Document:

Execution
      Copy

    EXHIBIT
      10.2

     

    SECURITIES
      PURCHASE AGREEMENT

     

    This
      Securities Purchase Agreement (this “Agreement”)
      is
      dated as of May 2, 2006, by and between HydroGen Corporation, a Nevada
      corporation (the “Company”),
      and
      CD Investment Partners, Ltd., a Cayman Islands company (the “Purchaser”).

     

    RECITALS

     

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

    

    B. The
      Purchaser wishes to purchase, and the Company wishes to sell, upon the terms
      and
      conditions stated in this Agreement, (i) 200,000 shares (the “Shares”)
      of the
      Common Stock, par value $0.001 per share (the “Common
      Stock”),
      of
      the Company and (ii) a warrant, in the form attached hereto as Exhibit
      A
      (the
“Warrant”),
      to
      acquire up to 50,000 additional shares of Common Stock (the shares of Common
      Stock issuable to the Purchaser upon exercise of or otherwise pursuant to the
      Warrant, collectively, the “Warrant
      Shares”).

    

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

    

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

    

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

    

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

     

    ARTICLE
      I.

    DEFINITIONS

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    “Company
      Counsel”
means
      Graubard Miller.

    

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

    

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

    

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    

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

     

    “Outside
      Date”
means
      May 12, 2006.

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

    “Warrant”
has
      the
      meaning set forth in the Preamble to this Agreement.

     

    ARTICLE
      II.

    PURCHASE
      AND SALE

     

    2.1 Closing.
      Subject
      to the terms and conditions set forth in this Agreement, at the Closing, the
      Company shall issue and sell to the Purchaser, and the Purchaser shall purchase
      from the Company, such number of shares of Common Stock and the Warrant to
      purchase a number of Warrant Shares, each as indicated below the Purchaser’s
      name on the signature page of this Agreement, for an aggregate purchase price
      for the Purchaser as indicated below the Purchaser’s name on the signature page
      of this Agreement. Upon confirmation that the other conditions to closing
      specified herein have been satisfied or duly waived by the Purchaser, the
      Company shall deliver to Lowenstein Sandler PC (“Placement
      Agent Counsel”),
      in
      trust, a certificate or certificates, registered in such name or names as the
      Purchaser may designate, representing the Shares and Warrant, with instructions
      that such certificates are to be held for release to the Purchaser only upon
      payment in full of the Purchase Price to the Company by the Purchaser. Upon
      such
      receipt by Placement Agent Counsel of the certificates, the Purchaser shall
      promptly, but no more than one Business Day thereafter, cause a wire transfer
      in
      same day funds to be sent to the account of the Company as instructed in writing
      by the Company, in an amount representing the purchase price for such Purchaser
      as indicated below the Purchaser’s name on the signature page of this Agreement.
      On the date (the “Closing
      Date”)
      the
      Company receives the Purchase Price, the certificates evidencing the Shares
      and
      Warrants shall be released to the Purchaser (the “Closing”).
      The
      Closing of the purchase and sale of the Shares and Warrant 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 Purchaser shall mutually agree.

     

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

     

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

     

    (ii) One
      or
      more stock certificates, free and clear of all restrictive and other legends
      (except as expressly provided in Section
      4.1(b)
      hereof),
      evidencing the Shares, registered in the name of the Purchaser;

     

    (iii) the
      Warrant, executed by the Company and registered in the name of the Purchaser,
      pursuant to which the Purchaser shall have the right to acquire up to 50,000
      Warrant Shares on the terms set forth therein;

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

    (ii) The
      Subscription Amount, in United States dollars and in immediately available
      funds; 

     

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

     

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

     

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

     

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

     

    ARTICLE
      III.

    REPRESENTATIONS
      AND WARRANTIES

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
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    3.2 Representations
      and Warranties of the Purchaser.
      The
      Purchaser hereby represents and warrants to the Company as follows:

     

    (a) Organization;
      Authority.
      The
      Purchaser is an entity duly organized, validly existing and in good standing
      under the laws of the jurisdiction of its organization with the requisite
      corporate power and authority to enter into and to consummate the transactions
      contemplated by the applicable Transaction Documents and otherwise to carry
      out
      its obligations hereunder and thereunder. The execution, delivery and
      performance by the Purchaser of the transactions contemplated by this Agreement
      have been duly authorized by all necessary corporate action. Each of this
      Agreement and the Registration Rights Agreement has been duly executed by the
      Purchaser, and when delivered by the Purchaser in accordance with terms hereof,
      will constitute the valid and legally binding obligation of the Purchaser,
      enforceable against it in accordance with its terms, except as such
      enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium, liquidation or similar laws relating to, or
      affecting generally the enforcement of, creditors’ rights and remedies or by
      other equitable principles of general application.

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

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

     

    (g) Residency.
      The
      Purchaser has its primary residence in the jurisdiction set forth following
      its
      name on the first page of this Agreement.

     

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

     

    
      
        
        

      

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

     

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

     

    The
      Company acknowledges and agrees that the Purchaser has not made and does not
      make any representations or warranties with respect to the transactions
      contemplated hereby other than those specifically set forth in this Section
      3.2.

     

    ARTICLE
      IV.

    OTHER
      AGREEMENTS OF THE PARTIES

     

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

     

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

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

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

     

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

     

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

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

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

    

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

    

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

     

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

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    4.7 Indemnification.

     

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

     

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

     

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

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

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

     

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

     

    ARTICLE
      V.

    CONDITIONS
      PRECEDENT TO CLOSING

    

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

    (j) Contemporaneous
      Offering.
      Simultaneously with or prior to the Closing, the Company shall have sold
      securities to third party purchasers, who are not acting in concert with the
      Purchaser, for an aggregate minimum of $24,775,000. Such Securities shall be
      sold on, and have, such terms as the Company shall determine in its sole
      discretion.

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    (d) Purchaser
      Deliverables.
      The
      Purchaser shall have delivered the Purchaser Deliverables in accordance with
      Section
      2.2(b);
      and

     

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

     

    (f) Contemporaneous
      Offering.
      Simultaneously with or prior to the Closing, the Company shall have sold
      securities to third party purchasers, who are not acting in concert with the
      Purchaser, for an aggregate minimum of $24,775,000. Such Securities shall be
      sold on, and have, such terms as the Company shall determine in its sole
      discretion.

     

    ARTICLE
      VI.

    MISCELLANEOUS

     

    6.1 Fees
      and Expenses.
      The
      Company and the Purchaser shall each pay the fees and expenses of their
      respective advisers, counsel, accountants and other experts, if any and all
      other expenses incurred by such party in connection with the negotiation,
      preparation, execution, delivery and performance of this Agreement. The Company
      shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied
      in connection with the sale and issuance of the Securities.

     

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

     

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

     

    If
      to the
      Company:      
HydroGen
      Corporation

    10
      East
      40th
      Street

    Room
      3405

    New
      York,
      New York 10016

    Telephone
      No.: (212) 672-0380

    Facsimile
      No.: (212) 672-0393

    Attention:
      Chief Executive Officer

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    With
      a
      copy to:            Graubard
      Miller

    The
      Chrysler Building

    405
      Lexington Avenue

    19th
      Floor

    New
      York,
      New York 10174-1901

    Telephone
      No.: 212-818-8614

    Facsimile
      No.: (212) 818-8881

    Attention:
      Andrew Hudders, Esq.

     

    If
      to the
      Purchaser:      CD
      Investment Partners, Ltd.

                          
      Two North Riverside Plaza

                    Suite
      600

    Chicago,
      Illinois 60606

    Telephone
      No.: (312) 466-3226

    Facsimile
      No: (312) 559-1288

    Attention:
      Investment Manager

     

           
      With a copy to:      
Greenberg
      Traurig

                         
77
      W. Wacker Drive, Suite
      2500

                            
      Chicago, IL 60601

                            
      Tel: (312) 456-8400

                         
Fax:
      (312) 456-8435

     Attn:
      Peter H. Lieberman

    Todd
      A.
      Mazur

    

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

    

    6.4 Amendments;
      Waivers; No Additional Consideration.
      No
      provision of this Agreement may be waived or amended except in a written
      instrument signed, in the case of an amendment, by the Company and the Purchaser
      or, in the case of a waiver, by the party against whom enforcement of any such
      waiver is sought. No waiver of any default with respect to any provision,
      condition or requirement of this Agreement shall be deemed to be a continuing
      waiver in the future or a waiver of any subsequent default or a waiver of any
      other provision, condition or requirement hereof, nor shall any delay or
      omission of either party to exercise any right hereunder in any manner impair
      the exercise of any such right.

