) day period
      set forth in this Section shall be extended for the number of days during such
      period in which (i) trading in the Common Stock is suspended by any exchange
      or
      market on which the Common Stock is listed or quoted, or (ii) following the
      Effective Date, the Registration Statement is not effective or the prospectus
      included in the Registration Statement may not be used by the Investors for
      the
      resale of the Conversion Shares or Warrant Shares.

     

                    (b)           From
      the date hereof until such time as the Investors no longer hold a majority
      of
      the Shares purchased hereunder, the Company shall be prohibited from effecting
      or entering into an agreement to effect any Subsequent Financing involving
      a
“Variable Rate Transaction”.  The term “Variable Rate Transaction”
shall mean a transaction in which the Company issues or sells (i) any debt
      or
      equity securities that are convertible into, exchangeable or exercisable for,
      or
      include the right to receive additional shares of Common Stock either (A) at
      a
      conversion, exercise or exchange rate or other price that is based upon and/or
      varies with the trading prices of or quotations for the shares of Common Stock
      at any time after the initial issuance of such debt or equity securities, or
      (B)
      with a conversion, exercise or exchange price that is subject to being reset
      at
      some future date after the initial issuance of such debt or equity security
      or
      upon the occurrence of specified or contingent events directly or indirectly
      related to 

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    the
      business of the Company or the market for the Common Stock or (ii) enters into
      any agreement, including, but not limited to, an equity line of credit, whereby
      the Company may sell securities at a future determined price.

     

                    (c)           Notwithstanding
      the foregoing, this Section shall not apply in respect of an Excluded Stock,
      except that no Variable Rate Transaction shall be an Excluded
      Stock.

    

    7.11           Equal
      Treatment of Investors.  No consideration shall be offered or paid
      to any Person to amend or consent to a waiver or modification of any provision
      of any of the Transaction Documents unless the same consideration is also
      offered to all of the parties to the Transaction Documents.  For
      clarification purposes, this provision constitutes a separate right granted
      to
      each Investor by the Company and negotiated separately by each Investor, and
      is
      intended for the Company to treat the Investors as a class and shall not in
      any
      way be construed as the Investors acting in concert or as a group with respect
      to the purchase, disposition or voting of Securities or otherwise.

    

    8.        
          Survival and Indemnification.

    

    8.1    Survival.  The
      representations, warranties, covenants and agreements contained in this
      Agreement shall survive the Closing of the transactions contemplated by this
      Agreement; provided, however, that the representations and warranties contained
      in this Agreement shall expire twelve (12) months after the
      Closing.

    

    8.2    Indemnification.  Subject
      to the provisions of Section 8.1, the Company agrees to indemnify and hold
      harmless each Investor and its Affiliates and their respective directors,
      officers, employees and agents from and against any and all losses, claims,
      damages, liabilities and expenses (including without limitation reasonable
      attorney fees and disbursements and other expenses incurred in connection with
      investigating, preparing or defending any action, claim or proceeding, pending
      or threatened and the costs of enforcement thereof) (collectively, “Losses”) to
      which such Person may become subject as a result of any breach of
      representation, warranty, covenant or agreement made by or to be performed
      on
      the part of the Company under the Transaction Documents, and will reimburse
      any
      such Person for all such amounts as they are incurred by such
      Person.

    

    8.3    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 8.2, 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 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 

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    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, but if settled with 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 loss or liability
      (to
      the extent stated above) by reason of such settlement or
      judgment.  Without the prior written consent of the Indemnified
      Person, which consent shall not be unreasonably withheld, 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.

