Document:

Exhibit
10.2

    
April 7,
2010

     

    CONFIDENTIAL

     

    Mr. James
V. Dyke

    c/o
Psychemedics Corporation

    125 Nagog
Park, Suite 200

    Acton,
MA  01720

     

    Dear
Jim:

     

    This
letter sets forth the agreements we have made regarding your employment with
Psychemedics Corporation (the “Company”).

     

    
      	
               
      

            	
              1.

            	
              If at any time after
      the effective date hereof and prior to the date which is five (5) years
      following the date hereof, your employment is terminated by the Company
      without “Cause” (as defined in paragraph 13 below), or you
      voluntarily terminate your employment for “Good Reason” (as defined in
      paragraph 13 below), in either case at the time of, or within twelve (12)
      months following, a “Change of Control of the Company” (as defined in
      paragraph 13 below), then you will continue to be paid monthly an amount
      equal to your average monthly compensation for the twelve full months
      preceding the date of such termination ("Termination Pay") for a period of
      twelve (12) months from the date of such termination.  For
      purposes of the foregoing sentence, average monthly compensation shall be
      determined with reference to the aggregate base salary, commission and
      bonus compensation, if any, earned by you during such period, including
      any bonus compensation accrued for such period or any portion of such
      period but not paid as of the date of such termination) provided, however, that the amount of
      commission and bonus compensation for a fiscal year included in
      Termination Pay shall in no event exceed twenty-five percent (25%) of your
      base salary for such fiscal year, and provided further, however,
      that  Termination Pay otherwise payable hereunder during any
      month shall be reduced by any salary continuation payments payable during
      such month under your employment offer letter dated April 7,
      2010. Your
      Termination Pay will be subject to normal deductions for taxes, benefit
      plan contributions, other payroll deductions and any amount due the
      Company as a result of cash advances. The Company agrees to continue to
      make health insurance available to you under such health insurance plan as
      the Company has in effect for so long as you are receiving Termination Pay
      and so long as you contribute such portion of the premiums for such
      insurance as is required of employees under such plan. You agree, however,
      that if you obtain health insurance coverage through another employer
      while you are eligible to receive health insurance under this Agreement,
      the Company shall no longer be required to make health insurance available
      to you under this Agreement. You agree to give the Company at least
      fourteen (14) days prior written notice of the termination of your
      employment in the event of your voluntary termination without Good
      Reason.  You shall not be entitled to Termination Pay as a
      result of termination by reason of your death or “Disability” (as defined
      in paragraph 13 below) following a Change of Control of the
      Company.

            

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              2.

            	
              Notwithstanding
      any other provision of this Agreement, the Termination Pay contemplated to
      be paid to you under certain circumstances set forth in this Agreement
      shall only be paid in consideration of the execution and delivery by you
      of a release reasonably satisfactory to the Company waiving all claims
      you, your heirs, or legal representatives have or may have against the
      Company or any of its shareholders, officers, directors, employees or
      agents with respect to your employment or the termination thereof, or any
      other claim.

            

    

    

    
      	
               
      

            	
              3.

            	
              You
      acknowledge that, as the Company’s Vice President - Sales, you are in
      possession of specialized information concerning the total operations,
      conduct, management, and strategy of the Company, as well as proprietary
      information concerning the Company’s products and services and that the
      applicability of your knowledge of these matters is applicable to all
      geographic areas in which the Company does business.  You
      further acknowledge that the Company has a legitimate business interest in
      protecting its hair testing business from unfair
    competition.

            

    

    

    
      	
               
      

            	
              4.

            	
              In
      addition to any other confidentiality obligations you may have as an
      employee of the Company, you shall not, without the prior and express
      written approval of the Company, either during or subsequent to the term
      of your employment, disclose or use or enable another to disclose or use
      any secret, private or confidential information, trade secret or other
      proprietary knowledge of the Company, or its subsidiaries, divisions,
      employees or agents.  Upon termination of your employment with
      the Company, you shall deliver to the Company all equipment, records and
      copies of records, notes, data, memoranda, prototypes, designs, customer
      lists and other information which is embodied in physical media and
      documents belonging to the Company which are then in your possession. You
      agree that all such information and documents shall be the property of the
      Company and that the obligations set forth in this paragraph shall survive
      termination of your employment.

            

    

    

    
      	
               
      

            	
              5.

            	
              You
      agree that, In addition to any other covenant not to compete with the
      Company following termination of your employment, if you or the Company
      shall terminate your employment in such a manner as to entitle you to
      Termination Pay  under paragraph 1, above, you shall not, for so
      long as you are entitled to receive such Termination
  Pay:

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (a)           directly
or indirectly own, manage, operate or control, or participate in the ownership,
management, operation or control of, or become associated in any capacity with
any business enterprise, firm, corporation or company related to the field of
testing for the detection of drug use, which is in competition with the business
of the Company, or directly or indirectly accept employment with or render
services on behalf of a competitor of the Company, or any other third party, in
any capacity which may reasonably be considered to be useful to the competitor
or such other third party to become a competitor, without receiving the
Company’s prior written approval; or 

    

    (b)         
induce or attempt to induce any employee, officer, consultant, or agent
of the Company to leave the employ thereof or in any way interfere with the
relationship between the Company and any employee, officer, consultant, or agent
thereof; hire directly or through another entity any person who was an employee
of the Company at any time during the six (6) months prior to the date such
person is to be so hired; or induce or attempt to induce any customer, client,
supplier, licensee, or other business relation of the Company to cease doing
business with the Company or in any way interfere with the relationship between
any such customer, client, supplier, licensee, or business relation and the
Company (including, without limitation, making any negative statements or
communications concerning the Company).

    

    
      	
               
      

            	
              6.

            	
              You
      agree that your obligations under paragraphs 4 and 5 are special, unique,
      and extraordinary and that any breach by you of such obligations shall be
      deemed material, and shall be deemed to cause irreparable injury not
      properly compensable by damages in an action at law, and the rights and
      remedies of the Company under paragraphs 4 and 5 may, therefore, be
      enforced both at law and in equity, by injunction or
      otherwise.  For purposes of paragraphs 4 and 5, the term
      "Company" shall include any and all subsidiaries or divisions of the
      Company.

            

    

    

    
      
        	
              	
                7.

              	
                The
      five year period set forth in paragraph 1 above may be extended only with
      the mutual written agreement of the
parties.

              

      

    

    

    
      	
               
      

            	
              8.

            	
              If
      at any time a controversy between you and the Company arises as to the
      meaning or operation of this Agreement, such controversy shall be
      submitted to arbitration by either party in Boston, Massachusetts, before
      an arbitrator to be named by the President of the Boston Branch of the
      American Arbitration Association, provided however, that the Company shall
      also have the rights set forth in paragraph 6 above.  Such
      arbitration proceedings shall be conducted in accordance with the rules
      and procedures then in effect of the American Arbitration
      Association.  The decision of the arbitrator shall be binding
      upon the parties and judgment on any award made by the arbitrator may be
      entered in any court having jurisdiction thereof.  The costs of
      the arbitrator shall be borne equally by you and the
      Company.  Each party will bear his or its own legal
      costs.