     

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

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

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

     

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

     

    6.8 Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by and construed and enforced in accordance
      with the internal laws of the State of New York, without regard to the
      principles of conflicts of law thereof. Each party agrees that all Proceedings
      concerning the interpretations, enforcement and defense of the transactions
      contemplated by this Agreement and any other Transaction Documents (whether
      brought against a party hereto or its respective Affiliates, employees or
      agents) shall be commenced exclusively in the New York Courts. Each party hereto
      hereby irrevocably submits to the exclusive jurisdiction of the New York Courts
      for the adjudication of any dispute hereunder or in connection herewith or
      with
      any transaction contemplated hereby or discussed herein (including with respect
      to the enforcement of the any of the Transaction Documents), and hereby
      irrevocably waives, and agrees not to assert in any Proceeding, any claim that
      it is not personally subject to the jurisdiction of any such New York Court,
      or
      that such Proceeding has been commenced in an improper or inconvenient forum.
      Each party hereto hereby irrevocably waives personal service of process and
      consents to process being served in any such Proceeding by mailing a copy
      thereof via registered or certified mail or overnight delivery (with evidence
      of
      delivery) to such party at the address in effect for notices to it under this
      Agreement and agrees that such service shall constitute good and sufficient
      service of process and notice thereof. Nothing contained herein shall be deemed
      to limit in any way any right to serve process in any manner permitted by law.
      Each party hereto hereby irrevocably waives, to the fullest extent permitted
      by
      applicable law, any and all right to trial by jury in any legal proceeding
      arising out of or relating to this Agreement or the transactions contemplated
      hereby. If either party shall commence a Proceeding to enforce any provisions
      of
      a Transaction Document, then the prevailing party in such Proceeding shall
      be
      reimbursed by the other party for its reasonable attorney’s fees and other costs
      and expenses incurred with the investigation, preparation and prosecution of
      such Proceeding.

     

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

     

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

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

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

     

    6.17 Independent
      Nature of Purchaser's Obligations and Rights.
      The
      obligations of the Purchaser under any Transaction Document are several and
      not
      joint with the obligations of any third party purchaser of the Company’s
      securities, and the Purchaser shall not be responsible in any way for the
      performance of the obligations of any third party purchaser of the Company’s
      securities. The decision of the Purchaser to purchase Securities pursuant to
      the
      Transaction Documents has been made by the Purchaser independently of any third
      party purchaser of the Company’s securities and independently of any
      information, materials, statements or opinions as to the business, affairs,
      operations, assets, properties, liabilities, results of operations, condition
      (financial or otherwise) or prospects of the Company or any Subsidiary which
      may
      have been made or given by any third party purchaser of the Company’s securities
      or by any agent or employee of any third party purchaser of the Company’s
      securities, and neither the Purchaser nor any of its agents or employees shall
      have any liability to any third party purchaser of the Company’s securities (or
      any other Person) relating to or arising from any such information, materials,
      statement or opinions. Nothing contained herein or in any Transaction Document,
      and no action taken by the Purchaser pursuant thereto, shall be deemed to
      constitute the Purchaser and any third party purchaser of the Company’s
      securities as a partnership, an association, a joint venture or any other kind
      of entity or group, or create a presumption that the Purchaser and any such
      third party purchaser of the Company’s securities are in any way acting in
      concert or as a group with respect to any matters. The Purchaser acknowledges
      that no third party purchaser of the Company’s securities has acted as agent for
      the Purchaser in connection with making its investment hereunder and that no
      third party purchaser of the Company’s securities will be acting as agent of the
      Purchaser in connection with monitoring its investment in the Securities or
      enforcing its rights under the Transaction Documents. The Purchaser shall be
      entitled to independently protect and enforce its rights, including without
      limitation the rights arising out of this Agreement or out of the other
      Transaction Documents, and it shall not be necessary for any third party
      purchaser of the Company’s securities to be joined as an additional party in any
      proceeding for such purpose. To the extent that any such third party purchasers
      purchase the same or similar securities as the Purchaser hereunder or on the
      same or similar terms and conditions or pursuant to the same or similar
      documents, all such matters are solely in the control of the Company, not the
      action or decision of the Purchaser, and would be solely for the convenience
      of
      the Company and not because it was required or requested to do so by the
      Purchaser or any such third party purchaser. For clarification purposes only
      and
      without implication that the contrary would otherwise be true, the transactions
      contemplated by the Transaction Documents include only the transaction between
      the Company and the Purchaser and do not include any other transaction between
      the Company and any other third party purchaser of the Company’s
      securities.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    6.18 Termination.
      This
      Agreement may be terminated and the sale and purchase of the Shares and the
      Warrant abandoned at any time prior to the Closing by either the Company or
      the
      Purchaser upon written notice to the other, if the Closing has not been
      consummated on or prior to 5:00 p.m. (New York City time) on the Outside Date;
      provided,
      however,
      that
      the right to terminate this Agreement under this Section
      6.18
      shall
      not be available to any Person whose failure to comply with its obligations
      under this Agreement has been the cause of or resulted in the failure of the
      Closing to occur on or before such time. Nothing in this Section
      6.18
      shall be
      deemed to release any party from any liability for any breach by such party
      of
      the terms and provisions of this Agreement or the other Transaction Documents
      or
      to impair the right of any party to compel specific performance by any other
      party of its obligations under this Agreement or the other Transaction
      Documents. Upon a termination in accordance with this Section, the Company
      and
      the Purchaser shall not have any further obligation or liability (including
      arising from such termination) to the other party.

     

    6.19 Delivery
      of Securities.
      Notwithstanding anything contained in this Agreement or any other Transaction
      Document to the contrary, unless otherwise directed in writing by the Purchaser,
      the Company shall, and shall cause its agents and representatives to, deliver
      all of the Purchaser's securities purchased pursuant to this Agreement (and
      all
      securities which are issuable to the Purchaser pursuant to the terms of this
      Agreement or any other agreement or instrument entered into, or delivered,
      in
      connection with execution of this Agreement or the consummation of the
      transaction contemplated hereby) to Goldman, Sachs & Co., One New York
      Plaza, New York, NY 10004, Attention: Justin Freedland, and copies of the
      certificates representing such securities shall be sent to the Purchaser in
      accordance with Section
      6.3
      of this
      Agreement.

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

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

     

    HYDROGEN
      CORPORATION 

     

    By:_______________________________________ 

     

    Name: 

     

    Title: 

     

    CD
      INVESTMENT PARTNERS, LTD.

     

    By:
      CD
      Capital Management, LLC

     

    Its:
      Investment Manager

     

    By:_______________________________________ 

     

    Name: 

     

    Title: 

     

    Purchase
      Price (Subscription Amount): $

     

    Number
      of
      Shares to be acquired: ______________________

     

    Underlying
      Shares subject to Warrant: ________________

     

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

     

    Tax
      ID
      No.: ____________________

     

    Address
      for Notice: 

     

    __________________________________ 

                                                                   
       __________________________________

                           
      __________________________________

           
                Telephone
      No.: ______________________                  

                                   
       Facsimile No.: ________________________ 

         
                Attention:
      _______________________

    

    Delivery
      Instructions:

    (if
      different than above)

    

    c/o
      _______________________________

    

    Street:
      ____________________________

    

    City/State/Zip:
      ______________________

    

    Attention:
      __________________________

    

    Telephone
      No.: ______________________

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBITS:
      

     

    A:
       Form
      of
      Warrant 

     

    B:
       Form
      of
      Registration Rights Agreement

     

    C-1:
       Accredited
      Investor Questionnaire

     

    C-2: Stock
      Certificate Questionnaire

     

    D:
       Form
      of
      Opinion of Company Counsel

     

    E:
       Transfer
      Agent Instructions

     

    F:
       Instruction
      Sheet 

     

    G: Wire
      Instructions

     

    SCHEDULES:
      

     

    3.1(a)
      Subsidiaries

     

    3.1(c)
      Authorization; Enforcement

     

    3.1(g)
      Capitalization 

     

    3.1(k)
      Material Changes 

     

    3.1(q)
      Title to Assets

     

    3.1(x)
      Registration Rights 

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

     

    Form
      of
      Warrant

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

     

    Form
      of
      Registration Rights Agreement

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C-1

    

    Accredited
      Investor Questionnaire

    

    

    CERTIFICATE
      

     

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

     

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

     

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

     

    __
       Limited
      Partnership 

    __
       General
      Partnership 

    __
       Corporation
      

    
      	 	
              __
                

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

            

    

    

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

    

    
      	 	
              __
                

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

            

    

    

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

    

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

    

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

    

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

     

    
      	 	
              __
                (1) 

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

            

    

    

    
      	 	
              __
                (2) 

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

            

    

    

    
      	 	
              __
                (3) 

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

            

    

    

    
      	 	
              __
                (4) 

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

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	
              __
                (5) 

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

            

    

    

    
      	 	
              __
                (6)

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

            

    

    

    
      	 	
              __
                (7) 

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

            

    

    

    
      	 	
              __
                (8) 

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

            

    

     

    
      	 	
              __
                (9) 

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

            

    

    

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

            

    

     

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

            

    

    

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

    

    Dated:_______________  ,
      2006

     

     

    ______________________________

    Name
      of
      Purchaser

     

     

    ______________________________________

    Signature
      and title of authorized officer, partner or trustee

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

    

    EXHIBIT
      C-2

     

    Stock
      Certificate Questionnaire

     

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

     

    
      	
              1.