    

    9.       
           Miscellaneous.

    

    9.1           Successors
      and Assigns.  This Agreement may not be assigned by a party hereto
      without the prior written consent of the Company or the Investors, as
      applicable, provided, however, that an Investor may assign its rights and
      delegate its duties hereunder in whole or in part to an Affiliate or to a third
      party acquiring some or all of its Securities in a private transaction without
      the prior written consent of the Company or the other Investors, after notice
      duly given by such Investor to the Company provided, that no such assignment
      or
      obligation shall affect the obligations of such Investor
      hereunder.  The provisions of this Agreement shall inure to the
      benefit of and be binding upon the respective permitted successors and assigns
      of the parties.  Nothing in this Agreement, express or implied, is
      intended to confer upon any party other than the parties hereto or their
      respective successors and assigns any rights, remedies, obligations, or
      liabilities under or by reason of this Agreement, except as expressly provided
      in this Agreement.

    

    9.2           Counterparts;
      Faxes.  This Agreement may be executed in two or more
      counterparts, each of which shall be deemed an original, but all of which
      together shall constitute one and the same instrument.  This Agreement
      may also be executed via facsimile, which shall be deemed an
      original.

    

    9.3           Titles
      and Subtitles.  The titles and subtitles used in this Agreement
      are used for convenience only and are not to be considered in construing or
      interpreting this Agreement.

    

    9.4           Notices.  Unless
      otherwise provided, any notice required or permitted under this Agreement shall
      be given in writing and shall be deemed effectively given as hereinafter
      described (i) if given by personal delivery, then such notice shall be deemed
      given upon such delivery, (ii) if given by telex or telecopier, then such notice
      shall be deemed given upon receipt of confirmation of complete transmittal,
      (iii) if given by mail, then such notice shall be deemed given upon the earlier
      of (A) receipt of such notice by the recipient or (B) three days after such
      notice is deposited in first class mail, postage prepaid, and (iv) if given
      by
      an internationally recognized overnight air courier, then such notice shall
      be
      deemed given one 

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    Business
      Day after delivery to such carrier.  All notices shall be addressed to
      the party to be notified at the address as follows, or at such other address
      as
      such party may designate by ten days’ advance written notice to the other
      party:

    

    
      	
              If
                to the
                Company:

            
	 
	
              Caprius,
                Inc.

            
	
              One
                University Plaza

            
	
              Hackensack,
                NJ 07601

            
	
              Attention:  Dwight
                Morgan, President

            
	
              Fax:  (201)
                342-0991

            
	 
	
              With
                a copy
                to:

            
	 
	
              Thelen
                Reid Brown Raysman & Steiner LLP

            
	
              875
                Third Avenue

            
	
              New
                York, NY  10022

            
	
              Attention:  Bruce
                A. Rich, Esq.

            
	
              Fax:  (212)
                603-2001

            
	 
	
              If
                to the
                Investors:

            
	 
	
              to
                the addresses set forth on the signature pages
                hereto.

            

    

    

    9.5           Expenses.  The
      parties hereto shall pay their own costs and expenses in connection herewith,
      except that the Company shall pay the reasonable fees and expenses of Lowenstein
      Sandler PC not to exceed $25,000; it being understood that Lowenstein Sandler
      PC
      has only rendered legal advice to the Special Situations Funds participating
      in
      this transaction and not to the Company or any other Investor in connection
      with
      the transactions contemplated hereby, and of Morrison & Cohen not to exceed
      $10,000; it being understood that Morrison & Cohen has only rendered legal
      advice to the Biomedical Value Funds participating in this transaction and
      not
      to the Company or any other Investor in connection with the transactions
      contemplated hereby; that each of the Company and each Investor has relied
      for
      such matters on the advice of its own respective counsel.  Such
      expenses shall be paid not later than the Closing.  The Company shall
      reimburse the Investors upon demand for all reasonable out-of-pocket expenses
      incurred by the Investors, including without limitation reimbursement of
      attorneys’ fees and disbursements, in connection with any amendment,
      modification or waiver of this Agreement or the other Transaction
      Documents.  In the event that legal proceedings are commenced by any
      party to this Agreement against another party to this Agreement in connection
      with this Agreement or the other Transaction Documents, the party or parties
      which do not prevail in such proceedings shall severally, but not jointly,
      pay
      their pro rata share of the reasonable attorneys’ fees and other reasonable
      out-of-pocket costs and expenses incurred by the prevailing party in such
      proceedings.

