Document:

ODYNE
      CORPORATION

    Warrant
      No. 2008-___

     

    WARRANT
      TO PURCHASE COMMON STOCK

     

    VOID
      AFTER 5:00 P.M., EASTERN TIME, 

    ON
      THE
      EXPIRATION DATE

     

    NEITHER
      THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
      HAVE BEEN REGISTERED WITH THE U.S. 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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
      TO
      SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
      COMPANY.

     

    FOR
      VALUE
      RECEIVED, Odyne Corporation, a
      Delaware corporation (the “Company”),
      hereby agrees to sell upon the terms and on the conditions hereinafter set
      forth, at any time commencing on the date hereof but no later than 5:00 p.m.,
      Eastern Time, on March __, 2013 (the “Expiration
      Date”),
      to
_______________________,
      or his,
      her or its registered assigns (the “Holder”),
      under
      the terms as hereinafter set forth, ____________________
      (____________) fully
      paid and non-assessable shares of the Company’s Common Stock, par value $.001
      per share (the
      “Common
      Stock”),
      at a
      purchase price per share of $0.72 (the “Warrant
      Price”),
      pursuant to the terms and conditions set forth in this warrant (this
“Warrant”).
      The
      number of shares of Common Stock issued upon exercise of this Warrant
      (“Warrant
      Shares”)
      and
      the Warrant Price are subject to adjustment in certain events as hereinafter
      set
      forth. 

     

    This
      Warrant is one of a series of the Company’s Warrants to purchase Common Stock
      issued pursuant to the Securities Purchase Agreement between the Company and
      the
      Holder dated of even date herewith (the “Purchase
      Agreement”).
      Capitalized terms used but not otherwise defined in this Warrant shall have
      the
      meaning ascribed to such term in the Purchase Agreement or, as to Section 1(a),
      in the Registration Rights Agreement between the Company and the Holder dated
      of
      even date herewith.

     

    
      	
            	1.	
              Exercise
                of Warrant.

            

    

     

    (a)
      The
      Holder may exercise this Warrant according to the terms and conditions set
      forth
      herein by delivering to the Company, at the address set forth in Section 9
      prior
      to 5:00 p.m., Eastern Time, on the Expiration Date (i) this Warrant, (ii) the
      Subscription Form attached hereto as Exhibit
      A
      (the
“Subscription
      Form”)
      or the
      Notice of Cashless Exercise Form attached hereto as Exhibit
      B
      (the
“Cashless
      Exercise Form”)
      (in
      either case having then been duly executed by the Holder) and (iii) if not
      cashless, cash, a certified check or a bank draft in payment of the purchase
      price, in lawful money of the United States of America, for the number of
      Warrant Shares specified in the Subscription Form. If for any reason or for
      no
      reason whatsoever, either (A) the Registration Statement is not declared
      effective by the Commission prior to the Outside Date or any additional
      registration statement is not filed by the Additional Filing Date or is not
      declared effective by the Commission prior to the Additional Outside Date,
      or
      (B) after the effective date of the Registration Statement (or any additional
      registration statement), without regard for the reason thereunder or efforts
      therefor, such Registration Statement (or any additional registration statement)
      ceases for any reason to be effective and available to the Holders as to such
      Registrable Securities to which it is required to cover at any time prior to
      the
      expiration of the Effectiveness Period or Additional Effectiveness Period,
      as
      the case may be, for more than an aggregate of 30 Trading Days (which need
      not
      be consecutive), or (C) following the expiration of the Effectiveness Period
      or
      any Additional Effectiveness Period, any portion of this Warrant remains
      outstanding and/or unexercised as to any Warrant Shares previously covered
      by
      the respective existing and effective registration statement, then in any such
      case, a Holder may notify the Company, by its delivery of the Cashless Exercise
      Form, of its election to utilize cashless exercise under this Warrant relating
      to the Warrant Shares that are not then covered by an existing and effective
      registration statement (including the Registration Statement) (but only after
      exercising for cash Warrant Shares that are then covered by an existing and
      effective Registration Statement), in which event the Company shall issue to
      the
      Holder the number of Warrant Shares determined as follows in accordance with
      the
      provisions of this Warrant:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

    

    where:

    

    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 for the five Trading Days immediately prior to
      (but not including) the Date of Exercise.

    

    B
      = the
      Warrant 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 the Warrant was originally issued. 

    

     

    (b)
      This
      Warrant may be exercised in whole or in part so long as any exercise in part
      hereof would not involve the issuance of fractional Warrant Shares. If exercised
      in part, the Company shall deliver to the Holder a new Warrant, identical in
      form to this Warrant, in the name of the Holder, evidencing the right to
      purchase the number of Warrant Shares as to which this Warrant has not been
      exercised, which new Warrant shall be signed by the Chief Executive Officer
      or
      President of the Company. The term Warrant as used herein shall include any
      subsequent Warrant issued as provided herein. 

     

    (c)
      No
      fractional Warrant Shares or scrip representing fractional Warrant Shares shall
      be issued upon the exercise of this Warrant, but the number of shares issuable
      shall be rounded to the nearest whole share

     

    (d)
      In
      the event of any exercise of the rights represented by this Warrant, the Company
      shall promptly (but in no event later than three Trading Days after the Date
      of
      Exercise (as defined herein)) issue and deliver to the Holder, a certificate
      for
      the Warrant Shares issuable upon such exercise, which, unless otherwise required
      by the Purchase Agreement and applicable law, shall be free of restrictive
      legends. The Company shall, upon request of the Holder and subsequent to the
      date on which a registration statement covering the resale of the Warrant Shares
      has been declared effective by the SEC, use its reasonable best efforts to
      deliver Warrant Shares hereunder electronically through the Depository Trust
      Corporation or another established clearing corporation performing similar
      functions, if available, provided,
      that,
      the Company may, but will not be required to change its transfer agent if its
      current transfer agent cannot deliver Warrant Shares electronically through
      the
      Depository Trust Corporation. A "Date
      of Exercise"
      means
      the date on which the Holder shall have delivered to the Company: (i) the
      Subscription Form or Cashless Exercise Form, as the case may be, appropriately
      completed and duly signed and (ii) if not a cashless exercise, payment of the
      Warrant Price for the number of Warrant Shares so indicated by the Holder to
      be
      purchased. If by the third Trading Day after a Date of Exercise the Company
      fails to deliver the required number of Warrant Shares in the manner required
      pursuant to this Section, then the Holder will have the right to rescind such
      exercise. If by the third Trading Day after a Date of Exercise the Company
      fails
      to deliver the required number of Warrant Shares in the manner required pursuant
      to this Section, 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 pay in cash to the Holder the amount by which (x) the Holder's
      total purchase price (including brokerage commissions, if any) for the shares
      of
      Common Stock so purchased exceeds (y) the amount obtained by multiplying (A)
      the
      number of Warrant Shares that the Company was required to deliver to the Holder
      in connection with the exercise at issue by (B) the closing bid price of the
      Common Stock on the Date of Exercise. The Holder shall provide the Company
      written notice indicating the amounts payable to the Holder in respect of the
      Buy-In. 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 Warrant Shares upon exercise
      of the Warrant as required pursuant to the terms hereof. The person or entity
      in
      whose name any certificate for Warrant Shares is issued upon exercise of the
      rights represented by this Warrant shall for all purposes be deemed to have
      become the holder of record of such Warrant Shares immediately prior to the
      close of business on the date on which the Warrant was surrendered and payment
      of the Warrant Price and any applicable taxes was made, irrespective of the
      date
      of delivery of such certificate, except that, if the date of such surrender
      and
      payment is a date when the stock transfer books of the Company are closed,
      such
      person shall be deemed to have become the holder of such shares at the opening
      of business on the next succeeding date on which the Company’s stock transfer
      books are open. Except as provided in Section 4 hereof, the Company shall pay
      any and all documentary stamp or similar issue or transfer taxes payable in
      respect of the issue or delivery of Warrant Shares on exercise of this
      Warrant.

     

     

    
      	
            	2.	
              Disposition
                of Warrant Shares and Warrant.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (a)
      The
      Holder hereby agrees that he, she or it will not sell, transfer, pledge or
      otherwise dispose of (collectively, “Transfer”)
      all or
      any part of this Warrant unless and until he, she or it shall have first have
      given notice to the Company describing such Transfer and furnished to the
      Company (i) a statement from the transferee, whereby the transferee represents
      and warrants that he, she, or it is acquiring this Warrant and will acquire
      Warrant Shares, as applicable, for investment for his, her or its own account,
      with no present intention of dividing his, her or its participation with others
      or reselling or otherwise distributing this Warrant or Warrant Shares, as
      applicable, and either (ii) an opinion, reasonably satisfactory to counsel
      for
      the Company, of counsel (skilled in securities matters, selected by the Holder
      and reasonably satisfactory to the Company) to the effect that the proposed
      Transfer may be made without registration under the Act and without registration
      or qualification under any state law, or (iii) an interpretative letter from
      the
      U.S. Securities and Exchange Commission to the effect that no enforcement action
      will be recommended if the proposed sale or transfer is made without
      registration under the Act. 

     

    (b)
      If,
      at the time of issuance of Warrant Shares, no registration statement is in
      effect with respect to such shares under applicable provisions of the Act,
      the
      Company may, at its election, require that (i) the Holder provide written
      reconfirmation of the Holder’s investment intent to the Company, and (ii) any
      stock certificate evidencing Warrant Shares shall bear legends reading
      substantially as follows:

     

    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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
      TO
      SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
      COMPANY.

     

    In
      addition, so long as the foregoing legend may remain on any stock certificate
      evidencing Warrant Shares, the Company may maintain appropriate “stop transfer”
orders with respect to such certificates and the shares represented thereby
      on
      its books and records and with those to whom it may delegate registrar and
      transfer functions.

     

    3.     Reservation
      of Shares.
      The
      Company hereby agrees that at all times there shall be reserved for issuance
      upon the exercise of this Warrant such number of shares of the Common Stock
      as
      shall be required for issuance upon exercise of this 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
      5).
      The Company further agrees that all Warrant Shares will be duly authorized
      and
      will, upon issuance and payment of the exercise price therefor, be validly
      issued, fully paid and non-assessable, free from all taxes, liens, charges
      and
      encumbrances with respect to the issuance thereof, other than taxes, if any,
      in
      respect of any transfer occurring contemporaneously with such issuance and
      other
      than transfer restrictions imposed by federal and state securities
      laws.

     

    4.     Exchange,
      Transfer or Assignment of Warrant.
      Subject
      to Section 2, this Warrant is exchangeable, without expense, at the option
      of
      the Holder, upon presentation and surrender hereof to the Company or at the
      office of its stock transfer agent, if any, for other warrants of the Company of
      different denominations, entitling the Holder or Holders thereof to purchase
      in
      the aggregate the same number of Warrant Shares purchasable hereunder and
      otherwise on identical terms. Subject to Section 2, upon surrender of this
      Warrant to the Company or at the office of its stock transfer agent, if any,
      with the Assignment Form attached hereto as Exhibit
      C
      (the
“Assignment
      Form”)
      duly
      executed and funds sufficient to pay any transfer tax, the Company shall,
      without charge, execute and deliver a new warrant on identical terms in the
      name
      of the assignee named in the Assignment Form and this Warrant shall promptly
      be
      canceled. Subject to Section 2, this Warrant may be divided or combined with
      other Warrants that carry the same rights upon presentation hereof at the office
      of the Company or at the office of its stock transfer agent, if any, together
      with a written notice specifying the names and denominations in which new
      warrants are to be issued and signed by the Holder hereof.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    5.     Capital
      Adjustments.
      The
      Warrant 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
      5.