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

            	 
	
              2.

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

            	 
	
              3.

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

            	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	
              4.

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

            	 

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      D

     

    Form
      of
      Opinion of Company Counsel

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      E

     

    Transfer
      Agent Instructions

     

    As
      of
      _________, ____

     

    Computershare
      Trust Company, Inc. 

    350
      Indiana Street, Suite 800 

    Golden,
      CO 80401

    Attn:
      _________________

     

     

    Ladies
      and Gentlemen: 

     

          Reference
      is made to that certain Securities Purchase Agreement, dated as of
      _____________, 2006 (the “Agreement”),
      by
      and between HydroGen Corporation, a Nevada corporation (the “Company”),
      and
      CD Investment Partners, Ltd. (the “Holder”),
      pursuant to which the Company is issuing to the Holder shares (the “Shares”)
      of
      Common Stock of the Company, par value $0.001 per share (the “Common
      Stock”),
      and a
      warrant (the “Warrant”),
      which
      is exercisable into shares of Common Stock. 

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    

    Very
      truly yours,

    

    HYDROGEN
      CORPORATION

     

     

    By:
      __________________________________

    Name:
      ________________________________

    Title:
      ________________________________

    

    

    Acknowledged
      and Agreed:

    

    COMPUTERSHARE
      TRUST COMPANY, INC.

    

    By:
      __________________________________

    Name:
      ________________________________ 

    Title:
      ________________________________

     

    Date:
      _________________, 2006

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Annex
      I 

     

    Form
      of
      Exercise Notice 

     

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

    of
      Common
      Stock under the foregoing Warrant) 

     

    To:
       HydroGen
      Corporation 

     

          The
      undersigned is the Holder of Warrant No.                     
      (the
“Warrant”)
      issued
      by HydroGen
      Corporation,
      a
      Nevada corporation (the “Company”).
      Capitalized terms used herein and not otherwise defined have the respective
      meanings set forth in the Warrant. 

     

          1.  The
      Warrant is currently exercisable to purchase a total of                     
      Warrant
      Shares. 

     

          2.  The
      undersigned Holder hereby exercises its right to purchase                     
      Warrant
      Shares pursuant to the Warrant. 

     

          3.  The
      holder [(i)] has paid the sum of $                    
      to the
      Company, simultaneously with this exercise notice, in accordance with the terms
      of the Warrant[, or (ii) hereby elects to utilize the cashless exercise option
      and convert _________________ percent (___%) of the value of the Warrant
      pursuant to the provisions of [Section 10(b)] of the Warrant]. 

     

          4.  Pursuant
      to this exercise, the Company shall deliver to the holder                     
      Warrant
      Shares in accordance with the terms of the Warrant. 

     

          5.  Following
      this exercise, the Warrant shall be exercisable to purchase a total of
                    
      additional Warrant Shares. 

     

    Dated:_______________,
      _____ 

     

    Name
      of
      Holder: ______________________

     

    

     

    By:________________________________

     

    Name:
      _____________________________

     

    Title:
      ______________________________

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Acknowledgement
      

     

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

     

    

     

    HYDROGEN
      CORPORATION

     

     

    By:
      __________________________________       

      
                    Name:
      ________________________________

    Title:
      ________________________________

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Annex
      II

     

    Form
      of
      Notice of Effectiveness of Registration Statement 

    
      	
               

            	
               

            	
               

            
	
              Computershare
                Trust Company, Inc. 

              350
                Indiana Street, Suite 800 

              Golden,
                CO 80401

              Attn:
                _________________

            
	
               

            	
               

            	
               

            
	
               
                

            	
               

            	
              Re:
                HydroGen
                Corporation

            

    

     

    Ladies
      and Gentlemen: 

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
              Very
                truly yours,

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
              Graubard
                Miller

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               
                

            	
               

            	
              By:_____________________________

            
	
               
                

            	
               

            	
               

            	
               

            	
               

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      F

    

    Instruction
      Sheet

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

    

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

    

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

    

    2.
       Exhibit
      C-1
      -
      Accredited Investor Questionnaire: 

     

        
      Provide the information requested by Exhibit
      C-1.

     

    3.
       Exhibit
      C-2
      - Stock
      Certificate Questionnaire: 

     

        
      Provide the information requested by the Stock Certificate
      Questionnaire.

    

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

     

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

    

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

    

    David
      Stadinski

    Piper
      Jaffray & Co. 

    The
      Chrysler Building

    405
      Lexington Avenue, 58th Floor

    New
      York,
      New York 10174

    Tel:
      (212) 284-9572

    Fax:
      (212) 284-9579

    Email:
      david.w.stadinski@pjc.com

    

    
      	
              B.
                

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

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              C.
                

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

            

    

    

    
      	 	
              1.
                

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

            

    

    

    
      	 	
              2.
                

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

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      G

     

    Wire
      Instructions

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      3.1(a)

     

    Subsidiaries

     

    

     

    HydroGen,
      LLC, an Ohio Limited Liability Company.

     

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      3.1(c)

     

    Authorization;
      Enforcement

     

    

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      3.1(g)

     

    Capitalization

    
 

    
      
        	
                Common
                  stock, par value $0.001

              	 	 	 
	
                         Shares
                  authorized

              	 	 	
                65,000,000

              	 
	 	 	 	 	 
	
                         Issued
                  and outstanding

              	 	 	
                7,614,904

              	 
	
                Series
                  B convertible preferred stock, par $0.001, authorized 10,000,000
                  shares,

              	 	 	 	 
	
                no
                  shares issued or outstanding

              	 	 	 	 
	 	 	 	 	 
	
                Equity
                  compensation plans approved by security holders:

              	 	 	 	 
	
                                  Maximum
                  stock-based awards permitted under the plan

              	 	 	
                1,100,000

              	 
	
                                  Number
                  of Stock Options Outstanding

              	 	 	
                247,735

              	 
	
                                           Amount
                  available for future grants

              	 	 	
                852,265

              	 
	 	 	 	 	 
	
                Equity
                  compensation plans not approved by security holders:

              	 	 	 	 
	
                         Stock
                  options granted prior to the above plan's approval

              	 	 	
                342,345

              	 

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    Schedule
      3.1(k)

     

    Material
      Changes

     

    None.

     

    

 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      3.1(q)

     

    Title
      to
      Assets

     

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

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
      3.1(x)

     

    Registration
      Rights

     

    

     

    
      	 	
              1.

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

            

    

     

    
      	 	
              2.

            	
              In
                connection with two capital raising transactions by HydroGen LLC,
                the
                Company is obliged to provide piggy back registration rights to investors
                who acquired $100,000 or more of securities in the transactions.
                The
                Company has registered these securities, however, the piggy back
                right
                continues with respect to future registration statements if the initial
                registration statement is not current or effective for some
                reason.Exhibit
      10.3

    

    NEITHER
      THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
      HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
      SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
      AND APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR
      SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
      ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
      TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
      APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES AND THE SECURITIES ISSUABLE
      UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
      FIDE
      MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. 

    

    HYDROGEN
      CORPORATION

     

    WARRANT
      

     

    
      	 	 	 
	
              Warrant
                No. [    ]

            	
                

            	
              Original
                Issue Date: [    ],
                2006

            

    

     

    HYDROGEN
      CORPORATION, a Nevada corporation (the “Company”),
      hereby certifies that, for value received,
      [            ] or
      its permitted registered assigns (the “Holder”),
      is
      entitled to purchase from the Company up to a total of
      [            ]
      shares of common stock, $0.001 par value (the “Common
      Stock”),
      of
      the Company (each such share, a “Warrant
      Share”
and
      all
      such shares, the “Warrant
      Shares”)
      at an
      exercise price equal to $6.60 per share (as adjusted from time to time as
      provided herein, the “Exercise
      Price”),
      at
      any time and from time to time from and after the Original Issue Date and
      through and including
      [            ], 2011
      (the “Expiration
      Date”),
      and
      subject to the following terms and conditions: 

    

    This
      Warrant is one of a series of warrants issued pursuant to that certain
      Securities Purchase Agreement, dated May 2, 2006, by and among the Company
      and
      the Purchasers identified therein (the “Purchase
      Agreement”).
      All
      such warrants are referred to herein, collectively, as the “Warrants.”