    

    9.6           Amendments
      and Waivers.  Any term of this Agreement may be amended and the
      observance of any term of this Agreement may be waived (either generally or
      in a

     

    
      
        
        

      

      
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    particular
      instance and either retroactively or prospectively), only with the written
      consent of the Company and the Investors.  Any amendment or waiver
      effected in accordance with this paragraph shall be binding upon each holder
      of
      any Securities purchased under this Agreement at the time outstanding, each
      future holder of all such Securities, and the Company.

    

    9.7           Publicity.  Except
      as set forth below, no public release or announcement concerning the
      transactions contemplated hereby shall be issued by the Company or the Investors
      without the prior consent of the Company (in the case of a release or
      announcement by the Investors) or the Investors (in the case of a release or
      announcement by the Company) (which consents shall not be unreasonably
      withheld), except as such release or announcement may be required by law or
      the
      applicable rules or regulations of any securities exchange or securities market,
      in which case the Company or the Investors, as the case may be, shall allow
      the
      Investors or the Company, as applicable, to the extent reasonably practicable
      in
      the circumstances, reasonable time to comment on such release or announcement
      in
      advance of such issuance.  By 8:30 a.m. (New York City time) on the
      trading day immediately following the Closing Date, the Company shall issue
      a
      press release disclosing the consummation of the transactions contemplated
      by
      this Agreement.  No later than the third trading day following the
      Closing Date, the Company will file a Current Report on Form 8-K attaching
      the
      press release described in the foregoing sentence as well as copies of the
      Transaction Documents.  In addition, the Company will make such other
      filings and notices in the manner and time required by the SEC.

    

    9.8           Severability.  Any
      provision of this Agreement that is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof but shall be interpreted as if it were written so as to be
      enforceable to the maximum extent permitted by applicable law, and any such
      prohibition or unenforceability in any jurisdiction shall not invalidate or
      render unenforceable such provision in any other jurisdiction.  To the
      extent permitted by applicable law, the parties hereby waive any provision
      of
      law which renders any provision hereof prohibited or unenforceable in any
      respect.

    

    9.9           Entire
      Agreement.  This Agreement, including the Exhibits and the
      Disclosure Schedules, and the other Transaction Documents constitute the entire
      agreement among the parties hereof with respect to the subject matter hereof
      and
      thereof and supersede all prior agreements and understandings, both oral and
      written, between the parties with respect to the subject matter hereof and
      thereof.

    

    9.10          Further
      Assurances.  The parties shall execute and deliver all such
      further instruments and documents and take all such other actions as may
      reasonably be required to carry out the transactions contemplated hereby and
      to
      evidence the fulfillment of the agreements herein contained.

    

    9.11          Governing
      Law; Consent to Jurisdiction; Waiver of Jury Trial.  This
      Agreement shall be governed by, and construed in accordance with, the internal
      laws of the State of New York without regard to the choice of law principles
      thereof.  Each of the parties hereto irrevocably submits to the
      exclusive jurisdiction of the courts of the State of New York located in New
      York County and the United States District Court for the Southern District
      of
      New York for 

     

    
      
        
        

      

      
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    the
      purpose of any suit, action, proceeding or judgment relating to or arising
      out
      of this Agreement and the transactions contemplated hereby.  Service
      of process in connection with any such suit, action or proceeding may be served
      on each party hereto anywhere in the world by the same methods as are specified
      for the giving of notices under this Agreement.  Each of the parties
      hereto irrevocably consents to the jurisdiction of any such court in any such
      suit, action or proceeding and to the laying of venue in such
      court.  Each party hereto irrevocably waives any objection to the
      laying of venue of any such suit, action or proceeding brought in such courts
      and irrevocably waives any claim that any such suit, action or proceeding
      brought in any such court has been brought in an inconvenient forum.
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY
      JURY
      IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL
      HAS
      BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