     

    (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
      outstanding shares of Common Stock into a larger number of shares, or (iii)
      combines outstanding shares of Common Stock into a smaller number of shares,
      then in each such case the Warrant 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)
      Fundamental
      Transactions.
      If, at
      any time while this Warrant is outstanding, there is 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").
      For
      purposes of any such exercise, the determination of the Warrant Price shall
      be
      appropriately adjusted to apply to such Alternate Consideration based on the
      amount of Alternate Consideration issuable in respect of one share of Common
      Stock in such Fundamental Transaction, and the Company shall apportion the
      Warrant Price among the Alternate Consideration in a reasonable manner
      reflecting the relative value of any different components of the Alternate
      Consideration. If holders of Common Stock are given any choice as to the
      securities, cash or property to be received in a Fundamental Transaction, then
      the Holder shall be given the same choice as to the Alternate Consideration
      it
      receives upon any exercise of this Warrant following such Fundamental
      Transaction. The terms of any agreement pursuant to which a Fundamental
      Transaction is effected shall include terms requiring any such successor or
      surviving entity to comply with the provisions of this paragraph (b) and
      insuring that the Warrant will be similarly adjusted upon any subsequent
      transaction analogous to a Fundamental Transaction. For purposes hereof
      "Fundamental
      Transaction"
      means
      any of the following: (1) the Company effects any merger or consolidation of
      the
      Company with or into another Person, (2) the Company effects any sale of all
      or
      substantially all of its assets in one or a series of related transactions,
      (3)
      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 (4) 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.

     

    (c) Subsequent
      Equity Sales.

     

    (i)
      If
      the Company, at any time while this Warrant is outstanding, issues shares of
      Common Stock or Common Stock Equivalents entitling any Person to acquire shares
      of Common Stock, at a price per share less than the Warrant Price (if the holder
      of the Common Stock or Common Stock Equivalent so issued shall at any time,
      whether by operation of purchase price adjustments, reset provisions, floating
      conversion, exercise or exchange prices or otherwise, or due to warrants,
      options or rights issued in connection with such issuance, be entitled to
      receive shares of Common Stock at a price less than the Warrant Price, such
      issuance shall be deemed to have occurred for less than the Warrant Price),
      then, the Warrant Price shall be reduced to equal such lower price, but
in
      no
      event shall the Warrant Price be less than $0.60 per share and the number of
      Warrant Shares which the Holder may acquire under this Warrant will not be
      effected thereby.
      Such
      adjustment shall be made whenever such Common Stock or Common Stock Equivalents
      are issued. The Company shall notify the Holder in writing, no later than the
      second Trading Day following the issuance of any Common Stock or Common Stock
      Equivalent subject to this Section, indicating therein the applicable issuance
      price, or of any applicable reset price, exchange price, conversion price and
      other pricing terms. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (ii)
      For
      purposes of this subsection 5(c), the following subsections (5)(ii)(l) to
      (5)(ii)(6) 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 Warrant 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
      Warrant Price. Except as otherwise provided in subsection 5(c)(ii)(3), no
      adjustment of the Warrant 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. 

     

    (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 Warrant 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 Warrant Price, provided that (a) except as otherwise
      provided in subsection 5(c)(ii)(3), no adjustment of the Warrant 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 Warrant
      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 Warrant Price have been made pursuant to the other
      provisions of subsection 5(c).

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (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 5(c)(ii)(l) hereof, the
      additional consideration, if any, payable upon the conversion or exchange of
      any
      Convertible Securities referred to in subsections 5(c)(ii)(l) or 5(c)(ii)(2),
      or
      the rate at which Convertible Securities referred to in subsections 5(c)(ii)(l)
      or 5(c)(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 Warrant Price in effect
      at
      the time of such event shall forthwith be readjusted to the Warrant 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 5(c) or any right to convert
      or exchange Convertible Securities for which any adjustment was made pursuant
      to
      this subsection 5(c) (including without limitation upon the redemption or
      purchase for consideration of such Convertible Securities by the Company),
      the
      Warrant Price then in effect hereunder shall forthwith be changed to the Warrant
      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.

     

    (4)
      Stock
      Dividends.
      Subject
      to the provisions of this Section 5(c), 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, provided that all deductions
      therefrom of any expenses incurred or any cash underwriting commissions or
      concessions paid or allowed by the Company in connection therewith shall not
      exceed 15% of the aggregate consideration received. 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, after deduction of any expenses incurred or any cash underwriting
      commissions or concessions paid or allowed by the Company in connection
      therewith as long as such expenses, cash commissions or concessions do not
      exceed 15% in the aggregate. 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 Holders as
      to
      the fair market value of the Additional Rights. In the event that the Board
      of
      Directors of the Company and the Required Holders are unable to agree upon
      the
      fair market value of the Additional Rights, the Company and the Required Holders
      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 Holders.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (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.

     

    Notwithstanding
      the foregoing, no adjustment will be made under this paragraph (c) 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
      (but will apply to any amendments, modifications and reissuances thereof),
      (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 (but not as to any amendments or other modifications to the amount
      of Common 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) securities
      issued pursuant to acquisitions or strategic transactions, provided any such
      issuance shall only be to a Person which is, itself or through its subsidiaries,
      an operating company in a business synergistic with the business of the Company
      and in which the Company receives benefits in addition to the investment of
      funds, but shall not include a transaction in which the Company is issuing
      securities primarily for the purpose of raising capital or to an entity whose
      primary business is investing in securities,
      or (iv)
      Common Stock issued upon conversion of the Company’s 10% senior secured
      convertible debentures dated October 26, 2007.

     

    (d)
      Number
      of Warrant Shares.
      Simultaneously with any adjustment to the Warrant Price pursuant to Section
      5(a), 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 Warrant Price payable hereunder for the adjusted number
      of Warrant Shares shall be the same as the aggregate Warrant Price in effect
      immediately prior to such adjustment. Notwithstanding the foregoing, in
      connection with any adjustment to the Warrant Price pursuant to Section 5(c),
      the number of Warrant Shares which the Holder may acquire under this Warrant
      will not be effected thereby.

     

    (e)
      Calculations.
      All
      calculations under this Section 5 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.

     

    (f)
      Notice
      of Adjustments.
      Upon
      the occurrence of each adjustment pursuant to this Section 5, the Company at
      its
      expense will promptly compute such adjustment in accordance with the terms
      of
      this Warrant and prepare a certificate setting forth such adjustment, including
      a statement of the adjusted Warrant 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.

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (g)
      Notice
      of Corporate Events.
      If 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 the Company shall deliver to
      the
      Holder a notice describing the material terms and conditions of such transaction
      (but only to the extent such disclosure would not result in the dissemination
      of
      material, non-public information to the Holder) at least 10 calendar 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 steps reasonably necessary in order
      to insure that the Holder is given the practical opportunity to exercise this
      Warrant prior to such time so as to participate in or vote with respect to
      such
      transaction; 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.

     

    6. Notice
      to Holders.

     

    (a) Notice
      of
      Record Date. In case:

     

    (i)
      the
      Company shall take a record of the holders of its Common Stock (or other stock
      or securities at the time receivable upon the exercise of this Warrant) for
      the
      purpose of entitling them to receive any dividend (other than a cash dividend
      payable out of earned surplus of the Company) or other distribution, or any
      right to subscribe for or purchase any shares of stock of any class or any
      other
      securities, or to receive any other right;

     

    (ii)
      of
      any capital reorganization of the Company, any reclassification of the capital
      stock of the Company, any consolidation with or merger of the Company into
      another corporation, or any conveyance of all or substantially all of the assets
      of the Company to another corporation; or

     

    (iii)
      of
      any voluntary dissolution, liquidation or winding-up of the
      Company;

     

    then,
      and
      in each such case, the Company will mail or cause to be mailed to the Holder
      hereof at the time outstanding a notice specifying, as the case may be, (i)
      the
      date on which a record is to be taken for the purpose of such dividend,
      distribution or right, and stating the amount and character of such dividend,
      distribution or right, or (ii) the date on which such reorganization,
      reclassification, consolidation, merger, conveyance, dissolution, liquidation
      or
      winding-up is to take place, and the time, if any, is to be fixed, as of which
      the holders of record of Common Stock (or such stock or securities at the
      time receivable upon the exercise of this Warrant) shall be entitled to exchange
      their shares of Common Stock (or such other stock or securities) for securities
      or other property deliverable upon such reorganization, reclassification,
      consolidation, merger, conveyance, dissolution or winding-up. Such notice shall
      be mailed at least ten (10) calendar days prior to the record date therein
      specified, or if no record date shall have been specified therein, at least
      ten
      (10) days prior to such specified date.

     

    (b) Certificate
      of Adjustment.
      Whenever any adjustment shall be made pursuant to Section 5 hereof, the Company
      shall promptly make available and have on file for inspection a certificate
      signed by its Chairman, Chief Executive Officer, President or a Vice President,
      setting forth in reasonable detail the event requiring the adjustment, the
      amount of the adjustment, the method by which such adjustment was calculated
      and
      the Warrant Price and number of Warrant Shares purchasable upon exercise of
      this
      Warrant after giving effect to such adjustment.

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    7.     Loss,
      Theft, Destruction or Mutilation.
      Upon
      receipt by the Company of evidence satisfactory to it, in the exercise of its
      reasonable discretion, of the ownership and the loss, theft, destruction or
      mutilation of this Warrant and, in the case of loss, theft or destruction,
      of
      indemnity reasonably satisfactory to the Company and, in the case of mutilation,
      upon surrender and cancellation thereof, the Company will execute and deliver
      in
      lieu thereof, without expense to the Holder, a new Warrant of like tenor dated
      the date hereof.

     

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

     

    9.     Notices.
      Any
      notice provided for in this Warrant must be in writing and must be either
      personally delivered, mailed by first class mail (postage prepaid and return
      receipt requested), or sent by reputable overnight courier service (charges
      prepaid) to the recipient at the address below indicated:

    

    If
      to the
      Company:

     

    Odyne
      Corporation

    89
      Cabot
      Court, Suite L

    Hauppauge,
      New York 11788

    Attention:
      Chief Executive Officer

     

    If
      to the
      Holder:

    

    
      	 	 	
              To
                the address of such Holder set forth on the books and records of
                the
                Company.

            

    

     

    or
      such
      other address or to the attention of such other person as the recipient party
      shall have specified by prior written notice to the sending party. Any notice
      under this Warrant will be deemed to have been given (a) if personally
      delivered, upon such delivery, (b) if mailed, five days after deposit in the
      U.S. mail, or (c) if sent by reputable overnight courier service, one business
      day after such services acknowledges receipt of the notice.

     

    10.
      Governing
      Law; Venue.
      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 of the Holder and the Company
      agree
      that all legal proceedings concerning the interpretations, enforcement and
      defense of this Warrant and the transactions herein contemplated (“Proceedings”)
      (whether brought against a Holder or the Company or any respective Affiliates,
      employees or agents) shall be commenced exclusively in the New York Courts.
      Each
      of the Holder and the Company hereby irrevocably submit 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 of the Holder and the Company hereby irrevocably
      waive personal service of process and consent 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 of the Holder and the Company hereby
      irrevocably waive, 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 the Holder
      or
      the Company 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 with
      the investigation, preparation and prosecution of such Proceeding.

     

     

     

     

    11.
      Miscellaneous.
      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 and their successors and assigns. 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 hereof 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. The Company shall serve
      as
      warrant agent under this Warrant. Upon 10 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.

     

    IN
      WITNESS WHEREOF, the Company has duly caused this Warrant to be signed on its
      behalf, in its corporate name and by a duly authorized officer, as of this
      __
      day of March 2008.