     

    1.
       Definitions.
      In
      addition to the terms defined elsewhere in this Warrant, capitalized terms
      that
      are not otherwise defined herein have the meanings given to such terms in the
      Purchase Agreement. 

      

    2.  List
      of Warrant Holders.
      The
      Company shall register this Warrant, upon records to be maintained by the
      Company for that purpose (the “Warrant
      Register”),
      in
      the name of the record Holder (which shall include the initial Holder or, as
      the
      case may be, any registered assignee to which this Warrant is permissibly
      assigned hereunder from time to time). The Company may deem and treat the
      registered Holder of this Warrant as the absolute owner hereof for the purpose
      of any exercise hereof or any distribution to the Holder, and for all other
      purposes, absent actual notice to the contrary. 

     

    
      
         

      

      
        -1-

        
          

        

      

      
         

        EXECUTION
          COPY

      

    

    3.
       List
      of Transfers.
      

    

    (a) In
      addition to the restrictions noted in the legend set forth on the first page
      of
      this Warrant, this Warrant and the Warrant Shares are subject to the
      restrictions on transfer set forth in the Purchase Agreement.

    

    (b) The
      Company shall register any such transfer of all or any portion of this Warrant
      in the Warrant Register, upon (i) surrender of this Warrant, with the Form
      of
      Assignment attached hereto duly completed and signed, to the Company at its
      address specified herein and (ii) if the Registration Statement is not
      effective, (x) delivery, at the request of the Company, of an opinion of counsel
      reasonably satisfactory to the Company, to the effect that the transfer of
      such
      portion of this Warrant may be made pursuant to an available exemption from
      the
      registration requirements of the Securities Act and all applicable state
      securities or blue sky laws and (y) delivery by the transferee of a written
      statement to the Company certifying that the transferee is an “accredited
      investor” as defined in Rule 501(a) under the Securities Act and making the
      representations and certifications set forth in Section 3.2(b), (c) and (d)
      of
      the Purchase Agreement, to the Company at its address specified in the Purchase
      Agreement. Upon any such registration or transfer, a new Warrant to purchase
      Common Stock, in substantially the form of this Warrant (any such new Warrant,
      a
“New
      Warrant”),
      evidencing the portion of this Warrant so transferred shall be issued to the
      transferee and a New Warrant evidencing the remaining portion of this Warrant
      not so transferred, if any, shall be issued to the transferring Holder. The
      acceptance of the New Warrant by the transferee thereof shall be deemed the
      acceptance by such transferee of all of the rights and obligations in respect
      of
      the New Warrant that the Holder has in respect of this Warrant. Notwithstanding
      the foregoing, to the extent a Holder desires to transfer this Warrant to a
      non-affiliate after the effectiveness of the Registration Statement and the
      Commission notifies the Company in writing that it is not permitted to use
      a
      prospectus supplement to change the selling stockholder table to reflect the
      new
      transferee, then such transferee shall not be entitled to the registration
      rights associated with the underlying Warrant Shares but shall be entitled
      to
      all other rights as a Holder hereunder, including the right to exercise this
      Warrant on a “cashless” exercise basis pursuant to Section 10(b)
      hereof.

     

    4.
       Exercise
      and Duration of Warrants.
      

     

    (a)
       All
      or
      any part of this Warrant shall be exercisable by the registered Holder at any
      time and from time to time on or after the Original Issue Date and through
      and
      including the Expiration Date. Subject to Section 11 hereof, at 5:00 p.m.,
      New
      York City time, on the Expiration Date, the portion of this Warrant not
      exercised prior thereto shall be and become void and of no value and this
      Warrant shall be terminated and no longer outstanding. 

    

    
      
         

      

      
        -2-

        
          

        

      

      
         

        EXECUTION
          COPY

      

    

    (b) The
      Holder may exercise this Warrant by delivering to the Company (i) an exercise
      notice, in the form attached hereto (the “Exercise
      Notice”),
      completed and duly signed, together with the aggregate Exercise Price for the
      number of Warrant Shares to be issued pursuant to such exercise, and (ii) if
      such Holder is not utilizing the cashless exercise provisions set forth in
      this
      Warrant, payment of the Exercise Price for the number of Warrant Shares as
      to
      which this Warrant is being exercised, and the date such items are delivered
      to
      the Company (as determined in accordance with the notice provisions hereof)
      is
      an “Exercise
      Date.”
The
      delivery by (or on behalf of) the Holder of the Exercise Notice and the
      applicable Exercise Price as provided above shall constitute the Holder’s
      certification to the Company that its representations contained in Section
      3.2(b), (c) and (d) of the Purchase Agreement are true and correct as of the
      Exercise Date as if remade in their entirety (or, in the case of any transferee
      Holder that is not a party to the Purchase Agreement, such transferee Holder’s
      certification to the Company that such representations are true and correct
      as
      to such assignee Holder as of the Exercise Date). The Holder shall not be
      required to deliver the original Warrant in order to effect an exercise
      hereunder. Execution and delivery of the Exercise Notice shall have the same
      effect as cancellation of the original Warrant and issuance of a New Warrant
      evidencing the right to purchase the remaining number of Warrant
      Shares.

     

     5.
       Delivery
      of Warrant Shares.
      

     

    (a)
       Upon
      exercise of this Warrant, the Company shall promptly (but in no event later
      than
      three Trading Days after the Exercise Date) issue or cause to be issued and
      cause to be delivered to or upon the written order of the Holder and in such
      name or names as the Holder may designate (provided that, if the Registration
      Statement is not effective and the Holder directs the Company to deliver a
      certificate for the Warrant Shares in a name other than that of the Holder
      or an
      Affiliate of the Holder, it shall deliver to the Company on the Exercise Date
      an
      opinion of counsel reasonably satisfactory to the Company to the effect that
      the
      issuance of such Warrant Shares in such other name may be made pursuant to
      an
      available exemption from the registration requirements of the Securities Act
      and
      all applicable state securities or blue sky laws), a certificate for the Warrant
      Shares issuable upon such exercise, free of restrictive legends unless a
      registration statement covering the resale of the Warrant Shares and naming
      the
      Holder as a selling stockholder thereunder is not then effective or the Warrant
      Shares are not freely transferable without volume restrictions pursuant to
      Rule
      144(k) under the Securities Act. The Holder, or any Person permissibly so
      designated by the Holder to receive Warrant Shares, shall be deemed to have
      become the holder of record of such Warrant Shares as of the Exercise Date.
      

     

    (b)
       If
      by the
      close of the third Trading Day after delivery of an Exercise Notice, the Company
      fails to deliver to the Holder a certificate representing the required number
      of
      Warrant Shares in the manner required pursuant to Section 5(a), and if after
      such third Trading Day and prior to the receipt of such Warrant Shares, the
      Holder purchases (in an open market transaction or otherwise) shares of Common
      Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares
      which the Holder anticipated receiving upon such exercise (a “Buy-In”),
      then
      the Company shall, within three Trading Days after the Holder’s request and in
      the Holder’s sole discretion, either (1) pay in cash to the Holder an amount
      equal to the Holder’s total purchase price (including brokerage commissions, if
      any) for the shares of Common Stock so purchased (the “Buy-In
      Price”),
      at
      which point the Company’s obligation to deliver such certificate (and to issue
      such Warrant Shares) shall terminate or (2) promptly honor its obligation to
      deliver to the Holder a certificate or certificates representing such Warrant
      Shares and pay cash to the Holder in an amount equal to the excess (if any)
      of
      the Buy-In Price over the product of (A) such number of Warrant Shares, times
      (B) the closing bid price of a share of Common Stock on the date of the event
      giving rise to the Company’s obligation to deliver such certificate.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

        EXECUTION
          COPY

      

    

    (c)
       To
      the
      extent permitted by law, the Company’s obligations to issue and deliver Warrant
      Shares in accordance with the terms hereof are absolute and unconditional,
      irrespective of any action or inaction by the Holder to enforce the same, any
      waiver or consent with respect to any provision hereof, the recovery of any
      judgment against any Person or any action to enforce the same, or any setoff,
      counterclaim, recoupment, limitation or termination, or any breach or alleged
      breach by the Holder or any other Person of any obligation to the Company or
      any
      violation or alleged violation of law by the Holder or any other Person, and
      irrespective of any other circumstance which might otherwise limit such
      obligation of the Company to the Holder in connection with the issuance of
      Warrant Shares. Nothing herein shall limit a Holder’s right to pursue any other
      remedies available to it hereunder, at law or in equity including, without
      limitation, a decree of specific performance and/or injunctive relief with
      respect to the Company’s failure to timely deliver certificates representing
      shares of Common Stock upon exercise of the Warrant as required pursuant to
      the
      terms hereof. 