            

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              9.

            	
              This
      Agreement shall be governed by and interpreted in accordance with the laws
      of the Commonwealth of Massachusetts without reference to principles of
      conflict of laws.

            

    

    

    
      	
               
      

            	
              10.

            	
              This
      Agreement, together with your offer letter dated the date hereof, contains
      the entire agreement of the parties in respect of this transaction and
      supersedes any prior agreement or understanding relating to your
      employment by the Company, other than any
      existing nondisclosure or confidentiality agreements you may have with the
      Company.  No amendment or modification of any provision
      of this Agreement will be valid unless in writing signed by both
      parties.  Any waiver must be in writing and signed by you or an
      authorized officer of the Company, as the case may
  be.

            

    

    

    
      	
               
      

            	
              11.

            	
              This
      Agreement shall be binding upon and inure to the benefit
    of:

            

    

     

    (a)  the
Company, and any successors or assigns of the Company, whether by way of a
merger or consolidation, or liquidation of the Company, or by way of the Company
selling all or substantially all of the assets and
business of the Company to a successor entity; and, subject to the Company's
right to terminate your employment at any time, the Company agrees to require
any successor entity to expressly assume or unconditionally guarantee the
Company's obligations under this Agreement (unless such obligations are assumed
by operation of law); and (b) you and your heirs, executors and
administrators.

     

    
      	
               
      

            	
              12.

            	
              Any
      notice or other communication required hereunder shall be in writing,
      shall be deemed to have been given and received when delivered in person,
      or, if mailed, shall be deemed to have been given when deposited in the
      United States mail, first class, registered or certified, return receipt
      requested, with proper postage prepaid, and shall be deemed to have been
      received on the third business day thereafter, and shall be addressed as
      follows:

            

    

    

    If to the
Company, addressed to:

     

    Psychemedics
Corporation

    125 Nagog
Park, Suite 200

    Acton,
MA  01720

    Attn:  President

     

    If to
you, addressed to:

     

    James V.
Dyke

    c/o
Psychemedics Corporation

    125 Nagog
Park, Suite 200

    Acton,
MA  01720

     

    or such
other address as to which any party hereto may have notified the other in
writing.
 

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              13.

            	
              Definitions.

            

    

    

    (a)  "Cause"
shall mean: (i) theft or embezzlement, or attempted theft or embezzlement, by
you of money or property of the Company, your  perpetration or
attempted perpetration of fraud, or your participation in a fraud or attempted
fraud upon the Company; (ii) your unauthorized appropriation of, or attempt to
misappropriate, any tangible or intangible assets or property of the Company, or
your appropriation of, or attempt to appropriate, a business opportunity of the
Company, including but not limited to attempting to secure or securing any
profit for yourself or any of your family members or personal associates in
connection with any transaction entered into on behalf of the Company; (iii) any
act or acts of disloyalty, misconduct, or moral turpitude by you, including but
not limited to violation of the Company’s sexual harassment or non-harassment
policy, any of which the Board of Directors of the Company determines in good
faith has been or is likely to be materially injurious to the interest,
property, operations, business, or reputation of the Company, or its directors,
employees or shareholders; (iv) any act or omission constituting gross
negligence in connection with the performance of your duties on behalf of the
Company which is materially injurious to the interest, property, operations,
business, or reputation of the Company; (v) your conviction of a crime other
than minor traffic violations or other similar minor offenses (including
pleading guilty or entering a plea of no contest), or your indictment for a
felony or its equivalent, or your being charged with a violent crime, a crime
involving moral turpitude, or any other crime for which imprisonment is a
possible punishment; (vi) your willful refusal or material failure (other than
by reason of Disability) to carry out reasonable and lawful instructions and
directives from the Board of Directors and your failure to cure or correct such
refusal or failure within ten (10) days after receiving written notice from the
Board of Directors describing such refusal or failure; or (vii) the material
breach by you of your obligations under paragraphs 4 or 5 hereof or under any
other confidentiality, non-compete, non-solicitation, non-disparagement or
similar agreement with the Company.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (b)  “Change
in Control of the Company” shall mean

    

    (i)  any
person or group as defined in Rule 13d-3 under the Securities Exchange Act of
1934 (the “Exchange Act”) shall own more than 30% of the then outstanding shares
of the outstanding Common Stock of the Company; or

    
 

    (ii) the
consummation of a reorganization, merger or consolidation or sale or disposition
of all or substantially all of the assets of the Company (a “Business
Combination”), unless, in each case following such Business Combination, (A) all
or substantially all of the individuals and entities who were the beneficial
owners of the Common Stock of the Company immediately before the consummation of
such Business Combination beneficially own, directly or indirectly, more than
50% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation that as a result of the transaction owns the Company or all or
substantially all of the assets of the Company either directly or indirectly
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the Common Stock
of the Company; and (B) no person or group (as defined in Section 13(d) of the
Exchange Act) of the Company or the corporation resulting from the Business
Combination) beneficially owns, directly or indirectly, more than 30% of the
then outstanding shares of the common stock of the corporation resulting from
the Business Combination or of the combined voting power of the then outstanding
voting securities of the corporation; or

     

    (iii)
Individuals who, as of the date of this Agreement, constitute the Board of
Directors of the Company (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors of the Company,
provided, however, that any individual's becoming a director after the date of
this Agreement whose election, or nomination for election by the stockholders of
the Company, was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board will be considered as though the individual were
a member of the Incumbent Board, but excluding, for this purpose, any individual
whose initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board.

     

    (c)  "Disability"
shall mean your inability because of physical or mental incapacity to perform
your usual duties at the Company for a period of one hundred eighty (180) days
in any consecutive twelve (12) month period.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (d)

            	
              "Good
      Reason" shall mean: (i) reduction in your base salary below $215,000 or
      such higher base salary as is in effect immediately prior to such
      reduction; or (ii) a material decrease in your duties or
      responsibilities.

            

    

    

    
      	
            	
              14.

            	
              Section
      409A.

            

    

    

    (a)  Anything
in this Agreement to the contrary notwithstanding, if at the time of your
separation from service within the meaning of Section 409A of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder (the “Code”),
following a Change in Control as defined in paragraph 13(b) above, you are a
“specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code,
then to the extent any payment or benefit that you become entitled to under this
Agreement would be considered deferred compensation subject to the twenty
percent (20%) additional tax imposed pursuant to Section 409A(a) of the Code as
a result of the application of Section 409A(a)(2)(B)(i) of the Code, such
payment shall not be payable and such benefit shall not be provided until the
date that is the earlier of (i) six (6) months and one (1) day after your
separation from service, or (ii) your death.