     

    ODYNE
      CORPORATION

     

    By:_________________________________

    Name:

    Title:

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    
 

    
      SUBSCRIPTION
        FORM

    

     

    Odyne
      Corporation

    89
      Cabot
      Court, Suite L

    Hauppauge,
      New York 11788

    Attention:
      Chief Executive Officer

     

    The
      undersigned hereby (1) irrevocably elects to exercise his, her or its rights
      to
      purchase ____________ shares of the common stock, par value $.001 per share
      (“Common
      Stock”),
      of
      Odyne Corporation, a Delaware corporation, covered by the attached Warrant,
      (2)
      makes payment in full of the purchase price therefore by enclosure of cash,
      a
      certified check or bank draft, (3) requests that certificates for such shares
      of
      Common Stock be issued in the name of:

     

    (Please
      print the Warrant holder’s name, address and Social Security/Tax Identification
      Number)

    ________________________________________________

    ________________________________________________

    ________________________________________________

    and
      (4)
      if such number of shares of Common Stock shall not be all the shares receivable
      upon exercise of the attached Warrant, requests that a new Warrant for the
      balance of the shares covered by the attached Warrant be registered in the
      name
      of, and delivered to:

     

    (Please
      print name, address and Social Security/Tax Identification Number)

    ________________________________________________

    ________________________________________________

    ________________________________________________

    In
      lieu
      of receipt of a fractional share of Common Stock, the undersigned will receive
      a
      check representing payment therefor.

     

    Dated:
      _____________________  _________________________________

                                                                                
      PRINT
      WARRANT HOLDER NAME

     

                                                                                                                        

                                                                                  
      Name:

                                                                                  
      Title: 

    Witness:

     

    

    ___________________________

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

     

    
 

    EXHIBIT
      B

     

    NOTICE
      OF CASHLESS EXERCISE

     

    Odyne
      Corporation

    89
      Cabot
      Court, Suite L

    Hauppauge,
      New York 11788

    Attention:
      President

     

    The
      undersigned, the Holder of the attached Warrant, hereby irrevocably elects
      to
      exchange its Warrant for _________ shares of the common stock, par value $.001
      per share (“Common
      Stock”),
      of
      Odyne Corporation, a Delaware corporation, pursuant to the cashless exercise
      provisions of the within Warrant, as referred to in Section 1(a) of such
      Warrant, and requests that a certificate or certificates for such shares of
      Common Stock (and any warrants or other property issuable upon such exercise),
      unless otherwise required by applicable law, free of restrictive legends, be
      issued in the name of and delivered to __________________________ whose address
      is _______________________________ (social security or taxpayer identification
      number ___________) and, if such shares shall not include all of the shares
      issuable under such Warrant, that a new warrant of like tenor and date for
      the
      balance of the shares issuable thereunder be delivered to the
      undersigned.

     

    

    

    Dated:
      _____________________                                                                                                      

                                                                              PRINT
      WARRANT HOLDER NAME  

     

     

                                                           
                                                                

                                                                              
      Name: 

                                                                              
      Title: 

     

    

    Witness:

     

     

                                                                        

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C

    

    ASSIGNMENT
      FORM

     

    Odyne
      Corporation

    89
      Cabot
      Court, Suite L

    Hauppauge,
      New York 11788

    Attention:
      Chief Executive Officer

    

    FOR
      VALUE
      RECEIVED,                                                              hereby
      sells, assigns and transfers unto

    

    (Please
      print assignee’s name, address and Social Security/Tax Identification
      Number)

    ________________________________________________

    ________________________________________________

    ________________________________________________

    the
      right
      to purchase shares of common stock, par value $.001 per share, of Odyne
      Corporation, a Delaware corporation (the “Company”),
      represented by this Warrant to the extent of shares as to which such right
      is
      exercisable and does hereby irrevocably constitute and appoint
      ____________________________, Attorney, to transfer the same on the books of
      the
      Company with full power of substitution in the premises.

     

    Dated:
      _____________________ _________________________________

    PRINT
      WARRANT HOLDER NAME

     

                                                              
 _________________________________

    Name:
      

    Title:
      

    

    Witness:

     

    ____________________________

     

    
      
        
        

      

      
        12SECURITIES
      PURCHASE AGREEMENT

     

    This
      SECURITIES PURCHASE AGREEMENT (this "Agreement")
      is
      made as of March __, 2008, by and between Odyne Corporation, a Delaware
      corporation with its principal office at 89 Cabot Court, Suite L, Hauppauge,
      New
      York 11788, and all predecessors thereof (collectively, the "Company"),
      and
      each of the several purchasers named in Exhibit
      A
      attached
      hereto (each, a "Purchaser"
      and
      collectively, the "Purchasers").

     

    WHEREAS,
      the Company desires to issue and sell to the Purchasers (i) an aggregate of
      up
      to 11,666,666 shares (the "Shares")
      of the
      authorized but unissued shares of the Company's common stock, par value $.001
      per share (the "Common
      Stock"),
      and
      (ii) warrants to purchase an aggregate of up to 11,666,666 shares of the Common
      Stock (the “Warrants”)
      in the
      form attached hereto as Exhibit
      B;
      and

     

    WHEREAS,
      each Purchaser, severally, wishes to purchase the number of Shares shown next
      to
      its name on Exhibit
      A
      hereto,
      all upon the terms and subject to the conditions set forth in this
      Agreement.

     

    NOW
      THEREFORE, in consideration of the mutual agreements, representations,
      warranties and covenants herein contained, the parties hereto agree as
      follows:

     

    1. Definitions.
      As used
      in this Agreement, the following terms shall have the following respective
      meanings:

     

    "Affiliate"
      of a
      party means any other Person controlling, controlled by or under common control
      with the specified Person. For the purposes of this definition, "control" means
      the power to direct the management and policies of such Person, whether through
      the ownership of voting securities, by contract or otherwise.

     

    “Business
      Day”
means
      any day except Saturday, Sunday and any day which is a federal legal holiday
      or
      a day on which banking institutions in the State of New York are authorized
      or
      required by law or other governmental action to close.

     

    “Common
      Stock Equivalents”
means
      any securities of the Company or any Subsidiary which entitle the holder thereof
      to acquire Common Stock at any time, 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.

     

    "Exchange
      Act"
      means
      the Securities Exchange Act of 1934, as amended, and all of the rules and
      regulations promulgated thereunder.

     

    "GAAP"
      means
      United States generally accepted accounting principles.

     

    “Material
      Adverse Effect”
      means any of (i) a material and adverse effect on the legality, validity or
      enforceability of this Agreement, the Warrants or the Registration Rights
      Agreement, (ii) a material and adverse effect on the results of operations,
      assets, properties, prospects, business or condition (financial or otherwise)
      of
      the Company and its Subsidiaries, taken as a whole, or (iii) an adverse
      impairment to the Company’s ability to perform on a timely basis its obligations
      under any of this Agreement, the Warrants or the Registration Rights
      Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

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

     

    "Person"
      shall
      mean an individual, corporation, company, partnership, firm, association, joint
      venture, trust, unincorporated organization, government, governmental body,
      agency, political subdivision or other entity.

     

    “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.

     

    “Registration
      Rights Agreement”
means
      the Registration Rights Agreement, dated as of the date hereof, by and between
      the Company and each of the several Purchasers, in the form attached hereto
      as
Exhibit
      C.
      

     

    "SEC"
      shall
      mean the U.S. Securities and Exchange Commission.

     

    "Securities
      Act"
      shall
      mean the Securities Act of 1933, as amended, and all of the rules and
      regulations promulgated thereunder.

     

    “Subsidiary”
or
      “Subsidiaries”
of
      any
      Person means any “subsidiary” as defined in Rule 1-02(x) of the Regulation S-X
      promulgated by the SEC under the Exchange Act of such Person.

     

    "Trading
      Day"
      means
      (i) a day on which the Common Stock is traded on a 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
      Pink Sheets, LLC (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 Global Select Market, the NASDAQ Global 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.

     

    "Warrant
      Share"
      shall
      mean the shares of Common Stock issuable or issued upon the exercise of the
      Warrants.

     

    2. Purchase
      and Sale of Shares and Warrants.

     

    2.1 Purchase
      and Sale.
      Subject
      to and upon the terms and conditions set forth in this Agreement, the Company
      agrees to issue, sell and deliver to each Purchaser, and each Purchaser,
      severally, hereby agrees to purchase from the Company, at the Closing, (i)
      the
      number of shares of Common Stock set forth opposite the name of such Purchaser
      under the heading "Number of Shares to be Purchased" on Exhibit
      A
      hereto,
      at a purchase price of $.60 per share (the “Purchase
      Price”)
      and
      (ii) one or more Warrants to purchase the number of shares of Common Stock
      set
      forth opposite the name of such Purchaser under the heading “Shares to be Issued
      upon Exercise of Warrants” on Exhibit
      A
      hereto,
      at an exercise price of $.72 per Warrant Share. The total purchase price payable
      by each Purchaser for the number of shares of Common Stock and the Warrants
      that
      such Purchaser is hereby agreeing to purchase is set forth opposite the name
      of
      such Purchaser under the heading "Purchase Price" on Exhibit
      A
      hereto.
      The Company shall be obligated to register the Warrant Shares pursuant to the
      terms and conditions set forth in the Registration Rights
      Agreement.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    2.2 Closing.
      The
      closing of the transactions contemplated under this Agreement (the "Closing")
      shall
      take place at 10:00 a.m. at the offices of Greenberg Traurig, LLP in New York,
      New York, on Friday, March 28, 2008, or at such other location, date and time
      as
      may be agreed upon between the Purchasers and the Company (the “Closing
      Date”).
      At
      the Closing, the Company shall authorize its transfer agent to issue to each
      Purchaser, against delivery of payment for the Shares and the Warrants by wire
      transfer of immediate available funds in accordance with the Company's
      instructions, (i) one or more stock certificates registered in the name of
      each
      Purchaser, representing the number of shares set forth opposite the appropriate
      Purchaser's name on Exhibit
      A
      hereto,
      and (ii) one or more warrant certificates registered in the name of each
      Purchaser to purchase the number of shares of Common Stock set forth opposite
      the appropriate Purchaser’s name on Exhibit
      A
      hereto,
      and, in the case of both (i) and (ii) above, bearing the legend set forth in
      Section 6.2 hereof. Closing documents may be delivered by facsimile with
      original signature pages sent by overnight courier.

     

    2.3 Independent
      Purchasers.
      The
      Company acknowledges and agrees that each of the Purchasers is acting solely
      in
      the capacity of an arm's length purchaser with respect to this Agreement and
      the
      transactions contemplated hereby and that each Purchaser has separately
      negotiated the terms of this Agreement. Nothing contained herein or in any
      agreement or document relating to this transaction, and no action taken by
      any
      Purchaser, shall be deemed to constitute the Purchasers as, or to create any
      presumption that the Purchasers are in any way acting in concert or as, a group
      with respect to the obligations or transaction hereunder. No Purchaser has
      relied upon any other Purchaser for advice in entering into the transactions
      contemplated hereby.

     

    3. Representations
      and Warranties of the Company.
      The
      Company hereby represents and warrants to each of the Purchasers as
      follows:

     

    3.1 Organization
      and Good Standing.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware and has all requisite power and
      authority, and all necessary licenses and permits, to own and lease its
      properties and assets and to conduct its business as now conducted. Each
      Subsidiary as referred to in the SEC Documents (as hereinafter defined) is
      a
      corporation duly organized, validly existing and in good standing under the
      laws
      of the jurisdiction of its incorporation and has all requisite power and
      authority, and all necessary licenses and permits, to own and lease its
      properties and assets and to conduct its business as now conducted. The Company
      and its Subsidiaries are each qualified to do business as a foreign corporation
      and are in good standing in all states where the conduct of their respective
      businesses or their ownership or leasing of property requires such
      qualification, except where the failure to so qualify would not have a Material
      Adverse Effect. The Company does not own or control, directly or indirectly,
      any
      interest in any other corporation, partnership, limited liability company,
      unincorporated business organization, association, trust or other business
      entity.