     

    6.
       Charges,
      Taxes and Expenses.
      Issuance and delivery of certificates for shares of Common Stock upon exercise
      of this Warrant shall be made without charge to the Holder for any issue or
      transfer tax, withholding tax, transfer agent fee or other incidental tax or
      expense in respect of the issuance of such certificates, all of which taxes
      and
      expenses shall be paid by the Company; provided,
      however,
      that
      the Company shall not be required to pay any tax which may be payable in respect
      of any transfer involved in the registration of any certificates for Warrant
      Shares or Warrants in a name other than that of the Holder. The Holder shall
      be
      responsible for all other tax liability that may arise as a result of holding
      or
      transferring this Warrant or receiving Warrant Shares upon exercise hereof.
      

     

    7.
       Replacement
      of Warrant.
      If this
      Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or
      cause to be issued in exchange and substitution for and upon cancellation
      hereof, or in lieu of and substitution for this Warrant, a New Warrant, but
      only
      upon receipt of evidence reasonably satisfactory to the Company of such loss,
      theft or destruction and customary and reasonable indemnity (which shall not
      include a surety bond), if requested. Applicants for a New Warrant under such
      circumstances shall also comply with such other reasonable regulations and
      procedures and pay such other reasonable third-party costs as the Company may
      prescribe. If a New Warrant is requested as a result of a mutilation of this
      Warrant, then the Holder shall deliver such mutilated Warrant to the Company
      as
      a condition precedent to the Company’s obligation to issue the New Warrant.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

        EXECUTION
          COPY

      

    

    8.
       Reservation
      of Warrant Shares.
      The
      Company covenants that it will initially reserve and keep available out of
      the
      aggregate of its authorized but unissued and otherwise unreserved Common Stock,
      solely for the purpose of enabling it to issue Warrant Shares upon exercise
      of
      this Warrant as herein provided, one hundred twenty percent (120%) of the number
      of Warrant Shares which are initially issuable and deliverable upon the exercise
      of this entire Warrant, free from preemptive rights or any other contingent
      purchase rights of persons other than the Holder. The Company further covenants
      that it will at all times reserve and keep available out of the aggregate of
      its
      authorized but unissued and otherwise unreserved Common Stock, solely for the
      purpose of enabling it to issue Warrant Shares upon exercise of this Warrant
      as
      herein provided, the number of Warrant Shares which are then issuable and
      deliverable upon the exercise of this entire Warrant, free from preemptive
      rights or any other contingent purchase rights of persons other than the Holder
      (taking into account the adjustments and restrictions of Section
      9).
      The
      Company covenants that all Warrant Shares so issuable and deliverable shall,
      upon issuance and the payment of the applicable Exercise Price in accordance
      with the terms hereof, be duly and validly authorized, issued and fully paid
      and
      nonassessable. 

     

    9.
       Certain
      Adjustments.
      The
      Exercise Price and number of Warrant Shares issuable upon exercise of this
      Warrant are subject to adjustment from time to time as set forth in this
Section
      9.
      

     

    (a)  Stock
      Dividends and Splits.
      If the
      Company, at any time while this Warrant is outstanding, (i) pays a stock
      dividend on its Common Stock or otherwise makes a distribution on any class
      of
      capital stock that is payable in shares of Common Stock, (ii) subdivides its
      outstanding shares of Common Stock into a larger number of shares, or (iii)
      combines its outstanding shares of Common Stock into a smaller number of shares,
      then in each such case the Exercise Price shall be multiplied by a fraction
      of
      which the numerator shall be the number of shares of Common Stock outstanding
      immediately before such event and of which the denominator shall be the number
      of shares of Common Stock outstanding immediately after such event. Any
      adjustment made pursuant to clause (i) of this paragraph shall become effective
      immediately after the record date for the determination of stockholders entitled
      to receive such dividend or distribution, and any adjustment pursuant to clause
      (ii) or (iii) of this paragraph shall become effective immediately after the
      effective date of such subdivision or combination. 

     

    (b)
       Pro
      Rata Distributions.
      If the
      Company, at any time while this Warrant is outstanding, distributes to all
      holders of Common Stock (i) evidences of its indebtedness, (ii) any security
      (other than a distribution of Common Stock covered by the preceding paragraph),
      (iii) rights or warrants to subscribe for or purchase any security, or (iv)
      any
      other asset (in each case, “Distributed
      Property”),
      then,
      upon any exercise of this Warrant that occurs after the record date fixed for
      determination of stockholders entitled to receive such distribution, the Holder
      shall be entitled to receive, in addition to the Warrant Shares otherwise
      issuable upon such exercise (if applicable), the Distributed Property that
      such
      Holder would have been entitled to receive in respect of such number of Warrant
      Shares had the Holder been the record holder of such Warrant Shares immediately
      prior to such record date.

    

    
      
         

      

      
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    (c) Fundamental
      Transactions.
      If, at
      any time while this Warrant is outstanding (i) the Company effects any merger
      or
      consolidation of the Company with or into another Person, in which the Company
      is not the survivor, (ii) the Company effects any sale of all or substantially
      all of its assets in one or a series of related transactions, (iii) any tender
      offer or exchange offer (whether by the Company or another Person) is completed
      pursuant to which holders of Common Stock are permitted to tender or exchange
      their shares for other securities, cash or property, or (iv) the Company effects
      any reclassification of the Common Stock or any compulsory share exchange
      pursuant to which the Common Stock is effectively converted into or exchanged
      for other securities, cash or property (each, a “Fundamental
      Transaction”),
      then
      the Holder shall have the right thereafter to receive, upon exercise of this
      Warrant, the same amount and kind of securities, cash or property as it would
      have been entitled to receive upon the occurrence of such Fundamental
      Transaction if it had been, immediately prior to such Fundamental Transaction,
      the holder of the number of Warrant Shares then issuable upon exercise in full
      of this Warrant (the “Alternate
      Consideration”).
      The
      Company shall not effect any such Fundamental Transaction unless prior to or
      simultaneously with the consummation thereof, any successor to the Company,
      surviving entity or the corporation purchasing or otherwise acquiring such
      assets or other appropriate corporation or entity shall assume the obligation
      to
      deliver to the Holder, such Alternate Consideration as, in accordance with
      the
      foregoing provisions, the Holder may be entitled to purchase and/or receive
      (as
      the case may be), and the other obligations under this Warrant. The provisions
      of this paragraph (c) shall similarly apply to subsequent transactions analogous
      to a Fundamental Transaction.

     

    (d)
       Number
      of Warrant Shares.
      Simultaneously with any adjustment to the Exercise Price pursuant to paragraph
      (a) of this Section 9, the number of Warrant Shares that may be purchased upon
      exercise of this Warrant shall be increased or decreased proportionately, so
      that after such adjustment the aggregate Exercise Price payable hereunder for
      the adjusted number of Warrant Shares shall be the same as the aggregate
      Exercise Price in effect immediately prior to such adjustment. 

     

    (e)   
       Subsequent
      Equity Sales.

     

    (i)   Except
      as provided in subsection (e)(iii) hereof, if and whenever the Company shall
      issue or sell, or is, in accordance with any of subsections (e)(ii)(l) through
      (e)(ii)(4) hereof, deemed to have issued or sold, any shares of Common Stock
      for
      no consideration or for a consideration per share less than the Exercise Price
      in effect immediately prior to the time of such issue or sale, then and in
      each
      such case (a “Trigger
      Issuance”)
      the
      then-existing Exercise Price, shall be reduced, as of the close of business
      on
      the effective date of the Trigger Issuance, to a price determined as
      follows:

    
      
         

      

      
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              Adjusted
                Exercise Price = (A
                x B) + D

            
	 	
              A+C          
                         
                

            

    

    

    where

    

    “A”
      equals the number of shares of Common Stock outstanding, including Additional
      Shares of Common Stock (as defined below) deemed to be issued hereunder,
      immediately preceding such Trigger Issuance;

    

    “B”
      equals the Exercise Price in effect immediately preceding such Trigger
      Issuance;

    

    “C”
      equals the number of Additional Shares of Common Stock issued or deemed issued
      hereunder as a result of the Trigger Issuance; and

    

    “D”
      equals the aggregate consideration, if any, received or deemed to be received
      by
      the Company upon such Trigger Issuance;

    

    provided,
      however,
      that in
      no event shall the Exercise Price after giving effect to such Trigger Issuance
      be greater than the original Exercise Price.