    

    (b) This
Agreement is intended to be in compliance with the provisions of Section 409A of
the Code.  To the extent that any provision of this Agreement is
ambiguous as to its compliance with Section 409A of the Code, the provision
shall be read in such a manner so that all payments hereunder comply with said
Section.  The parties agree that this Agreement may be amended, as
reasonably requested by either party, and as may be necessary to fully comply
with Section 409A of the Code and all related rules and regulations in order to
preserve the payments and benefits provided hereunder without additional cost to
either party.

    

    (c)  Solely
for the purposes of Section 409A of the Code, each installment payment of
Termination Pay shall be considered a separate payment.

    

    (d)  The
Company makes no representation or warranty and shall have no liability to you
or any other person if any provisions of this Agreement are determined to
constitute deferred compensation subject to Section 409A of the Code but do not
satisfy an exemption from, or the conditions of, said Section.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    If this
letter correctly sets forth our understanding and agreement, please indicate
your acceptance by signing both copies of this letter and returning one
copy.

    

    
      
        
          	 
      	 	
                  Very
      truly yours,

                
	 
      	 	 
      
	 
      	 	
                  PSYCHEMEDICS
      CORPORATION

                
	 
      	 	 
      
	 
      	 	
                  By:

                	
                  /s/ Raymond C. Kubacki

                
	 
      	 	 
      	
                  Raymond
      C. Kubacki, President

                
	 
      	 	 
      
	
                  Agreed
      to:  April 7, 2010

                	 	 
      
	 
      	 	 
      
	
                  /s/ James V. Dyke

                	 	 
      
	
                  James
      V. Dyke

                	 	 
      

        

      

    

     

    
      
         

      

      
        8Unassociated Document

    THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE THEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED (A) UNLESS THERE IS A (I) AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT RELATED THERETO, (II) AN OPINION OF COUNSEL FOR THE
HOLDER REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED, (III) RECEIPT OF A NO-ACTION LETTER(S) FROM THE APPROPRIATE
GOVERNMENTAL AUTHORITY(IES), OR (B) UNLESS PURSUANT TO AN EXEMPTION THEREFROM
UNDER RULE 144 OF THE ACT.

     

    MANAGEMENT
ENERGY, INC.

     

    WARRANT TO PURCHASE SHARES
OF COMMON STOCK

     

    
      
        	

                Warrant
      No. __________ 

              	
                Dated:  April
      1, 2010 (the “Effective
      Date”)

              

      

    

     

    MANAGEMENT
ENERGY, INC., a Nevada corporation (the “Company”), hereby
certifies that, for value received, Wilkes Lane Capital LLC, or its permitted
registered assigns (“Holder”), is
entitled, subject to the terms set forth below, to purchase from the Company up
to an aggregate of Eight Million (8,000,000) shares of Common Stock, par value
$0.001 per share (the “Common Stock”), of
the Company (each such share, a “Warrant Share” and
all such shares, the “Warrant Shares”) at
an exercise price equal to $0.28 per share (the “Exercise Price”), at
any time and from time to time during the Exercise Period (as defined below),
and subject to the following terms and conditions:

     

    1.      Vesting, Duration and
Exercise of the Warrant.

     

    (a)           This
Warrant has been issued pursuant to that certain Consulting Agreement, dated as
of the Effective Date and effective as of March 1, 2010, by and between Wilkes
Lane Capital LLC and the Company (as the same may be amended from time to time,
the “Consulting
Agreement”), and will vest with respect to Two Million (2,000,000)
Warrant Shares on each of the Vesting Dates set forth below as long as the
Consulting Agreement remains in effect on such Vesting Date (including the last
day of the Term (as defined in the Consulting Agreement) (i.e., May 31,
2010)):

     

    
      	 
      	 	
              Cumulative
      # of

            	 
	
              Vesting Date

            	 	
              Warrant Shares

              Vested

            	 
	 
      	 	 	 
	
              Effective
      Date

            	 	 	2,000,000	 
	 
      	 	 	 	 
	
              3rd
      business day
      after
      Effective Date

            	 	 	4,000,000	 
	 
      	 	 	 	 
	
              April
      30, 2010

            	 	 	6,000,000	 
	 
      	 	 	 	 
	
              May
      31, 2010

            	 	 	8,000,000	 

    

    

    (b)           The
term of this Warrant (the “Exercise Period”)
shall be the period commencing as of the Effective Date and ending on the date
five years after the Effective Date (the “Expiration
Date”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)           All
or any part of this Warrant shall be exercisable by the registered Holder at any
time and from time to time on or after the Effective Date and through and
including 5:00 P.M., Pacific time, on the Expiration
Date   At 5:00 P.M., Pacific time on the Expiration Date (or
the next business day thereafter, if the Expiration Date is not a business day),
the portion of this Warrant not exercised prior thereto shall be and become void
and of no value.

     

    (d)           Subject
to Sections 2 and 5, upon surrender of this Warrant, with the Form of Election
to Purchase in the form of Exhibit A hereto (the “Exercise Notice”)
duly completed and executed, to the Company at its office at 30950 Rancho Viejo
Road, Suite 120, San Juan Capistrano, CA 92675, Attention: CFO, or at
such other address as the Company may specify in writing to the then registered
Holder, and upon payment of the Exercise Price multiplied by the number of
Warrant Shares that the Holder intends to purchase hereunder, in lawful money of
the United States of America, in cash or by certified or official bank check or
checks (subject to the Conversion Right in accordance with Section 1(f)), all as
specified by the Holder in the Form of Election to Purchase, the Company shall
promptly (but in no event later than three (3) business days after the date of
exercise) issue or cause to be issued and cause to be delivered to or upon the
written order of the Holder and in such name or names as the Holder may
designate, a certificate for the Warrant Shares issuable upon such
exercise.

     

    (e)           If
by the close of the third business day after delivery of a properly completed
Exercise Notice, the Company fails to deliver to the Holder the required number
of Warrant Shares in the manner required pursuant hereto, and if on or after the
business day immediately following such third business day and prior to the
receipt of such Warrant Shares, the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of the Warrant Shares which the Holder anticipated receiving
upon such exercise (a “Buy-In”), then the
Company shall, within three business days after the Holder’s request, either (1)
pay in cash to the Holder an amount equal to the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased (the “Buy-In
Price”), at which point the Company’s obligation to deliver such
certificate (and to issue such Warrant Shares) shall terminate or (2) promptly
honor its obligation to deliver to the Holder Warrant Shares and pay cash to the
Holder in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of Warrant Shares, times (B) the Closing Sales Price
(as defined below).  The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of the Buy-In,
together with applicable confirmations and other evidence reasonably requested
by the Company.  This Section 1(e) is the Holder’s exclusive remedy in
respect of the Company’s failure to deliver to the Holder the required number of
Warrant Shares in the manner required pursuant hereto.  “Closing Sales Price”
means the closing sales price of
the Common Stock on the date of receipt of a properly completed Exercise
Notice.