     

    3.2 Capitalization.

     

    (a)
      The
      authorized capital stock of the Company consists of: (i) 5,000,000 shares of
      preferred stock of the Company, par value $.001 per share, of which 6,000 shares
      of preferred stock have been designated Series A Convertible Preferred Stock
      and
      2,886.62 of such shares are issued and outstanding; and (ii) 95,000,000 shares
      of Common Stock, par value $.0001 per share, of which, immediately prior to
      the
      consummation of the transactions contemplated hereby, (A) 22,101,448 shares
      are
      issued and outstanding and all such outstanding shares are validly issued,
      fully
      paid and non-assessable; (B) 1,975,000 shares of Common Stock are reserved
      for
      issuance upon the exercise of outstanding stock options granted under the
      Company's 2006 Equity Incentive Plan and 2,400,000 shares of Common Stock are
      reserved for issuance upon the exercise of stock options granted pursuant to
      a
      Non-Qualified Stock Option Agreement; (C) 3,850,751 shares are reserved for
      issuance upon the conversion of outstanding shares of Series A Convertible
      Preferred Stock of the Company; and (D) 10,586,347 shares of Common Stock are
      reserved for issuance upon exercise of outstanding warrants. 

     

    (b)
      There
      are no preemptive or similar rights to purchase or otherwise acquire shares
      of
      capital stock of the Company or any Subsidiary pursuant to any provision of
      law
      or the Certificate of Incorporation or By-laws of the Company, any Subsidiary
      or
      by agreement or otherwise. Except for the Warrants, as set forth in this Section
      3.2 and except as set forth in the SEC Documents, there are no outstanding
      subscriptions, warrants, options or other rights or commitments of any character
      to subscribe for or purchase from the Company or any Subsidiary, or obligating
      the Company or any Subsidiary to issue, any shares of capital stock of the
      Company or any securities convertible into or exchangeable for such shares.
      Except as set forth on Schedule
      3.2(b),
      the
      issue and sale of the Shares hereunder will not, immediately or with the passage
      of time, obligate the Company or any Subsidiary to issue shares of Common Stock
      or other securities to any Person (other than the Purchasers pursuant to this
      Agreement and the Warrants) and will not result in a right of any holder of
      Company or Subsidiary securities to adjust the exercise, conversion, exchange
      or
      reset price under such securities.

     

    (c)
      There
      are no stockholder agreements, voting agreements, or similar agreements with
      respect to the Common Stock to which the Company or any Subsidiary is a party,
      or to the knowledge of the Company, by or between any stockholders of the
      Company or any of its Affiliates. 

     

    
      
        
        

      

      
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    3.3 Authorization.
      The
      Company has all requisite corporate power to enter into this Agreement, the
      Registration Rights Agreement and the Warrants, to issue the Shares, the
      Warrants and the Warrant Shares and to carry out and perform its obligations
      under the terms of this Agreement (including, without limitation, the issuance
      of the Shares, the Warrants and the Warrant Shares). All corporate action on
      the
      part of the Company, its officers, directors and stockholders necessary for
      the
      authorization, execution, delivery and performance of this Agreement and the
      consummation of the transactions contemplated herein has been taken or will
      be
      taken prior to the Closing Date. When executed and delivered by the Company,
      this Agreement shall constitute the legal, valid and binding obligation of
      the
      Company, enforceable against the Company in accordance with their respective
      terms, except as such may be limited by bankruptcy, insolvency, reorganization
      or other laws affecting creditors' rights generally and by general equitable
      principles.

     

    3.4 Valid
      Issuance of the Shares and the Warrant Shares.
      The
      Shares and the Warrant Shares have been duly authorized and will, upon issuance
      pursuant to the terms hereof, be validly issued, fully paid and non-assessable,
      free from all liens, claims, encumbrances with respect to the issuance of such
      Shares and Warrant Shares and will not be subject to any preemptive or similar
      rights. Except for blue sky filing fees, if any, there are no state or city
      taxes, fees or other charges payable in connection with the execution or
      delivery of this Agreement, the Shares, the Warrants and the Warrant Shares.
      The
      Company has reserved from its duly authorized capital stock the shares of Common
      Stock issuable pursuant to this Agreement in order to issue the Shares and
      Warrant Shares. 

     

    3.5 SEC
      Documents.
      The
      Company has made available to each Purchaser, a true and complete copy of the
      Company's Annual Report on Form 10-KSB for the year ended December 31, 2006,
      and
      any other statement, report, registration statement (other than registration
      statements on Form S-8) or definitive proxy statement filed by the Company
      with
      the SEC during the period commencing on December 31, 2006 and ending on the
      date
      hereof. The Company will, promptly upon the filing thereof, also make available
      to each Purchaser on its website, www.odyne.com, all statements, reports
      (including, without limitation, Quarterly Reports on Form 10-Q and Current
      Reports on Form 8-K), registration statements and definitive proxy statements
      filed by the Company with the SEC during the period commencing on the date
      hereof and ending on the Closing Date (all such materials required to be
      furnished to each Purchaser pursuant to this sentence or pursuant to the next
      preceding sentence of this Section 3.5 being called, collectively, including
      any
      amendments thereto, the "SEC
      Documents").
      Since
      January 1, 2007, the Company has timely made all filings required to be made
      by
      it under the Securities Act, Exchange Act and the securities laws of any state,
      and any rules and regulations promulgated thereunder. The SEC Documents comply
      in all material respects with the requirements of the Exchange Act or the
      Securities Act, as applicable, and none of the SEC Documents 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 made therein,
      in light of the circumstances under which they were made, not misleading, as
      of
      their respective filing dates, except to the extent corrected by a subsequently
      filed SEC Document filed prior to the date hereof. 

     

    3.6 Financial
      Statements.
      All
      financial statements included in the SEC Documents (hereinafter referred to
      collectively as the "Financial
      Statements")
      have
      been prepared in accordance with U.S. generally accepted accounting principles
      applied on a consistent basis during the periods involved, and fairly present,
      in all material respects, the financial position of the Company and any
      Subsidiaries and the results of its operations as of the date and for the
      periods indicated thereon. Since December 31, 2006, to the Company's knowledge,
      (i) there has been no development or change (actual or threatened), individually
      or in the aggregate, having a Material Adverse Effect, (ii) there does not
      exist
      any condition reasonably likely to result in a Material Adverse Effect, and
      (iii) the Company has conducted its business only in the ordinary course
      consistent with past practice. The Company has no indebtedness, obligations
      or
      liabilities of any kind (whether accrued, absolute, contingent or otherwise,
      and
      whether due or to become due) which were not fully reflected in, reserved
      against or otherwise described in the Financial Statements or the notes thereto,
      or incurred in the ordinary course of business consistent with the Company's
      past practices, all of which individually and in the aggregate do not or would
      not have a Material Adverse Effect.

     

    3.7 Consents.
      All
      permits, consents, waivers, approvals, orders, authorizations of, or
      declarations to (collectively, "Permits")
      or
      filings with any federal, state, local or foreign court, governmental or
      regulatory authority, or other person (including third party consents) required
      on the part of the Company in connection with the execution, delivery or
      performance of this Agreement, the Warrants and the Registration Rights
      Agreement and the consummation of the transactions contemplated herein have
      been
      obtained or will be obtained prior to the Closing Date, and will be effective
      as
      of the Closing Date.

     

    3.8 No
      Conflict.
      The
      execution, delivery and performance of this Agreement, the Registration Rights
      Agreement and the Warrants by the Company, and the consummation by the Company
      of the transactions contemplated 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,
      or (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 Subsidiary debt or otherwise) or other understanding
      to
      which 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 United States court or governmental authority to which the Company or
      a
      Subsidiary is subject (including federal and state securities laws and
      regulations), or by which any property or asset of the Company or a Subsidiary
      is bound or affected; except in the case of each of clauses (ii) and (iii),
      such
      as could not, individually or in the aggregate, have or reasonably be expected
      to result in a Material Adverse Effect. 

     

    
      
        
        

      

      
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    3.9 Brokers
      or Finders.
      Except
      for vFinance Investments, Inc. (the "Placement
      Agent"),
      the
      Company has not dealt with any broker or finder in connection with the
      transactions contemplated by this Agreement, and, except for certain fees and
      expenses payable by the Company to the Placement Agent, the Company has not
      incurred, and shall not incur, directly or indirectly, any liability for any
      brokerage or finders' fees or agents commissions or any similar charges in
      connection with this Agreement or any transaction contemplated
      hereby.

     

    3.10 OTC
      Bulletin Board.
      The
      Common Stock is listed on the OTC Bulletin Board and there are no proceedings
      to
      revoke or suspend such listing. The Common Stock is registered pursuant to
      Section 15(d) of the Exchange Act. The Company has taken no action designed
      to,
      or which to its knowledge is likely to have the effect of, terminating the
      registration of the Common Stock under the Exchange Act or delisting the Common
      Stock from the OTC Bulletin Board. The Company has not received any notification
      that, and has no knowledge that, the SEC is contemplating terminating such
      registration. The issuance of the Shares, the Warrants and the Warrant Shares
      does not require stockholder approval. The Company has not, since October 17,
      2006, received notice from any Trading Market to the effect that the Company
      is
      not in compliance with the listing or maintenance requirements thereof, which
      has not otherwise been cured. The Company is, and has no reason to believe
      that
      it will not in the foreseeable future continue to be, in compliance with the
      listing and maintenance requirements for continued listing of the Common Stock
      on the OTC Bulletin Board on which the Common Stock is currently listed or
      quoted. The issuance and sale of the Shares and Warrants under this Agreement
      does not contravene the rules and regulations of the OTC Bulletin Board on
      which
      the Common Stock is currently listed or quoted.

     

    3.11 Absence
      of Litigation.
      Except
      for the action, Amity
      Truck Service Corp. v. Odyne Corporation, et al.,
      filed
      in the Supreme Court of the State of New York, County of Suffolk, in January
      2008 (as described on Schedule
      3.11),
      there
      is no action, suit or proceeding or, to the Company's knowledge, any
      investigation, pending, or to the Company's knowledge, threatened by or before
      any governmental body against the Company, its Subsidiaries, its activities,
      properties or assets or any officer, director, or employee of the Company in
      connection with such officer's, director's or employee's relationship with,
      or
      actions taken on behalf of the Company and in which an unfavorable outcome,
      ruling or finding in any said matter, or for all matters taken as a whole,
      might
      have a Material Adverse Effect. The foregoing includes, without limitation,
      any
      such action, suit, proceeding or investigation that questions this Agreement
      or
      the right of the Company to execute, deliver and perform under same. The Company
      is not a party to or subject to the provisions of any order, writ, injunction
      or
      decree of any court or government agency. Neither the Company nor any
      Subsidiary, nor any director or officer thereof (in his or her capacity as
      such), is or has been the subject of any action, suit or proceeding 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 knowledge
      of
      the Company, there is not pending any investigation by the SEC involving the
      Company or any Subsidiary or any of their respective current or former directors
      or officers (in his or her capacity as such). The SEC has not issued any stop
      order or other order suspending the effectiveness of any registration statement
      filed by the Company or any Subsidiary under the Exchange Act or the Securities
      Act.

     

    3.12 Title
      to Property and Assets.
      Except
      as set forth on Schedule
      3.12,
      each of
      the Company and its Subsidiaries owns its property and assets free and clear
      of
      all mortgages, liens, loans, claims, charges and encumbrances, and except such
      encumbrances and liens that arise in the ordinary course of business and do
      not
      materially impair their respective ownership or use of such property or assets.
      With respect to property and assets it leases, the Company and its Subsidiaries
      are in material compliance with such leases and, to the best of its knowledge,
      holds a valid leasehold interest free of any liens, charges, claims or
      encumbrances, except to the extent any such lien, charge, claim or encumbrance
      would not have a Material Adverse Effect.

     

    
      
        
        

      

      
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    3.13 Patents,
      Trademarks, Proprietary Rights.

     

    (a)
      Each
      of the Company and its Subsidiaries owns or has the right to use all of the
      Intellectual Property Rights (as defined below), except where such failure
      would
      not have a Material Adverse Effect on the business, properties or assets of
      the
      Company and its Subsidiaries, taken as a whole. For purposes of this Agreement,
      "Intellectual
      Property Rights"
      means
      all patents, patent applications, copyrights, trademarks, trademark
      applications, service marks, trade names, permits, trade secrets, computer
      programs, software designs and related materials and other intellectual property
      that are used by the Company or a Subsidiary as set forth on Schedule
      3.13.