     

    For
      purposes of this subsection (e), “Additional
      Shares of Common Stock”
shall
      mean all shares of Common Stock issued by the Company or deemed to be issued
      pursuant to this subsection (e), other than Excluded Issuances (as defined
      in
      subsection (e)(iii) hereof).

     

    (ii)   
      For purposes of this subsection 9(e), the following subsections (e)(ii)(l)
      to (e)(ii)(4) shall also be applicable:

     

    (1)   
      Issuance
      of Rights or Options.
      In case
      at any time the Company shall in any manner grant (directly and not by
      assumption in a merger or otherwise) any warrants or other rights to subscribe
      for or to purchase, or any options for the purchase of, Common Stock or any
      stock or security convertible into or exchangeable for Common Stock (such
      warrants, rights or options being called “Options”
and
      such convertible or exchangeable stock or securities being called “Convertible
      Securities”)
      whether or not such Options or the right to convert or exchange any such
      Convertible Securities are immediately exercisable, and the price per share
      for
      which Common Stock is issuable upon the exercise of such Options or upon the
      conversion or exchange of such Convertible Securities (determined by dividing
      (i) the sum (which sum shall constitute the applicable consideration) of
      (x) the total amount, if any, received or receivable by the Company as
      consideration for the granting of such Options, plus (y) the aggregate
      amount of additional consideration payable to the Company upon the exercise
      of
      all such Options, plus (z), in the case of such Options which relate to
      Convertible Securities, the aggregate amount of additional consideration, if
      any, payable upon the issue or sale of such Convertible Securities and upon
      the
      conversion or exchange thereof, by (ii) the total maximum number of shares
      of Common Stock issuable upon the exercise of such Options or upon the
      conversion or exchange of all such Convertible Securities issuable upon the
      exercise of such Options) shall be less than the Exercise Price in effect
      immediately prior to the time of the granting of such Options, then the total
      number of shares of Common Stock issuable upon the exercise of such Options
      or
      upon conversion or exchange of the total amount of such Convertible Securities
      issuable upon the exercise of such Options shall be deemed to have been issued
      for such price per share as of the date of granting of such Options or the
      issuance of such Convertible Securities and thereafter shall be deemed to be
      outstanding for purposes of adjusting the Exercise Price. Except as otherwise
      provided in subsection 9(e)(ii)(3), no adjustment of the Exercise Price
      shall be made upon the actual issue of such Common Stock or of such Convertible
      Securities upon exercise of such Options or upon the actual issue of such Common
      Stock upon conversion or exchange of such Convertible Securities. 

     

    
      
         

      

      
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      (2)   
      Issuance
      of Convertible Securities.
      In case
      the Company shall in any manner issue (directly and not by assumption in a
      merger or otherwise) or sell any Convertible Securities, whether or not the
      rights to exchange or convert any such Convertible Securities are immediately
      exercisable, and the price per share for which Common Stock is issuable upon
      such conversion or exchange (determined by dividing (i) the sum (which sum
      shall constitute the applicable consideration) of (x) the total amount
      received or receivable by the Company as consideration for the issue or sale
      of
      such Convertible Securities, plus (y) the aggregate amount of additional
      consideration, if any, payable to the Company upon the conversion or exchange
      thereof, by (ii) the total number of shares of Common Stock issuable upon
      the conversion or exchange of all such Convertible Securities) shall be less
      than the Exercise Price in effect immediately prior to the time of such issue
      or
      sale, then the total maximum number of shares of Common Stock issuable upon
      conversion or exchange of all such Convertible Securities shall be deemed to
      have been issued for such price per share as of the date of the issue or sale
      of
      such Convertible Securities and thereafter shall be deemed to be outstanding
      for
      purposes of adjusting the Exercise Price, provided that (a) except as
      otherwise provided in subsection 9(e)(ii)(3), no adjustment of the Exercise
      Price shall be made upon the actual issuance of such Common Stock upon
      conversion or exchange of such Convertible Securities and (b) no further
      adjustment of the Exercise Price shall be made by reason of the issue or sale
      of
      Convertible Securities upon exercise of any Options to purchase any such
      Convertible Securities for which adjustments of the Exercise Price have been
      made pursuant to the other provisions of subsection 9(e).

     

       (3)   
      Change
      in Option Price or Conversion Rate.
      Upon
      the happening of any of the following events, namely, if the purchase price
      provided for in any Option referred to in subsection 9(e)(ii)(l) hereof,
      the additional consideration, if any, payable upon the conversion or exchange
      of
      any Convertible Securities referred to in subsections 9(e)(ii)(l) or
      9(e)(ii)(2), or the rate at which Convertible Securities referred to in
      subsections 9(e)(ii)(l) or 9(e)(ii)(2) are convertible into or exchangeable
      for
      Common Stock shall change at any time (including, but not limited to, changes
      under or by reason of provisions designed to protect against dilution), the
      Exercise Price in effect at the time of such event shall forthwith be readjusted
      to the Exercise Price which would have been in effect at such time had such
      Options or Convertible Securities still outstanding provided for such changed
      purchase price, additional consideration or conversion rate, as the case may
      be,
      at the time initially granted, issued or sold. On the termination of any Option
      for which any adjustment was made pursuant to this subsection 9(e) or any
      right to convert or exchange Convertible Securities for which any adjustment
      was
      made pursuant to this subsection 9(e) (including without limitation upon
      the redemption or purchase for consideration of such Convertible Securities
      by
      the Company), the Exercise Price then in effect hereunder shall forthwith be
      changed to the Exercise Price which would have been in effect at the time of
      such termination had such Option or Convertible Securities, to the extent
      outstanding immediately prior to such termination, never been
      issued.

     

    
      
         

      

      
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      (4)
       Stock
      Dividends.
      Subject
      to the provisions of this Section 9(e), in case the Company shall declare a
      dividend or make any other distribution upon any stock of the Company (other
      than the Common Stock) payable in Common Stock, Options or Convertible
      Securities, then any Common Stock, Options or Convertible Securities, as the
      case may be, issuable in payment of such dividend or distribution shall be
      deemed to have been issued or sold without consideration.

     

    (5)   
      Consideration
      for Stock.
      In case
      any shares of Common Stock, Options or Convertible Securities shall be issued
      or
      sold for cash, the consideration received therefor shall be deemed to be the
      gross amount received by the Company therefor. In case any shares of Common
      Stock, Options or Convertible Securities shall be issued or sold for a
      consideration other than cash, the amount of the consideration other than cash
      received by the Company shall be deemed to be the fair value of such
      consideration as determined in good faith by the Board of Directors of the
      Company. In case any Options shall be issued in connection with the issue and
      sale of other securities of the Company, together comprising one integral
      transaction in which no specific consideration is allocated to such Options
      by
      the parties thereto, such Options shall be deemed to have been issued for such
      consideration as determined in good faith by the Board of Directors of the
      Company. If Common Stock, Options or Convertible Securities shall be issued
      or
      sold by the Company and, in connection therewith, other Options or Convertible
      Securities (the “Additional
      Rights”)
      are
      issued, then the consideration received or deemed to be received by the Company
      shall be reduced by the fair market value of the Additional Rights (as
      determined using the Black-Scholes option pricing model or another method
      mutually agreed to by the Company and the Holder). The Board of Directors of
      the
      Company shall respond promptly, in writing, to an inquiry by the Holder as
      to
      the fair market value of the Additional Rights. In the event that the Board
      of
      Directors of the Company and the Holder are unable to agree upon the fair market
      value of the Additional Rights, the Company and the Holder 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
      evenly by the Company and the Holder. 

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

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    (6)
       Record
      Date.
      In case
      the Company shall take a record of the holders of its Common Stock for the
      purpose of entitling them (i) to receive a dividend or other distribution
      payable in Common Stock, Options or Convertible Securities or (ii) to subscribe
      for or purchase Common Stock, Options or Convertible Securities, then such
      record date shall be deemed to be the date of the issue or sale of the shares
      of
      Common Stock deemed to have been issued or sold upon the declaration of such
      dividend or the making of such other distribution or the date of the granting
      of
      such right of subscription or purchase, as the case may be.