    

    9.12          Independent
      Nature of Investors' Obligations and Rights.  The obligations of
      each Investor under any Transaction Document are several and not joint with
      the
      obligations of any other Investor, and no Investor shall be responsible in
      any
      way for the performance of the obligations of any other Investor under any
      Transaction Document.  The decision of each Investor to purchase
      Securities pursuant to the Transaction Documents has been made by such Investor
      independently of any other Investor.  Nothing contained herein or in
      any Transaction Document, and no action taken by any Investor pursuant thereto,
      shall be deemed to constitute the Investors as a partnership, an association,
      a
      joint venture or any other kind of entity, or create a presumption that the
      Investors 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 Investor acknowledges that no other Investor has
      acted as agent for such Investor in connection with making its investment
      hereunder and that no Investor will be acting as agent of such Investor in
      connection with monitoring its investment in the Securities or enforcing its
      rights under the Transaction Documents.  Each Investor 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 Investor
      to
      be joined as an additional party in any proceeding for such
      purpose.  The Company acknowledges that each of the Investors has been
      provided with the same Transaction Documents for the purpose of closing a
      transaction with multiple Investors and not because it was required or requested
      to do so by any Investor.

    [signature
      page follows]

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement or caused their duly
      authorized officers to execute this Agreement as of the date first above
      written.

    

    
      	
              The
                Company:

            	 	
              CAPRIUS,
                INC.

            
	 	 	 
	 	 	 
	 	 	 
	 	
              By:

            	 /s/
              Jonathan Joels
	 	 	
              Name:  Jonathan
                Joels

            
	 	 	
              Title:
                Vice President

            
	 	 	 
	 	 	 

    

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	
              The
                Investors:

            	 	
              SPECIAL
                SITUATIONS FUND III QP, L.P.

            
	 	 	 
	 	
              By:

            	 /s/
              David Greenhouse
	 	 	
              Name:
                David Greenhouse

            
	 	 	
              Title:
                Managing Director

            
	 	 	 
	 	 	 
	
              Address
                for Notice:

            	 	 
	 	 	
              527
                Madion Avenue

            
	 	 	
              Suite
                2600

            
	 	 	
              New
                York, NY  10022

            
	 	 	 
	 	 	
              with
                a copy to:

            
	 	 	 
	 	 	
              Lowenstein
                Sandler PC

            
	 	 	
              65
                Livingston Avenue

            
	 	 	
              Roseland,
                NJ  07068

            
	 	 	
              Attn:  John
                D. Hogoboom, Esq.

            
	 	 	
              Telephone:  973.597.2500

            
	 	 	
              Facsimile:  973.597.2400

            
	 	 	 
	 	 	 
	 	 	 
	 	 	
              SPECIAL
                SITUATIONS FUND III, L.P.

            
	 	 	 
	 	
              By:

            	 /s/
              David Greenhouse
	 	 	
              Name:
                David Greenhouse

            
	 	 	
              Title:
                General Partner

            
	 	 	 
	 	 	 
	
              Address
                for Notice:

            	 	 
	 	 	
              527
                Madison Avenue

            
	 	 	
              Suite
                2600

            
	 	 	
              New
                York, NY  10022

            

    

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	 	
              with
                a copy to:

            
	 	 	 
	 	 	
              Lowenstein
                Sandler PC

            
	 	 	
              65
                Livingston Avenue

            
	 	 	
              Roseland,
                NJ  07068

            
	 	 	
              Attn:  John
                D. Hogoboom, Esq.

            
	 	 	
              Telephone:  973.597.2500

            
	 	 	
              Facsimile:  973.597.2400

            
	 	 	 
	 	 	 
	 	 	 
	 	 	
              SPECIAL
                SITUATIONS PRIVATE EQUITY FUND, L.P.