     

    (f)           In
addition to and without limiting the rights of the Holder under the terms of
this Warrant, Holder shall have the right to convert this Warrant or any portion
thereof (the “Conversion Right”)
into Warrant Shares as provided in this Section 1(f) at any time or from time to
time during the Exercise Period by delivering notice in accordance with Section
1(d).  Upon exercise of the Conversion Right with respect to all or a
specified portion of shares subject to this Warrant (the “Pre-Converted Warrant
Shares”), the Company shall deliver to Holder that number of Warrant
Shares equal to the quotient obtained by dividing (i) the value of this Warrant
(or the specified portion hereof) on the Date of Exercise (as defined in Section
1(g)), which value shall be equal to (A) the aggregate Fair Market Value (as
defined below) of the Pre-Converted Warrant Shares issuable upon exercise of
this Warrant on the Exercise Date less (B) the aggregate Exercise Price of such
Pre-Converted Warrant Shares immediately prior to the exercise of the Conversion
Right by (ii) the Fair Market Value of one (1) Warrant Share on the Exercise
Date.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    Expressed
as a formula, such conversion shall be computed as follows:

     

    X = (A-B)

    Y

    

    
      	
              where

            	
              X  =

            	
              the
      number of Warrant Shares to be issued to the Holder pursuant to this
      Section 1.

            
	 	 	 
	 
      	
              Y  =

            	
              the
      Fair Market Value (as defined below) of one (1) Warrant
    Share.

            
	 
      	 
      	 
      
	 
      	
              A  =

            	
              the
      aggregate Fair Market Value of the Pre-Converted Warrant Shares at the
      time the Conversion Right is elected pursuant to this Section 1(f) (i.e.,
      Fair Market Value (as defined below) per Warrant Share x Pre-Converted
      Warrant Shares).

            
	 
      	 
      	 
      
	 
      	
              B  =

            	
              the
      aggregate Exercise Price of the Pre-Converted Warrant Shares (i.e.,
      Exercise Price x Pre-Converted Warrant Shares).

            
	 
      	 
      	 
      

    

    

    For
purposes of the provisions of this Warrant requiring a determination in
accordance with this Section 1(f), “Fair Market Value” as
of a particular date (the “Determination Date”)
shall mean (i) for any security if such security is traded on a national
securities exchange (an “Exchange”), the
volume weighted average (based on daily trading volume) prices of the security
on each of the last five (5) trading days prior to the Determination Date
reported on such Exchange, (ii) for any security that is not traded on an
Exchange but which is quoted on  an electronic quotation system, the
volume weighted average (based on daily trading volume) prices reported on such
electronic quotation system on each of the last five (5) trading days (or if the
relevant price or quotation did not exist on any of such days, the relevant
price or quotation on the next preceding business day on which there was such a
price or quotation, for a total of five trading days) prior to the Determination
Date, or (iii) for any security or any other asset, if no price can be
determined on the basis of the above methods of valuation, then the judgment of
valuation shall be the valuation as mutually determined by the Company and the
Holder.  If the Company and the Holder are unable to agree upon the
fair market value of such security or other asset, then the Company shall,
within two business days submit via facsimile (a) the disputed determination of
the Exercise Price to an independent, reputable investment bank selected by the
Company and approved in writing by the Holder (which approval shall not be
unreasonably withheld, conditioned or delayed) or (b) the disputed arithmetic
calculation of the Warrant Shares to the Company’s independent, outside
accountant.  The Company shall cause the investment bank or the
accountant, as the case may be, to perform the determinations or calculations
and notify the Company and the Holder of the results no later than ten business
days from the time it receives the disputed determinations or
calculations.  The Company and the Holder shall each bear 50% of the
expense of the investment bank or the accountant, as the case may
be.  Such investment bank’s or accountant’s determination or
calculation, as the case may be, shall be binding upon all parties absent
demonstrable error.  All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar
transaction during the applicable calculation period.

    

    (g)           Any
person so designated by the Holder to receive Warrant Shares shall be deemed to
have become holder of record of such Warrant Shares as of the Date of Exercise
of this Warrant.  For purposes of this Section, a “Date of Exercise”
means the date on which the Company shall have received (i) this Warrant
(or any new Warrant, as applicable), with the Form of Election to Purchase
attached hereto (or attached to such new Warrant) appropriately completed and
duly executed, and (ii) payment of the Exercise Price for the number of
Warrant Shares so indicated by the holder hereof to be purchased.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    (h)           This
Warrant shall be exercisable, either in its entirety or, from time to time, for
a portion of the number of whole Warrant Shares.  If less than all of
the Warrant Shares which may be purchased under this Warrant are exercised at
any time, the Company shall issue or cause to be issued, at its expense, a new
Warrant evidencing the right to purchase the remaining number of Warrant Shares
for which no exercise has been evidenced by this Warrant.

     

    2.      Payment of
Taxes.  The Company will pay all documentary stamp taxes
attributable to the issuance of Warrant Shares upon the exercise of this
Warrant; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or Warrants in a name other than that of the Holder, and the Company shall not
be required to issue or cause to be issued or deliver or cause to be delivered
the certificates for Warrant Shares unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.  The Holder shall be responsible for all other tax
liability that may arise as a result of holding or transferring this Warrant or
receiving Warrant Shares upon exercise hereof.

     

    3.      Replacement of
Warrant.  If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a new Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and indemnity
(which shall not include a surety bond), if requested, reasonably satisfactory
to it.  Applicants for a new Warrant under such circumstances shall
also comply with such other reasonable regulations and procedures and pay such
other reasonable third-party charges as the Company may prescribe.

     

    4.      Adjustments

     

    (a)           Subdivisions and
Combinations.  If the Company at any time while this Warrant
remains outstanding and unexpired shall subdivide (by stock split) or combine
(by reverse stock split) its outstanding shares of capital stock into which this
Warrant is exercisable, the Exercise Price shall be proportionately decreased in
the case of a subdivision or increased in the case of a combination, effective
at the close of business on the date the subdivision or combination becomes
effective and the number of shares of Common Stock issuable upon exercise of
this Warrant shall be proportionately increased in the case of a subdivision or
decreased in the case of a combination, and in each case to the nearest whole
share, effective at the close of business on the date the subdivision or
combination becomes effective.  The provisions of this
Section 4(a) shall similarly apply to successive subdivisions or
combinations of outstanding shares of capital stock into which this Warrant is
exercisable.