    

    (7)
       Treasury
      Shares.
      The
      number of shares of Common Stock outstanding at any given time shall not include
      shares owned or held by or for the account of the Company or any of its
      wholly-owned subsidiaries, and the disposition of any such shares (other than
      the cancellation or retirement thereof) shall be considered an issue or sale
      of
      Common Stock for the purpose of this subsection (e).

     

    (iii)   
      Notwithstanding the foregoing, no adjustment will be made under this
      paragraph (e) in respect of: (i) the issuance of securities upon the
      exercise or conversion of any Common Stock or Common Stock Equivalents issued
      by
      the Company prior to the date hereof, (ii) the grant of options, warrants
      or other Common Stock Equivalents under any duly authorized Company stock
      option, restricted stock plan or stock purchase plan whether now existing or
      hereafter approved by the Company and its stockholders in the future stock
      issuable thereunder, the terms set forth therein, or the exercise price set
      forth therein) and the issuance of Common Stock in respect thereof,
      (iii) the issuance of securities in connection with a Strategic
      Transaction, (iv) the issuance of securities to vendors, (v) the
      issuance of securities in a transaction described in Section 9(a) or 9(b),
      or (vi) the issuance of securities in a firm commitment underwritten offering
      at
      a price per share at or above the then current market price per share. For
      purposes of this paragraph, a “Strategic
      Transaction”
means
      a
      transaction or relationship in which (1) the Company issues shares of
      Common Stock to a Person which the Board of Directors of the Company determined
      in good faith is, itself or through its Subsidiaries, an operating company
      in a
      business synergistic with the business of the Company (or a stockholder thereof)
      and (2) the Company expects to receive benefits in addition to the
      investment of funds, but shall not include (x) a transaction in which the
      Company is issuing securities primarily for the purpose of raising capital
      or to
      a Person whose primary business is investing in securities or (y) issuances
      to lenders.

     

    (iv) Upon
      any
      adjustment to the Exercise Price pursuant to Section 9(e)(i) above, the number
      of Warrant Shares purchasable hereunder shall be adjusted by multiplying such
      number by a fraction, the numerator of which shall be the Exercise Price in
      effect immediately prior to such adjustment and the denominator of which shall
      be the Exercise Price in effect immediately thereafter. 

    

    (f)
       Calculations.
      All
      calculations under this Section
      9
      shall be
      made to the nearest cent or the nearest 1/100th
      of a
      share, as applicable. The number of shares of Common Stock outstanding at any
      given time shall not include shares owned or held by or for the account of
      the
      Company, and the disposition of any such shares shall be considered an issue
      or
      sale of Common Stock. 

     

    
      
         

      

      
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    (g)
       Notice
      of Adjustments.
      Upon
      the occurrence of each adjustment pursuant to this Section
      9,
      the
      Company at its expense will, at the written request of the Holder, promptly
      compute such adjustment, in good faith, in accordance with the terms of this
      Warrant and prepare a certificate setting forth such adjustment, including
      a
      statement of the adjusted Exercise Price and adjusted number or type of Warrant
      Shares or other securities issuable upon exercise of this Warrant (as
      applicable), describing the transactions giving rise to such adjustments and
      showing in detail the facts upon which such adjustment is based. Upon written
      request, the Company will promptly deliver a copy of each such certificate
      to
      the Holder and to the Company’s Transfer Agent. 

     

    (h)
       Notice
      of Corporate Events.
      If,
      while this Warrant is outstanding, the Company (i) declares a dividend or any
      other distribution of cash, securities or other property in respect of its
      Common Stock, including without limitation any granting of rights or warrants
      to
      subscribe for or purchase any capital stock of the Company or any Subsidiary,
      (ii) authorizes or approves, enters into any agreement contemplating, or
      solicits stockholder approval for any Fundamental Transaction or (iii)
      authorizes the voluntary dissolution, liquidation or winding up of the affairs
      of the Company, then, except if such notice and the contents thereof shall
      be
      deemed to constitute material non-public information, the Company shall deliver
      to the Holder a notice describing the material terms and conditions of such
      transaction at least ten (10) Trading Days prior to the applicable record or
      effective date on which a Person would need to hold Common Stock in order to
      participate in or vote with respect to such transaction, and the Company will
      take all reasonable steps to give the Holder the practical opportunity to
      exercise this Warrant prior to such time; provided,
      however,
      that
      the failure to deliver such notice or any defect therein shall not affect the
      validity of the corporate action required to be described in such notice.

     

    10.
       Payment
      of Exercise Price.
      The
      Holder may pay the Exercise Price in one of the following manners: 

     

    (a)
       Cash
      Exercise.
      The
      Holder may deliver immediately available funds; or 

     

    (b)
       Cashless
      Exercise.
      If an
      Exercise Notice is delivered at a time when a registration statement permitting
      the Holder to resell the Warrant Shares is required to be effective and is
      not
      then effective or the prospectus forming a part thereof is not then available
      to
      the Holder for the resale of the Warrant Shares, then the Holder may notify
      the
      Company in an Exercise Notice of its election to utilize cashless exercise,
      in
      which event the Company shall issue to the Holder the number of Warrant Shares
      determined as follows: 

     

    X
      = Y
      [(A-B)/A] 

     

    where:
      

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

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    X
      = the
      number of Warrant Shares to be issued to the Holder. 

     

    Y
      = the
      number of Warrant Shares with respect to which this Warrant is being exercised.
      

     

    A
      = the
      average of the closing prices of a share of Common Stock for the five Trading
      Days immediately prior to (but not including) the Exercise Date. 

     

    B
      = the
      Exercise Price. 

     

    For
      purposes of Rule 144 promulgated under the Securities Act, it is intended,
      understood and acknowledged that the Warrant Shares issued in a cashless
      exercise transaction shall be deemed to have been acquired by the Holder, and
      the holding period for the Warrant Shares shall be deemed to have commenced,
      on
      the date this Warrant was originally issued. 

     

    11.
       Limitations
      on Exercise.
      

    

    (a) Notwithstanding
      anything to the contrary contained herein, the number of Warrant Shares that
      may
      be acquired by the Holder upon any exercise of this Warrant (or otherwise in
      respect hereof) shall be limited to the extent necessary to insure that,
      following such exercise (or other issuance), the total number of shares of
      Common Stock then beneficially owned by such Holder and its Affiliates and
      any
      other Persons whose beneficial ownership of Common Stock would be aggregated
      with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not
      exceed 4.999% (the “Maximum
      Percentage”)
      of the
      total number of issued and outstanding shares of Common Stock (including for
      such purpose the shares of Common Stock issuable upon such exercise). For such
      purposes, beneficial ownership shall be determined in accordance with Section
      13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
      Each delivery of an Exercise Notice hereunder will constitute a representation
      by the Holder that it has evaluated the limitation set forth in this Section
      and
      determined that issuance of the full number of Warrant Shares requested in
      such
      Exercise Notice is permitted under this Section. The Company’s obligation to
      issue shares of Common Stock in excess of the limitation referred to in this
      Section shall be suspended (and, except as provided below, shall not terminate
      or expire notwithstanding any contrary provisions hereof) until such time,
      if
      any, as such shares of Common Stock may be issued in compliance with such
      limitation; provided, that, if, as of 5:00 p.m., New York City time, on the
      Expiration Date, the Company has not received written notice that the shares
      of
      Common Stock may be issued in compliance with such limitation, the Company’s
      obligation to issue such shares shall terminate. This provision shall not
      restrict the number of shares of Common Stock which a Holder may receive or
      beneficially own in order to determine the amount of securities or other
      consideration that such Holder may receive in the event of a Fundamental
      Transaction as contemplated in Section 9 of this Warrant. By written notice
      to
      the Company, the Holder may waive the provisions of this Section but any such
      waiver will not be effective until the 61st
      day
      after such notice is delivered to the Company, nor will any such waiver effect
      any other Holder. 