     

    (b)
      To
      the Company's knowledge, the Company's and each Subsidiary's use and enjoyment
      of the Intellectual Property Rights do not violate any license or conflict
      with
      or infringe the intellectual property rights of others in a manner which would
      materially and adversely affect the business, assets, properties, operations
      or
      condition (financial or otherwise) of the Company and its Subsidiaries, taken
      as
      a whole.

     

    3.14 Environmental
      Matters.
      To the
      Company’s knowledge, neither the Company nor any of its Subsidiaries is in
      violation of any applicable statute, law or regulation relating to the
      environment or occupational health and safety, which violation could reasonably
      be expected to result in a Material Adverse Effect, and to the best of its
      knowledge, no expenditures are required in order to comply with any such
      existing statute, law or regulation, which expenditures could reasonably be
      expected to result in a Material Adverse Effect.

     

    3.15 Permits.
      Each of
      the Company and its Subsidiaries possesses all Permits or similar authority
      necessary to conduct its business as described in the SEC Documents, except
      where the failure to possess such Permits would not, individually or in the
      aggregate, have a Material Adverse Effect on the Company or its Subsidiaries
      ("Material
      Permits"),
      and
      neither the Company nor any such Subsidiary has received any notice of
      proceedings relating to the revocation or modification of any Material
      Permit.

     

    3.16 Employees.
      No
      strike, labor dispute or union organizing activities are pending or to the
      Company’s knowledge threatened against the Company or any of its Subsidiaries by
      its employees. No employees belong to a union or collective bargaining unit.
      To
      the Company's knowledge, neither the Company nor any of its Subsidiaries has
      any
      workers' compensation liabilities.

     

    3.17 Compliance
      with Certificate of Incorporation and By-laws; Compliance with
      Laws.
      The
      Company is not in violation or default of any provisions of its Certificate
      of
      Incorporation or By-laws. The business and operations of the Company and each
      of
      its Subsidiaries have been conducted in accordance with all applicable laws,
      rules and regulations of all governmental agencies, authorities and
      instrumentalities (including, without limitation, under the Employee Retirement
      Income Security Act of 1974, as amended, and all laws relating to the employment
      of labor), except for such violations which would not, individually or in the
      aggregate, have a Material Adverse Effect.

     

    3.18 Insurance.
      The
      Company and each of its Subsidiaries maintains insurance of the type and in
      the
      amount reasonably adequate for its business, including, but not limited to,
      insurance covering all real and personal property owned or leased by the Company
      against theft, damage, destruction, acts of vandalism, and all other risks
      customarily insured against by similarly situated companies, all of which
      insurance is in full force and effect.

     

    3.19 Investment
      Company Act.
      The
      Company is not and will not be following the Closing, nor is any Affiliate
      of
      the Company, an "Investment Company" within the meaning of the Investment
      Company Act of 1940, as amended (the "Investment
      Company Act"),
      and
      the Company is not directly or indirectly controlled by or acting on behalf
      of
      any person that is an "Investment Company" within the meaning of the Investment
      Company Act.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    3.20 Compliance
      with Securities Laws.
      Assuming the accuracy of the representations and warranties of the Purchasers
      set forth in Section 4 hereof, the offer and sale by the Company of the Shares
      and the Warrants, and the offer of the Warrant Shares, are exempt from the
      registration requirements of the Securities Act. Other than pursuant to an
      effective registration statement under the Securities Act, the Company has
      not
      issued, offered or sold any shares of Common Stock (including for this purpose
      any securities of the same or a similar class as the Common Stock) within the
      six-month period preceding the date hereof or taken any other action, or failed
      to take any action, that, in any such case, would (i) eliminate the availability
      of the exemption from registration under Regulation D under the Securities
      Act
      in connection with the offer and sale of the Shares and the Warrants as
      contemplated hereby or (ii) cause the offering of the Shares or the Warrants
      pursuant to this Agreement to be integrated with prior offerings by the Company
      for purposes of the Securities Act or any applicable stockholder approval
      provisions. The Company shall not directly or indirectly take, and shall not
      permit any of its directors, officers or Affiliates directly or indirectly
      to
      take, any action (including, without limitation, any offering or sale to any
      Person of the Shares, the Warrants or any Common Stock) that will make
      unavailable the exemption from registration under the Securities Act being
      relied upon by the Company for the offer and sale to the Purchasers of the
      Shares and the Warrants as contemplated by this Agreement, including, without
      limitation, the filing of a registration statement under the Securities Act.
      No
      form of general solicitation or advertising within the meaning of Rule 502(c)
      under the Securities Act has been used or authorized by the Company or any
      of
      its officers, directors or Affiliates in connection with the offer or sale
      of
      the Shares and the Warrants as contemplated by this Agreement or any other
      agreement to which the Company is a party. The Company is eligible to register
      its Common Stock for resale by the Purchasers under Form S-1 promulgated under
      the Securities Act. 

     

    3.21 Registration
      Rights.
      Except
      as set forth on Schedule
      3.21,
      there
      are no Persons with registration or other similar rights (including “piggy-back”
registration rights) to have any securities registered by the Company under
      the
      Securities Act which have not been satisfied.

     

    3.22 Related-Party
      Transactions.
      Except
      as set forth on Schedule
      3.22,
      neither
      the Company nor any of its officers, directors or five-percent shareholders
      nor
      any family member of any officer, director or five-percent shareholder of the
      Company has borrowed any moneys from or has outstanding any indebtedness or
      other similar obligations to the Company or any Subsidiary. Except as set forth
      on Schedule
      3.22,
      no
      director or five-percent shareholder nor any family member of any officer,
      director or five-percent shareholder of the Company or any Subsidiary (i) owns
      any direct or indirect interest constituting more than a 1% equity (or similar
      profit participation) interest in, or controls or is a director, officer,
      partner, member or employee of, or consultant or lender to or borrower from,
      or
      has the right to participate in the profits of, any person or entity which
      is a
      participant in any transaction to which the Company or any Subsidiary is a
      party
      or (ii) is a party to any contract, agreement, commitment or other arrangement
      with the Company or any Subsidiary or (iii) has entered into any transaction
      with the Company or any Subsidiary that would be required to be disclosed under
      Item 404 of Regulation S-K. 

     

    3.23 Sarbanes-Oxley
      Act.
      The
      Chief Executive Officer and the Chief Financial Officer of the Company have
      signed, and the Company has furnished to the SEC, all certifications required
      by
      Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. Such certifications
      contain no qualifications or exceptions to the matters certified therein and
      have not been modified or withdrawn; and neither the Company nor any of its
      officers has received notice from any governmental entity questioning or
      challenging the accuracy, completeness, form or manner of filing or submission
      of such certifications.

     

    
      
        
        

      

      
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    3.24 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 GAAP and to maintain asset accountability, (iii)
      access to assets is permitted only in accordance with management’s general or
      specific authorization, and (iv) the recorded accountability for assets is
      compared with the existing assets at reasonable intervals and appropriate action
      is taken with respect to any differences. The Company has established disclosure
      controls and procedures (as defined in 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, including its
      Subsidiaries, is made known to the certifying officers by others within those
      entities, particularly during the period in which the Company’s Form 10-KSB or
      10-QSB, as the case may be, is being prepared. The Company’s certifying officers
      have evaluated the effectiveness of the Company’s controls and procedures in
      accordance with Item 307 of Regulation S-B under the Exchange Act for the
      Company’s most recently ended fiscal quarter or fiscal year-end (such date, the
“Evaluation
      Date”).
      The
      Company presented in its most recently filed Form 10-KSB or Form 10-QSB the
      conclusions of the certifying officers about the effectiveness of the disclosure
      controls and procedures based on their evaluations as of the Evaluation Date.
      Since the Evaluation Date, there have been no significant changes in the
      Company’s internal controls (as such term is defined in Item 308(c) of
      Regulation S-K under the Exchange Act) or, to the Company’s knowledge, in other
      factors that could significantly affect the Company’s internal
      controls.

     

    3.25 Solvency.
      Based
      on the financial condition of the Company as of the Closing Date (and assuming
      that the Closing shall have occurred), (i) the Company’s fair saleable value of
      its assets exceeds the amount that will be required to be paid on or in respect
      of the Company’s existing debts and other liabilities (including known
      contingent liabilities) as they mature, (ii) the Company’s assets do not
      constitute unreasonably small capital to carry on its business for the current
      fiscal year as now conducted and as proposed to be conducted including its
      capital needs taking into account the particular capital requirements of the
      business conducted by the Company, and projected capital requirements and
      capital availability thereof, and (iii) the current cash flow of the Company,
      together with the proceeds the Company would receive, were it to liquidate
      all
      of its assets, after taking into account all anticipated uses of the cash,
      would
      be sufficient to pay all amounts on or in respect of its debt when such amounts
      are required to be paid. The Company does not intend to incur debts beyond
      its
      ability to pay such debts as they mature (taking into account the timing and
      amounts of cash to be payable on or in respect of its debt).

     

    3.26 Application
      of Takeover Protections.
      The
      Company has taken all necessary action, if any, in order to render inapplicable
      any control share acquisition, business combination, poison pill (including
      any
      distribution under a rights agreement) or other similar anti-takeover provision
      under the Company’s Certificate of Incorporation (or similar charter documents)
      or the laws of its state of incorporation that is or could become applicable
      to
      the Purchasers as a result of the Purchasers and the Company fulfilling their
      obligations or exercising their rights under this Agreement, the Registration
      Rights Agreement and the Warrants, including without limitation the Company’s
      issuance of the Shares and Warrants and the Investors’ ownership of the Shares
      and Warrants.

     

    3.27 No
      Additional Agreements.
      The
      Company does not have any agreement or understanding with any Purchaser with
      respect to the transactions contemplated by this Agreement, other than as
      specified in this Agreement, the Registration Rights Agreement, the Warrants
      or
      in Schedule
      3.27.

     

    3.28 Consultation
      with Auditors.
      The
      Company has consulted its independent registered public accounting firm
      concerning the accounting treatment of the transactions contemplated by this
      Agreement, and in connection therewith has furnished such auditors complete
      copies of this Agreement, the Registration Rights Agreement and the
      Warrants.

     

    
      
        
        

      

      
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    3.29 General
      Solicitation.
      Neither
      the Company nor any other person or entity authorized by the Company to act
      on
      its behalf has engaged in a general solicitation or general advertising (within
      the meaning of Regulation D of the Securities Act) of any Person with
      respect to offers or sales of the Shares or the Warrants.

     

    3.30 Disclosure.
      Neither
      this Agreement nor the SEC Documents taken together contain any untrue statement
      of a material fact nor omit to state a material fact necessary in order to
      make
      the statements contained herein or therein, in light of the circumstances under
      which they were made, not misleading. Neither the Company nor any Person on
      its
      behalf, has provided any of the Purchasers or their agents or counsel with
      any
      information that constitutes, or might reasonably be expected to constitute,
      material, non-public information, except insofar as the existence and terms
      of
      the proposed transactions contemplated hereunder may constitute such
      information. The Company understands and confirms that each of such Purchasers
      will rely on the foregoing representations in effecting transactions in
      securities of the Company.

     

    4. Representations,
      Warranties and Agreements of the Purchasers.
      Each
      Purchaser severally for itself, and not jointly with the other Purchasers,
      represents and warrants to, and agrees with, the Company as
      follows:

     

    4.1 Authorization.
      Such
      Purchaser has all requisite power under its constituent documents to enter
      into
      each of this Agreement and to carry out and perform its obligations under the
      terms of this Agreement. All action on the part of such Purchaser and, if
      applicable, its officers, directors, stockholders, managers, members and equity
      holders necessary for the authorization, execution, delivery and performance
      of
      this Agreement and the consummation of the transactions contemplated herein
      has
      been taken. When executed and delivered, this Agreement will constitute the
      legal, valid and binding obligation of such Purchaser, enforceable against
      such
      Purchaser in accordance with its terms, except as such may be limited by
      bankruptcy, insolvency, reorganization or other laws affecting creditors' rights
      generally and by general equitable principles.