     

    (b)           Reorganization,
Reclassification, Consolidation, Merger or Sale of Assets.  If
any capital reorganization or reclassification (other than as a result of a
subdivision or combination described in Section 4(a)) of the capital stock
of the Company, or consolidation or merger of the Company with or into another
corporation, or the sale of all or substantially all of its assets to another
corporation shall be effected in such a way that holders of Common Stock shall
be entitled to receive stock, securities, cash or other property with respect to
or in exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the Holder shall have the right to acquire and receive,
upon exercise of this Warrant, such shares of stock, securities, cash or other
property issuable or payable (as part of the reorganization, reclassification,
consolidation, merger or sale) with respect to or in exchange for such number of
outstanding shares of the Common Stock as would have been received upon exercise
of this Warrant at the Exercise Price then in effect.  The Company
will not effect any such consolidation, merger or sale, unless prior to the
consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger or the corporation purchasing such
assets shall assume by written instrument delivered to the Holder, the
obligation to deliver to the Holder such shares of stock, securities or assets
as, in accordance with the foregoing provisions, the Holder may be entitled to
purchase.  The provisions of this Section 4(b) shall similarly
apply to successive reorganizations, reclassifications, consolidations, mergers
and sales of assets.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    (c)           Stock Dividends and Other
Distributions.  If the Company at any time while this Warrant
is outstanding and unexpired shall (i) pay a dividend with respect to Common
Stock payable in Common Stock, then (A) the Exercise Price shall be adjusted,
from and after the date of determination of stockholders entitled to receive
such dividend or distribution (the “Record Date”), to
that price determined by multiplying the Exercise Price in effect immediately
prior to such date of determination by a fraction (1) the numerator of which
shall be the total number of shares of Common Stock outstanding immediately
prior to such dividend or distribution, and (2) the denominator of which shall
be the total number of shares of Common Stock outstanding immediately after such
dividend or distribution and (B) the number of shares of Common Stock issuable
upon exercise of this Warrant shall be proportionately adjusted, to the nearest
whole share, from and after the Record Date by multiplying the number of shares
of Common Stock purchasable hereunder immediately prior to such Record Date by a
fraction (1) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately after such dividend or distribution, and
(2) the denominator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution; or (ii) make any
other distribution with respect to Common Stock (except any distribution
specifically provided for in Sections 4(a) or 4(b) above), then, in each
such case, provision shall be made by the Company such that the holder of this
Warrant shall receive upon exercise of this Warrant a proportionate share of any
such dividend or distribution as though it were the holder of Common Stock as of
the Record Date fixed for the determination of the stockholders of the Company
entitled to receive such dividend or distribution (and the Company shall not pay
a dividend or make any distributions to the stockholders after the exercise of
the Warrant (in whole or part) unless and until the Company pays in full such
proportionate share to the Holder).  The provisions of this
Section 4(c) shall similarly apply to successive stock dividends and other
distributions by the Company.

     

    (d)           Notices of Record Date,
Etc.  In the event that:

     

    
      	
               
      

            	
              (i)

            	
              there
      shall be any capital reorganization or reclassification of the capital
      stock of the Company, including any subdivision or combination of its
      outstanding shares of Common Stock, or consolidation or merger of the
      Company with, or sale of all or substantially all of its assets to,
      another corporation, or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              there
      shall be a voluntary or involuntary dissolution, liquidation or winding up
      of the Company;

            

    

     

    then, in
connection with such event, the Company shall give to the Holder at least twenty
(20) days’ prior written notice of (1) the date on which the books of the
Company shall close or a record shall be taken for determining rights to vote in
respect of any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding up and (2) the date when the same
shall take place.  Such notice shall also specify (if applicable) the
date on which the holders of Common Stock shall be entitled to exchange their
Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, as the case may be.

     

    (e)           Adjustment by Board of
Directors.  If any event occurs as to which, in the reasonable
opinion of the Board of Directors of  the Company, the provisions of
this Section 4 are not strictly applicable or if strictly applicable would
not fairly protect the rights of the Holder in accordance with the essential
intent and principles of such provisions, then the Board of Directors shall make
an adjustment in the application of such provisions, in accordance with such
essential intent and principles, so as to protect such rights as aforesaid, but
in no event shall any adjustment have the effect of increasing the Exercise
Price or decreasing the number of Warrant Shares as otherwise determined
pursuant to any of the provisions of this Section 4 except in the case of a
combination of shares of a type contemplated in Section 4(a) and then in no
event to an amount larger than the Exercise Price as adjusted pursuant to
Section 4(a).

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    (f)           Certificate of
Adjustment.  In each case of any adjustment or readjustment in
the shares of Common Stock or other securities issuable on the exercise of this
Warrant, the Company at its expense will promptly cause its Chief Financial
Officer or other appropriate designee to compute such adjustment or readjustment
in accordance with the terms of this Warrant and prepare a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based, including a statement of (i) the
consideration received or receivable by the Company for any additional shares of
Common Stock or other securities issued or sold or deemed to have been issued or
sold, (ii) the number of shares of Common Stock or other securities outstanding
or deemed to be outstanding, and (iii) the Exercise Price and the number of
shares of Common Stock to be received upon exercise of this Warrant, in effect
immediately prior to such adjustment or readjustment and as adjusted or
readjusted as provided in this Warrant.  The Company will forthwith
deliver a copy of each such certificate to the Holder and any warrant agent of
the Company (appointed pursuant to Section 7 hereof).  In addition,
upon the occurrence of event which entitles the Holder to a dividend or
distribution upon exercise of the Warrant Shares, the Company shall provide
prompt notice to the Holder.

     

    (g)           Calculations. All
calculations under this Section 4 shall be made to the nearest cent or the
nearest 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 sale or issuance of any such shares shall be considered
an issue or sale of Common Stock.

     

    5.      Fractional
Shares.  The Company shall not be required to issue or cause to
be issued fractional Warrant Shares on the exercise of this
Warrant.  The number of full Warrant Shares which shall be issuable
upon the exercise of this Warrant shall be computed on the basis of the
aggregate number of Warrant Shares purchasable on exercise of this Warrant so
presented.  If any fraction of a Warrant Share would be issuable on
the exercise of this Warrant, such fractional share shall be disregarded and the
number of shares of Common Stock issuable upon exercise shall, on an aggregate
basis, be rounded down to the nearest whole
number of shares.

     

    6.      Notices.  All
notices and other communications given or made pursuant to this Warrant shall be
in writing and shall be deemed effectively given:  (a) upon personal
delivery to the party to be notified, (b) when sent by confirmed electronic
mail, (c) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, (d) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt, or (e) only in the case of notices or
communications from the Holder to the Company, when sent by confirmed facsimile
if sent during normal business hours of the Company, and if not so confirmed,
then on the next business day.  The addresses for such communications
shall be:  (i) if to the Company, to Management Energy, Inc.,
30950 Rancho Viejo Road, Suite 120, San Juan Capistrano, CA 926752, Attention: CFO; or
(ii) if to the Holder, to the Holder at the address appearing on the
Warrant Register or such other address as the Holder may provide to the Company
in accordance with this Section 6.