    

    
      
         

      

      
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    (b) Notwithstanding
      anything to the contrary contained herein, the number of Warrant Shares that
      may
      be acquired by the Holder upon any exercise of this Warrant (or otherwise in
      respect hereof) shall be limited to the extent necessary to insure that,
      following such exercise (or other issuance), the total number of shares of
      Common Stock then beneficially owned by such Holder and its Affiliates and
      any
      other Persons whose beneficial ownership of Common Stock would be aggregated
      with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not
      exceed 9.999% of the total number of issued and outstanding shares of Common
      Stock (including for such purpose the shares of Common Stock issuable upon
      such
      exercise). For such purposes, beneficial ownership shall be determined in
      accordance with Section 13(d) of the Exchange Act and the rules and regulations
      promulgated thereunder. Each delivery of an Exercise Notice hereunder will
      constitute a representation by the Holder that it has evaluated the limitation
      set forth in this Section and determined that issuance of the full number of
      Warrant Shares requested in such Exercise Notice is permitted under this
      Section. The Company’s obligation to issue shares of Common Stock in excess of
      the limitation referred to in this Section shall be suspended (and, except
      as
      provided below, shall not terminate or expire notwithstanding any contrary
      provisions hereof) until such time, if any, as such shares of Common Stock
      may
      be issued in compliance with such limitation; provided, that, if, as of 5:00
      p.m., New York City time, on the Expiration Date, the Company has not received
      written notice that the shares of Common Stock may be issued in compliance
      with
      such limitation, the Company’s obligation to issue such shares shall terminate.
      This provision shall not restrict the number of shares of Common Stock which
      a
      Holder may receive or beneficially own in order to determine the amount of
      securities or other consideration that such Holder may receive in the event
      of a
      Fundamental Transaction as contemplated in Section 9 of this Warrant. This
      restriction may not be waived.

     

    12.
       No
      Fractional Shares.
      No
      fractional Warrant Shares will be issued in connection with any exercise of
      this
      Warrant. In lieu of any fractional shares which would otherwise be issuable,
      the
      Company shall pay cash equal to the product of such fraction multiplied by
      the
      closing price of one Warrant Share as reported by the applicable Trading Market
      on the Exercise Date. 

     

    13.
       Notices.
      Any and
      all notices or other communications or deliveries hereunder (including, without
      limitation, any Exercise Notice) shall be in writing and shall be deemed given
      and effective on the earliest of (i) the date of transmission, if such notice
      or
      communication is delivered via facsimile at the facsimile number specified
      in
      this Section prior to 5:00 p.m. (New York City time) on a Trading Day, (ii)
      the
      next Trading Day after the date of transmission, if such notice or communication
      is delivered via facsimile at the facsimile number specified in this Section
      on
      a day that is not a Trading Day or later than 5:00 p.m. (New York City time)
      on
      any Trading Day, (iii) the Trading Day following the date of mailing, if sent
      by
      nationally recognized overnight courier service, or (iv) upon actual receipt
      by
      the party to whom such notice is required to be given. The addresses for such
      notices or communications shall be: (i) if to the Company, to HydroGen
      Corporation, 10 East 40th
      Street,
      Room 3405, New York, New York 10016, Attn: Chief Executive Officer or to
      facsimile number (212) 672-0393 (or such other address as the Company shall
      indicate in writing in accordance with this Section) or (ii) if to the Holder,
      to the address or facsimile number appearing on the Warrant Register (or such
      other address as the Company shall indicate in writing in accordance with this
      Section). 

     

    
      
         

      

      
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    14.
       Warrant
      Agent.
      The
      Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’
notice to the Holder, the Company may appoint a new warrant agent. Any
      corporation into which the Company or any new warrant agent may be merged or
      any
      corporation resulting from any consolidation to which the Company or any new
      warrant agent shall be a party or any corporation to which the Company or any
      new warrant agent transfers substantially all of its corporate trust or
      shareholders services business shall be a successor warrant agent under this
      Warrant without any further act. Any such successor warrant agent shall promptly
      cause notice of its succession as warrant agent to be mailed (by first class
      mail, postage prepaid) to the Holder at the Holder’s last address as shown on
      the Warrant Register. 

     

    15.
       Miscellaneous.
      

     

    (a)
       This
      Warrant shall be binding on and inure to the benefit of the parties hereto
      and
      their respective successors and assigns. Subject to the preceding sentence,
      nothing in this Warrant shall be construed to give to any Person other than
      the
      Company and the Holder any legal or equitable right, remedy or cause of action
      under this Warrant. This Warrant may be amended only in writing signed by the
      Company and the Holder, or their successors and assigns. 

     

    (b)
       All
      questions concerning the construction, validity, enforcement and interpretation
      of this Warrant shall be governed by and construed and enforced in accordance
      with the internal laws of the State of New York, without regard to the
      principles of conflicts of law thereof. Each party agrees that all legal
      proceedings concerning the interpretations, enforcement and defense of this
      Warrant and the transactions herein contemplated (“Proceedings”)
      (whether brought against a party hereto or its respective Affiliates, employees
      or agents) shall be commenced exclusively in the New York Courts. Each party
      hereto hereby irrevocably submits to the exclusive jurisdiction of the New
      York
      Courts for the adjudication of any dispute hereunder or in connection herewith
      or with any transaction contemplated hereby or discussed herein, and hereby
      irrevocably waives, and agrees not to assert in any Proceeding, any claim that
      it is not personally subject to the jurisdiction of any New York Court, or
      that
      such Proceeding has been commenced in an improper or inconvenient forum. Each
      party hereto hereby irrevocably waives personal service of process and consents
      to process being served in any such Proceeding by mailing a copy thereof via
      registered or certified mail or overnight delivery (with evidence of delivery)
      to such party at the address in effect for notices to it under this Warrant
      and
      agrees that such service shall constitute good and sufficient service of process
      and notice thereof. Nothing contained herein shall be deemed to limit in any
      way
      any right to serve process in any manner permitted by law. Each party hereto
      hereby irrevocably waives, to the fullest extent permitted by applicable law,
      any and all right to trial by jury in any legal proceeding arising out of or
      relating to this Warrant or the transactions contemplated hereby. If either
      party shall commence a Proceeding to enforce any provisions of this Warrant,
      then the prevailing party in such Proceeding shall be reimbursed by the other
      party for its attorney’s fees and other costs and expenses incurred in
      connection with the investigation, preparation and prosecution of such
      Proceeding.

     

    
      
         

      

      
        -14-

        
          

        

      

      
         

        EXECUTION
          COPY

      

    

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

     

    (d)
       In
      case
      any one or more of the provisions of this Warrant shall be invalid or
      unenforceable in any respect, the validity and enforceability of the remaining
      terms and provisions of this Warrant shall not in any way be affected or
      impaired thereby and the parties will attempt in good faith to agree upon a
      valid and enforceable provision which shall be a commercially reasonable
      substitute therefor, and upon so agreeing, shall incorporate such substitute
      provision in this Warrant. 

     

    (e)
       Other
      than as provided in Section 9(h) or otherwise set forth herein, prior to
      exercise of this Warrant, the Holder hereof shall not, by reason of by being
      a
      Holder, be entitled to any rights of a stockholder with respect to the Warrant
      Shares 

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK, 

    SIGNATURE
      PAGE FOLLOWS] 

     

    
      
         

      

      
        -15-

        
          

        

      

      
         

        
          EXECUTION
            COPY

        

      

    

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

     

    
      	 	 	 	 
	 	
              HYDROGEN
                CORPORATION

            
	 	 	 
	 	
              By:

            	
               

            	
               

              _________________________

            
	 	
              Name:

            	
               

            	
               

            
	 	
              Title:

            	
               

            	
               

            

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

        EXECUTION
          COPY

      

    

    EXERCISE
      NOTICE 

    

    HYDROGEN
      CORPORATION

    

    WARRANT
      DATED _________________, 2006

     

    Ladies
      and Gentlemen:

    

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

      

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

    

      Cash
      Exercise under Section 10

    

      Cashless
      Exercise under Section 10

    

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

    

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

     

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

    

     

    Dated:_______________,
      _____ 

     

    Name
      of
      Holder: ___________________________

     

    

     

    By:__________________________________

    Name:
      _______________________________ 

    Title:
      _______________________________

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

     

    
      
         

      

      
        
        

        
          

        

      

      
         

        EXECUTION
          COPY

      

    

    

    HYDROGEN
      CORPORATION

    WARRANT
      ORIGINALLY ISSUED _____________, 2006

    WARRANT
      NO. _____________

    

    FORM
      OF
      ASSIGNMENT 

     

    [To
      be
      completed and signed only upon transfer of Warrant]

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers unto                             
      the
      right represented by the within Warrant to purchase                 
      shares
      of Common Stock to which the within Warrant relates and appoints                             
      attorney
      to transfer said right on the books of the Company with full power of
      substitution in the premises. 

     

    
      	 	 	 
	
              Dated:
                _________,
                ___

            	
               

            	
               

              ___________________________________

            
	
               

            	
               

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

            
	
               

            	
               

            	
               

              
                ___________________________________

              

            
	
               

            	
               

            	
              Address
                of Transferee

            
	
               

            	
               

            	
               

              
                ___________________________________

              

            
	
               

            	
               

            	
               

              
                ___________________________________

              

            

    

     

    
      	 	 	 
	
              In
                the presence of:

            
	
               

              
                ____________________________

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