     

    4.2 Purchase
      Entirely for Own Account.
      Such
      Purchaser is acquiring the Shares and the Warrants being purchased by it
      hereunder for investment, for its own account, and not with a view to
      distribution thereof in violation of the Securities Act.

     

    4.3 Investor
      Status; Etc.
      Such
      Purchaser certifies and represents to the Company that at the time such
      Purchaser acquires any of the Shares or Warrants, such Purchaser will be an
      "Accredited
      Investor"
      as
      defined in Rule 501 of Regulation D promulgated under the Securities Act and
      was
      not organized for the purpose of acquiring the Shares or the Warrants. Such
      Purchaser's financial condition is such that it is able to bear the risk of
      holding the Shares, the Warrants or the Warrant Shares for an indefinite period
      of time and the risk of loss of its entire investment. The foregoing shall
      in no
      way limit or modify the representations of the Company set forth in Section
      3
      hereof.

     

    4.4 Shares
      and Warrants Not Registered.
      Such
      Purchaser understands that the Shares and the Warrants have not been registered
      under the Securities Act, by reason of their issuance by the Company in a
      transaction exempt from the registration requirements of the Securities Act,
      and
      that the Shares and the Warrants must continue to be held by such Purchaser
      unless a subsequent disposition thereof is registered under the Securities
      Act
      or is exempt from such registration. 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    4.5 Brokers.
      Such
      Purchaser has not retained, utilized or been represented by any broker or finder
      in connection with the transactions contemplated by this Agreement.

     

    4.6 Agreement
      with Respect to Short Sales.
      Neither
      the Purchasers nor any of their respective Affiliates nor any person acting
      on
      their behalf will have entered into for a period of five (5) days prior to
      the
      Closing Date, any "short sale" (as such term is defined in Rule 3b-3 under
      the
      Securities Exchange Act of 1934, as amended). 

     

    The
      Company acknowledges and agrees that no Purchaser has made or makes any
      representations or warranties with respect to the transactions contemplated
      hereby other than those specifically set forth in this Section 4.

     

    5. Conditions
      Precedent.

     

    5.1 Conditions
      to the Obligation of the Purchasers to Consummate the Closing.
      The
      obligation of each Purchaser to consummate the Closing and to purchase and
      pay
      for the Shares and the Warrants being purchased by it pursuant to this Agreement
      is subject to the satisfaction of the following conditions precedent (or waiver
      by such Purchaser) at or before Closing:

     

    (a)
      The
      representations and warranties contained herein of the Company that are
      qualified as to "materiality" shall be true and correct, and the representations
      and warranties contained herein of the Company that are not so qualified shall
      be true and correct in all material respects, in each case, as of the date
      of
      this Agreement and as of the Closing Date (except for such representations
      and
      warranties which are made expressly as of a specified date or period, which
      shall be true and correct or true and correct in all material respects, as
      herein above required, as of such specified date or period).

     

    (b)
      The
      Company shall have performed all covenants, agreements, obligations and
      conditions herein required to be performed or observed by the Company on or
      prior to the Closing Date.

     

    (c)
      Prior
      to the Closing Date, no event or series of events shall have occurred which
      has
      had or reasonably could have a Material Adverse Effect on the Company or any
      Subsidiary.

     

    (d)
      No
      suit, statute, rule, regulation, action, or other proceeding challenging this
      Agreement or the transactions contemplated hereby, or seeking to prohibit,
      alter, prevent or materially delay the Closing, shall have been instituted
      before any court, arbitrator or governmental body, agency or official and shall
      be pending.

     

    (e)
      The
      purchase of and payment for the Shares and the Warrants by such Purchasers
      shall
      not be prohibited by any law or governmental order or regulation. All necessary
      consents, approvals, licenses, permits, orders and authorizations of, or
      registrations, declarations and filings with, any governmental or administrative
      agency or of any other person with respect to any of the transactions
      contemplated hereby (including, without limitation, the issuance of the Shares,
      the Warrants and the Warrant Shares) shall have been duly obtained or made
      and
      shall be in full force and effect.

     

    (f)
      The
      Company shall have complied with all applicable requirements of federal and
      state securities or "blue sky" laws with respect to the issuance of the Shares
      and the Warrants, and each Purchaser, at such Purchaser's request, shall have
      been provided reasonable evidence thereof.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (g)
      The
      Common Stock of the Company (i) shall be designated for quotation or listed
      on
      the OTC Bulletin Board and (ii) shall not have been suspended from trading
      on
      the OTC Bulletin Board.

     

    (h)
      A
      certificate shall have been delivered by the Company, signed by its Chief
      Executive Officer, President or Chief Financial Officer, dated as of the Closing
      Date, certifying as to the fulfillment of the conditions specified in Sections
      5.1(a) and (b).

     

    (i)
      (i) A
      copy of the stock certificate shall have been delivered by the Company to each
      Purchaser representing the number of shares of Common Stock purchased by such
      Purchaser as set forth opposite such Purchaser’s name on Exhibit
      A
      (with
      the original stock certificate from the Company’s transfer agent delivered on
      the Business Day following the Closing), and (ii) one or more warrants to
      purchase the number of shares of Common Stock set forth opposite such
      Purchaser’s name on Exhibit
      A
      shall
      have been delivered by the Company to a Purchaser, and in each case shall be,
      registered in the name of such Purchaser or nominee as designated by such
      Purchaser in writing, free of all restrictive and other legends (except as
      provided in Section 6.2 hereof).

     

    (j)
      All
      instruments and corporate proceedings in connection with the transactions
      contemplated by this Agreement to be consummated at the Closing shall be
      satisfactory in form and substance to such Purchaser, and such Purchaser shall
      have received copies (executed or certified, as may be appropriate) of all
      documents which such Purchaser may have reasonably requested in connection
      with
      such transactions.

     

    (k)
      No
      proceeding challenging this Agreement or the transactions contemplated hereby,
      or seeking to prohibit, alter, prevent or materially delay the Closing, shall
      have been instituted before any court, arbitrator or governmental body, agency
      or official and shall be pending.

     

    (l)
      The
      Company shall have delivered to the Purchasers a certificate of the Company
      executed by the Company's Secretary attaching and certifying to the truth and
      correctness of (i) the Company's Certificate of Incorporation, (ii) the
      Company's By-laws and (iii) the resolutions adopted by the Company's Board
      of
      Directors in connection with the transactions contemplated by this
      Agreement.

     

    (m)
      The
      Company shall have delivered to the Purchasers a certificate of the Secretary
      of
      State of the State of Delaware, dated as of a date within five days of the
      date
      of the Closing, with respect to the good standing of the Company.

     

    (n)
      The
      Purchasers will have received an opinion on behalf of the Company, dated as
      of
      the date of the Closing, from Greenberg Traurig, LLP, counsel to the Company,
      in
      a form satisfactory to the Purchasers and addressed to the
      Purchasers.

     

    (o)
      The
      Purchasers shall have committed, pursuant to the terms and subject to the
      conditions contained in this Agreement, to purchase Shares for an aggregate
      amount of at least $5.0 million.

     

    5.2 Conditions
      to the Obligation of the Company to Consummate the Closing.
      The
      obligation of the Company to consummate the Closing, to issue and sell to each
      Purchaser the Shares and the Warrants to be purchased by it at the Closing
      is
      subject to the satisfaction of the following conditions precedent (or waiver
      by
      the Company) at or before Closing:

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (a)
      The
      representations and warranties contained herein of such Purchaser that are
      qualified as to “materiality” shall be true and correct, and the representations
      and warranties contained herein of such Purchaser that are not so qualified
      shall be true and correct in all material respects, in each case, as of the
      date
      of this Agreement and as of the Closing Date (except for such representations
      and warranties which are made expressly as of a specified date or period, which
      shall be true and correct or true and correct in all material respects, as
      herein above required, as of such specified date or period).

     

    (b)
      Such
      Purchaser shall have performed all obligations and conditions herein required
      to
      be performed or observed by it on or prior to the Closing Date.

     

    (c)
      No
      proceeding challenging this Agreement or the transactions contemplated hereby,
      or seeking to prohibit, alter, prevent or materially delay the Closing, shall
      have been instituted before any court, arbitrator or governmental body, agency
      or official and shall be pending.

     

    (d)
      The
      sale of the Shares and the Warrants by the Company shall not be prohibited
      by
      any law or governmental order or regulation.

     

    (e)
      The
      Company shall have received this Agreement and the Registration Rights Agreement
      (which may be a counterpart signature) from the Purchasers.

     

    (f)
      No
      Purchaser nor any of its Affiliates nor any person acting on behalf of such
      Persons will have entered into for a period of five days prior to the Closing
      Date, any "short sale" (as such term is defined in Section 6.5 hereof).

     

    (g)
      The
      Purchasers shall have committed, pursuant to the terms and subject to the
      conditions contained in this Agreement, to purchase Shares for an aggregate
      amount of at least $5.0 million.

     

    6. Transfer;
      Legends; Future Financings; Short Sales and Additional
      Agreements.

     

    6.1 Securities
      Law Transfer Restrictions.
      No
      Purchaser shall sell, assign, pledge, transfer or otherwise dispose or encumber
      any of the Shares, the Warrants, and if applicable, the Warrant Shares, being
      purchased by it hereunder, except: (i) pursuant to an effective registration
      statement under the Securities Act or (ii) pursuant to an available exemption
      from registration under the Securities Act and applicable state securities
      laws
      and, if reasonably requested by the Company, upon delivery by such Purchaser
      of
      an opinion of counsel reasonably satisfactory to the Company to the effect
      that
      the proposed transfer is exempt from registration under the Securities Act
      and
      applicable state securities laws. The Company may, and may instruct any transfer
      agent for the Company, to place such stop transfer orders as may be required
      on
      the transfer books of the Company in order to ensure compliance with the
      provisions of this Section 6.1.

     

    6.2 Legends.
      Each
      certificate representing any of the Shares, the Warrants and, if applicable,
      the
      Warrant Shares shall be endorsed with a legend in substantially the form set
      forth below, and each Purchaser covenants that, except to the extent such
      restrictions are waived by the Company, it shall not transfer the securities
      represented by any such certificate without complying with the restrictions
      on
      transfer described in this Agreement and the legends endorsed on such
      certificate:

     

    [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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
      TO
      THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
      ACCEPTABLE TO THE COMPANY.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    6.3 Removal
      of Legends.
      Certificates evidencing Shares and Warrant Shares shall not contain any legend
      (including the legend set forth in Section 6.2): (i) while a registration
      statement covering either the Shares or Warrant Shares, as applicable, is
      effective, or (ii) following a sale or transfer of such Shares or Warrant Shares
      pursuant to Rule 144 (assuming the transferee is not an Affiliate of the
      Company), or (iii) while such Shares or Warrant Shares are eligible for sale
      without any conditions pursuant to Rule 144. If a Purchaser shall make a sale
      or
      transfer of Shares or Warrant Shares either (x) pursuant to Rule 144 or (y)
      pursuant to a registration statement and in each case shall have delivered
      to
      the Company or the Company’s transfer agent the certificate representing Shares
      or Warrant Shares containing a restrictive legend which are the subject of
      such
      sale or transfer (the date of such sale or transfer and Share or Warrant Share,
      as the case may be, delivery being the “Share
      Delivery Date”)
      and
      (1) the Company shall fail to deliver or cause to be delivered to such Purchaser
      a certificate representing such Shares or Warrant Shares that is free from
      all
      restrictive or other legends by the third Trading Day following the Share
      Delivery Date and (2) following such third Trading Day after the Share Delivery
      Date and prior to the time such Shares or Warrant Shares are received free
      from
      restrictive legends, the Purchaser, or any third party on behalf of such
      Purchaser, purchases (in an open market transaction or otherwise) shares of
      Common Stock to deliver in satisfaction of a sale by the Purchaser of such
      Shares or Warrant Shares (a "Buy-In"),
      then
      the Company shall pay in cash to the Purchaser (for costs incurred either
      directly by such Purchaser or on behalf of a third party) the amount by which
      the total purchase price paid for Common Stock as a result of the Buy-In
      (including brokerage commissions, if any) exceed the proceeds received by such
      Purchaser as a result of the sale to which such Buy-In relates. The Purchaser
      shall provide the Company written notice indicating the amounts payable to
      the
      Purchaser in respect of the Buy-In. The Company may not make any notation on
      its
      records or give instructions to any transfer agent of the Company that enlarge
      the restrictions on transfer set forth in this Section.