     

    7.      Warrant
Agent.  The Company shall serve as warrant agent under this
Warrant.  Upon thirty (30) days’ notice to the Holder, the Company may
appoint a new warrant agent.  Any new warrant agent shall be a party
to this Warrant without any further act.  Any new 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.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    8.      Stockholder
Rights.  Until the valid exercise of this Warrant, the Holder
shall not be entitled to any of the rights of a stockholder of the Company;
provided, however, the
foregoing does not limit the Holder’s right to receive its proportionate share
of dividends and distributions paid or made prior to exercise of this Warrant as
expressly provided herein.

     

    9.      Reservation of Warrant
Shares.  The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued
and otherwise unreserved Common Stock, solely for the purpose of enabling it to
issue Warrant Shares upon exercise of this Warrant as herein provided, the
number of Warrant Shares which are then issuable and deliverable upon the
exercise of this entire Warrant, free from preemptive rights or any other
contingent purchase rights of persons other than the Holder (taking into account
the adjustments and restrictions of Section 4).  The Company covenants
that all Warrant Shares so issuable and deliverable shall, upon issuance and the
payment of the applicable Exercise Price in accordance with the terms hereof, be
duly and validly authorized, issued and fully paid and
nonassessable.

     

    10.     No Dilution or
Impairment.  The Company will not, by amendment of its
certificate of incorporation or through reorganization, consolidation, merger,
dissolution, sale of assets or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder against dilution or other
impairment.  Without limiting the generality of the foregoing, the
Company will not increase the par value of any shares of stock receivable upon
the exercise of this Warrant above the amount payable therefor upon such
exercise, and at all times will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable stock upon the exercise of this Warrant.

     

    11.     Assignment; Exchange of
Warrant.    No Holder may assign or transfer this
Warrant without the prior written consent of the Company, which consent shall
not be unreasonably withheld, delayed or conditioned.  Should such
consent be granted, the Warrant so transferred shall continue to be bound by
this restriction in the hands of a subsequent Holder, and the Company shall not
be required to recognize any attempted transfer of the Warrant in violation of
this Agreement.  The Company shall not assign or transfer this Warrant
without the prior written consent of the Holder, except that consent of the
Holder shall not be required for transactions covered by Section 4(b) in
connection with which the successor corporation (if other than the Company)
resulting from such consolidation or merger or the corporation purchasing such
assets shall assume by written instrument delivered to the Holder, the
obligation to deliver to the Holder such shares of stock, securities or assets
as, in accordance with the provisions of Section 4(b), the Holder may be
entitled to purchase (as well as assuming the other obligations
hereunder).

     

    12.     Transfer on the Company’s
Books. Until this Warrant is transferred on the books of the Company, the
Company may treat the registered holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary.

     

    13.     Registration
Rights.  The Holder of this Warrant has been granted certain
registration rights by the Company. These registration rights are set forth in
Exhibit B attached hereto.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    14.     Limitations on
Exercise.

     

    (a)           Notwithstanding
anything to the contrary contained herein, the number of Warrant Shares that may
be acquired by the Holder upon any exercise of this Warrant (or otherwise in
respect hereof) shall be limited to the extent necessary to insure that,
following such exercise (or other issuance), the total number of shares of
Common Stock then beneficially owned by such Holder and any persons or entities
whose beneficial ownership of Common Stock would be aggregated with the Holder’s
for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange
Act”), does not exceed 4.999% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise).  For such purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated
thereunder.  This provision shall not restrict the number of shares of
Common Stock which a Holder may receive or beneficially own in order to
determine the amount of securities or other consideration that such Holder may
receive in the event of any transaction described in Section 4(b)
hereof.  By written notice to the Company, the Holder may waive the
provisions of this Section 14(a), but any such waiver will not be effective
until the 61st day after delivery of such notice, nor will any such waiver
effect any other Holder.

     

    (b)           Notwithstanding
anything to the contrary contained herein, the number of Warrant Shares that may
be acquired by the Holder upon any exercise of this Warrant (or otherwise in
respect hereof) shall be limited to the extent necessary to insure that,
following such exercise (or other issuance), the total number of shares of
Common Stock then beneficially owned by such Holder and any persons or entities
whose beneficial ownership of Common Stock would be aggregated with the Holder’s
for purposes of Section 13(d) of the Exchange Act, does not exceed 9.999% of the
total number of issued and outstanding shares of Common Stock (including for
such purpose the shares of Common Stock issuable upon such
exercise).  For such purposes, beneficial ownership shall be
determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder.  This provision shall not
restrict the number of shares of Common Stock which a Holder may receive or
beneficially own in order to determine the amount of securities or other
consideration that such Holder may receive in the event of any transaction
described in Section 4(b) hereof.   This restriction may not be
waived.

     

    (c)           The
Company’s obligation to issue Warrant Shares in excess of the limitations
referred to in this Section shall be only suspended (and shall not terminate or
expire notwithstanding any contrary provisions hereof) until such time, if any,
as such shares of Common Stock may be issued in compliance with such
limitations.

     

    15.     Miscellaneous.

     

    (a)           This
Warrant shall be binding on and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.

     

    (b)           This
Warrant may be amended only in writing signed by the Company and the
Holder.  No waiver shall be effective against any party unless it
shall be in writing and signed by such party.  No failure or delay on
the part of the Company or the Holder in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or
remedy.

     

    (c)           This
Warrant shall be governed by and construed and enforced in accordance with the
internal laws of the State of Nevada without regard to the principles of
conflicts of law thereof.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    (d)           The
Company stipulates that the remedies at law of the Holder in the event of any
default by the Company in the performance of or compliance with any of the terms
of this Warrant are not and will not be adequate, and that the same may be
specifically enforced.

     

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

     

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

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

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

     

    
      
        	 	 	
                MANAGEMENT
      ENERGY, INC.,

                

                  a
      Nevada corporation

                

              	 
	 	 	 	 	 
	 	 	
                By:
      

              	 	 
	 	 	 	Name:	 
	 	 	 	Title:	 
	 	 	 	 	 
	

                Acknowledged
      and agreed to:

              	 	 	 	 
	 	 	 	 	 
	

                WILKES
      LANE CAPITAL LLC

              	 	 	 	 
	 	 	 	 	 
	

                By:

              	 	 	 	 	 
	Name:
      Dan Reck	 
	
                Title:
      Manager

              	 
	 	 	 	 	 

      

    

    

      
        
          
            - - 

          

           

        

        
          -10-

          
            

          

        

        
           

        

      

    Exhibit
A

     

    FORM
OF ELECTION TO PURCHASE

     

    (To be
executed by the Holder to exercise the right to purchase shares of Common Stock
under the foregoing Warrant)

     

    To
Management Energy, Inc.:

     

    [CHECK
PARAGRAPH THAT APPLIES]

     

    _________
In accordance with the Warrant enclosed with this Form of Election to Purchase,
the undersigned hereby irrevocably elects to purchase  _____________
shares of Common Stock, par value $.001 per share (the “Common Stock”), of
Management Energy, Inc. and encloses herewith $________ in cash or certified or
official bank check or checks, which sum represents the aggregate Exercise Price
(as defined in the Warrant) for the number of shares of Common Stock to which
this Form of Election to Purchase relates, together with any applicable taxes
payable by the undersigned pursuant to the Warrant.