            
	 	 	 
	 	
              By:

            	 /s/
              David Greenhouse
	 	 	
              Name:
                David Greenhouse

            
	 	 	
              Title:
                Managing Director

            
	 	 	 
	 	 	 
	
              Address
                for Notice:

            	 	 
	 	 	
              527
                Madison Avenue

            
	 	 	
              Suite
                2600

            
	 	 	
              New
                York, NY  10022

            
	 	 	 
	 	 	
              with
                a copy to:

            
	 	 	 
	 	 	
              Lowenstein
                Sandler PC

            
	 	 	
              65
                Livingston Avenue

            
	 	 	
              Roseland,
                NJ  07068

            
	 	 	
              Attn:  John
                D. Hogoboom, Esq.

            
	 	 	
              Telephone:  973.597.2500

            
	 	 	
              Facsimile:  973.597.2400

            
	 	 	 

    

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 /s/
              ZACHARY
              PRENSKY
	 	 	
              ZACHARY
                PRENSKY

            
	 	 	 
	 	 	 
	 	 	 
	
              Address
                for Notice:

            	 	 
	 	 	
              c/o
                Little Bear Investments LLC

            
	 	 	
              1180
                Avenue of the Americas, 14th
                Floor

            
	 	 	
              New
                York, NY  10036

            
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 /s/
              WOLF
              PRENSKY
	 	 	
              WOLF
                PRENSKY

            
	 	 	 
	 	 	 
	 	 	 
	
              Address
                for Notice:

            	 	 
	 	 	
              28-10
                High St,

            
	 	 	
              Fair
                Lawn, NJ 07410

            
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 /s/
              EUGENE
              CINER & NATALIE CINER
	 	 	
              EUGENE
                CINER & NATALIE CINER

            
	 	 	 
	 	 	 
	 	 	 
	
              Address
                for Notice:

            	 	 

    

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	 	
              c/o
                Little Bear Investments LLC

            
	 	 	
              1180
                Avenue of the Americas, 14th
                Floor

            
	 	 	
              New
                York, NY  10036

            
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 /s/
              MARTHA
              LIPTON
	 	 	
              MARTHA
                LIPTON

            
	 	 	 
	 	 	 
	
              Address
                for Notice:

            	 	 
	 	 	
              392
                Central Park West Apt 17X

            
	 	 	
              New
                York, NY 10025

            

    

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	 	
              BIOMEDICAL
                VALUE FUND, L.P.

            
	 	 	 
	 	
              By:

            	 /s/
              David Gerber
	 	 	
              Name:
                David Gerber

            
	 	 	
              Title:
                Managing Director

            
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	
              Address
                for Notice:

            	 	 
	 	 	
              165
                Mason Street, 3rd
                Floor,

            
	 	 	
              Greenwich,
                CT 06830

            
	 	 	 
	 	 	 
	 	 	
              BIOMEDICAL
                OFFSHORE VALUE FUND, LTD.

            
	 	 	 
	 	
              By:

            	 /s/
              David Gerber
	 	 	
              Name:
                David Gerber

            
	 	 	
              Title:
                Managing Director

            
	 	 	 
	 	 	 
	 	 	 
	
              Address
                for Notice:

            	 	 
	 	 	
              165
                Mason Street, 3rd
                Floor,

            
	 	 	
              Greenwich,
                CT 06830

            
	 	 	 

    

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	 	 
	 	 	 
	 	 	
              DOLPHIN
                OFFSHORE PARTNERS, L.P.

            
	 	 	 
	 	
              By:

            	 /s/
              Peter E. Salas
	 	 	
              Name:
                Peter E. Salas

            
	 	 	
              Title:  General
                Partner

            
	 	 	 
	 	 	 
	
              Address
                for Notice:

            	 	 
	 	 	 
	 	 	
              c/o
                Dolphin Asset Management Corp.

            
	 	 	
              129
                East 17th Street

            
	 	 	
              New
                York, NY  10003

            

    

     

    
      
        
        

      

      
        34

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}]]