     

    6.4 Participation
      in Future Financings.

     

    (a) From
      the
      date hereof until the date that is 12 months after the Closing, the Company
      will
      not, directly or indirectly, offer, sell, grant any option to purchase, or
      otherwise dispose of (or announce any offer, sale, grant or any option to
      purchase or other disposition of) any of its or its Subsidiaries' equity or
      equity equivalent securities, including without limitation any debt, preferred
      stock or other instrument or security that is, at any time during its life
      and
      under any circumstances, convertible into or exchangeable or exercisable for
      shares of Common Stock or Common Stock Equivalents (any such event a
      "Subsequent
      Financing"),
      without affording each Purchaser the pro rata right (such right to be determined
      based on the number of Shares purchased on the Closing Date by each such
      Purchaser as set forth in Exhibit
      A
      hereto,
      divided by the aggregate number of Shares purchased on the Closing Date by
      all
      Purchasers) to participate in up to an amount of the Subsequent Financing equal
      to 100% of the Subsequent Financing (the "Participation
      Maximum")
      on the
      same terms, conditions and price provided for in the Subsequent Financing.
      

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (b) At
      least
      ten Business Days prior to the closing of the Subsequent Financing, the Company
      shall deliver to each Purchaser a written notice of its intention to effect
      a
      Subsequent Financing ("Pre-Notice"),
      which
      Pre-Notice shall ask such Purchaser if it wants to review the details of such
      financing (such additional notice, a "Subsequent
      Financing Notice").
      Upon
      the request of a Purchaser, and only upon a request by such Purchaser, for
      a
      Subsequent Financing Notice, the Company shall promptly, but no later than
      one
      Business Day after such request, deliver a Subsequent Financing Notice to such
      Purchaser. The Subsequent Financing Notice shall describe in reasonable detail
      the proposed terms of such Subsequent Financing (including pricing terms and
      type of securities offered), the amount of proceeds intended to be raised
      thereunder, the Person or Persons through or with whom such Subsequent Financing
      is proposed to be effected, and attached to which shall be a term sheet or
      similar document relating thereto. In the event a Subsequent Financing is not
      consummated and publicly announced within 30 calendar days following the date
      such Subsequent Financing Notice is first sent to a Purchaser, the Company
      shall, on such 30th
      calendar
      day, issue a press release regarding such Subsequent Financing Notice pursuant
      to Rule 135c under the Securities Act containing only the information regarding
      such Subsequent Financing that is permitted to be disclosed thereunder, in
      which
      case the Subsequent Financing shall be deemed to have been abandoned and the
      Purchasers shall no longer be deemed to be in possession of any non-public
      information with respect to the Company.

     

    (c) Any
      Purchaser desiring to participate in such Subsequent Financing must provide
      written notice to the Company by not later than 5:00 p.m. (New York time) on
      the
      tenth Business Day after all of the Purchasers have received the Pre-Notice
      that
      the Purchaser is willing to participate in the Subsequent Financing, the amount
      of the Purchaser’s participation, and that the Purchaser has such funds ready,
      willing and available for investment on the terms set forth in the Subsequent
      Financing Notice. If the Company receives no notice from a Purchaser as of
      such
      tenth Business Day, such Purchaser shall be deemed to have notified the Company
      that it does not elect to participate. 

     

    (d) If
      by
      5:00 p.m. (New York time) on the tenth Business Day after all of the Purchasers
      have received the Pre-Notice, notifications by the Purchasers of their
      willingness to participate in the Subsequent Financing (or to cause their
      designees to participate) is, in the aggregate, less than the total amount
      of
      the Subsequent Financing, then the Company may effect the remaining portion
      of
      such Subsequent Financing on the same terms and with the Persons set forth
      in
      the Subsequent Financing Notice within 30 calendar days after the date of the
      initial Subsequent Financing Notice. 

     

    (e) If
      by
      5:00 p.m. (New York time) on the tenth Business Day after all of the Purchasers
      have received the Pre-Notice, the Company receives responses to a Subsequent
      Financing Notice from Purchasers seeking to purchase more than the aggregate
      amount of the Participation Maximum, each such Purchaser shall have the right
      to
      purchase the greater of (a) their Pro Rata Portion (as defined below) of the
      Participation Maximum and (b) the difference between the Participation Maximum
      and the aggregate amount of participation by all other Purchasers. “Pro
      Rata Portion”
means
      the ratio of (x) the number of Shares purchased on the Closing Date by a
      Purchaser participating under this Section 6.4, and (y) the sum of the aggregate
      number of Shares purchased on the Closing Date by all Purchasers participating
      under this Section 6.4.

     

    (f) The
      Company must provide the Purchasers with a second Subsequent Financing Notice,
      and the Purchasers will again have the right of participation set forth above
      in
      this Section 6.4, if the Subsequent Financing subject to the initial Subsequent
      Financing Notice is not consummated for any reason on the terms set forth in
      such Subsequent Financing Notice within 30 calendar days after the date of
      the
      initial Subsequent Financing Notice. Any securities not acquired by the
      Purchasers or other persons in accordance with this Section 6.4 may not be
      issued, sold or exchanged until they are again offered to the Purchaser under
      the procedures specified in this Agreement.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (g) Notwithstanding
      the foregoing, this Section 6.4 shall not apply in respect of securities
      issued pursuant to acquisitions or strategic transactions, provided any such
      issuance shall only be to a Person which is, itself or through its Subsidiaries,
      an operating company in a business synergistic with the business of the Company
      and in which the Company receives benefits in addition to the investment of
      funds, but shall not include a transaction in which the Company is issuing
      securities primarily for the purpose of raising capital or to an entity whose
      primary business is investing in securities.

     

    6.5 Short
      Sales.
      Each
      Purchaser, severally and not jointly with the other Purchasers, covenants that
      neither it nor any Affiliate acting on its behalf or pursuant to any
      understanding with it will execute any Short Sales (as defined below) during
      the
      period commencing on the date hereof and ending 12 months after the Closing.
      For
      purposes of this Section 6.5, “Short
      Sales”
means
      “short sales,” as defined in Rule 200 of Regulation SHO under the Exchange Act
      (but shall not be deemed to include the location and/or reservation of
      borrowable shares of Common Stock).

     

    6.6 Furnishing
      of Information.
      As long
      as any Purchaser owns the Shares and Warrant Shares, the Company covenants
      to
      timely file (or obtain extensions in respect thereof and file within the
      applicable grace period) all reports required to be filed by the Company after
      the date hereof pursuant to the Exchange Act. As long as any Purchaser owns
      the
      Shares and Warrant Shares, if the Company is not required to file reports
      pursuant to such laws, it will prepare and furnish to the Purchasers and make
      publicly available in accordance with Rule 144(c) such information as is
      required for the Purchasers to sell the Shares and Warrant Shares under Rule
      144. The Company further covenants that it will take such further action as
      any
      holder of Shares and Warrant Shares 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.

     

    6.7 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 would be integrated with the offer or sale of the Shares and Warrants
      in a manner that would require the registration under the Securities Act of
      the
      sale of the Shares and Warrants to the Purchasers, or that would be integrated
      with the offer or sale of the Shares and Warrants for purposes of the rules
      and
      regulations of any Trading Market in a manner that would require stockholder
      approval of the sale of the securities to the Purchasers.

     

    6.8 Subsequent
      Registrations.
      Other
      than pursuant to the Registration Rights Agreement, prior to the first to occur
      of (a) the effective date of the Registration Statement (as defined in the
      Registration Rights Agreement), or (b) such time as the Warrant Shares may
      be
      sold by the Purchasers pursuant to Rule 144, the Company may not file any
      registration statement (other than on Form S-8) with the Commission with respect
      to any securities of the Company.

     

    6.9 Limitation
      on Issuance of Future Priced Securities.
      During
      the six months following the Closing Date, the Company shall not issue any
      “Future Priced Securities” as such term is described by NASD
      IM-4350-1.

     

    6.10 Non-Public
      Information.
      The
      Company covenants and agrees that neither it nor any other Person acting on
      its
      behalf will provide any Purchaser or its agents or counsel with any information
      that the Company believes constitutes material non-public information, unless
      prior thereto such Purchaser shall have executed a written agreement regarding
      the confidentiality and use of such information. The Company understands and
      confirms that each Purchaser shall be relying on the foregoing representations
      in effecting transactions in securities of the Company.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    6.11 Listing
      of Securities.
      The
      Company agrees, (i) if the Company applies to have the Common Stock traded
      on
      any other Trading Market, it will include in such application the Shares and
      Warrant Shares, and will take such other action as is necessary or desirable
      to
      cause the Shares and Warrant Shares to be listed on such other Trading Market
      as
      promptly as possible, and (ii) it will take all action reasonably necessary
      to
      continue the listing and trading of its Common Stock on a Trading Market and
      will comply in all material respects with the Company’s reporting, filing and
      other obligations under the bylaws or rules of the Trading Market.

     

    7. Termination;
      Liabilities Consequent Thereon.
      This
      Agreement may be terminated and the transactions contemplated hereunder
      abandoned at any time prior to the Closing only as follows: 

     

    (a)
      with
      respect to a Purchaser, by such Purchaser, upon notice to the Company if the
      conditions set forth in Section 5.1 shall not have been satisfied on or prior
      to
      April 11, 2008; or

     

    (b)
      with
      respect to a Purchaser, by the Company, upon notice to such Purchaser if the
      conditions set forth in Section 5.2 to be satisfied by such Purchaser shall
      not
      have been satisfied on or prior to April 11, 2008; or

     

    (c)
      at
      any time by mutual agreement of the Company and Purchasers.

     

    Any
      termination pursuant to this Section 7 shall be without liability on the part
      of
      any party, unless such termination is the result of a material breach of this
      Agreement by a party to this Agreement in which case such breaching party shall
      remain liable for such breach notwithstanding any termination of this
      Agreement.

     

    8. Miscellaneous
      Provisions.

     

    8.1 Indemnification.
      In
      addition to the indemnity provided in the Registration Rights Agreement, the
      Company will indemnify and hold the Purchasers and their directors, officers,
      shareholders, partners, employees and agents (each, an “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 this Agreement, the Registration
      Rights Agreement or the Warrant, unless any such Losses were as a result of
      such
      Purchaser Party’s gross negligence, willful misconduct or bad faith. In addition
      to the indemnity contained herein, the Company will reimburse any 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. 

     

    8.2 Use
      of
      Proceeds.
      The
      Company shall use the net proceeds from the sale of the Shares and Warrants
      for
      working capital and other growth initiatives and not for the prepayment of
      any
      portion of the Company’s outstanding notes or debentures prior to their
      currently-stated maturity date (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.