     

    - OR
-

     

    __________
In accordance with the Warrant enclosed with this Form of Election to Purchase,
the undersigned hereby irrevocably elects to convert such Warrant into
___________ shares of Common Stock by cashless exercise pursuant to Section 1(f)
of the Warrant.  Also enclosed is documentation supporting the
calculation of such number of shares of Common Stock to which this Form of
Election to Purchase relates.

     

    The
undersigned requests that certificates for the shares of Common Stock issuable
upon this exercise be issued in the name of
___________________________.

     

    
      
        	 	
                PLEASE
      INSERT SOCIAL SECURITY 

                  OR
      TAX IDENTIFICATION NUMBER

                

              	 
	 	 	 
	 	 	 
	 	 	 	 
	 	 	 	 
	

                (Please
      print name and address)

              
	 
	 
	 
	 

      

    

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    If the
number of shares of Common Stock issuable upon this exercise shall not be all of
the shares of Common Stock which the undersigned is entitled to purchase in
accordance with the enclosed Warrant, the undersigned requests that a new
Warrant evidencing the right to purchase the shares of Common Stock not issuable
pursuant to the exercise evidenced hereby be issued in the name of and delivered
to:

     

    
      
        	 
	

                (Please
      print name and address)

              
	 
	 
	 
	 
	

                Dated:_____________________,
      _____

              	
                Name
      of Holder:

              	 
	 	 	 	 
	 	(Print) 	 	 
	 	 	 	 
	 	(By:)	 	 
	 	(Name:)	 	 
	 	(Title:)	 	 
	 	 	 	 
	 	 	 	 
	 	

                (Signature
      must conform in all respects to name of

                holder
      as specified on the face of the Warrant)

              	 
	 	 	 	 

      

    

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    Exhibit
B

     

    Registration
Rights

    

    (a)           From
or after the date that is six months after the Effective Date, 2010, upon
receipt of the written request of the Holder at any time, the Company shall
prepare and file with the Securities and Exchange Commission (the “Commission”) a
Registration Statement (as defined below) covering the resale by the Holder of
the Warrant Shares (collectively the “Registrable
Securities”) for an offering to be made on a delayed and/or continuous
basis pursuant to Rule 415 (as defined below).  The Registration
Statement shall be on Form S-3; provided, however, in the event
that Form S-3 is not  available for the registration of the resale of
Registrable Securities hereunder, the Company shall (i)
register the resale of the Registrable Securities on another appropriate form
reasonably acceptable to the Holder and (ii) undertake to register the
Registrable Securities on Form S-3 as soon as such form is available; provided further,
however, that
the Company shall maintain the effectiveness of the Registration Statement then
in effect until such time as a Registration Statement on Form S-3 covering the
Registrable Securities has been declared effective by the
Commission.  The Company shall use its commercially reasonable efforts
to cause the Registration Statement to become effective and remain effective as
provided herein.  The Company shall use its commercially reasonable
efforts to cause the Registration Statement to be declared effective under the
Securities Act as promptly as possible after the filing thereof.  The
Company shall use its commercially reasonable efforts to keep the Registration
Statement continuously effective under the Securities Act until the date which
is the earliest date of when (i) all Registrable Securities have been sold, (ii)
all Registrable Securities may be sold immediately without registration under
the Securities Act and without volume restrictions pursuant to Rule 144, as
determined by the counsel to the Company pursuant to a written opinion letter to
such effect, addressed and acceptable to the Company’s transfer agent, or (iii)
the date that is 9 months following the date that the Registration Statement is
declared effective under the Securities Act  (the “Effectiveness
Period”).  For the sake of clarity, Holder is entitled to
demand that the Company prepare and file only one such Registration
Statement.

    

     (b)           If
and whenever the Company is required by the provisions hereof to effect the
registration of any Registrable Securities under the Securities Act, the Company
shall, as expeditiously as possible:

    

    (i)           Not
less than five business days prior to the filing of a Registration Statement
and/or any related Prospectus (as defined below) or any amendment or supplement
thereto (except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K and any similar or successor reports), the
Company shall (i) furnish to the Holder copies of such Registration Statement,
Prospectus or amendment or supplement thereto, as proposed to be filed, which
documents will be subject to the review of such Holder (it being acknowledged
and agreed that if a Holder does not object to or comment on the aforementioned
documents within the three business days after its receipt thereof, then the
Holder shall be deemed to have consented to and approved the use of such
documents).  The Company shall not file any Registration Statement or
amendment or supplement thereto in a form to which a Holder reasonably objects
in good faith, provided that, the Company is notified of such objection in
writing within the applicable period set forth above.

    

    (ii)           prepare
and file with the Commission the Registration Statement with respect to such
Registrable Securities, respond as promptly as possible to any comments received
from the Commission, and use its commercially reasonable efforts to cause the
Registration Statement to become and remain effective for the Effectiveness
Period with respect thereto, and promptly provide to the Holder copies of all
filings and Commission letters of comment relating thereto;

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    (iii)           prepare
and file with the Commission such amendments and supplements to the Registration
Statement and the Prospectus (as defined below) used in connection therewith as
may be necessary to comply with the provisions of the Securities Act in order to
enable the disposition of all Registrable Securities covered by the Registration
Statement and to keep such Registration Statement effective until the expiration
of the Effectiveness Period;

    

    (iv)           furnish
to the Holder such number of copies of the Registration Statement and the
Prospectus included therein (including each preliminary Prospectus) as the
Holder reasonably may request to facilitate the public sale or disposition of
the Registrable Securities covered by the Registration Statement;

    

    (v)           use
its commercially reasonable efforts to register or qualify the Holder's
Registrable Securities covered by the Registration Statement under the
securities or “blue sky” laws of such jurisdictions within the United States as
the Holder may reasonably request; provided, however, that the
Company shall not for any such purpose be required to qualify generally to
transact business as a foreign corporation in any jurisdiction where it is not
so qualified or to consent to general service of process in any such
jurisdiction, unless the Company is already subject to service in such
jurisdiction and except as may be required by the Securities Act;

    

    (vi)           list
the Registrable Securities covered by the Registration Statement with any
securities exchange on which the Common Stock is then listed;

    

    (vii)           promptly
notify the Holder at any time when a Prospectus relating thereto is required to
be delivered under the Securities Act, of the happening of any event of which
the Company has knowledge as a result of which the Prospectus contained in such
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing;

    

    (viii)           make
available for inspection by the Holder and any attorney, accountant or other
agent retained by the Holder, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company’s
officers, directors, employees and independent contractors to supply all
information reasonably requested by Holder or the attorney, accountant or agent
of the Holder;

    

    (ix)           notify
each selling Holder, promptly after the Company receives notice thereof, of the
time when such registration statement has been declared effective or a
supplement to any prospectus forming a part of such registration statement has
been filed;

    

    (x)           after
such registration statement becomes effective, notify each selling Holder of any
request by the SEC that the Company amend or supplement such registration
statement or prospectus; and

    

    (xi)           In
order to enable the Holder to sell Registrable Securities under Rule 144, for a
period of two years hereafter (or such shorter period that the Holder can sell
under Rule 144 without regard to volume limitations), 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 Section 13(a) or 15(d) of the Exchange
Act.  During such period, if the Company is not required to file
reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare
and furnish to the Holders and make publicly available in accordance with Rule
144(c) promulgated under the Securities Act annual and quarterly financial
statements, together with a discussion and analysis of such financial statements
in form and substance substantially similar to those that would otherwise be
required to be included in reports required by Section 13(a) or 15(d) of the
Exchange Act, as well as any other information required thereby, in the time
period that such filings would have been required to have been made under the
Exchange Act.  The Company further covenants that it will take such
further action as Holder may reasonably request, all to the extent required from
time to time to enable Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 promulgated under the Securities Act.

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    
 

    (d)           The
Company shall be solely responsible for and bear all expenses relating to the
Company’s compliance with this Exhibit B, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees and expenses
incurred in connection with complying with state securities or “blue sky” laws,
fees of FINRA, transfer taxes, fees of transfer agents and registrars, fees of,
and disbursements incurred by, one counsel for the Holder; provided, however, and
notwithstanding the foregoing, the Holder shall be solely responsible for and
bear all selling commissions applicable to the sale of Registrable
Securities.

     

    (e)           Indemnification by the
Company.  The Company shall indemnify, defend and hold harmless
the Holder and its officers, directors, agents, partners, members, managers,
shareholders, and employees, each Affiliate of the Holder and the officers,
directors, partners, members, managers, shareholders, agents and employees of
each such Affiliate (collectively, the “Holder’s
Indemnitees”), to the fullest extent permitted by applicable law, from
and against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable costs of preparation and investigation and
reasonable attorneys’ fees) and expenses (collectively, “Losses”), as
incurred, that arise out of or are based upon (i) any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, or (ii) any violation or alleged violation by
the Company of the Securities Act, Exchange Act, any state securities law, any
“blue sky” laws of any jurisdiction in which Registrable Securities are offered
or any rule or regulation thereunder relating to the offer or sale of the
Registrable Securities pursuant to a Registration Statement or any violation of
this Exhibit B, except to the extent, but only to the extent, that such untrue
statements, alleged untrue statements, omissions or alleged omissions are based
solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and approved by such
Holder expressly for use in the Registration Statement, such Prospectus or such
form of Prospectus or in any amendment or supplement thereto.  The
Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding arising from or in connection with the transactions
contemplated by this Exhibit B of which the Company is aware.  Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of any Holder’s Indemnitees and shall survive the transfer
of the Registrable Securities by the Holder.

     

    (f)           Indemnification by the
Holder.  Holder shall indemnify and hold harmless the Company
and its officers, directors, agents, partners, members, managers, shareholders,
and employees, each Affiliate of the Holder and the officers, directors,
partners, members, managers, shareholders, agents and employees of each such
Affiliate (collectively, the “Company’s
Indemnitees”), to the fullest extent permitted by applicable law, from
and against all Losses, as incurred, arising out of or based solely upon any
untrue or alleged untrue statement of a material fact contained in any
Registration Statement, any Prospectus, or any form of prospectus, or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus, or any form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading to the extent, but only
to the extent that, such untrue statements or omissions are based solely upon
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, or to the extent that such information relates
to such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and approved by such Holder expressly for use in the
Registration Statement (it being understood that the Holder has approved Annex A hereto for
this purpose), such Prospectus or such form of Prospectus or in any amendment or
supplement thereto.  In no event shall the liability of Holder
hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    (g)           Indemnification
Procedure.  If any Proceeding shall be brought or asserted
against any person entitled to indemnity hereunder (an “Indemnified Party”),
such Indemnified Party shall promptly notify the person from whom indemnity is
sought (the “Indemnifying Party”)
in writing, and the Indemnifying Party shall have the right to assume the
defense thereof, including the employment of counsel reasonably satisfactory to
the Indemnified Party and the payment of all reasonable fees and expenses
incurred in connection with defense thereof; provided, however, that the
failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Warrant,
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party. An Indemnified Party shall have the
right to employ separate counsel in any such Proceeding and to participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party unless:  (1) the Indemnifying Party
has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party
shall have failed promptly to assume the defense of such Proceeding and to
employ counsel reasonably satisfactory to such Indemnified Party in any such
Proceeding; or (3) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel that a
conflict of interest exists if the same counsel were to represent such
Indemnified Party and the Indemnifying Party (in which case, if such Indemnified
Party notifies the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense thereof and such counsel
shall be at the expense of the Indemnifying Party); provided, however, that the
Indemnifying Party shall not be liable for the fees and expenses of more than
one separate firm of attorneys at any time for all Indemnified
Parties.  The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld, delayed or
conditioned.  No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding and such
settlement does not require the Indemnified Party to pay any amount or take any
action in connection therewith

     

    All fees
and expenses of the Indemnified Party (including reasonable fees and expenses to
the extent incurred in connection with investigating or preparing to defend such
Proceeding) shall be paid to the Indemnified Party, as incurred, within twenty
days of written notice thereof to the Indemnifying Party; provided, however, that the
Indemnified Party shall promptly reimburse the Indemnifying Party for that
portion of such fees and expenses applicable to such actions for which such
Indemnified Party is finally judicially determined to not be entitled to
indemnification hereunder.

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

    If a
claim for indemnification hereunder) is unavailable to an Indemnified Party (by
reason of public policy or otherwise), then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable
considerations.  The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission of a material fact, has been
taken or made by, or relates to information supplied by, such Indemnifying Party
or Indemnified Party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission.  The amount paid or payable by a party as a result of any
Losses shall be deemed to include any reasonable attorneys’ or other reasonable
fees or expenses incurred by such party in connection with any Proceeding to the
extent such party would have been indemnified for such fees or expenses if the
indemnification provided for herein was available to such party in accordance
with its terms.

     

    The
parties hereto agree that it would not be just and equitable if contribution
pursuant hereto were determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable considerations referred
to in the immediately preceding paragraph.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

     

    (h)           Unless
the context otherwise requires, the terms defined in this Section (h) have the
meanings herein specified for all purposes of this Exhibit B.

     

    “Affiliate” means,
with respect to any person, any other person which directly or indirectly
controls, is controlled by, or is under common control with, such
person.

     

    “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.

     

    “Prospectus” means the
prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration Statement, and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

     

    “Registration
Statement” means the registration statement required to be filed
hereunder, including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration
statement.

     

    “Rule 415” means Rule
415 promulgated by the Commission pursuant to the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.

     

    
      
         

      

      
        -17-

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