     

    8.3 Filings.
      The
      Company shall make all necessary filings with the SEC and "blue sky" filings
      required to be made by the Company in connection with the sale of the Shares
      and, if applicable, the Warrant Shares to the Purchasers as required by all
      applicable laws, and shall provide a copy thereof to the Purchasers promptly
      after such filing.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    8.4 Public
      Statements or Releases.
      Each of
      the parties to this Agreement agrees that it shall not make, issue, or release
      any announcement, whether to the public generally, or to any of its suppliers
      or
      customers, with respect to this Agreement or the transactions provided for
      herein, or make any statement or acknowledgment of the existence of, or reveal
      the status of, this Agreement or the transactions provided for herein, without
      the prior consent of the other parties, which shall not be unreasonably withheld
      or delayed. Notwithstanding the foregoing, nothing in this Section 8.4 shall
      prevent any party hereto from making such public announcements or filings as
      it
      may consider necessary in order to satisfy its legal obligations, or from
      releasing a public statement acceptable to each of the parties hereto upon
      the
      completion of the offering contemplated hereby. Notwithstanding the foregoing,
      as soon as possible but not later than 9:00 a.m. (New York time) on the first
      Business Day following the Closing Date, the Company will issue a press release
      acceptable to the Placement Agent and the Purchasers and in accordance with
      applicable law describing the transactions contemplated by this Agreement,
      and
      promptly thereafter file a Current Report on Form 8-K with the SEC, attaching
      such press release, this Agreement, the Registration Rights Agreement and the
      form of Warrant.

     

    8.5 Further
      Assurances.
      The
      parties agree to cooperate fully to execute such further instruments, documents
      and agreements and to give such further written assurances, as may be reasonably
      requested by any party to better evidence and reflect the transactions described
      herein and contemplated hereby, and to carry into effect the intents and
      purposes of this Agreement. 

     

    8.6 Rights
      Cumulative.
      Each
      and all of the various rights, powers and remedies of the parties hereto shall
      be considered to be cumulative with and in addition to any other rights, powers
      and remedies which such parties may have at law or in equity in the event of
      the
      breach of any of the terms of this Agreement. The exercise or partial exercise
      of any right, power or remedy shall neither constitute the exclusive election
      thereof nor the waiver of any other right, power or remedy available to such
      party.

     

    8.7 Notices.

     

    (a)
      Any
      notices, reports or other correspondence (hereinafter collectively referred
      to
      as “Correspondence”)
      required or permitted to be given hereunder shall be sent by postage prepaid
      first class mail, courier or facsimile or delivered by hand to the party to
      whom
      such correspondence is required or permitted to be given hereunder. The date
      of
      giving any notice shall be the date of its actual receipt.

     

    (b)
      All
      Correspondence to the Company shall be addressed as follows:

     

    Odyne
      Corporation

    89
      Cabot
      Court, Suite L

    Hauppauge,
      New York 11788

    Attention:
      Mr. Alan Tannenbaum

                      
      Chief
      Executive Officer

    Facsimile:
      (631) 750-1011

     

    with
      a
      copy to:

     

    Greenberg
      Traurig, LLP

    MetLife
      Building

    200
      Park
      Avenue, 15th
      Floor

    New
      York,
      NY 10166

    Attention:
      Spencer G. Feldman, Esq.

    Facsimile:
      (212) 801-6400

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (c)
      All
      Correspondence to any Purchaser shall be sent to such Purchaser at the address
      set forth in Exhibit
      A.

     

    (d)
      Any
      Person may change the address to which correspondence to it is to be addressed
      by notification as provided for herein.

     

    8.8 Captions.
      The
      captions and paragraph headings of this Agreement are solely for the convenience
      of reference and shall not affect its interpretation.

     

    8.9 Severability.
      Should
      any part or provision of this Agreement be held unenforceable or in conflict
      with the applicable laws or regulations of any jurisdiction, the invalid or
      unenforceable part or provisions shall be replaced with a provision which
      accomplishes, to the extent possible, the original business purpose of such
      part
      or provision in a valid and enforceable manner, and the remainder of this
      Agreement shall remain binding upon the parties hereto.

    

    8.10 Waiver.
      No
      waiver of any term, provision or condition of this Agreement, whether by conduct
      or otherwise, in any one or more instances, shall be deemed to be, or be
      construed as, a further or continuing waiver of any such term, provision or
      condition or as a waiver of any other term, provision or condition of this
      Agreement.

     

    8.11 Fees,
      Costs and Expenses.
      All
      fees, costs and expenses (including attorneys' fees and expenses) incurred
      by
      any party hereto in connection with the preparation, negotiation and execution
      of this Agreement and the exhibits hereto and the consummation of the
      transactions contemplated hereby and thereby (including the costs associated
      with any filings with, or compliance with any of the requirements of, any
      governmental authorities), shall be the sole and exclusive responsibility of
      such party, except as provided in the Placement Agent Agreement between the
      Company and the Placement Agent.

     

    8.12 Assignment.
      The
      rights and obligations of the parties hereto shall inure to the benefit of
      and
      shall be binding upon the authorized successors and permitted assigns of each
      party. The Company shall not assign this Agreement or any rights or obligations
      hereunder without the prior written consent of the Purchasers. Any Purchaser
      may
      assign its rights under this Agreement to any person to whom the Purchaser
      assigns or transfers any Shares, Warrants, and, if applicable, Warrant Shares
      provided that such transferee agrees in writing to be bound by the terms and
      provisions of this Agreement, and such transfer is in compliance with the terms
      and provisions of this Agreement and permitted, with the approval of counsel
      to
      the Company, by federal and state securities laws.

     

    8.13 Survival.
      The
      representations, warranties, agreements and covenants contained herein shall
      survive the Closing and the delivery of the Shares and Warrants.

     

    8.14 Entire
      Agreement.
      This
      Agreement, the Registration Rights Agreement, the Warrants and exhibits attached
      hereto and incorporated herewith constitute the entire agreement between the
      parties hereto respecting the subject matter hereof and supersedes all prior
      agreements, negotiations, understandings, representations and statements
      respecting the subject matter hereof, whether written or oral.

     

    8.15 Amendments.
      No
      modification, alteration, waiver or change in any of the terms of this Agreement
      shall be valid or binding upon the parties hereto unless made in writing and
      duly executed by the Company and (a) prior to Closing, Purchasers who represent
      at least 80% of the Shares being sold hereunder or (b) following Closing,
      Purchasers holding at least 80% of the Shares then held by such Purchasers;
      provided,
      however,
      that,
      in each case, no such amendment shall increase the obligations of any Purchaser
      without such Purchaser's written consent.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    8.16 Confidential
      Information.
      Each of
      the Company and each Purchaser agrees to keep confidential, and not to disclose
      to or use for the benefit of any third party, the terms of this Agreement or
      any
      other information which at any time is communicated by the other party as being
      confidential, without the prior written approval of the other party;
provided,
      however,
      that
      this provision shall not apply to information which, at the time of disclosure,
      is already part of the public domain (except by breach of this Agreement) and
      information which is required to be disclosed by law (including, without
      limitation, pursuant to Item 601(b)(10) of Regulation S-K under the Securities
      Act and the Exchange Act) and provided further the Company will not furnish
      confidential information to a Purchaser without (i) informing such Purchaser
      regarding the nature of such information and (ii) receiving the prior express
      written agreement of such Purchaser. Notwithstanding anything herein to the
      contrary, any party to this Agreement (and any employee, representative, or
      other agent of any party to this Agreement) may disclose to any and all persons,
      without limitation of any kind, the tax treatment and tax structure of the
      transactions contemplated by this Agreement and all materials of any kind
      (including opinions or other tax analyses) that are provided to it relating
      to
      such tax treatment and tax structure. However, any such information relating
      to
      the tax treatment or tax structure is required to be kept confidential to the
      extent necessary to comply with any applicable federal or state securities
      laws.

     

    8.17 Stock
      Splits, Dividends and other Similar Events.
      The
      provisions of this Agreement shall be appropriately adjusted to reflect any
      stock split, stock dividend, reorganization or other similar event that may
      occur with respect to the Company after the date hereof.

     

    8.18 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 as otherwise set
      forth
      in Section 8.1 (as to each Purchaser Party).

     

    8.19 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, the Registration Rights Agreement or the
      Warrants (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 this Agreement, the
      Registration Rights Agreement or the Warrants), 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 this Agreement, the
      Registration Rights Agreement or the Warrants, then the prevailing party in
      such
      Proceeding shall be reimbursed by the other party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation
      and prosecution of such Proceeding.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

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

     

    8.21 Replacement
      of Securities.
      If any
      certificate or instrument evidencing any Shares or Warrant Shares 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 customary and reasonable indemnity, if requested. 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
      Shares or Warrant Shares. If a replacement certificate or instrument evidencing
      any Shares or Warrant Shares 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.

     

    8.22 Limitation
      of Liability.
      Notwithstanding anything herein to the contrary, the Company acknowledges and
      agrees that the liability of a Purchaser arising directly or indirectly, under
      this Agreement, the Registration Rights Agreement or the Warrants of any and
      every nature whatsoever shall be satisfied solely out of the assets of such
      Purchaser, and that no trustee, officer, other investment vehicle or any other
      Affiliate of such Purchaser or any Purchaser, shareholder or holder of shares
      of
      beneficial interest of such a Purchaser shall be personally liable for any
      liabilities of such Purchaser.

     

    8.23 Counterparts.
      This
      Agreement may be executed simultaneously in two or more counterparts (including
      via facsimile), each of which shall be deemed an original, but all of which
      together shall constitute one and the same instrument.

     

    

     

    [THE
      REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK;

    SIGNATURE
      PAGE FOLLOWS.]

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Securities Purchase
      Agreement as of the day and year first above written.

     

    ODYNE
      CORPORATION

     

    By: 
      /s/ Alan
      Tannenbaum              

    Name:
      Alan Tannenbaum

    Title:  
      Chief
      Executive Officer

     

    [Investor
      signature pages follow]

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    Investor
      Signature Page 

     

    Odyne
      Corporation

     

    Securities
      Purchase Agreement

     

    The
      undersigned hereby executes and delivers the Securities Purchase Agreement
      (the
“Agreement”) to which this signature page is attached, which, together with all
      counterparts of the Agreement and signature pages of the other parties named
      in
      the Agreement, shall constitute one and the same document in accordance with
      the
      terms of the Agreement.

     

    Print
      Name:                                                                 
     

     

    By:                                                                               
            

     

    Name:                                                                          
            

     

    Title:                                                                            
            

     

    Address:                                                                     

         

                                                                                    

     

                                                                      

     

    Telephone:                                                                      

     

    Facsimile:                                                                          

     

    E-mail:                                                                         
            

     

    SSN/EIN#:                                                                        

     

    Number
      of
      Shares of Common Stock

    Purchased:                                                                       

     

    Number
      of
      Warrants
      Purchased:                               

     

    Aggregate
      Purchase
      Price:                                          

     

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

     

    INVESTORS

     

    
      	
               

              PURCHASER

            	
               

              ADDRESS

            	
              NUMBER
                OF 

              SHARES
                TO

               BE
                PURCHASED

               

            	
              SHARES
                TO

               BE
                ISSUED 

              UPON
                EXERCISE 

              OF
                

              WARRANTS

               

            	
               

               

              PURCHASE

               PRICE

               

            
	
              The
                Quercus Trust

            	
              1835
                Newport Blvd.

              A109-PMB
                467

              Costa
                Mesa, California 92627

               

            	
              8,33
                3,333

            	
              8,333,333

            	
              $5,000,000

            
	 	
               

               

            	 	 	 
	
              Spinel
                Finance LLC 

            	
              310
                East Shore Road, 

              Suite
                311

              Great
                Neck, New York 16023

               

            	
              3,333,333

            	
              3,333,333

            	
              $2,000,000

            
	 	
               

               

            	 	 	 
	
              Total

            	 	
              11,666,666

               

            	
              11,666,666

               

            	
              $7,000,000

               

            

    

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    
 

    EXHIBIT
      B

     

    FORM
      OF WARRANT

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C

     

    REGISTRATION
      RIGHTS AGREEMENT

    
 

    
      
        
        

      

      
        25

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